TRANSFER OF LIFE INSURANCE AND REINSURANCE BUSINESS FROM FINANCIAL ASSURANCE COMPANY LIMITED AND REINSURANCE OF LONG TERM INSURANCE BUSINESS FROM FINANCIAL INSURANCE COMPANY LIMITED TO AXA FRANCE VIE SCHEME SUMMARY 1. INTRODUCTION 1.1 Financial Assurance Company Limited ("FACL"), a member of the AXA Group, has agreed to transfer all of its insurance and reinsurance business (the "FACL Business") and Financial Insurance Company Limited ("FICL"), a member of the AXA Group, has agreed to transfer its business relating to reinsurance of long term sickness and disability covers (the "FICL Life Business" and together with the FACL Business, the "Transferring Businesses") to AXA France Vie, a member of the AXA Group, (the "Transfer"). 1.2 The Transfer to AXA France Vie will be effected by way of a scheme under the provisions contained in Part VII of the UK Financial Services and Markets Act 2000 (the "Act") (the "Scheme") and will require the sanction of the High Court of Justice of England and Wales (the "Court"). 1.3 Mr David King, a Fellow of the Institute and Faculty of Actuaries, of Ernst and Young has been appointed as the independent expert (the "Independent Expert") to prepare a report about the Transfer and its effects on policyholders. Mr King's appointment has been approved by the Financial Conduct Authority (the "FCA") and the Prudential Regulation Authority (the "PRA"). 1.4 A copy of this document, the full Scheme document and a copy of the full Report by the Independent Expert will be made available free of charge until the date of the presentation of the application to the Court (which is expected to be held on 28 November 2018) to anyone who requests it by phone on 0370 400 4704, by email to portfolio.transfer@partners.axa or in writing to Company Secretary, Financial Insurance Company Limited, Building 6, Chiswick Park, 566 Chiswick High Road, London, W4 5HR, United Kingdom. Alternatively, copies can be found on our website at https://en.clp.partners.axa/portfolio-transfer. 1
2. COURT APPROVAL OF THE TRANSFER The Court hearing to consider the Transfer is expected to take place at the Rolls Building, 7 Rolls Building, Fetter Lane, London on 28 November 2018 (the "Sanctions Hearing"). If the Court grants the order approving the Scheme, the Transfer is expected to come into effect on 1 January 2019 (the "Effective Date"). 3. SUMMARY OF THE SCHEME The consequences and coming into effect of the Scheme 3.1 The Transfer will only occur if the Court grants an order to approve the Scheme pursuant to the Act sanctioning the Transfer. If the order is granted, the Transfer will become effective on the Effective Date. If the Court imposes any change to the proposed Scheme, the Scheme will not take effect unless FACL, FICL and AXA France Vie agree to such changes. 3.2 The Scheme is intended to transfer all of the Transferring Business to AXA France Vie. If the Transfer goes ahead, AXA France Vie will replace FACL and FICL as the insurer or reinsurer (as applicable) in respect of the policies transferring under the Scheme. 3.3 If the Scheme is approved, all of the rights and obligations arising in respect of the Transferring Businesses (including legacy liabilities) will automatically transfer to AXA France Vie on the Effective Date. This means that AXA France Vie will become the provider of the policies transferring under the Scheme and will be responsible for meeting all the obligations which were previously the obligation of FACL or FICL(as applicable) in relation to the Transferring Businesses. Continuity of Proceedings 3.4 Any proceedings brought by or against FACL and/or FICL in connection with the Transferring Businesses shall be continued by or against AXA France Vie from the Effective Date. AXA France Vie shall be entitled to any defences, claims, counterclaims and rights of set-off that would have been available to FACL and/or FICL (as applicable) in such proceedings. 2
3.5 From the Effective Date, any judgement, settlement, order or award obtained by or against FACL or FICL (as applicable) in relation to the Transferring Business shall be enforceable by or against AXA France Vie in place of FACL and/or FICL (as applicable). Transfer of Contracts 3.6 From the Effective Date, AXA France Vie shall be entitled to all rights, benefits and power, and subject to all obligations and liabilities of FACL, and all obligations and liabilities of FICL in relation to the FICL Life Business, under or by virtue of the contracts transferring under the Scheme (the "Transferring Contracts"). 3.7 All Transferring Contracts and other contracts in relation to the FACL Business to which FACL is not a party but which includes references therein to FACL, FACL's group companies (or similar), its officers, employees or agents, shall from the Effective Date be read as references to AXA France Vie, its group companies (or similar), officers, employees or agents. 3.8 Any other contracts in relation to the FICL Life Business to which FICL is not a party but which includes references therein to FICL, FICL's group companies (or similar), its officers, employees or agents, shall from the Effective Date be read as references to AXA France Vie, its group companies (or similar), officers, employees or agents. Mandates and other Instructions 3.9 From the Effective Date, any mandate, including direct debits, standing orders or other instruction in force and providing for the payment by a bank (or other intermediary) of premiums payable under or in respect of any of the policies transferring under the Scheme or policies excluded from the Scheme (by virtue of not being capable of being transferred under the Scheme but would otherwise transfer) to FACL, and in relation to the FICL Life Business, to FICL, shall be deemed to have been given to AXA France Vie. 3.10 From the Effective Date, any mandate including direct debits, standing orders or other instruction in force in respect of any of the Transferring Policies or Excluded Policies as to the manner of payment of any benefit or other amount by FACL, and in relation 3
to the FICL Life Business, to FICL, shall continue in force as an effective authority to AXA France Vie (in relation to any Excluded Policies, as agent for FACL or FICL (as applicable)). Data Protection 3.11 From the Effective Date, AXA France Vie will become the data controller in place of FACL and FICL in relation to the Transferring Business where FACL and FICL (as applicable) is currently the data controller (and the data processor in place of FACL and FICL in relation to the Transferring Business where FACL and FICL is currently the data processor), and consents and information given to FACL, and in relation to the FICL Life Business, to FICL, will be deemed to have been given to AXA France Vie. The FACL Cross-Border Merger 3.12 At the same time as the Transfer, all of the non-insurance assets and liabilities of FACL, (which do not form part of the Transferring Businesses), will also be transferred to AXA France Vie through a cross-border merger process (the "FACL Merger"). Following the completion of the FACL Merger on the Effective Date, pursuant to the terms of the FACL Merger and the Scheme, FACL will be dissolved and will no longer exist. However, as noted in paragraph 3.3 above, AXA France Vie will be responsible for any and all obligations of FACL thereafter. The AXA France IARD Scheme and FICL Cross-Border Merger 3.13 At the same time as the Transfer, all the insurance and reinsurance business, other than the FICL Life Business, of FICL will be transferred to AXA France IARD, also a member of the AXA Group, pursuant to a separate scheme under the Act (the "AXA France IARD Scheme"). The non-insurance assets and liabilities of FICL (which do not form part of the Transferring Businesses and will not transfer under the AXA France IARD Scheme) will be transferred to AXA France IARD through a cross-border merger process (the "FICL Merger"). Following the completion of the FICL Merger on the Effective Date, pursuant to the terms of the FICL Merger and the AXA France IARD Scheme, FICL will be dissolved and will no longer exist. However, as noted in paragraph 3.3 above, AXA France Vie will be responsible for any and all obligations in relation to the FICL Life Business, and AXA France IARD will be responsible for 4
any and all other obligations of FICL that do not relate to the FICL Life Business thereafter. Costs and Expenses 3.14 All costs and expenses relating to the preparation of the Scheme and the related Court processes will be borne by FACL and AXA France Vie. No such costs will be borne by policyholders. Amendment of the Scheme 3.15 The Scheme provides that it may be amended on application to the Court, provided that the PRA and FCA have been notified of the application and a certificate is obtained from an independent expert to the effect that, in his opinion, the proposed amendment will not materially adversely affect the interests of policyholders who would be impacted by such amendment. 5