Context
The FCA is consulting on proposed updates to its Finalised Guidance, FG18/4: The FCA’s approach to the review of Part VII insurance business transfers, which was initially published in May 2018. Since then, the regulatory landscape has changed following the UK’s exit from the EU. The FCA is also proposing to amend the guidance following its experience of its application to a diverse range of Part VII transfers and feedback from stakeholders, with the aim of clarifying its expectations on Part VII transfers. The Guidance itself is detailed, the document running to 61 pages.
Key points to note
- This guidance will be of interest to:
- insurance firms considering Part VII Transfers and their professional advisors
- independent experts usually appointed by the Applicants to report to the High Court on the terms of the Scheme
- the Court
- affected policyholders
- The proposed amendments to the guidance include:
- The removal of references to certain EU provisions
- A number of minor revisions or corrections
- Increased requirements in relation to the skill, experience and independence of the peer reviewer in relation to the Independent Review
- A new set of general expectations in relation to the Part VII transfer process
- Updated commentary in relation to the business rationale for a Part VII transfer
- A number of updated items in relation to the considerations given to the impact of transfers on policyholders
- The FCA is asking for feedback on this consultation by 31st August 2021.
Next actions
Affected firms must become familiar with and understand the significant implications of the finalised rules and should seek professional advice where necessary.