Publicity requirements

Re Equitas Ltd [2008] EWHC 2960 (Ch) raised a short point on the publicity requirements of Part VII of the Financial Services and Markets Act 2000 in the context of the transfer of insurance business.

Equitas: facts and ruling

As is well known under the Reconstruction and Renewal agreement at Lloyd’s entered into in 1996 Equitas was established as a reinsurance company that reinsured the liabilities of Names at Lloyd’s in respect of their liabilities up to and including the year 1992. The present case was an application by Equitas to transfer the liabilities of the Names to a new company, Speyford Ltd. Transfers of insurance business are regulated by Part VII of the Financial Services and Markets Act 2000, and regulations that spell out procedural details, the Financial Services and Markets Act 2000 (Control of Business Transfers) (Requirements on Applicants) Regulations 2001,2001 SI No 3625. In outline, an application must be made to the court for approval under s107, and the application must be accompanied by an independent actuarial report on the scheme under s109. The applicant must also comply with the publicity requirements in the 2001 Regulations, by publishing a notice in two national newspapers and sending a copy to all policyholders (reg 3(2)). The publicity requirements may, however, be waived by the court in such circumstances and on such terms as it considers appropriate (reg 4(2)).