We have a market-leading Insurance group. We advise many of the major players in the insurance sector and have been involved in some of the largest and most complex insurance work. The breadth of our practice encompasses a wide range of transactions from the multi-national to the purely domestic, covering diverse aspects including mergers and acquisitions, commercial contracts, risk transfer and regulatory advice.
Our Insurance group has partners with considerable specialist knowledge and experience. We advise on a variety of areas, including corporate, financial regulation, capital markets, strategic sourcing and insurance and reinsurance litigation. We provide a multi-disciplinary team of practitioners with a formidable blend of legal and regulatory expertise.
We advise on:
- asset and liability management
- bulk and other annuity transactions and the pensions buy out and buy in market
- capital raising and securitisations
- demutualisations, flotations, restructurings and other Part VII transfers
- distribution and outsourcing transactions
- insurance dispute resolution
- management of long-term insurance funds
- product structuring and design
- private and public M&A, joint ventures and closed fund deals
- risk transfer, including reinsurance, longevity swaps and other risk transfer techniques
- solvency, capital resources and other regulatory requirements
- structuring of insurance and reinsurance operations
- the implications of Solvency II for regulatory capital, group structures, governance arrangements and other strategic matters
Our key experience includes advising:
Allianz SE on 10-year bancassurance distribution agreements with HSBC for life insurance in Asia and life insurance and pensions products in Turkey.
Aviva on the de-risking of the Aviva Staff Pension Scheme by way of a circa £5 billion longevity swap transaction involving insurance and reinsurance arrangements.
Brit, Direct Line and esure on their IPOs.
Catlin on its recommended acquisition by XL Group.
Delta Lloyd Levensverzekering on a longevity swap transaction with RGA in respect of underlying longevity reserves of approximately EUR12 billion.
esure in relation to the OFT call for evidence on the UK private motor insurance sector.
Legal & General on the restructuring of assets for Solvency II matching adjustment purposes.
MGM on the transfer of its entire business to Scottish Friendly Assurance Society by way of a Part VII transfer scheme.
RSA Insurance Group on the consolidation of certain of its UK general insurance businesses into three operating companies by means of a series of five insurance business transfer schemes under Part VII of FSMA.
Standard Life on the disposal of its Canadian business.
Solvency II developments
The regime has been in force for a year but the bedding in process is ongoing. Developments and changes in 2017 include:
Solvency and Financial Condition Report
The main wave of SFCRs are due to be published in May, allowing the first full comparison of SCR figures across the sector – with and without transitional measures and the application of the matching and volatility adjustments. Although most major insurers disclosed their headline SCR ratios in early 2016 and again at the half year mark, it remains to be seen how the market will respond to these more granular disclosures.
Review of the standard formula
The Commission is committed to reviewing the standard formula by the end of 2018. EIOPA published a discussion paper on the review in December 2016 and is expected to deliver final advice to the Commission by the end of February 2018, with some parts of the advice due to be delivered by the end of October this year.
The Delegated Regulation was amended in April 2016 to adjust the standard formula treatment of investments in “qualifying infrastructure investments”. Further advice was given to the Commission by EIOPA in June 2016 on changes which would also allow for preferential treatment for investment in “infrastructure corporates”. The Commission is yet to respond to the advice and the timetable for or likelihood of the changes being adopted is therefore unclear; however, the expectation is that something will emerge during 2017.
Key dates in 2017
Below are some of the key dates for regulatory developments in the insurance sector in 2017.
FCA policy statement expected on changes to the Handbook to reflect the introduction of the PRIIPs Regulation (PS to CP16/18)
7 March 2017
SIMR: final rules relating to regulatory references come into force
9 March 2017
Deadline for firms to implement any necessary changes arising out of finalised guidance on the treatment long-standing customers
31 March 2017
New rules capping early exit pension charges in personal pension and stakeholder pension contracts come into force
Expected publication of policy statement to FCA consultation on information prompts in the annuity market
Deadline for publication of SFCRs for firms with a 31 December year end
1 September 2017
Expected application date for new rules on information prompts in the annuity market
31 October 2017
EIOPA to provide elements of its technical advice to the Commission on the review of the Solvency II standard formula (with the rest due by 28 February 2018)
SIMR: application of the extension of selected conduct rules to “standard” NEDs
1 January 2018
PRIIPs Regulation comes into force/ FCA revised disclosure rules apply