16th Aug 2019 12:47
(Alliance News) - FTSE 100-listed insurer Prudential PLC said Friday a UK court refused to agree to an annuities portfolio transfer from one of its subsidiaries to Rothesay Life PLC.
In March 2018, Prudential Assurance Co Ltd - a subsidiary of soon-to-be-spun-off M&GPrudential PLC - agreed a deal that would see Rothesay re-insure GBP12.0 billion in shareholder-backed annuity liabilities covering 400,000 customers.
This was expected to be followed by the transfer of the business. At the time, Rothesay explained the deal would have been the "largest transaction of its type in the UK" and would have seen its assets under management jump to over GBP37 billion and insuring 750,000 people.
The High Court of England & Wales has since declined to sanction the transfer of the assets to Rothesay. This was despite an independent expert appointed by the court concluding the transfer would have "no material adverse effect" on the security of the benefits of the policyholders.
Prudential said it was "disappointed" by the court decision, but emphasised that the earlier reinsurance deal with Rothesay remains in place and the court decision has "no effect" on the capital position of the Prudential Assurance Co.
Prudential and Rothesay have been granted leave to appeal the court decision.
Shares in Prudential were 0.4% higher at 1,434.99 pence in London on Friday.
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