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Court approved the transfer of annuities from Prudential Assurance Company (PAC) to Rothesay.

The ruling is a travesty because the judge has ignored or misunderstood the points made by Dr Dean Buckner (policy director, UKSA) and Professor Ken Dowd, Durham University.

The Campaign.

UKSA has been supporting PAC policyholders who object to ‘Part VII’ process of transferring insurance obligations from Prudential to Rothesay Life. 


Part VII of the Financial Services and Markets Act 2000 (FSMA) is a court-sanctioned legal transfer of some or all of the policies of one company to another.  Policyholders rely on this process being fair, transparent, accessible and understandable.


Our concern is about the artificial creation of capital by an accounting device known as the Matching Adjustment (MA), which flatters the balance sheet of life insurance companies by lowering the reported value of insurance obligations.


The Judgement and the Travesty

The Court approved the transfer of annuities from PAC to Rothesay.


Given that MA is universally condemned within the financial economics profession, it is grossly irresponsible of the Court to sanction the Rothesay transfer in the face of such widespread disagreement, and such compelling evidence. Disagreement implies uncertainty, uncertainty impacts on policyholder security of benefits, yet such security is the central issue that a FSMA Part VII Court must consider.


The judgement was published on the 24th November. Our letter, covering policy holders’ unanswered concerns about the application of the process, can be found here and the Judgement  here.


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