Guidance Note: Transfers of Insurance Business under the Insurance Business (Jersey) Law 1996 (2014-01-10)

Summary

This JFSC guidance note explains the regulatory approval process for transfers of insurance business under Article 27 and Schedule 2 of the Insurance Business (Jersey) Law 1996. It sets out what documentation permit holders (Transferors and Transferees) must give the JFSC, and the timing of that documentation around the two Royal Court hearings involved in sanctioning a transfer scheme.

• Documentation for JFSC review: Representation to the Royal Court, Independent Actuary's report, the Jersey (and related overseas) transfer scheme document, affidavits/witness statements, policyholder communication documents, the legal notice for the Jersey Gazette, and, for Category A permit holders, overseas regulator contact details.
• First hearing (directions): A statement summarising the scheme and the Independent Actuary's report must normally be sent to policyholders and members of both Transferor and Transferee unless the Court directs otherwise; JFSC will consider requests to waive this notification requirement.
• Second hearing (sanction): Copies of the representation, actuary's report and any policyholder statement must be served on JFSC before the second hearing; JFSC considers the scheme's purpose, effect on policyholder security and benefit expectations, actuarial opinion, foreign regulator comments and policyholder objections.
• Novations: Insurers proposing a novation (or series of novations) must consider whether it amounts to a transfer of insurance business subject to Article 27/Schedule 2, and must document the rationale for their conclusion in governance records.
• Post sanction: Once a scheme is sanctioned, two copies of the Court Order must be deposited with the JFSC within a set period unless a longer period is agreed.

The guidance is procedural rather than creating new substantive rights, but failure to meet the stated timelines can prevent the JFSC from advising the Court on derogations or confirming no objection to the scheme.

Key obligations

• Provide the full transfer scheme documentation (representation, Independent Actuary's report, transfer scheme document(s), affidavits/witness statements, policyholder communication documents, Jersey Gazette legal notice, and for Category A permit holders overseas regulator contact details) to the JFSC no later than 15 business days before the first Royal Court hearing.
• If not all documents are available, provide details of proposed derogations under paragraph 4(b) of Schedule 2 at least 10 business days before the JFSC needs to consider them, or the JFSC may be unable to advise the Court.
• Send the statutory statement (terms of scheme and summary of Independent Actuary's report) to each policyholder and member of the Transferor and Transferee unless the Court directs otherwise or a waiver is granted.
• Provide the JFSC with full details and reasons for any proposed waiver of policyholder/member notification requirements to be requested at the first hearing.
• Advise the JFSC of the number of policyholders with a current Jersey address included in the proposed transfer scheme.
• Serve a copy of the representation to the Court, the Independent Actuary's report and any statement sent under paragraph 4(b) on the JFSC not less than 21 days before the date of the second hearing.
• Provide the JFSC with details of any objection relating to the Jersey scheme before affidavits are sworn and filed.
• Insurers considering a novation must document in their governance records the rationale for concluding whether or not Article 27 and Schedule 2 apply.
• Deposit two copies of the Court Order sanctioning the scheme with the JFSC within 10 days of the date of the Order, unless a longer period has been agreed with the JFSC.

Applies to

Insurance permit holders (Category A and other) under the Insurance Business (Jersey) Law 1996, Insurers acting as Transferor or Transferee in an insurance business transfer scheme

Deadlines

• 15 business days before the first hearing is scheduled in the Royal Court: Transfer scheme documentation should be provided to the JFSC.
• 10 business days: Minimum time the JFSC requires to consider proposed derogations under paragraph 4(b) of Schedule 2 if not all documents are available earlier.
• not less than 21 days before the date of the second hearing: Representation to the Court, Independent Actuary's report and any policyholder statement must be served on the JFSC.
• within 10 days of the date of the Order: Two copies of the Court Order sanctioning the scheme must be deposited with the JFSC, unless a longer period is agreed.