High Court approves £12bn annuity transfer from Prudential to Rothesay

The High Court has approved the transfer of a £12bn portfolio of annuities from The Prudential Assurance Company, a subsidiary of M&G, to Rothesay Life.

The court initially blocked the transfer, involving nearly 400,000 policy holders, in August 2019.

Rothesay subsequently appealed the decision from the High Court, with the Court of Appeal overturning the decision in December 2020 and describing the original ruling as “wrong” on a number of issues.

The successful appeal resulted in the High Court reviewing the case, and subsequently ruling that the transfer can now proceed.

The transfer will take place on 15 December 2021.

Commenting on the announcement, a Rothesay spokesperson said: “Rothesay Life Plc welcomes today's decision from the High Court of England and Wales in connection with the proposed transfer of a portfolio of annuities from The Prudential Assurance Company Limited, a subsidiary of M&G Plc, to Rothesay.

“The court's decision has provided important clarity for our whole sector. As the UK's largest pensions insurance specialist, dedicated to providing long-term security and excellent customer service, we are delighted to welcome our new policyholders to Rothesay.”

An M&G plc spokesperson added: “We welcome the High Court’s judgment approving the transfer of annuities to Rothesay with an effective date of 15 December 2021.

"Those policyholders transferring to Rothesay can rest assured that the terms and conditions of their annuities won’t change as a result of the transfer and they will continue to benefit from equivalent standards of service, management and governance as part of the UK’s largest pensions insurance specialist.”

Association of British Insurers (ABI) director general, Huw Evans, concluded: “Important news today that the High Court has approved the transfer of a portfolio of annuities from The Prudential Assurance Company Limited to Rothesay.

“These transfers lead to good outcomes for customers as companies, such as Rothesay, specialise in looking after annuity customers, providing guaranteed income for life.

“This follows the Court of Appeal’s decision last year, which provided legal clarity and certainty to the process for the transfer of business under Part VII of the Financial Services and Markets Act 2000.

“The ABI took part in the appeal to explain the wider consequences for both customers and businesses if a range of speculative discretionary factors could override the view of independent experts and regulators that a transfer can proceed without any detriment to consumers.”

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