Paul Taylor, the head of run-off supervision for insurance firms at the FSA, recently reiterated to the run-off sector that the FSA will object to solvent schemes of arrangement unless policyholders would be at least “no worse off” than in an ordinary solvent run-off. Although the FSA’s approval is not formally required for a scheme of arrangement to be implemented, it does have the power to object to a proposed scheme.
Paul Taylor was speaking at the Association of Run-Off Companies Congress 2009 in London. He also reminded delegates that the “no worse off” test also applied to claims handling under a scheme. He added that although the test may be difficult to comply with, anyone wishing to implement a solvent scheme would have to meet it.”
