The High Court has taken the highly unusual measure of blocking a proposal by Prudential to transfer £12bn of annuities to Rothesay Life.
Prudential said it was “disappointed” by the High Court’s decision to block the sale to Rothesay – a private company backed by Blackstone – which was agreed in March last year.
“The Independent Expert, who was appointed to report to the High Court, concluded the transfer would have no material advrotherse effect on the security of benefits or the reasonable benefit expectations of our policyholders,” it added.
Prudential said the decision would not affect the proposed demerger of its UK business, M&G Prudential, from its Asian and US operations, which is expected to be completed later this year.
The two companies had agreed a reinsurance contract covering the policies ahead of the proposed annuity transfer, and the policies will be unaffected by the judgement.
Rothesay said in a statement: “The reinsurance transaction agreements contain provisions to address this outcome and whilst it is not the preferred or optimal outcome for either party, it will not have a material impact on Rothesay Life as a whole. Rothesay Life and [Prudential] are committed to a long term relationship irrespective of the outcome of the proposed insurance business transfer.”
The companies have been granted leave to appeal the judgement by the High Court.
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