Questions & Answers
The following are answers to questions that you may have about the transfer of the long-term insurance business of Paternoster to Rothesay Life. The answers are general in nature and there may be exceptions to some of the answers.
What, in summary, happened?
Paternoster transferred its long-term insurance business to Rothesay Life by means of a Scheme of Transfer under Part VII of the Financial Services and Markets Act 2000. We were required by law to send all policyholders of either Paternoster or Rothesay Life a Formal Notice about the proposed transfer. That Notice can be downloaded from the Document Library.
Why did the transfer happen?
The purpose of the transfer was to simplify the operations of the two businesses which are both wholly owned by The Goldman Sachs Group Inc. Both companies had very similar types of business and therefore it made sense to manage and operate them as one company. This reduces administration costs, reduces the complexity of maintaining two separate legal entities by enabling the management of risks on a combined basis and allows the companies to respond more quickly to future regulatory requirements, such as Solvency II, the new European-wide regulatory regime for insurance companies due to be implemented in 2013.
How does the transfer affect my policy?
All existing operational and administration arrangements will remain the same as before. Therefore, your policy will continue to be serviced in the same way as now.
Will the benefits that I am entitled to, as a policyholder of Rothesay Life, change in any way?
No. Benefits will not change as a result of the transfer. If you are an individual policyholder and you are already in receipt of a pension, you will continue to receive your payments exactly as before. If you are an individual policyholder and you have not yet retired, your prospective benefits will, similarly, be unaltered.
How will my interests be protected?
Rothesay Life now assumes Paternoster’s contractual and other obligations. Rothesay Life and Paternoster were required to treat all customers fairly and to ensure that their reasonable expectations are met. Rothesay Life will continue to treat its customers fairly. The Independent Expert considered the terms of the Scheme of Transfer and how the different groups of policyholders were likely to be affected by the Scheme of Transfer and, in particular:
- the effect of the Scheme of Transfer on the security of the policyholders’ contractual rights, including the likelihood and potential effects of the insolvency of the insurer;
- and the likely effects of the Scheme of Transfer on the benefit expectations of policyholders.
The Independent Expert concluded that neither the security of your benefits nor the benefit expectations of the policyholders of either Paternoster or Rothesay Life would be materially adversely affected by the Scheme of Transfer.
Are you writing to all policyholders?
Yes, we wrote to policyholders of Rothesay Life, policyholders of Paternoster and all scheme Trustees that hold insurance contracts with either Rothesay Life or Paternoster as we believed that it was important that policyholders of both companies understood what was happening. A letter confirming the transfer was also issued to all parties. Although Rothesay Life policies did not transfer, Rothesay Life has become a larger business. Rothesay Life is now responsible for paying the pensions (either directly or to pension scheme trustees) for approximately 110,000 people, a significant increase from about 45,000.
What was the role of the Actuarial Function Holders?
The Actuarial Function Holders of Paternoster and Rothesay Life produced reports for the Directors of each of the companies involved. The purpose of those reports was to review the terms of the transfer and to consider its effect on all of the policyholders affected with particular reference to their benefit expectations and the future security of those benefits. The Independent Expert received those reports and other information provided by the companies and used the information to reach an opinion which he then provided to the High Court.
How will the transfer affect the way Rothesay Life will be run?
Paternoster and Rothesay Life were sister companies within the same group; both 100% owned by The Goldman Sachs Group Inc. They were both run and managed with similar strategies and through a common management team subject to the same controls and governance. Therefore, whilst there will be operational efficiencies as a result of being able to service your policy through one legal entity, the transfer does not affect the governance, oversight and control which operated across the two businesses previously.
How do I obtain more information?
If you would like more detailed information on the transfer then full details can be downloaded from the Document Library. Or please contact us in the usual way.
What if I want to complain?
We aim to provide excellent products and service at all times. If you feel you have cause to complain please write to us. We would hope that we are able to address your concerns to your satisfaction. However, if you remain unsatisfied you can contact:
Financial Ombudsman Service (FOS)
Individual policyholders of Rothesay Life (including former policyholders of Paternoster) are covered by the FOS. If certain types of complaint made by you remain unresolved after it has been through our internal complaint procedure the Ombudsman can arbitrate to resolve them.
South Quay Plaza, 183 Marsh Wall, London, E14 9SR
Telephone: 0845 080 1800
Fax: 020 7964 1001
Financial Services Compensation Scheme (FSCS)
In the unlikely event that Rothesay Life is unable to provide your pension, you should be covered by the FSCS. You may not be covered by the FSCS if your individual policy was issued when your habitual residence was not in the UK, another EEA State, the Channel Islands or the Isle of Man.
For details of the compensation levels that may apply to pension annuities (which are classed as long-term insurance business) please contact the FSCS:
7th Floor, Lloyds Chambers, Portsoken Street, London E1 8BN
Telephone: 020 7892 7300