Independent actuary services - Portfolio transfers

Portfolio Transfers refer to the sale or transfer of a portfolio of insurance policies from one entity to another

These transactions can be entered into for a number of reasons, typically strategic, such as restructuring, exiting a non-core line of business, capital optimisation, triggered by regulatory change (e.g. Brexit) etc. 

Such transfers are subject to insurance legislation in the countries of both the transferring entity and the receiving entity.  In Ireland, they are known as Section 13 transfers, as they fall under Section 13 of the 1909 Assurance Act. In the UK they are known as Part VII transfers as they are governed by Part VII of the Financial Services and Markets Act 2000.

In Europe, these transfers are subject to the requirements of applicable insurance directives and the legal requirements of the relevant EU/EEA member states concerned.

In Ireland the transfers require:

(a)  the sanction of the High Court (for life insurance; not required for reinsurance portfolio transfers and certain non-life insurance transfers).

(b)  the consent of the Central Bank of Ireland, pursuant to the Life or Non-life regulations. 

Requirement for an independent actuary

An independent actuary must be engaged by the transferor to consider and report to the High Court on the proposed transfer, primarily from the perspective of the policyholders of both the transferor and transferee and to opine as to whether any policyholder’s interest could be in any way (either directly or indirectly) be adversely affected by the proposed transfer. 

The appointment of an independent actuary is mandatory on transfers of life business, and though not mandatory for non-life transfers, one is usually appointed. 

The independent actuary produces two reports, the main report, for the Initial High Court hearing, and a Supplementary report for the second court hearing.  A third summary report may also be produced.

A copy of the Independent Actuary’s Report must be provided to policyholders and it must be provided to the CBI prior to the CBI granting consent. The CBI will generally have specific regard to the findings of the IA’s report to satisfy itself whether or not the transfer if permitted, would prejudice the rights of the policyholders of both the transferor and the transferee.

In addition to the independent actuary, the chief actuaries of the transferring and receiving entities generally produce an actuarial report on the proposed scheme.

How we can help

(a)    Act as an independent actuary.

(b)    Advise and support your internal chief actuary.

(c)    Reserving or other analysis.

(d)    Scheme design.

(e)    Project management.

Our actuaries have experience in portfolio transfers, as appointed/chief actuary within firms undergoing a portfolio transfer and as the Independent Actuary.  We also have significant experience in performing buyer/seller due diligence. We would be delighted to assist you with your portfolio transfer project.

Links to regulations

1909 Assurance Companies Act Section 13:

1989 Insurance Act, Section 36:

Statutory instrument 285 2015 Insurance Co. Regulations – Section 41

Part VII of FSMA 2000:

EIOPA 2022 Statement on Supervision of Run-Off Undertakings: