Friday, 25 April 2008
Reliance Mutual Insurance Society Limited (Reliance Mutual) announces that
it intends to acquire a further block of business from Family Investments.
Reliance Mutual’s seventh acquisition in five years.
In 2004, Reliance Mutual acquired 23,500 policies representing £260
million funds under management from Family Investments - policies included
the old Time Assurance and Templeton Life Assurance policies and annuities
in payment resulting from Family’s DSS rebate business.
However, in 2004, legislation did not explicitly permit any tax-exempt
friendly society business to retain its tax exemption when transferred to
an insurance company and as a result a number of policies could not be transferred
as part of the original agreement. That restrictive legislation was
amended in the Finance Act 2007 enabling those polices to now be transferred
to Reliance Mutual.
Commenting on the latest acquisition, Mark Goodale, Chief Executive of
Reliance Mutual said, “Over the last five years we have established
a sound reputation in the acquisition of small and medium size blocks of
business. Any organisation which finds itself with
a particular block of business that no longer fits its current core activities,
or they wish to raise additional capital, should talk to us.
“With the recent legal tax changes in tax-exempt business this may be particularly
relevant for any friendly society facing pressures on its financial resources.”
John Reeve, Chief Executive of Family Investments said “I am pleased that
we have successfully argued for the law to be clarified in respect of transfers
of tax exempt business. In doing so we have been able to protect the
interests of the transferring policyholders and subject to their agreement
at our AGM in May we will be finally able to complete the deal we originally
agreed with Reliance Mutual in 2004.
This latest transfer is scheduled for completion on 31 July 2008, subject
to the agreement of Family Investments’ members and FSA approval.
ENDS
Reliance Mutual Insurance Society Limited is authorised and regulated by
the Financial Services Authority