April 2007
Insurance Insider
Insurance Insider
(Spring 2008) Time to reconsider reinsurance(Oct 2007) High court sanctions Ruxley acquisition of Generali unit(Oct 2007) Ruxley in landmark reinsurance-funded acquisition(Apr 2007) Ruxley in Generali run-off talks(Autumn 2006) Part VII business transfers - adding flexibility to the run-off equation(Spring 2006) Why we need a scheme monitor(Spring 2006) BAIC and after(Feb 2006) Solvent Schemes of Arrangement Conference(Nov 2005) Scheming for solvency(Oct 2005) A wake-up call(Sept 2005) Time To Wake Up(Sept 2005) Free Audio Conference: Rating the Raters(Aug/Sept 2005) Air Your Views(Aug 2005) Ruling could curtail solvent runoff schemes(March 2005) Tackling The Pools(Spring 2005) Selling like hot cakes(Spring 2005) The scheming solution(28/02/05) Influx of capital can impact premiums(Feb 05) Bringing finality to underwriting pools(Winter 04) Dangerous waters(04/11/04) Solvent schemes offer real boost(01/09/04) Buying Run-off(05/07/04) Run-off moves to another level(03/02/04) Run-off on a positive note(2004) 2003 A year of innovation(Winter 03) Ruxley buys Aviation & General(06/10/03) Ruxley takes whole of A&G(04/07/03) End of asbestos saga?(03/07/03) Ruxley closes APH book(Summer 03) Vulture Culture?
Ruxley - which bought the legacy London market reinsurer City General in 2002 - is close to acquiring Generali Assurances General, a Financial Services Authority (FSA) authorised (re)insurer that has ceased underwriting.
If the deal is completed, it will be a regarded as a significant acquisition by the firm whose last major purchase was Aviation & General in October 2003. Generali Assurances General is an FSAapproved insurer that is domiciled in Geneva, Switzerland and has a UK branch office in London.
The Insurance Insider understands that City General may be a vehicle used in the transaction and the actual business will be transferred by way of a so-called Part VII transfer.
Part VII refers to the section in the Financial Services and Markets Act 2000 that enables the UK Courts to approve the transfers of liabilities (and assets) from one entity to another subject to the overall consent of policyholders.
Critically, the effect of a Part VII transfer alters the legal rights and duties of the insurer without the individual consent of each policyholder. In this respect, the process is different from reinsurance to close where the original liabilities remain with the (re)insurer notwithstanding the reinsurance contract on top.
It is a tool that has become increasingly popular in the UK in managing finality business and has been used by the firm in the past.
Ruxley, formed in December 2001 and headed by John Winter, has a reputation for taking a thorough approach to runoff acquisition. By proceeding via a Part VII transfer, the firm can offer immediate finality to the seller and it will then seek to close the business as swiftly as possible.
For instance, it acquired City General in January 2002 and, within 17 months, had resolved over 1,000 asbestos, pollution and health hazard (APH) claims and completed the run-off of some $22.7mn in liabilities.
According to the company’s website, typical portfolios Ruxley invest in include long-tail business with APH and/or London market business and overseas businesses with some UK-based policyholders.
The UK courts are also stretching the boundaries of businesses that can apply for Part VII transfers. For instance, in late January the courts approved the transferred business of Sompo Japan to a vehicle ultimately controlled by Berkshire Hathaway in the UK despite none of the business being written in the UK and the majority subject to US law.
Ruxley is understood to be working with at least one other party on the proposed acquisition. When approached by The Insurance Insider, the firm declined to comment.