We’re proposing to simplify our business by reducing the number of life insurance companies within the Scottish Widows Group from eight to one. We intend to achieve this by transferring the life insurance business of seven companies into an eighth company in the Group, Clerical Medical Investment Group Limited. Renaming is a separate process and is subject to Companies House approval. Its registered office address will be changed to 25 Gresham Street, London EC2V 7HN.
If approved by the High Court, the proposals are expected to come into effect from 31 December 2015.
We believe that the proposals will make our business more efficient, will simplify our corporate structure and regulatory reporting requirements and will help us make better use of our resources, including capital.
No. This is simply a re-organisation of the businesses within the Scottish Widows Group.
The entire long term business of:
Will be transferred to Clerical Medical Investment Group Limited. At the same time as the transfer, Clerical Medical Investment Group Limited will change its name to Scottish Widows Limited and its registered office will be changed to 25 Gresham Street, London EC2V 7HN. It will remain a subsidiary of Scottish Widows Group Limited, which will continue to be registered at 69 Morrison Street, Edinburgh EH3 8BW.
We’re required to undertake the transfer in accordance with a statutory process set out in Part VII of the Financial Services and Markets Act 2000. This requires us to make an application to the High Court to approve the transfers.
We’ll write to policyholders whose policies are affected. Details of the companies affected by the proposals are set out above.
Yes. There will be no changes to the features of affected policies or the branding that appears on our literature and correspondence. Existing policy numbers and terms and conditions will continue to apply.
Policyholders will retain their existing policy documents and these will be recognised by Scottish Widows Limited in the future.
If the proposals are approved, payments will automatically become payable to and from Scottish Widows Limited. Policyholders do not need to take any action and there will be no change to the timings, amounts or frequency of any regular payments to or from policies, or changes to the dates of automated collections.
Yes - subject to the terms and conditions of the policy, which are not changing as a result of these proposals.
From the Effective Date, the transferring Scottish Widows With Profits Fund will be maintained as a separate and distinct with-profits fund in Scottish Widows Limited, alongside the Clerical Medical Investment Group With Profits Fund. The proposals will not result in any significant reduction in security for any policyholders, including those invested in the Scottish Widows With Profits Fund.
There will be some changes built into the Scheme which affect the Scottish Widows With Profits Fund, but they will have no significant impact on the day to day operation of the fund including its: policyholder payout methodologies; quality of customer service; capital protections; investment policy; Additional Account distribution; policyholder expenses and charges; and taxation. The changes to the fund’s operation being made are largely to reflect the implementation of the new Solvency II regulatory regime (European legislation which will introduce a number of important changes for how insurance companies manage their assets and liabilities) and to align governance to industry best practice. These changes would have been made irrespective of the business transfer and should not significantly alter policyholder security or benefit expectations. The Scottish Widows With Profits Fund Principles and Practices of Financial Management (PPFM) will be updated to reflect the changes should they go ahead. We anticipate that these updates will be minor. An updated version of the PPFM will be available from the library from the Effective Date.
If you have a with-profits policy that was transferred to Scottish Widows plc under the Demutualisation Scheme in 2000, the Demutualisation Scheme includes a number of safeguards. These are designed to protect with-profits policyholders’ interests, particularly in relation to the governance and investment policy of the With Profits Fund to which the transferred with-profits policies were allocated. The proposed new Scheme will preserve these, or equivalent, safeguards.
The Scheme also introduces a management action that may allow either with-profits fund to close or both to merge, if the size of the relevant (or either fund in the case of merger) with-profits fund falls below a certain monetary threshold in the future (which is not expected for around another 15 years or more). Such management actions cannot be taken unless the directors of Scottish Widows Limited obtain appropriate actuarial advice, including that of an independent actuary, and receive non-objection from the regulators (the PRA and the FCA). These protections aim to ensure that any affected policyholders will be treated fairly, should either fund close or both merge in the future. This is one of a number of management actions that could be considered in the future.
Also, on the Effective Date, the current non-profit funds and shareholder funds of Scottish Widows plc and the other transferring companies in the Group will immediately transfer to Clerical Medical Investment Group Limited and merge with the non-profit fund and shareholder funds of Clerical Medical Investment Group Limited respectively. Either on this date or at a later stage, depending on the date of the implementation of certain regulations, these funds will merge to form a single fund, which will be called the Combined Fund. At this point, Scottish Widows Limited will comprise the Combined Fund, the Scottish Widows With Profits Fund and the Clerical Medical Investment Group With Profits Fund.
Policies will continue to be protected by capital which is held in the companies to help ensure that benefits are paid under a wide range of scenarios. The amount of this capital will continue to be set at a level significantly in excess of that required under the relevant regulations.
The proposals would result in the transfer of a number of books of business into a single entity, which will result in all of the attaching assets, risks and liabilities coming together. As a result, particular groups of policyholders will become more exposed to certain types of risk, and less exposed to others.
The Independent Expert, who is legally required to review the proposals, has considered these proposals and concluded that the security of benefits for any group of policyholders would not be “materially adversely affected” by them. In particular, he has considered the changes in the risks to which policyholders are exposed and discusses this in paragraphs 6.69 to 6.84 of his report, as well as explaining how this impacted his conclusions on the effect of the proposals on each of the groups of policyholders in Sections 7, 8 and 9.
The Independent Expert’s full report is available in the library.
The Independent Expert will continue to keep the proposals under review up until the date of the High Court hearing. He will also produce a supplementary report shortly before the court hearing which will be published in the library as soon as it is available.
No. Customers will continue to use the same contact details when getting in touch.
If they have a query about the proposed transfer specifically, they can call our dedicated team on 0800 151 2764 (or +44 131 203 3419 if calling from outside the UK).
If a policy is no longer in force and can’t be reinstated, customers don’t need to take any action and can ignore the mailing for that particular policy.
Customers that hold more than one policy with any of the other companies in the Scottish Widows Group may receive a separate letter for each policy. They should read each letter as they may need to consider different information depending on the policy it relates to.
We’ve only written to the named customer we normally contact when dealing with a policy. If a policy is jointly owned, the recipient should make each joint policyholder aware of the proposals and their right to object.
Where a policy is set up under trust, we’ve written one letter addressed to all trustees for the policy. The recipient should make each individual trustee aware of the proposals and their right to object.
No – the proposals are not subject to a vote. They do, however, need to be approved by the High Court. If any policyholder wishes to object to the proposals they have a right to do so.
Yes. An Independent Expert has reviewed the proposals and written a report on how they are likely to affect policyholders. The Independent Expert, Mr. David Murray, is a Senior Actuary and Partner at Deloitte MCS Ltd. He is independent of the companies involved in the proposals and his appointment has been approved by the PRA, one of our regulators. The Independent Expert has concluded that:
“I am satisfied that the proposals will not have any material effect on the level of benefits payable to policyholders (including their reasonable expectations of the benefits that will be payable in the future).
In relation to the security of benefits, I have considered the expected solvency position, noting that it is expected to be well in excess of regulatory requirements immediately post-Scheme and that there are policies in place that aim to maintain that position in future. I note that the proposals will result in the transfer of a number of books of business into a single entity, so all of the attaching assets, risks and liabilities come together. Particular groups of policyholders will become relatively more exposed to certain types of risk, and relatively less exposed to others. I have paid close attention to the larger risks that transfer, and confirm that the attaching reserves and capital that back them also transfer. I am satisfied that these resources are sufficient in each case to cover an adverse scenario plus a significant margin, and have concluded that an adverse impact on the security of policyholder benefits is only possible in extremely remote scenarios. I am therefore satisfied that the transfer does not materially adversely affect the security of the benefits payable to policyholders.
I have considered whether the proposals retain the various protections and principles of the previously approved scheme of demutualisation and have concluded that this is the case.
I am also satisfied that the proposals will not have any impact on the quality of administration services or investment management, or any adverse tax effects.
I will continue to keep the proposals under review and will submit a supplementary report to the High Court shortly before the hearing to decide whether to approve the transfer, in which I will confirm whether my conclusions continue to hold.”
You can obtain a summary of the Independent Expert’s report, or a copy of his full report, from the library.
The Independent Expert will also produce a supplementary report shortly before the court hearing which will be published in the library as soon as it is available.
No. The proposals will only go ahead if the Courts approve them. The High Court will only approve the changes if it is satisfied that the proposals are appropriate, fair to our policyholders and meet the legal requirements. To do this, it will consider the opinion of the Independent Expert and reports from our regulators, the PRA and the FCA. It will also consider objections received from policyholders.
The FCA, PRA and Independent Expert will keep the proposals under review up until the High Court hearing date.
The approval of the High Court is required by law, as transfers of insurance business by insurance companies are governed by the Financial Services and Markets Act 2000. This is an important protection for policyholders.
Following the final High Court hearing, we will publish the High Court’s decision on this website.
If the proposals aren’t approved, the transfer won’t go ahead and all policies will continue to be held by their current company.
Yes. Copies of all documents relating to the proposals are available in the library or can be requested by phone on 0800 151 2764 (or +44 131 203 3419 if calling from outside the UK), or by writing to us at:
Scottish WidowsInsurance Business Transfer DepartmentPO Box 28139EdinburghEH16 9BQ
If you have any questions about the proposals, please see Contact Us for details of the different ways to get in touch. If your query concerns a letter received by a policyholder, please quote the reference number at the top of the letter during any correspondence with us.
If you have a general query about a policy which is not related to the transfer, please use the usual contact details shown in the policy documents.
Yes. If having read the information available a policyholder wishes to object to the proposals they have a right to do so. They can do this by contacting us before the date of the High Court hearing on 0800 151 2764 (or +44 131 203 3419 if you are calling from outside the UK) or by writing to us at the address below, setting out the reasons for their objection. We will then make their views known to the High Court and the Independent Expert.
Alternatively, they are entitled to attend the High Court hearing and express their views in person or send a representative on their behalf. The High Court hearing is scheduled for Thursday 26 November 2015 at 7 Rolls Buildings, Fetter Lane, London EC4A 1NL. If they wish to attend in person, it would help if they could write to us at the address at the top of the letter as soon as possible (and ideally no later than 20 November 2015) setting out the reasons for their concerns. However, they are still entitled to attend the hearing if they haven't contacted us in advance.
Alternatively, they can write to Herbert Smith Freehills LLP, the solicitors acting for us, at:
Herbert Smith Freehills LLPExchange HousePrimrose StreetLondonEC2A 2EG
If they have a policy which was transferred to Scottish Widows plc or Scottish Widows Annuities Limited under the Demutualisation Scheme in 2000, particularly a with-profits policy, they can object to the separate application to the Court of Session. Similarly, if they have a policy which was transferred to Scottish Widows plc or Scottish Widows Annuities Limited under the 2004 Scheme, they can object to the further application to the Court of Session.
The applications will be advertised on or around 1 September 2015 in the Edinburgh Gazette and two national newspapers. Any policyholder who is concerned that the application to the Court of Session may adversely affect them should seek independent legal advice and lodge written “Answers” (formal legal objections) with the Court of Session at Parliament House, Parliament Square, Edinburgh, EH1 1RQ within 42 days after the publication of the last of those advertisements.
The Court of Session may also consider written objections which are not in the form of Answers and/or allow an affected policyholder to appear at the Court of Session hearing in person. If any such policyholder wishes to make written objections, but not in the form of Answers, they should address them to the solicitors acting for us in relation to the Court of Session applications at:
Maclay Murray & Spens LLPQuartermile One15 Lauriston PlaceEdinburghEH3 9EP
Reference – MBL/SCO/314/91
Jersey residents whose policies are managed by Scottish Widows plc, Scottish Widows Annuities Limited or Clerical Medical Investment Group Limited only.
The court hearing for the approval of the Jersey scheme is expected to take place on 2 December 2015 at 9.30am at the Royal Court of Jersey, Royal Court House, Royal Square, St Helier, Jersey JE1 1JG.
If a policyholder intends to appear at the Jersey Court hearing, they should notify us, or Mourant Ozannes, the advocates acting for us, in writing with details of their concerns as soon as possible and preferably by 20 November 2015. If they do not wish to attend the hearing, but do wish to have their written views considered by the Royal Court of Jersey, they should make this clear to us and we can provide their written concerns on the Jersey scheme to the Royal Court of Jersey on their behalf.
You can see or obtain copies of the Representation and the full Independent Expert’s report up to and including the date of the Royal Court hearing. They are available for inspection or collection free of charge between the hours of 9am and 5pm from our Jersey advocates at the address below.
Mourant Ozannes22 Grenville StreetSt HelierJerseyJE4 8PX
Copies are also available from our library at or by calling our helpline on 0800 151 2764 (or +44 131 203 3419 if you are calling from outside the UK).
The court hearing for the approval of the Guernsey scheme is expected to take place on 4 December 2015 at 9.30am at the Royal Court of Guernsey, The Royal Court House, St Peter Port, Guernsey GY1 2NZ.
If a policyholder intends to appear at the Guernsey Court hearing, they should notify us, or Mourant Ozannes, the advocates acting for us, in writing with details of their concerns as soon as possible and preferably by 20 November 2015. If they do not wish to attend the hearing, but do wish to have their written views considered by the Royal Court of Guernsey, they should make this clear to us and we can provide their written concerns on the Guernsey scheme to the Royal Court of Guernsey on their behalf.
You can see or obtain copies of the proposed application to the Royal Court of Guernsey and the full Independent Expert’s report up to and including the date of the Royal Court hearing. They are available for inspection or collection free of charge between the hours of 9am and 5pm from our Guernsey advocates at the address below.
Mourant Ozannes1 Le Marchant StreetSt Peter PortGuernseyGY1 4HP
Copies are also available from the library or by calling our helpline on 0800 151 2764 (or +44 131 203 3419 if you are calling from outside the UK).
Yes. We can provide copies of the letter, Questions and Answers and supporting documentation in a number of formats if required. Please contact us for more information.
For queries about the proposals.
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Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655.
Scottish Widows Unit Trust Managers Limited. Registered in England and Wales No. 1629925. Registered Office in the United Kingdom at Charlton Place, Andover, Hampshire SP10 1RE. Tel: 0345 300 2244. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 122129.
HBOS Investment Fund Managers Limited, registered in England number 941082. Registered office in the United Kingdom at Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 119223.
Scottish Widows Bank is a trading name of Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales, no. 2065. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278.