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LONDON, Dec 2 (Reuters) - A UK court of appeal on Wednesday
overturned a judgment blocking the transfer of 12 billion pounds
($15.97 billion) in annuities from insurance giant Prudential to
specialist provider Rothesay Life, paving the way for a second
transfer hearing.
The deal, which would have been the largest ever such
transfer covering 400,000 policyholders, was announced in 2018
at the same time as Prudential said it would split in two. The
annuities - which pay pensioners a fixed income for life - are
now managed by M&G, Prudential's former UK arm.
The High Court in London last year blocked the deal
following representations from around 1,000 policyholders, who
were wary about the financial strength of Rothesay, a major
player in the sector.
But the High Court was wrong to assume there was a material
difference between the level of financial support which the two
firms could offer, according to a summary of the appeal judgment
published on Wednesday.
"This will be very well received by the insurance industry,
as the original and unprecedented ruling risked stymieing
corporate activity," said Michael Abramson, partner at
consultants Hymans Robertson.
Insurers frequently transfer books of business to one
another, but the process requires court approval.
Another hearing for the policy transfer can now go ahead,
the appeal court said.
The hearing is likely to take place late next year, a
Rothesay spokesperson said.
($1 = 0.7513 pounds)
(Reporting by Carolyn Cohn, editing by Louise Heavens)
