On 19 October 2023, Mr Justice Richards handed down judgment in Re Phoenix Life Assurance Limited  EWHC 2612 (Ch), in which the Court considered whether to sanction a scheme to transfer insurance business under Part VII of the Financial Services and Markets Act 2000 and further applications to abrogate a number of existing transfer schemes, under the approach established in Re Windsor Life  EWHC 3429 (Ch).
Previously on 3 October 2023, the Court of Session had approved variations to certain other existing transfer schemes, that were necessary to facilitate, and conditional on approval of, the transfer being considered by the High Court.
The scheme comprised the transfer of the entire business held within Phoenix Life Assurance Limited, Standard Life Assurance Limited and Standard Life Pension Funds Limited to Phoenix Life Limited, including substantial with-profits as well as non-profit business totalling over 5 million policies, with best estimate liabilities of over £120 billion, structured across 11 funds. A number of persons alleging an adverse effect of the transfer attended or made submissions to the Court, as well as in correspondence with the parties.
The financial regulators of the applicant firms also appeared and Theodor van Sante was instructed by and represented the Financial Conduct Authority, which having itself reviewed the scheme and the objections thereto, did not object to sanction of the transfer or the amendments.
The Court applied the principles established by the Court of Appeal in the Re Prudential Assurance Company Limited  EWCA Civ 1626 and exercised its discretion to sanction the scheme and approved the amendments to existing schemes (at ).
In doing so, the Court considered grounds raised to object to the transfer, including concerns about the security of policyholder benefits, the use of matching adjustment and calculation of diversification benefits relevant to required capital, and the use of unrated debt as capital within the transferor. The Court also considered issues raised about policyholder’s reasonable expectations and standards of service, administration, management and governance, operation of sanctions regimes, as well as concerns about the Part VII and communications process and the approach adopted by the independent expert.