Halifax companies want to transfer insurance business within Lloyds
TWO companies which are part of the Lloyds banking group have brought petitions for transfer of their life and non-life insurance businesses to two London-based based companies within the same group.
The companies - Halifax Insurance Ireland Ltd (HIIL) and Halifax Assurance Ireland Ltd (HAIL), both with registered offices at Shannon, Co Clare - have 220 employees.
They said they anticipate most employees associated with the carrying out of policy administration services will be transferred to a outsourcing company, Wipro Outsourcing Services Ireland Ltd.
The companies said a small number of employees will remain in HIIL and HAIL until completion of the transfer of policies to St Andrews Insurance plc and St Andrews Life Assurance plc after which they will be made redundant.
A further small number of employees will be made redundant on transfer of the administration of the business.
Denis McDonald SC, for the companies, applied to Mr Justice Peter Kelly today to fast-track in the Commercial Court the hearing of the petitions for transfer of the businesses.
The judge agreed to admit the case to the court, made directions for advertisement of the petitions and associated directions, and listed the petitions for hearing on October 11th next.
He was anxious the employees be given clear information of what was being proposed, he also said.
In May 2012, HIL had some 633,776 payment protection insurance policies issued. Of those, only 2,267 were issued to policyholders now living outside the UK, including 242 now residing in Ireland.
The group stopped selling PPI policies in July 2010 following a period of regulatory uncertainty and scrutiny surrounding such policies.
In May 2012, HAIL had 438,499 PPI policies issued, including 435,790 written jointly with HIIL and 2,709 on a stand-alone basis. In May 2012, HAIL had 2,558 policyholders now living outside the UK, including
279 in Ireland.
HIIL and HAIL did not underwite any other lines of business and their existing books of business are being run off which could take "a very long time", according to the petition.
Lloyds Banking Group plc had considered selling the business of the companies to a third party but later agreed this would be more costly, time consuming and disruptive to policyholders than the transfer option, the petitions stated.
It was considered transfer to the St Andrews's companies would best safeguard policy holders interests and was in the interests of the policyholders, the petitions added.
The petitions stated every holder of a transferring policy will have the same rights against the St Andrews companies while the liabilities under those policies will also become the liabilities of the St Andrews companies.
An independent actuary who reviewed the transfer scheme had concluded it would not have a material adverse effect on the security of benefits for any of the policyholders involved or on their reasonable benefit expectations, it was also stated.