Latham Secures Significant Milestone for Rothesay Before UK High Court

Latham & Watkins represented Rothesay Life Plc (Rothesay) on its successful application before the High Court of England and Wales sanctioning a £10.1 billion annuity book transfer from The Prudential Assurance Company Limited (PAC) to Rothesay Life Plc (Rothesay) under Part VII of the Financial Services and Markets Act 2000 (FSMA).

In March 2018, Rothesay and PAC entered into a reinsurance transaction covering a £11.7 billion portfolio of over 366,000 annuities. It was expected that this would be followed by an insurance business transfer under Part VII FSMA. Following an initial sanction hearing in July 2019, the High Court declined to sanction the transfer. Latham advised Rothesay on its successful appeal before the Court of Appeal in December 2020, overturning the High Court judgment, a landmark decision clarifying the law on the exercise of the Court’s discretion in Part VII transfers. The transfer was remitted to the High Court for a further sanction hearing (the Remitted Sanction Hearing). 

On 24 November 2021, the High Court sanctioned the £10.1 billion annuity book transfer. The judgment provides a clear statement of the approach that the Court should take in deciding whether or not to exercise its discretion under s.111(3) of FSMA to sanction a proposed transfer following the principles set out in the Court of Appeal’s decision.

Latham & Watkins advised Rothesay on the transaction and the Remitted Sanction Hearing with a team led by London insurance M&A partner Victoria Sander with associates Chris Ramsey and Warren Wellington.