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UK High Court approves 12 billion pound annuity transfer to Rothesay from M&G

UK High Court approves 12 billion pound annuity transfer to Rothesay from M&G
UK High Court approves 12 billion pound annuity transfer to Rothesay from M&G   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p><span class="caps">LONDON</span> – London’s High Court has ruled that the transfer of 12 billion pounds ($16.03 billion) in annuity policies from M&G to specialist insurer Rothesay Life can go ahead, Rothesay said on Wednesday, after the court originally blocked the move.</p> <p>The deal – set to be the largest ever such transfer, covering 400,000 policyholders – was announced in 2018 at the time that British insurer Prudential, the annuities’ former manager, said it would split in two. </p> <p>Financial terms of the transfer were not disclosed. The annuities, which pay pensioners a fixed income for life, have since been managed by Prudential’s former UK arm M&G. </p> <p>The High Court initially blocked the transfer following representations from around 1,000 policyholders, who were wary about the financial strength of Rothesay, a major player in the sector.</p> <p>But a UK court of appeal overturned that judgment last year, paving the way for a second transfer hearing.</p> <p>Insurers frequently transfer books of business to one another, but the process requires court approval.</p> <p>Industry sources say the annuity transfer market was hit by the initial ruling.</p> <p>“The court’s decision has provided important clarity for our whole sector,” Rothesay said in a statement. </p> <p>($1 = 0.7484 pounds)</p> <p/> </div>