Lloyds Set To Liquidate And Transfer Two PPI Misselling Hit Companies

St Andrews Insurance plc and St Andrews Life Assurance plc, two London-based companies of the Lloyds banking group shall receive the assets and liabilities of Halifax Insurance Ireland Ltd and Halifax Assurance Ireland Ltd. The two companies having around 220 employees will be liquidated and all the policies sold to customers will be transferred to the London-based companies. The employees providing administration services related to the insurance policies shall be handed over to Wipro Outsourcing Services Ireland Ltd. It is expected that few employees shall become redundant after the transfer is effected.

The Commercial Court was requested by the representative of the companies to speed up the process of transfer of the business. It is mandatory for the petitions to be heard in public and orders to be passed on the same before the transfer can be finalized. The application has been admitted and the court has passed orders for advertisement of the petitions and other related documents. The petition shall come up for hearing on October 11 2012. The court stressed on ensuring that all employees received the necessary information and details about the transfer.

Both the companies were very actively involved in the sale of PPI policies. As of May 2012, HIIL had issued around 633,775 policies while HAIL had issued around 438,500 policies. HAIL was operating jointly with the other company and had jointly underwritten 435,800 policies with only 2710 policies being sold independently. Both the companies have around 2000-2500 customers living outside the United Kingdom with 240-280 customers living in Ireland. Companies stopped selling PPI policies after the Group decided to stay away from the PPI business in July 2012 fearing regulatory action and public backlash.

The petition provided detailed information on why the transfer was necessary and unavoidable. The companies were involved in sale of PPI policies and had not participated in any other line of business. The petitions stated that a third-party sale transaction would have been detrimental to the interests of policyholders. On the other hand, transfer within the group will ensure continuation of quality service. The rights and liabilities of the policyholders will remain unchanged. The petition also included a report of an independent actuary stating that the policyholders shall not suffer because of the change and that expectation of reasonable benefits on the part of shareholders shall not be affected.

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