How To Understand The Plan To Change Your Life Insurance Policy

Transcription

1 INFORMATION GUIDE ABOUT THE PROPOSED TRANSFER OF THE LIFE ASSURANCE BUSINESS OF CUNA MUTUAL LIFE ASSURANCE (EUROPE) LIMITED (CMLAE) TO STERLING LIFE LIMITED (SL) Pursuant to Section 13 of the Assurance Companies Act 1909, Section 36 of the Insurance Act 1989 (as amended) and Article 35 of the European Communities (Life Assurance) Framework Regulations 1994 (as amended) 19

2 THIS DOCUMENT IS IMPORTANT PLEASE READ IT CAREFULLY. NO ACTION IS REQUIRED BY YOU BUT IF YOU ARE IN ANY DOUBT ABOUT THE PROPOSAL YOU SHOULD CONSULT YOUR FINANCIAL ADVISOR CONTENTS SECTION 1: COMMUNICATION FROM CMLAE CEO 2 SECTION 2: SUMMARY OF THE SCHEME 5 SECTION 3: YOUR QUESTIONS ANSWERED 7 SECTION 4: SUMMARY OF INDEPENDENT ACTUARY S REPORT 10 SECTION 5: GENERAL INFORMATION 15 SECTION 6: OFFICIAL NOTIFICATION 16 APPENDIX: DEFINITIONS 18 WHERE CAPITALISED TERMS APPEAR IN THIS DOCUMENT (MARKED WITH AN ASTERIX), PLEASE REFER TO THE DEFINITIONS SECTION IN THE APPENDIX, WHICH EXPLAINS THEIR MEANING. 1

3 SECTION 1 - COMMUNICATION FROM THE CEO OF CMLAE Dear Policyholder, Introduction I am writing to you, as a valued policyholder (or in the case of Family Protection Plan (UK) / Group Family Life+ (Ireland*) a certificate holder) of a life assurance policy with CUNA Mutual Life Assurance (Europe) Limited (CMLAE*) to inform you of a forthcoming change in the underwriting of your cover that we re planning to undertake. CMLAE s* parent company has decided to restructure its European distribution and underwriting operations with a view to repositioning its franchise in Europe. As part of this restructuring, your policy/certificate will transfer from CMLAE* to Sterling Life Limited, (SL*). There will be no change to the terms of your policy/certificate, or any of your benefits as a consequence of the change in underwriter. On an occasion such as this, where we are planning to transfer your policy/certificate, we are required to apply a process which includes obtaining permission from the regulators in markets where we operate, i.e. the regulators in Ireland*, the regulators in the United Kingdom, and the High Court of Ireland. As CMLAE* is authorised by the Central Bank of Ireland* to carry on life assurance business, Irish law relating to the transfer of insurance business applies. This means that the Transfer* must be approved by the High Court of Ireland in a plan referred to as a Scheme*. It will also be necessary to have the consent of the Central Bank of Ireland* (as the insurance regulator in Ireland)* and both the Prudential Regulation Authority* and Financial Conduct Authority* in the United Kingdom. The objective of this letter and the attached documents is to fully inform you of this planned process. It aims to reassure you that the benefits and rights you currently have will be unaffected, explain our role, SL s role and the process that the Court* and regulators will take to ensure that you are protected throughout the process. Certain defined terms (marked with an asterisk*) are used in this Circular*, of which this letter forms a part. The meanings of those terms are given in the Appendix on page 18. Company Information CMLAE* was incorporated in Ireland* on 23 rd July It is authorised to transact life assurance business by the Central Bank of Ireland*. SL* was incorporated in England on 21 st July It is authorised to transact life assurance business by the Prudential Regulation Authority*. 2

4 Procedure for Implementing the Scheme The Transfer* can only take place with the sanction of the Court* in accordance with the 1909 Act* and does not require the consent of policyholders. A Petition by the Board of Directors (the Board) of each of CMLAE* and SL* to the Court* was filed in Court* and an application for directions was made to the Court* on 15 th December The Court* has directed that the hearing of the Petition will take place on Thursday 16 th April 2015 at 11am. The Court* will hear any person whom it considers ought to be heard (in particular, you are entitled to be heard as a policyholder should you have concerns) and may sanction the Scheme* if it is satisfied that no sufficient objection has been established. If the Court* sanctions the Scheme* and the conditions precedent are satisfied, the Scheme Date* (on which the Transfer* takes effect) is expected to be 1 st June Advertisements will appear in the legal notice sections in newspapers, i.e. Iris Oifigiúil, the Irish Independent, the Irish Times and the Financial Times (International Edition), the London Gazette, the Edinburgh Gazette, the Belfast Gazette, the English Times and the Financial Times (United Kingdom edition) advertising the hearing of the Petition. Actuarial Report Irish law requires that a report on the Scheme* and its effect on policyholders be prepared by an Independent Actuary*. Mr. Brian Morrissey, a Fellow of the Society of Actuaries in Ireland and of KPMG (having an address at KPMG, 1 Harbourmaster Place, International Financial Services Centre, Dublin 1, Ireland) has prepared such a report (a summary of which is set out in Section 4 of this Circular), setting out his views on the effect of the Scheme* on policyholders. He has concluded that the Transfer* will not have a material adverse effect on the security of benefits for any of the policyholders involved and will not have a material adverse effect on the reasonable benefit expectations of any of the policyholders involved. Additional Information If you have any questions on the Scheme*, or if you require more information please feel free to call CMLAE* Customer Services (quoting Scheme transfer) on (UK) or (Ireland*). Copies of the Petition, the Scheme*, and the full report of the Independent Actuary* will also be provided: on request from CMLAE* or SL* at the office address listed in Section 5 of this Circular* or by telephone at the numbers mentioned above; on the CUNA Mutual Group website at (UK) or (Ireland*); and on the Sterling Group website at 3

5 Conclusion The directors of each of CMLAE* and SL* are of the view that the proposed Transfer* will not diminish in any way the security or future benefits of any of CMLAE s* policyholders. We are grateful for your business and you may be assured that SL* looks forward to meeting your insurance needs in the future. Thank you for your time and if you have any questions please do not hesitate to contact me, or any of our team directly on the number above. Yours faithfully, Paul J. Walsh CEO, CMLAE 4

6 SECTION 2 - SUMMARY OF THE TERMS OF THE SCHEME General The following is a statement summarising the nature of the transfer of the policies of CMLAE* to SL* and an abstract containing the material facts embodied in the Scheme* under which the Transfer* is to take place, as required by Section 13(3)(b) of the 1909 Act*. Nature/Scope of the Scheme* The Scheme* provides for the transfer of the policies of CMLAE* to SL* and other matters which will arise as a consequence of that transfer. The Transfer* is to be effected pursuant to Section 13 of the 1909 Act*, Section 36 of the 1989 Act* and Article 35 of the 1994 Regulations*. The Transfer On the Scheme Date*, CMLAE s* life assurance business, which includes the Transferring Policies* (and your policy/certificate), the Transferring Assets*, the Policy Records* and the Transferring Liabilities* will be transferred from CMLAE* to SL* and become part of SL s* business. SL* will become the insurer of the Transferring Policies* in place of CMLAE* with effect from the Scheme Date*. Vis-à-vis the holders of the Transferring Policies*, with effect from the Scheme Date*, SL* will assume responsibility for all of the liabilities in respect of the Transferring Policies* and CMLAE* will be released from all such liability. Rights of Policyholders Holders of Transferring Policies* will retain the same rights with SL* under those policies as they previously had with CMLAE*. Any premium monies which would have become payable to CMLAE* will automatically become payable to SL*. Bank mandates (direct debit, credit cards, credit transfer and other instructions) with respect to the payment of premiums or benefits under the Transferring Policies* will take effect accordingly without further action by policyholders. Rights and options under a Transferring Policy* which, were it not for the Transfer*, would give rise to the issue of a new policy by CMLAE*, will instead be satisfied by the issue of a new policy by SL*. Asset Allocation On the Scheme Date*, the assets of CMLAE* backing the Transferring Liabilities* will be allocated by CMLAE* to SL*. Proceedings If on the Scheme Date* any judicial, quasi-judicial, disciplinary, administrative, arbitration or other proceedings shall be pending by or against CMLAE* in respect of Transferring Policies* the same shall be continued by or against SL* (provided that SL* shall retain certain indemnification rights against CMLAE*). 5

7 Administration It is intended that there will be no variation in the terms and conditions governing the Transferring Policies*. Modifications or Additions On or before the Scheme Date*, CMLAE* and SL* may agree to any modifications or additions to the Scheme*, subject to the Court s* approval and advance notice of that change or addition to the Central Bank*. If after the Scheme Date* it proves impossible or impractical to implement the Scheme*, SL* may apply to the Court* for consent to amend the terms of the Scheme*. That application must be accompanied by a report or an opinion from an Independent Actuary*, and the Central Bank* and CMLAE* (unless it has been wound up in the interim period) must be notified in advance and their consent obtained. Costs and Expenses The costs of and incidental to the Scheme* will be borne by the shareholders funds of CMLAE* and/or SL* and will not be borne by the policyholders of CMLAE* or SL*. Governing Law The Scheme* is governed by and construed in accordance with the laws of Ireland*. 6

8 SECTION 3 - YOUR QUESTIONS ANSWERED Whilst it is not possible to cover every aspect of the Scheme* in this Circular*, we feel that these are some of the questions which you are most likely to have in connection with the proposed Transfer*. Q1: Will my policy be the same after the Transfer*? A: Yes. After the Transfer*, SL* will be responsible for the policy you originally took out with CMLAE*. There will be no changes made to your existing policy terms and conditions. Your policy/certificate will retain the same benefits. There will be no need for existing policy documents to be altered or new policy documents to be issued as exactly the same terms and conditions will apply. You will retain your existing policy / certificate documents and these will be recognised by SL* in the future. Q2: Will the amount and manner of any monies becoming due under my policy be affected? A: Firstly, the amount of any monies becoming due under your policy/certificate will not change as all the terms and conditions of your policy/certificate will still apply. Any future changes (for example if your policy/certificate provides for indexation) will take place just as they would have done with CMLAE*, except that they will be undertaken by SL*. Secondly, the way in which your monies may currently be collected from you will continue in its current form; you need to take no action in relation to your existing arrangements for payments of monies by direct debit or otherwise, unless SL* advises otherwise. Q3: Will I be able to make changes to my policy or take advantage of any options available under my policy? A: Your terms and conditions remain the same. Any rights or options that are available under your current policy will continue to be available and exercisable against SL*. Q4: Is there any change to my contact point if I wish to contact someone about my policy? A: Your normal day to day contacts for account relationship and administration will remain the same. If you have a particular query regarding your policy/certificate please contact our Customer Service telephone line on (UK) or (Ireland*). Q5: Am I required to take any actions? A: No action is required by you. This Circular* is intended to provide you with information and advise you of your rights. 7

9 Q6: Has any independent person reported on the Scheme*? A: Yes, under Irish law an Independent Actuary* has to consider and report on the Scheme*. A summary report from the Independent Actuary* is set out in Section 4 of this Circular*. In their view, the Scheme* will not have a material adverse effect on the security of benefits for any of the policyholders involved and will not have a material adverse effect on the reasonable benefit expectations of any of the policyholders involved. The Independent Actuary* was proposed by CMLAE* and no objection was raised to his appointment by the Central Bank*. Q7: What is an Actuary? A: An Actuary is a professionally qualified person who uses mathematical methods to assess the financial behaviour and security of insurance companies. An Actuary has a wide ranging and in depth knowledge of how insurance companies work and can use these skills to assess the impact of changes on them and on their policyholders. Q8: Will this Transfer* automatically go ahead? A: The Court* will sanction this Scheme* only if satisfied that it has heard all persons whom it considers should be heard and is satisfied that no sufficient objection has been established; and provided the conditions precedent to which the Transfer* is subject are satisfied. Q9: Why is the sanction of the Court* necessary? A: Because CMLAE* is regulated by the Central Bank*, the laws of Ireland* apply to the Scheme*. Under Irish law, it is necessary to apply to the Court* for its sanction of the Scheme* before it can take effect. The Court* must be satisfied that the interests of the policyholders are protected and that they are not being adversely affected by the Transfer*. Q10: When and how will I know whether the Court* has sanctioned the Scheme*? A: In accordance with Irish law and the requirements of the Court*, we will publicise (a) the intention to seek the sanction of the Court and (b) if sanctioned, the fact that the Scheme* has taken effect, through legal notices that we will publish in Ireland and the UK. You need take no action as a result of the Transfer*. 8

10 Q11: Can I object to the Transfer*? A: If you wish to object to the Transfer* you are entitled to be heard by the Court*. You are entitled to attend the Court* on the day of the hearing of the Petition (scheduled for Thursday 16 th April 2015) to object in person, or by your legal adviser. Alternatively, you can notify CMLAE* of your objection in the manner specified in the Official Notification set out in Section 6 of this Circular*, and any such objection will be brought to the attention of the Court*. You should review the full details contained in this Circular*. If, after reading the information, you still feel you wish to object then you are advised to seek independent legal advice as soon as possible. Q12: What happens if the Court* does not approve the Transfer*? A: Your policy/certificate will continue to be a CMLAE* policy. Your policy/certificate will also continue to be a CMLAE* policy if the other conditions precedent to the Transfer* agreed to between CMLAE* and SL* are not satisfied. Q13: I have received this Circular* but my policy was surrendered. What should I do? A: You do not need to take any action, and you can ignore this mailing. Q14: I have some other questions. Who do I contact? A: If you have any additional queries or concerns, you may contact our Customer Service telephone line (quoting Scheme transfer) on (UK) or (Ireland) or your account relationship manager. Alternatively, you may write to those contacts at CUNA Mutual Life Assurance (Europe) Limited, Harcourt Building, Harcourt Street, Dublin 2, Ireland. Q15: What impact will the Transfer* have on my contacts that currently administer the CMLAE* policies? A: SL* will continue to use the current administrators (who are part of the SL* group) therefore there will be no change or disruption to the on-going administration of your policy/certificate. Q16: Will policyholders receive any immediate direct financial benefit as a consequence of the Transfer*? A: No. CMLAE* policyholders have no financial interest in the company other than the benefits provided directly by their policies, which will remain governed by the insurance policy following the Transfer*. 9

11 SECTION 4 - SUMMARY OF THE REPORT OF THE INDEPENDENT ACTUARY The following is an extract from a Report on the Scheme by the Independent Actuary, Mr. Brian Morrissey. The full Report is available on request from CMLAE*, and will be available for viewing and / or download online at (UK) or (Ireland*) and on the Sterling Group s website on Introduction An Independent Actuary s Report ( Report ) has been prepared in order that the Irish High Court ( the Court ), the Central Bank of Ireland ( CBI ), the UK Prudential Regulation Authority ( PRA ), the UK Financial Conduct Authority ( FCA ), the policyholders and other affected parties may properly assess the impact of the proposed transfer of life insurance business (the Scheme ). The proposed Scheme involves the transfer of the life insurance business of CUNA Mutual Life Assurance (Europe) Limited ( CMLAE ) into Sterling Life Limited ( SLL ) together known as the Scheme Companies. CMLAE is part of the CUNA Mutual Group Holdings Europe Limited ( CMG ) and SLL is part of the Sterling Insurance Group Limited ( Sterling ). I note that the non-life insurance business of CMLAE s sister company CUNA Mutual Insurance (Europe) Limited ( CMIEL ), will also be transferred under the Scheme into Sterling Insurance Company Limited ( SICL ) (SLL s sister company). An assessment of that transfer is out of scope of this Summary Report. This Summary Report describes the Scheme and considers the potential impact and benefits on all affected policyholders (of both CMLAE and SLL), including the security of their policy and the levels of service that policyholders should expect to receive after the transfer. This Summary Report is a summary of the Independent Actuary s Report. The full Report is available on request from the offices of CMLAE and SLL and on the internet at the CUNA Mutual Europe website and Sterling Insurance Group Limited website. The proposed transfer of insurance business from one entity to another must be approved by the Court. In addition the CBI (the regulator of CMLAE) and the PRA and FCA (the regulators of SLL) will be consulted. The terms covering the proposed Scheme are set out in the Scheme document that will be presented to the Court. I refer to that document as the Scheme of Transfer. It is anticipated that the Scheme of Transfer will be presented to the Court under Section 13 of the Assurance Companies Act 1909 in late November/ early December 2014 with a proposed effective date of March/April 2015 ( Effective Date ). About the Independent Actuary I am a partner in KPMG Ireland, a global consultancy providing audit, tax and advisory services. I am a Fellow of the Society of Actuaries in Ireland with more than 20 years experience of working in the insurance industry. I have previously conducted similar Independent Actuary roles with respect to businesses in Ireland and the UK. My full biography is included in the Report. 10

12 Use and Limitations This summary covers the main conclusions of the full Report. However, this summary must be considered in conjunction with that Report and reliance must not be placed solely on this summary. Both this summary and the full Report must be considered in their entirety as individual sections, if considered in isolation, may be misleading. This summary is subject to the same limitations on its use as are set out in the full Report. In the event of any real or perceived conflict between this summary and the full Report, the latter contains the definitive description. Neither the full Report, nor any extract from it, may be published without my specific written consent having been given, save that copies of the Report may be made available for inspection by policyholders and shareholders of the Scheme Companies and copies may be provided to any person requesting the same in accordance with legal requirements or any order of the Court. In the event such consent is provided, the full Report must be provided in its entirety. A summary of my Report is set out below. Background to CMLAE and SLL CMLAE, an Irish regulated life insurance company authorised by the CBI, underwrites whole of life term assurance business and group life business in Ireland and also on a freedom of services basis in the UK. SLL is a UK regulated assurance company, authorised by the PRA and the FCA to transact life and pensions assurance business (mainly term assurance and creditor business) and reassurance business in the UK and also on a freedom of services basis in Ireland. The PRA is responsible for ensuring compliance with prudential requirements and the FCA is responsible for ensuring compliance with market and conduct issues. My full report contains a summary of the products offered by the Scheme Companies, together with financial details of the Scheme Companies, their financial strength and their recent solvency position. I have not reproduced these details in this Summary Report as my full Report is available on request from the Scheme Companies. Details of the Scheme CMLAE has transferred its renewable business into SLL by way of a Renewal Rights Arrangement ( RRA ) with business transferring onto SLL s books at renewal. The RRA is not part of the Scheme and took effect from 1 st October CMLAE now intends to transfer the remaining life (non renewable) insurance business via a Scheme of Transfer. The Scheme of Transfer provides for the transfer of CMLAE s life assurance business, incorporating the insurance policies, together with the associated liabilities and assets as at the Effective Date to SLL, such that CMLAE s policyholder liabilities are extinguished in CMLAE and SLL become responsible for the CMLAE policyholder benefits. 11

13 The Scheme proposes on the Effective Date to: Transfer the assets supporting the liabilities of the CMLAE long term business fund to the long term business fund within SLL. We note: The contingency reserve held by CMLAE for the closed to new business scenario (required under CBI regulatory rules) will be released at the Effective Date into the net assets of CMLAE and will not be transferred across to SLL; and For Whole of Life insurance business the assets transferred will be in excess of those currently held by CMLAE due to the different reserve requirements for that business within the UK regulatory regime. I have been provided with the draft analysis prepared by the SLL Actuarial Function Holder to support the proposed amount to be transferred over. All in force CMLAE policies and policies in respect of which any potential liability exists at the effective date should be included in the transfer. Upon transfer SLL will establish regulatory reserves in respect of the transferring CMLAE liabilities under their UK regulatory basis and methodology. I note that under the Scheme of Transfer: There will be no changes to transferring CMLAE or existing SLL policyholder terms or conditions as a result of the Scheme; There are no plans to change the existing administration of CMLAE or SLL policies post the transfer as CMLAE currently outsources policy and claims administration to Sterling. There are no plans to change the existing service levels; and There will be no material changes to policyholder benefits as a result of the Scheme and all rights and obligations of CMLAE policyholders will transfer to SLL. Policyholder impacts Benefit Expectations I have considered the effects of the Scheme on the fair treatment of CMLAE and SLL policyholders and in doing so I have considered the following aspects: Policyholder Reasonable Expectations ( PRE ). This is an important part of the current regulatory regime for CMLAE policyholders in Ireland. This is referred to as Treating Customers Fairly ( TCF ) in the UK. The concept relates to how life insurance companies deal with their policyholders across a wide range of areas as per the areas discussed in the following bullets in this Section. I have discussed with CMLAE and SLL the key elements of PRE and TCF and what will happen to CMLAE policyholders post the Scheme. In particular, I have discussed with SLL the Company s views of PRE and TCF and that existing PRE practices in respect of CMLAE will remain unchanged post the Scheme, which will be the case. Fair treatment of all policies including policyholders existing terms and conditions. CMLAE policy terms and conditions will remain unchanged as a consequence of the Scheme. There is no impact on existing SLL policyholders terms and conditions. All policyholders will be treated in the same manner as they would have been pre transfer; 12

14 Servicing of policies. There will be no material changes in the administrative arrangements and servicing of CMLAE or SLL policies; Expenses and charges levied on funds. The implementation of the Scheme makes no explicit changes to CMLAE policy charges. The expense basis of SLL is not expected to be adversely affected as a consequence of the Scheme and therefore I don t expect SLL policyholders to be adversely affected by the Scheme; Costs of the Scheme. The costs and expenses associated with implementing the Scheme will be met jointly by CMG and Sterling. No costs are borne by the CMLAE or SLL policyholders; Discretionary powers. I do not expect that the Scheme will cause a change in the approach to the use of discretionary powers; and Other. I have also considered current operational practices and approaches, complaints and redress, legal risk and regulatory requirements relating to the fair treatment of policyholders and policyholder notifications. I do not expect any material impact on CMLAE and SLL policyholders. Overall, I am therefore able to conclude that there will be no adverse effect on the benefit expectations of the transferring CMLAE policyholders and there will be no impact on the benefit expectations of SLL policyholders. Security of benefits I have considered the effects of the Scheme on the security of transferring CMLAE and existing SLL policyholder benefits and in doing so I have considered the following aspects: The risk profile of CMLAE and SLL. The risk profile of SLL after the transfer should not be materially changed from its risk profile before the transfer as the types of risks inherent in CMLAE s business are similar to the life assurance business written by SLL; The relative financial and capital strength of CMLAE and SLL prior to the transfer, and SLL post the transfer on both a UK Pillar 1 (akin to Solvency I in Ireland) and Pillar 2 (economic capital basis in UK) regulatory capital basis. There is a strong capital position on a Pillar 1 basis (pre transfer) for the Scheme Companies and on a Pillar 2 basis for SLL both pre and post transfer (CMLAE is not required to prepare Pillar 2 figures under Irish regulatory rules). While CMLAE policyholders will sit in a company that has a lower capital coverage ratio post transfer they will be part of a larger company that has a higher level of available capital resources (available Pillar 1 assets of 13.1m pre transfer in CMLAE versus 58.3m post transfer in SLL at 31 st December 2013). For existing SLL policyholders, SLL continues to meets its regulatory capital requirements before the Scheme and will continue to meet its regulatory capital requirements on a standalone and a combined basis after the proposed Scheme based on the proforma financial analysis prepared. The impact of the Scheme is not material. The CMLAE and SLL projected capital plan and management actions anticipated. The CMLAE Financial Condition Report (illustrating the projected financial strength over the next three years) shows a declining level of projected financial strength including possible capital injections to maintain solvency which supports the strategic decision to transfer the business to SLL. The SLL business plan outlines profits over the business planning period to 2018; and Future regulatory changes in terms of capital arrangements namely Solvency II (European wide risk-based measure of regulatory capital commencing 1 st January 2016). Both CMLAE and SLL have a strong and improved solvency coverage ratio on a Solvency II basis compared to Solvency I. The impact of the Scheme is not expected to be material on the SLL Solvency II position. 13

15 Policyholder Communication CMLAE s stand-alone policyholders, the policyholders of the Family Protection Plan policies and the financial institutions who are policyholders of the group life assurance policies and stand-alone life assurance policies shall be sent a Circular setting out the Scheme. The Circular includes a statement summarising the terms of the proposed Scheme, a copy of the summary of the Independent Actuary s Report and a frequently asked questions brochure. The summary version of my Report covers all the material points and issues raised in my Report. Therefore, CMLAE policyholders will not be disadvantaged by the transmission of a summary version of my Report rather than the full Report. I note that SLL does not intend to write to its policyholders. I am satisfied that SLL does not write to its policyholders regarding the Scheme, on the basis that the impact of the transfer on SLL policyholders is not sufficiently material to warrant the additional expense in doing so. The terms of the proposed Scheme are such that there will be no material adverse effects for policyholders of CMLAE and SLL and, in consequence, I believe that the proposed notification arrangements are satisfactory. Other Considerations If any risks materialise or operative errors are made as a result of the actual transfer of business, the companies will be duty bound under standard regulatory processes to put policyholders in the same position they would have been in had the errors not been made. I have no reason to believe that the service levels for transferring CMLAE policies or existing SLL policies are likely to suffer any material diminution as a result of the implementation of the Scheme. Conclusions Having considered the impact of the Scheme on both the transferring policyholders of CMLAE and the existing policyholders of SLL, it is my opinion that: The Scheme will not have a material adverse effect on the security of benefits for any of the policyholders involved; and The Scheme will not have a material adverse effect on the reasonable benefit expectations of any of the policyholders involved. My opinion in relation to CMLAE and SLL policyholders is based on: My review of all the pertinent historic and current information provided by CMLAE and SLL; The investigations completed at 31 st December 2013 by the CMLAE Appointed Actuary and the SLL Actuarial Function Holder and their respective conclusions based on those investigations; and Discussions with the management of CMLAE and SLL on what will happen post transfer. My assessments are made in the context of the current Irish and UK regulatory regimes and the proposed Solvency II regime from 1 st January

16 SECTION 5 - GENERAL INFORMATION CMLAE* Directors Secretary Registered Office Appointed Actuaries SL* Directors Secretary Registered Office Actuarial Function Holder Alastair Shore Ciaran McGettrick Faye Patzner Garry Cullen Paul Joseph Walsh Paul Matthew Treinen Megan Arrogante Harcourt Building, Harcourt Street, Dublin 2, Ireland. Michael Culligan, Milliman, Verschoyle House, Lower Mount Street, Dublin 2. Ireland. John Giles Blundell Stephen Andrew Clarke Nicholas George Cooper Brett Donald McWilliam Edgardo Paunlagui Penollar Anthony Pritchard Paul Edward Godfrey Thompson Stephen David Williams Graham Victor Rivers-Moore 50 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4JX, England Lindsay Unwin Documents available for inspection: Copies of the following documents are available for inspection online at policyholdercomms (UK) or (Ireland*) or on the Sterling Group s website at The Petition to the Court* including the Scheme*; The report of the Independent Actuary*; Affidavit of Paul M. Treinen; and Affidavit of Brett Donald McWilliam The above documents will also be available for inspection at (a) the office of Matheson Solicitors at 70 Sir John Rogerson s Quay, Dublin 2, Ireland, (b) at the office of Matheson Solicitors at 16 th Floor, Heron Tower, 110 Bishopsgate, London EC2N 4AY, England, (c) at the office of CMLAE* at the address set out above, and (d) at the office of SL* at the address set out above, between the hours of 9am to 5pm (local time); Monday to Friday for 15 clear days between 14 th January 2015 and 4 th February 2015 (inclusive). 15

17 SECTION 6 - OFFICIAL NOTIFICATION THE HIGH COURT 2014 / No. 543 COS IN THE MATTER OF CUNA MUTUAL LIFE ASSURANCE (EUROPE) LIMITED AND IN THE MATTER OF STERLING LIFE LIMITED AND IN THE MATTER OF THE ASSURANCE COMPANIES ACT 1909, THE INSURANCE ACT 1989, AND THE EUROPEAN COMMUNITIES (LIFE ASSURANCE) FRAMEWORK REGULATIONS 1994 (AS AMENDED) NOTICE TAKE NOTICE that it is the intention of all of the directors of CUNA Mutual Life Assurance (Europe) Limited (CMLAE), having its principal place of business at Harcourt Building, Harcourt Street, Dublin 2, Ireland and Sterling Life Limited (SL), having its principal place of business at 50 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4JX, England, to make an application to the High Court of Ireland (the High Court) to sanction the transfer of the life assurance business of CMLAE to SL. AND FURTHER TAKE NOTICE that copies of the Life Scheme whereby the said transfer is to be effected, the Petition to be presented to the High Court and the Schedules annexed thereto, the report by an Independent Actuary on the Life Scheme, together with a summary thereof, the Affidavit of Paul M. Treinen dated 26 th November 2014 and the Affidavit of Brett Donald McWilliam, dated 27 th November 2014, and the exhibits to the said affidavits, will be available for the inspection of any policyholder or shareholder of CMLAE at the offices of Matheson Solicitors at 70 Sir John Rogerson s Quay, Dublin 2, Ireland, and at 16 th Floor, Heron Tower, 110 Bishopsgate, London EC2N 4AY, England, between the hours of 9.00 a.m. and 5.00 p.m. (local time), and/or any policyholder or shareholder of SL at its registered office at 50 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4JX, England, between the hours of 9.00 a.m. and 5.00 p.m. (local time) on each working day between 14 th January 2015 and 4 th February 2015, inclusive. Copies of those documents will also be available for viewing and/or download online at (UK) or (Ireland) or on the Sterling Group s website on AND FURTHER TAKE NOTICE that the said Petition is to be listed for hearing by the High Court on Thursday 16 th April 2015 at the Four Courts, Inns Quay, Dublin 8, Ireland, at a.m. Any person who wishes to be heard at the hearing of the said Petition should send a notice of their intention to appear, in writing, to Matheson Solicitors at 70 Sir John Rogerson s Quay, Dublin 2, Ireland, no later than 5.00 p.m. on Wednesday 8 th April 2015 and should indicate whether such person or persons support or oppose the said Petition. Any person wishing to make submissions at the hearing of the Petition on Thursday 16 th April 2015 should file an affidavit setting out those submissions with the Court and serve a copy of that affidavit on Matheson at the aforementioned address no later than 5.00 p.m. on Wednesday 8 th April

18 If you have any queries or concerns, you may contact CMLAE by telephoning the Customer Service telephone line (quoting Scheme transfer) on (UK) or (Ireland) Alternatively, you may write to those contacts at CUNA Mutual Life Assurance (Europe) Limited, Harcourt Building, Harcourt Street, Dublin 2, Ireland. MATHESON 70 Sir John Rogerson s Quay Dublin 2 17

19 Definitions APPENDIX 1909 Act means the Assurance Companies Act 1909 (as amended); 1989 Act means the Insurance Act 1989 (as amended); 1994 Regulations means the European Communities (Life Assurance) Framework Regulations, 1994; Central Bank means the Central Bank of Ireland; Circular means the statement of the nature of the Scheme and other information required to be transmitted to the holders of the transferring policies pursuant to Section 13(3) of the 1909 Act; CMLAE means CUNA Mutual Life Assurance (Europe) Limited; Court means the High Court of Ireland; Effective Time means on 1 June 2015 or such other date as the parties with the consent of the Court agree; Financial Conduct Authority means the UK Financial Conduct Authority or any related replacement, substitute or successor body; Independent Actuary means the Actuary appointed for the purposes of the Scheme under Section 13(3) of the 1909 Act; Ireland means the Republic of Ireland; Policy Records means any and all records, data and other information in any form whatsoever relating to the Transferring Policies maintained by CMLAE; Prudential Regulation Authority means the UK Prudential Regulation Authority or any replacement, substitute or successor body; Scheme means the Scheme agreed between CMLAE and SL for the purposes of transferring certain policies pursuant to the 1909 Act, in its original form or with or subject to any modification, addition or condition which may be approved or imposed by the Court; Scheme Date means 1 June 2015 or such other date as CMLAE and SL may agree and to which the Court consents, upon which the Order takes effect; SL means Sterling Life Limited; Transfer means the transfer of the Transferring Policies, Transferring Assets, Policy Records and Transferring Liabilities from CMLAE to SL; Transferring Assets means (i) all premium, monies, pre-payments, sundry receivables, properties and other assets (if any) due in respect of or representing or held on account of the Transferring Policies and all balances due on foot of the Transferring Policies as at the Effective Time; and (ii) the benefit of all commissions and charges received or receivable by CMLAE in respect of a Transferring Policy; Transferring Liabilities means any and all of CMLAE s debts, obligations and other liabilities (whether current, future or contingent) arising on or before the Effective Time in respect of the Transferring Assets and Transferring Policies; Transferring Policy(ies) means the contracts of insurance (including any proposal for new or renewal business made by or to CMLAE which remains open for acceptance as of the Effective Time) forming part of the business of SL. 18

20 The Harcourt Building, Harcourt Street, Dublin 2, Ireland Phone: IRL (01) / UK Fax: IRL (01) / UK Registered in Ireland. No CUNA Mutual Life Assurance (Europe) Limited is regulated by the Central Bank of Ireland 20 KH