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.
An insurance client on the implications of the FCA’s proposed past business review and redress programme in respect of its thematic review of the sale of enhanced annuities.
Aviva on the de-risking of the Aviva Staff Pension Scheme by way of an innovative circa £5 billion longevity swap transaction involving insurance and reinsurance arrangements.
Brit, China Re, Direct Line and esure on their IPOs.
Delta Lloyd Levensverzekering on a longevity swap transaction with RGA in respect of underlying longevity reserves of approximately EUR12 billion.
Legal & General on the sale of its Mature Savings business to the ReAssure division of Swiss Re, involving assets under administration of approximately £30 billion.
ReAssure, part of the Swiss Re group, on the acquisition of the UK pensions business of HSBC Life (UK), including the associated insurance business transfer.
RSA Insurance Group on its issue of Floating Rate Perpetual Restricted Tier 1 Contingent Convertible Notes – the first public Solvency II compliant Restricted Tier 1 issuance by a UK insurer.
RSA Insurance Group on its disposal of £834 million of UK legacy liabilities to the Enstar Group.
Standard Life on its recommended all-share merger with Aberdeen Asset Management.
The Insurance Distribution Directive
The Insurance Distribution Directive (“IDD”) entered into force on 22 February 2016 and was due to be applied by Member States on 23 February 2018. The application date is being changed to 1 October to allow more time for firms to implement the required changes, although the legal process to effect this will probably not be completed until March.
The IDD sets out rules for the regulation of the distribution of insurance products by insurance undertakings and insurance intermediaries (referred to collectively as “insurance distributors” in the directive). The IDD replaces the current Insurance Mediation Directive (“IMD”). It will introduce a greater level of harmonisation between Member States although there remains scope for more prescriptive requirements to be included in domestic rules in some areas.
Some new requirements introduced by the IDD already apply in some form under the UK regime, which had significantly gold-plated the IMD. Key changes for UK insurers will include:
- a new over-arching “customer’s best interests” rule
- restrictions on cross-selling of insurance products bundled with other products
- requirements for intermediaries selling non-life and pure protection products to disclose information about remuneration received in relation to an insurance contract (remuneration disclosure requirements already apply under the current UK regime to the sale of insurance investment products)
- a prohibition on any insurance distributor (which includes insurance undertakings) making any remuneration arrangement which could provide an incentive to itself or its employees to recommend an insurance product other than the one which is best for the customer
- some changes to the scope of activities falling within the regulation of insurance distribution - for example, the mere provision of data and information on potential policyholders to insurers or insurance intermediaries or vice versa will not be within the scope of regulation. Currently, firms carrying out these activities in the UK are usually “introducer appointed representatives”.