FRAMEWORK for a

TRANSFER OF ENGAGEMENTS

Robert Wharton of

Thrings LLP

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What is it?

Moving from one society to another, the obligations to and from its members.

How does it happen?• Agreement

• Information to members

• Special Resolutions

• FSA consent

• Court consent (part VII FiSMA)

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Preliminaries

• Confidentiality/Exclusivity agreement

• Brief report by actuary/accountant• Heads of terms• FSA discussions• Draft timetable

What law applies• 1992 Act and SUP 18.4

Society to Society• FiSMA (SUP 18.2)

Insurance Company

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LEGAL DOCS (1)

Agreement• Duty to promote transfer• Conditions precedent• Premises/employees/IT• Contracts/outsourcing• Pension schemes

Concurrent activity• Transferee’s actuarial report on minimum solvency• Timetable• Transfer instrument• Actuarial report on assets (long term business)

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LEGAL DOCS (2)

Transfer instrument• States policies to be transferred• Ring fenced fund• Maintenance of fund by transferee• Allocation of costs/new business• Principles of financial management (long

term business only)• Closure of ring fenced fund• Dissolution of transferor

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Information to members

• Schedule 15 1992 Act• Statement to ALL members entitled to vote• “Sufficient” information “financial strengths” and

“Key features” of parties• Comparative balance sheets• Number of members, types of policies, premium

income• Summary of actuary’s statements• Independent actuary’s report• Auditors statement, reasonableness of info

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Member agreement

• Special Resolutions of each party• Alteration of Rules of transferor• Transfer of part – “affected members” resolution

FSA discretions/quirks• Board of directors decision of transferee• Independent actuary• Auditors statement• Foreign customers• EEA state consultation

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Final consent

1992 Act• FSA public learning• Confirm consentCourt hearingAll at the effective date

Not covered- Conversion to a corporation- Amalgamation of societies

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Contact

• Robert Wharton• Tel: 0117 930 9572 or 020-7766-5600• Email: rwharton@thrings.com

This presentation does not constitute legal advice