FSMA 2000 s.109 – Scheme reports: insurance business transfer schemes

(1) An application under section 107 in respect of an insurance business transfer scheme must be accompanied by a report on the terms of the scheme (“a scheme report”).

(2)A scheme report may be made only by a person—

(a)appearing to the [^F874appropriate regulator^F874] to have the skills necessary to enable him to make a proper report; and

(b)nominated or approved for the purpose by the [^F874appropriate regulator^F874] .

(3)A scheme report must be made in a form approved by the [^F874appropriate regulator^F874] .

[^F875 (4)Where the appropriate regulator is the PRA, it must consult the FCA before—

(a)nominating or approving a person under subsection (2)(b), or

(b)approving a form under subsection (3).

(5)Subsection (6) applies where the appropriate regulator is the FCA and either—

(a)the transferee is a PRA-authorised person, or

(b)[^F847 the transferor concerned^F847] or the transferee has as a member of its immediate group a PRA-authorised person.

(6)The FCA must consult the PRA before—

(a)nominating or approving a person under subsection (2)(b), or

(b)approving a form under subsection (3).^F875]

Read section 109 in the full Act → Definitions (7) Cases (31)

Definitions used in section 109

the appropriate regulator

(1) In this Part “the appropriate regulator” means—

(a)in relation to a ring-fencing transfer scheme or a scheme (other than a ring-fencing transfer scheme) in respect of which the transferor concerned is a PRA-authorised person, the PRA;

(b)in any other case, the FCA.

Defined in s.103A(1) · see it in the full Act

appropriate regulator

(11) The FCA is the “appropriate regulator” in the case of a contravention of any other requirement , other than a case falling within paragraph 26 of Schedule 17A .

Defined in s.380(11) · see it in the full Act

the PRA

“the PRA” means the Prudential Regulation Authority;

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

the FCA

(2) The Financial Conduct Authority is in this Act referred to as “the FCA”.

Defined in s.1A(2) · see it in the full Act

“the FCA” means the Financial Conduct Authority;

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

PRA-authorised person

(5) In this Act “PRA-authorised person” means an authorised person who has permission—

(a)given under Part 4A, or

(b)resulting from any other provision of this Act,

Defined in s.2B(5) · see it in the full Act

“PRA-authorised person” has the meaning given in section 2B(5);

Defined in s.417(1) · 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

immediate group

In this Act “immediate group”, in relation to a person (“A”), means—

(a)A;

(b)a parent undertaking of A;

(c)a subsidiary undertaking of A;

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

(e)a parent undertaking of a subsidiary undertaking of A.

Defined in s.421ZA · see it in the full Act

Cases considering section 109 (31)

Mercantile Indemnity Company Limited & Ors, Re

[2025] EWHC 3396 (Ch) · 23 December 2025

A scheme application must be accompanied by a scheme report on the terms of the scheme. (see paras [42]-[46]) The scheme report must be prepared by a person with the necessary skills who is nominated or approved by the appropriate regulator. (see paras [43]-[46]) The scheme report must be in a form approved by the appropriate regulator; the independent expert’s appointment and report satisfied that requirement. (see paras [43]-[47])

Southern Rock Insurance Company Limited, Re

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

Applies the requirement for an independent expert’s report. The report and supplementary report were considered in assessing policyholder security and service standards (see paras [19]-[23]).

Scottish Windows Limited, Re

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

The court confirmed that an application must be accompanied by a scheme report from the independent expert. (see para [47]) The court applied the requirements governing the expert’s skills, nomination or approval by the appropriate regulator. (see paras [47]-[49]) The court noted that the scheme report must be in a form approved by the appropriate regulator. (see para [47])

Phoenix Life Assurance Limited & Ors, Re[2023] EWHC 2612 (Ch) · 19 October 2023
In the matter of USAA Limited[2022] EWHC 3161 (Ch) · 21 November 2022
In the Matter of Zurich Insurance Public Limited Company[2022] EWHC 3047 (Ch) · 3 November 2022
Society of Lloyd's, Re (Part VII of the Financial Services and Markets Act 2000)[2020] EWHC 3266 (Ch) · 30 November 2020
Legal And General Assurance Society Ltd, Re[2020] EWHC 2299 (Ch) · 20 August 2020
Equitable Life Assurance Society, Re Companies Act 2006[2019] EWHC 3336 (Ch) · 4 December 2019
Scottish Widows Ltd, Re[2019] EWHC 642 (Ch) · 18 March 2019
Lloyds Insurance Company SA, Re[2018] EWHC 3228 (Ch) · 21 November 2018
Excess Insurance Company Ltd & Ors, Re[2015] EWHC 3572 (Ch) · 8 December 2015
Commercial Union Life Assurance Company Ltd, Re[2009] EWHC 2521 (Ch) · 16 October 2009
Equitas Ltd (the Names At Lloyd's for the 1992 and Prior Years of Account), Re[2009] EWHC 1595 (Ch) · 7 July 2009
Equitas Ltd, Re[2008] EWHC 2960 (Ch) · 3 December 2008
Re Windsor Life Assurance Company Ltd[2007] EWHC 3429 (Ch) · 13 December 2007
First Alternative Insurance Company Ltd v Esure Insurance Ltd[2006] EWHC 694 (Ch) · 14 March 2007
Alba Life Ltd. & Ors, Re[2006] EWHC 3507 (Ch) · 8 December 2006
Pearl Assurance (Unit Linked Pensions) Ltd, Re[2006] EWHC 2291 (Ch) · 14 September 2006
Eagle Star Insurance Company Ltd & Anor, Re[2006] EWHC 1850 (Ch) · 29 June 2006

11 more judgments, and what each says about section 109, are in the case-law panel in the full Act.

Explanatory note

206.Under this section, it is a requirement that a proposal to transfer insurance business is to be accompanied by a report by an expert. The coverage of the report may be determined by the Authority and the appointment of the expert is subject to the approval of the Authority. The purpose of this section is to ensure that the court is presented with a full and accurate report of the proposed transfer by an independent expert in order that the court may properly assess its impact, including the effect on policyholders of the authorised person in question (and any third parties who may rely on their policies).

All the explanatory notes for the Act

Amendments and notes

5 notes from legislation.gov.uk

Amendments

F873S. 109 heading substituted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 1 para. 7; S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1
F874Words in s. 109 substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 3(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
F875S. 109(4)-(6) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 3(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
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

Modifications

C324S. 109 applied (1.12.2001) by S.I. 2001/3626, arts. 1, 3(a)