FRAMEWORK for a TRANSFER OF ENGAGEMENTS Robert Wharton of Thrings LLP

2 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)

3 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

4 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)

5 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

6 Information to members Schedule 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

7 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

8 Final consent 1992 Act FSA public learning Confirm consent Court hearing All at the effective date Not covered -Conversion to a corporation -Amalgamation of societies

9 Contact Robert Wharton Tel: or This presentation does not constitute legal advice