Zurich Insurance Company transfer scheme

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made to notify the Jersey Financial Commission that the Minister has no comments to make in respect of the Zurich Insurance Company transfer scheme.

Subject:	Zurich Insurance Company Transfer Scheme - Minister comment
Decision Reference:	MD-E-2006-0010		Exempt clause(s):
Type of Report: (oral or written)	Written		Person Giving Report (if oral):
Telephone or e-mail Meeting?			Report File ref:
Written report – Title	Zurich Insurance Company – Transfer Scheme-
Written report – Author (name and job title)	Paul de Gruchy, Finance Industry Executive
Decision(s): To notify the Jersey Financial Services Commission that the Minister has no comments to make in respect of the transfer scheme.
Reason(s) for decision: The Minister relies on the conclusions of the Commission, based upon an actuarial report, to the effect that policyholders will not be prejudiced by the transfer scheme.
Action required: PDG to notify Commission that the Minister has no comment to make and that the Royal Court be informed that he has no objections or comments to make in respect of the transfer scheme.
Signature: (Minister/ Assistant Minister)		Date of Decision: 23 January 2006

Zurich Insurance Company transfer scheme - Minister's comment.

MINISTER FOR ECONOMIC DEVELOPMENT

ZURICH INTERNATIONAL COMPANY

TRANSFER SCHEME

1 THE ISSUE

1.1 Under the provisions of the Insurance Business (Jersey) Law 1996 (the “Insurance Law”), when an insurance company holding a permit under that law wishes to transfer its assets and liabilities to another insurance company a Formal Transfer Scheme (the “Scheme”) must be produced for the approval of the Royal Court. The law provides for the Scheme to be reviewed by the Minister, and for the Minister to make such representations to the court as it considers desirable.

1.2 It is proposed that the long-term insurance assets and liabilities of Eagle Star Insurance Company Limited (“Eagle Star”) be transferred to Zurich Insurance Company (“ZIC”). Eagle Star is a wholly owned subsidiary of ZIC.

1.3 The purpose of this Paper is to set out the background to the proposal and to recommend that the Minister agrees that he has no objections or observations to make in respect of the Scheme, which is due to come before the Royal Court for the first time on 31 January 2006.

2 BACKGROUND

2.1 The Background to this proposal is set out in sections 3 and 4 of the annex to this paper, which was prepared by Nigel Woodroffe of the Financial Services Commission.

2.2 In summary, the purpose of the scheme is to rationalise the structure of the group so as to bring about administrative savings. This will be achieved through transferring the assets and liabilities of Eagle Star to ZIC.

2.3 The Commission has carried out a review of the documentation intended to effect the Scheme, and has noted the contents of an actuarial report into the same. The Commission is of the view that, according to the terms of the Scheme, Jersey policyholders and members will be treated in the same way as those in other jurisdictions, and their long-term expectations from their policies will not be diminished or jeopardised.

2.4 In particular, it should be noted that an independent actuarial report has concluded that the terms of the Scheme provide sufficient protection for the policyholders’ interests.

2.5 It should also be noted that, as is often the case with schemes of this type, the Royal Court will be asked to consider derogations from the provisions of the Insurance Law in relation to the manner in which policy holders are to be notified of the proposals and the information which will, at first instance, be sent to policyholders.

3 ISSUE AND RECOMMENDATION

3.1 It is recommended that the Minister accepts the observations of the Commission and agree that, should the opinion of the Minister be sought by the Royal Court, a representative of the Commission be asked to inform the Court that the Minister has no objections or comments to make in relation to the proposed Scheme.

3.2 The Minister is also requested to note the derogations from the Law that will be sought by Eagle Star and ZIC (as set out in paragraph 4.3 of the Annex) and to confirm that he has no objections or comments to make in that regard.

PAUL DE GRUCHY

Finance Industry Executive

23 January 2006Annex

JFSC Paper of 13 January 2006