IN THE MATTER OF PHOENIX LIFE LIMITED & Ors

The court may give prospective guidance on a pure jurisdictional point at an early stage of an insurance business transfer scheme, particularly where timing pressures make guidance practically valuable. Such guidance must remain provisional where affected policyholders have not yet had an opportunity to be heard and must not determine their later arguments.

Under paragraph 2 of the Schedule to the 2019 Regulations, the relevant deadline concerns when the court’s sanction order is made, not when the scheme becomes effective. An order under section 112 of FSMA may also be made after that deadline if the sanction order under section 111 was made before it.

Phoenix Life Limited, Reassure Life Limited and Phoenix Life Assurance Europe Designated Activity Company applied for prospective guidance concerning a proposed Brexit-related insurance business transfer scheme under Part 7 of the Financial Services and Markets Act 2000.

The applicants sought confirmation that the court could sanction the scheme before 31 December 2022 even though the transfer would become effective after that date, and that ancillary orders under section 112 could be made later. The application was heard before policyholders had been notified or given an opportunity to object. The central issues were whether the court should give guidance at that stage and how paragraph 2 of the Schedule to the 2019 Regulations operated.

1. Prospective guidance. The court declined to grant a final declaration binding on policyholders because they had not yet been able to exercise their rights under section 110 of the Financial Services and Markets Act 2000. However, following the approach in Re Barclays Bank PLC and others [2017] EWHC 1482 (Ch), and having regard to the caution explained in Re Certain of the Members at Lloyd’s and Lloyd’s Insurance Company SA [2018] EWHC 3228 (Ch), the court could express provisional views to facilitate efficient case management. The guidance would not restrict later submissions or determine the sanction application.
2. Meaning of “made”. Paragraph 2 of the Schedule to the 2019 Regulations limited the period in which an order sanctioning a transitional insurance business transfer scheme could be made. The ordinary meaning of “made” referred to the court’s pronouncement of an enforceable order, normally when sealed. It did not include the separate event when the scheme became effective.
3. Separate statutory events. Section 111(2)(b) of FSMA contemplated that the transferee might obtain authorisation before the scheme took effect, confirming that sanction and effectiveness were distinct. The structure of section 112, and the prospective guidance in Re Barclays Bank PLC and Barclays Bank Ireland PLC [2018] EWHC 2868 (Ch), likewise supported that distinction.
4. Ancillary orders. Section 112 expressly permitted provision to be made by the sanction order or by a subsequent order. An order made after 31 December 2022 under section 112 was not an order made under section 111 and was therefore not caught by paragraph 2’s deadline.
5. The court accordingly gave prospective guidance that the proposed construction was correct, subject to policyholders’ right to challenge it at the sanction hearing.

First instance application for prospective guidance. No appeal or earlier decision in the same proceedings is stated.