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Part VII Business Transfers – “ Equitas – a case study” PowerPoint PPT Presentation


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Part VII Business Transfers – “ Equitas – a case study”. 10 November 2009. Agenda. Section 1»Part VII Transfers – The Process - Mary Gavigan Section 2» Legal Challenges - Philip Hertz Section 3» Preparing the ground - Gregory Overton

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Part VII Business Transfers – “ Equitas – a case study”

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Part vii business transfers equitas a case study

Part VII Business Transfers –“Equitas – a case study”

10 November 2009

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Agenda

Agenda

Section 1»Part VII Transfers – The Process - Mary Gavigan

Section 2» Legal Challenges - Philip Hertz

Section 3» Preparing the ground - Gregory Overton

Section 4» Role of the Independent Expert - Allan Kaufman

Section 5»Questions

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Part vii business transfers the process

Part VII Business Transfers –The Process

Section 1

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Part vii business transfers a reminder

Part VII Business Transfers – A Reminder

  • What are Part VII’s

  • The Equitas’ Part VII

  • Benefits:

    • Reinsurance moves with underlying policies

    • Finality

  • Role of FSA

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Structure pre transfer

Structure Pre-Transfer

Policyholders

Names

ERL

EL

Claims handling by RMSL

NICO

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Structure post transfer

Structure Post-Transfer

Policyholders

EIL

ERL

EL

Claims handling by RMSL

NICO

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Legal challenges

Legal Challenges

Section 2

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Legal issues

Legal Issues

  • Amendments to legislation

  • The overall requirement – policyholder no worse off

    • Claims v Names v EIL

    • Insolvency priority

    • US Issues

      • Security

      • Credit for reinsurance

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Preparing the ground

Preparing the Ground

Section 3

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Preparing the ground1

Preparing the Ground

First step

Scale of the book of business to be transferred

Communications with policyholder

Transaction design

Constructing the argument

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Role of the independent expert

Role of the Independent Expert

Section 4

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Role of the independent expert ie

Role of the Independent Expert (IE)

  • Appointment approved by FSA

  • Reports to the Court

  • Considers all groups of affected policyholders

  • Impact on other stakeholders

  • Report filed in Court

  • Supplementary report

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Ie s role in the equitas part vii

IE’s Role in the Equitas Part VII

Analysis assuming no Equitas insolvency

  • Claims handling

  • Credit for reinsurance

  • Regulation

  • External outwards reinsurance

Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


Ie s role in the equitas part vii1

IE’s Role in the Equitas Part VII

Analysis considering risk of Equitas insolvency

  • Policyholder security before and after transfer

    • Types of policyholders

    • Liability and coverage models

  • Recovery rate from names

    • Mortality

    • Fragmentation

  • Lloyd’s obligations

  • NICO security

  • Trust funds

  • Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


    Questions

    Questions

    Section 5

    Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


    Contact details

    Contact Details

    Allan Kaufman

    020 7398 3831

    [email protected]

    Mary Gavigan, Director

    • 020 7469 1119

      [email protected]

    Philip Hertz

    • 020 7006 1666

      [email protected]

      Gregory Overton, Director

      020 7583 5000

      [email protected]

    Proprietary & Confidential Property of Navigant Consulting, Inc., PwC & Clifford Chance


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