Rothesay Life has filed an appeal against the High Court’s decision to block the proposed transfer of £12bn of annuities from Prudential.
Rothesay Life lodged its notice of appeal on Friday (September 27) on the basis that the judgment contained what it claimed were material errors of law and should therefore be reconsidered.
It is not yet known when the appeal will be heard but is not expected to be this year.
In a statement Rothesay Life said: “We have asked the Court of Appeal to set aside the judgment and sanction the transfer.
“The appeal is unlikely to be heard for several months and the Court of Appeal will then need time to deliver its judgment. So the outcome of the appeal will not be known for some time.”
In March 2018, Prudential announced its plan to sell £12bn of annuities to derisking expert Rothesay Life, covering 400,000 policies.
But last month (August 16), the High Court blocked the sale, otherwise known as a Part VII transfer, over client detriment concerns.
Judge Justice Snowden found Prudential had never mentioned to its clients that a transfer to another provider could occur.
He also found there was a fair degree of disparity between the two providers, which could impact clients, with Rothesay being “a relatively new entrant without an established reputation in the business”.
This came as a shock to the industry as the deal had already been approved by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) but the court documents revealed there was opposition from a number of policyholders who had assumed Prudential was committed to making payments to them for the remainder of their lives.
Mr Snowden found that many policyholders would have chosen the Prudential Assurance Company – a subsidiary of Prudential - as the provider for their annuities based on its age, established reputation and the financial support it would be likely to receive from the wider Prudential group if the need were ever to arise.
Rothesay Life doesn’t have the same capital management policies, or the backing of a large group to support it should the need arise over the lifetime of the annuity policies, Mr Snowden said.
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