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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

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

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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

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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

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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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