Financial Services and Markets Act 2000, section 105

Insurance business transfer schemes

Part VII Control of Business Transfers

(1)A scheme is an insurance business transfer scheme if it—

(a)satisfies [F850the conditionF850] set out in subsection (2);

(b)results in the business transferred being carried on from an establishment of the transferee in [F851the United Kingdom or GibraltarF851] ; and

(c)is not an excluded scheme.

[F852 (2) The condition is that the whole or part of the business carried on in the United Kingdom by an authorised person who has permission to effect or carry out contracts of insurance (“the transferor concerned”) is to be transferred to another body (“the transferee”). F852]

(3)A scheme is an excluded scheme for the purposes of this section if it falls within any of the following cases:

Case 1

Where [F847the transferor concernedF847] is a friendly society.

F853 Case 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Case 3

Where—

(a)[F847 the transferor concernedF847] is a UK authorised person;

(b)F855the business to be transferred under the scheme is carried on in one or more countries or territories [F854outside the United KingdomF854] and does not include policies of insurance . . . against risks arising in [F856the United KingdomF856] ; and

(c)the scheme has been approved by a court in a country or territory [F857outside the United KingdomF857] or by the authority responsible for the supervision of that business in a country or territory in which it is carried on.

Case 4

Where [F858—

(a)the business to be transferred under the scheme is the whole of the business of [F847 the transferor concernedF847] ;F858]

(b)all the policyholders are controllers of the firm or of firms within the same group as the firm which is the transferee, and,

[F859 (c)F859] all of the policyholders who will be affected by the transfer have consented to it.

[F860 CASE 5

Where—

(a)the business of [F847 the transferor concernedF847] consists solely of the effecting or carrying out of contracts of reinsurance;

(b)the business to be transferred is the whole or part of that business;

(c)the scheme does not fall within Case 4;

(d)all of the policyholders who will be affected by the transfer have consented to it; and

(e)a certificate has been obtained under paragraph 2 of Schedule 12 in relation to the proposed transfer.F860]

[F861 Case 6

Where the scheme is effected under Part 7A (unilateral changes to pension schemes).F861]

(4)F862The parties to a scheme which falls within Case ... [F8633, 4 or 5F863] may apply to the court for an order sanctioning the scheme as if it were an insurance business transfer scheme.

[F864 (5)If the scheme involves a compromise or arrangement falling within Part 27 of the Companies Act 2006 (mergers and divisions of public companies), the provisions of that Part (and [F865 Part 26 or 26A of that Act, as the case may beF865] ) apply accordingly but this does not affect the operation of this Part in relation to the scheme.F864]

(8) “UK authorised person” means a body which is an authorised person and which—

(a)is incorporated in the United Kingdom; or

(b)is an unincorporated association formed under the law of any part of the United Kingdom.

(9) “Establishment” means, in relation to a person, his head office or a branch of his.

Read section 105 in the full Act → Definitions (7) Cases (22)

Definitions used in section 105

authorised person

“authorised person” has the meaning given in section 31(2);

Defined in s.417(1) · see it in the full Act

(2) In this Act “authorised person” means a person who is authorised for the purposes of this Act.

Defined in s.31(2) · see it in the full Act
the transferor concerned

(2) In this Part, “the transferor concerned”—

(a)in the case of an insurance business transfer scheme, is to be read in accordance with section 105(2);

(b)in the case of a banking business transfer scheme, is to be read in accordance with section 106(2);

(c)in the case of a reclaim fund business transfer scheme, means the reclaim fund to whose business the scheme relates.

(d)in the case of a ring-fencing transfer scheme, means the body to whose business the scheme relates.

Defined in s.103A(2) · see it in the full Act
friendly society

“friendly society” means an incorporated or registered friendly society;

Defined in s.417(1) · see it in the full Act
UK authorised person

“UK authorised person” has the meaning given in section 191G(1) ;

Defined in s.417(1) · see it in the full Act
policy

(2) In this Act “policy” and “policyholder”, in relation to a contract of insurance, have such meaning as the Treasury may by order specify.

Defined in s.424(2) · see it in the full Act
policyholder

(2) In this Act “policy” and “policyholder”, in relation to a contract of insurance, have such meaning as the Treasury may by order specify.

Defined in s.424(2) · see it in the full Act
group

(1) In this Act “group”, in relation to a person (“A”), means A and any person who is—

(a)a parent undertaking of A;

(b)a subsidiary undertaking of A;

(c)a subsidiary undertaking of a parent undertaking of A;

(d)a parent undertaking of a subsidiary undertaking of A;

(e)an undertaking in which A or an undertaking mentioned in paragraph (a), (b), (c) or (d) has a participating interest;

(f)if A or an undertaking mentioned in paragraph (a) or (d) is a building society, an associated undertaking of the society; or

(g)if A or an undertaking mentioned in paragraph (a) or (d) is an incorporated friendly society, a body corporate of which the society has joint control (within the meaning of section 13(9)(c) or (cc) of the Friendly Societies Act 1992).

Defined in s.421(1) · see it in the full Act

Cases considering section 105 (22)

Southern Rock Insurance Company Limited, Re

[2025] EWHC 3539 (Ch) · 28 November 2025Interprets

Defines the statutory framework for an insurance business transfer scheme. The court held that the proposed scheme engaged section 105, subject to satisfying its conditions (see paras [9]-[16]). Applies the requirement that the transferred business be carried on from an establishment of the transferee in the United Kingdom or Gibraltar. Alwyn’s Gibraltar establishment satisfied the requirement (see paras [9], [15](ii)). Applies the condition requiring transfer of whole or part of business carried on in the United Kingdom by an authorised person permitted to effect or carry out insurance contracts. The condition was satisfied (see paras [9], [15](i)). Applies the exclusion provisions for insurance business transfer schemes. The scheme did not fall within an excluded category (see paras [9]-[10], [15](iii)).

Scottish Windows Limited, Re

[2025] EWHC 1482 (Ch) · 14 May 2025Defines

The court confirmed that the proposed transfer was not an excluded scheme and was therefore capable of approval under Part VII. (see para [23])

Phoenix Life Assurance Limited & Ors, Re

[2023] EWHC 2612 (Ch) · 19 October 2023Defines

Defines the scheme as an insurance business transfer scheme for the purposes of the statutory Part 7 regime. The classification engaged the requirement for court sanction. (see para [6])

2 more judgments, and what each says about section 105, are in the case-law panel in the full Act.

Explanatory note

197.This section defines the insurance business transfers covered by the new mechanism.  It only applies to transfer schemes where, after the transfer, the business transferred will be carried on from an establishment in the EEA, and where prior to the transfer all or part of the business to be transferred is:

  • carried on, wholly or in part, in the EEA by a “UK authorised person” (defined in subsection (8)); or

  • reinsurance business and it is carried on in the UK branch of an EEA firm (see Schedule 3); or

  • carried on, wholly or in part, in the United Kingdom by an authorised person who is neither a UK authorised person nor an EEA firm.

198.In each case the authorised person transferring the business must have the appropriate permission under Part IV of, or Schedule 3 to, the Act.

199.However, subsection (3) sets out a series of cases for which the new mechanism does not apply. The mechanism does not apply where the transferor is a friendly society (referred to as case 1). Such transfers are covered by provisions in the Friendly Societies Act 1992.  The other cases are where the arrangements under this Part do not apply are:

  • transfers of reinsurance business by UK authorised persons which have been approved by a court in another EEA State or by the relevant regulator in the State or States in which it is carried on (case 2);

  • transfers of business carried on outside the EEA which do not include policies (other than reinsurance policies) against risks arising in the EEA, and which have been approved by the courts or relevant authorities in a non-EEA State (case 3);

  • where each of the policyholders has consented to the transfer, in cases of reinsurance business and entities where the policyholders are ‘controllers’ (within the meaning of Part XII) of the firm or other firms in the same group, essentially “captive” insurers (case 4).

200.Subsections (5) to (7) ensure that the powers of a court to make orders under the Companies Act (and the equivalent Northern Ireland provisions) dealing with schemes for reconstruction (compromises or arrangements agreed with creditors) can apply in transfers covered by the arrangements under the Part.

All the explanatory notes for the Act

Amendments and notes

18 notes from legislation.gov.uk

Amendments

  1. F850Words in s. 105(1)(a) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 32(2)(a) (with transitional provisions in S.I. 2019/710, regs. 1(4), 36, Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1) this amendment is subject to savings and/or transitional provisions, see the commentary.
  2. F851Words in s. 105(1)(b) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 32(2)(b) (as amended by S.I. 2019/680, regs. 1(3), 9(2)) (with transitional provisions in S.I. 2019/710, regs. 1(4), 36, Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1) this amendment is subject to savings and/or transitional provisions, see the commentary.
  3. F852S. 105(2) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 32(3) (with transitional provisions in S.I. 2019/710, regs. 1(4), 36, Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1) this amendment is subject to savings and/or transitional provisions, see the commentary.
  4. F847Words in Pt. 7 substituted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 1 para. 2; S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1
  5. F853Words in s. 105(3) omitted (31.12.2020) by virtue of The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 32(4)(a) (with transitional provisions in S.I. 2019/710, regs. 1(4), 36, Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1) this amendment is subject to savings and/or transitional provisions, see the commentary.
  6. F855Words in s. 105(3) Case 3(b) omitted (10.12.2007) by virtue of The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 2(1)(c)
  7. F854Words in s. 105(3) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 32(4)(b)(i) (with transitional provisions in S.I. 2019/710, regs. 1(4), 36, Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1) this amendment is subject to savings and/or transitional provisions, see the commentary.
  8. F856Words in s. 105(3) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 32(4)(b)(ii) (with transitional provisions in S.I. 2019/710, regs. 1(4), 36, Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1) this amendment is subject to savings and/or transitional provisions, see the commentary.
  9. F857Words in s. 105(3) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 32(4)(b)(iii) (with transitional provisions in S.I. 2019/710, regs. 1(4), 36, Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1) this amendment is subject to savings and/or transitional provisions, see the commentary.
  10. F858Words in s. 105(3) Case 4 substituted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 2(1)(d)(i)
  11. F859Words in s. 105(3) Case 4 substituted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 2(1)(d)(ii)
  12. F860S. 105(3) Case 5 inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 2(1)(e)
  13. F861S. 105(3) Case 6 inserted (29.4.2026 for specified purposes) by Pension Schemes Act 2026 (c. 22), ss. 49(3), 133(1)(4)(e) text inserted for certain specified purposes only, see the commentary.
  14. F862Word in s. 105(4) omitted (31.12.2020) by virtue of The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 32(5) (with transitional provisions in S.I. 2019/710, regs. 1(4), 36, Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1) this amendment is subject to savings and/or transitional provisions, see the commentary.
  15. F863Words in s. 105(4) substituted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 2(1)(f)
  16. F864S. 105(5) substituted (6.4.2008) for s. 105(5)-(7) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(2), 3(1), Sch. 1 para. 211(1) (with arts. 6, 11, 12)
  17. F865Words in s. 105(5) substituted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 18 (with ss. 2(2), 5(2))

Modifications

  1. C321S. 105 modified (31.12.2020) by The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/710), reg. 1(3), Sch. para. 4, 5, 6(2); 2020 c. 1, Sch. 5 para. 1(1)