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Member, Beacon International Group, Ltd.
LONDONThe High Court in London Wednesday sanctioned a so-called Part VII transfer of the business of a Lloyd's of London syndicate to an outside company, the first time such a mechanism has been used at Lloyd's.
Part VII transfers, which were introduced in the Financial Services and Markets Act 2000, allow the transfer of some or all of the policies of one company to another, subject to court approval.
In the Lloyd's case, the High Court gave approval for the business of Lloyd's syndicate 982, which is in runoff, to be transferred to Sterling Life Ltd.
Syndicate 982, formerly managed by Crowe Syndicate Management, wrote mainly short-term life business.
The syndicate was placed into runoff in 2002 and transferred to Spectrum Syndicate Management Ltd.
The move marks a break from conventional Lloyd's practice where syndicates were placed in runoff and eventually shut-down through the purchase of reinsurance-to-close contracts with other syndicates.