On 2 December 2020 the Court of Appeal in England handed down its judgement to uphold the appeal that had been brought in relation to the Part VII transfer of annuity business from The Prudential Assurance Company Limited (Prudential) to Rothesay Life Plc (Rothesay), collectively referred to as “the Appellants.”
The appeal was brought by the Appellants following the decision of the High Court, delivered by Mr. Justice Snowden on 16 August 2019, to decline to sanction the transfer of approximately £12 billion of nonprofit annuity liabilities from Prudential to Rothesay. The annuities in question had already been 100% reinsured to Rothesay and therefore the purpose of the Part VII transfer was to formalise the transfer of risk that had already taken place.
In his oral remarks when handing down the judgement, the Chancellor of the High Court, the Rt. Hon. Sir Geoffrey Vos, noted the following areas of disagreement with Mr. Justice Snowden’s original judgement:
Mr. Justice Snowden’s decision to disregard the conclusions of the Independent Expert in relation to the likelihood of future capital support being required by Prudential and Rothesay. The Court of Appeal took the view that basing conclusions in this area primarily on the Solvency II financial strength of the transferor and the transferee was justified, notwithstanding that the Solvency II capital requirement is based on a one-year time horizon rather than a time horizon consistent with the lifetime of an annuity, given the role of the regulatory regime in protecting future solvency and the speculative nature of any assumptions about the future availability of parental support.
Mr. Justice Snowden’s decision to disregard the non-objection to the transfer of the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The Court of Appeal was mindful of the PRA’s and FCA’s views.
Mr. Justice Snowden’s decision to assign significant weight to the argument by objecting policyholders that they had specifically chosen Prudential based on its age and venerability; the Court of Appeal concluded that the relevant consideration was whether the transfer would have a material adverse effect on policyholders, and that this rested principally on the impact of the transfer on the likelihood that obligations to policyholders would continue to be met.
The decision to uphold the appeal does not mean that the transfer has been sanctioned. The appeal was focused on the question of whether the original judgement in the High Court, delivered by Mr. Justice Snowden, was legally sound based on the information available to the High Court at the time. The Court of Appeal elected not to consider the question of whether it was appropriate to sanction the transfer based on current circumstances, and therefore the question of whether the transfer should be sanctioned will now be remitted to the High Court for a fresh round of hearings, in effect starting the Part VII transfer process again.
Milliman has received two 2020 U.S. Captive Review Awards. These awards recognize and reward providers of captive insurance products and services, who have outperformed their competitors and demonstrated the highest levels of excellence.
As an organization, Milliman received an award in the Actuarial Firm of the Year category. The award recognizes the firm that has demonstrated the highest level of service meeting clients’ needs over the past year. Milliman has received this recognition for three consecutive years.
Individually, consultant Joel Chansky received an award for Outstanding Contribution of the Year. The award is given to a captive professional that has made significant contributions to enhance the industry.
Milliman consultant Mike Meehan was again named to the Captive Review Power 50 list. It is the fourth consecutive year that he has received the distinction. Mike was named the 29th most influential professional in the global captive insurance industry.
“I once again find myself both humbled and honored to be
included on Captive Review’s Power 50 list. For over 25 years I have been very
fortunate to work with an amazing and talented team at Milliman. The honor of
being included on the Power 50 list would not be possible without these collective
efforts,” he said.
Milliman and Enova Decisions, a leading financial technology and analytics company, today announced a strategic alliance aimed at bringing new advanced analytics to insurers. The alliance brings together Milliman’s deep domain expertise and data resources and Enova Decisions’ real-time analytic capabilities, giving insurers an innovative platform for retaining customers, optimizing sales operations, and maximizing the value of current and future customers.
“Insurers everywhere are competing on the basis of who can best understand consumer behavior, and this competition is driven by increasingly sophisticated analytics,” says Sam Nandi, Milliman Principal and Consulting Actuary. “With Milliman’s deep subject matter expertise and Enova Decisions’ decision management platform, we give insurers the best tools to succeed in all the different dimensions of their business, whether it’s sales, distribution management, customer targeting, product development, or myriad other applications.”
“Leaders in highly regulated industries know
that proper management of data for security and privacy is critical,” said
Joe DeCosmo, Chief Analytics Officer for Enova Decisions. “By working with
Enova Decisions, insurers can leverage our 15 year of experience making
data-driven decisions in real time and access the latest decisioning technology
while remaining compliant.”
Milliman/Enova Decisions strategic alliance will provide life insurance clients
with the opportunity to achieve strategic targets and business goals through
the activation and operationalization of integrated, data intelligence-driven solutions.
For the fourth time in the last six years, including in 2018, Milliman was named actuarial firm of the year at the 2019 U.S. Captive Review Awards, held recently in Burlington, Vt. These awards recognize and reward providers of captive insurance products and services, who have outperformed their competitors and demonstrated the highest levels of excellence over the past 12 months.
“I was honored to once again be able to accept this award on behalf of Milliman. I am fortunate to work with an amazing team of consultants and thought leaders that continue to provide exceptional service to the captive industry,” said consultant Mike Meehan, who has been named to the Captive Review Power 50 list in 2016, 2017, and 2018.
Milliman’s Joel Chansky was inducted into the Captive Review Hall of Fame, which celebrates the most influential professionals in the captive insurance industry over the past 50 years. Joel has assisted with the formation and the ongoing actuarial needs of many captive insurers. He also reviews captive and risk retention group applications for several state insurance departments.
“This is truly a great honor. When I heard about this, I felt a number of things. First, a bit old, especially when there is a reference to the past 50 years. But second, and more importantly, both humbled and fortunate. A big thank you to the great team around me at Milliman that’s allowed me to do the things it takes to get this recognition, and a bigger thank you to my wife and kids who have always supported me throughout my career,” Joel said.
It was also a three-peat for Milliman consultant Mike Meehan, who was named to the Captive Review Power 50 list for the third consecutive year. Mike climbed up the list five spots, appearing at #34 this year. “I am honored to be included on Captive Review’s Power 50 again this year. It is truly a privilege to be included among the names of so many in the captive industry for whom I have the utmost respect, several of which I am fortunate to call my friends,” he said.
The Captive Review Power 50 recognizes the most influential captive insurance professionals around the world. Individuals are nominated and voted for by peers who identify them as the biggest “movers and shakers” in the captive insurance industry over the past 12 months and who will continue to influence the industry’s direction and progress in the future.
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