STATEMENT OF THE MAIN TERMS OF THE INSURANCE BUSINESS TRANSFER SCHEME TO TRANSFER THE LONG-TERM INSURANCE BUSINESS OF AVIVA ANNUITY UK LIMITED TO AVIVA LIFE & PENSIONS UK LIMITED PART A: UK SCHEME 1 INTRODUCTION 1.1 We, Aviva Annuity UK Limited ( UKA ), are proposing to transfer a portfolio of approximately 809,101 immediate annuity policies and 381 BPA 1 schemes (the Transferring Annuities ), along with the related assets and liabilities (together, the Transferring Business ) to Aviva Life & Pensions UK Limited ( UKLAP ), (the Transfer ). 1.2 The Transfer aims to simplify UKA s and UKLAP s UK corporate structure, reduce costs and access diversification benefits by combining businesses within a single entity, thereby achieving capital efficiency. 1.3 Under the Transfer, the Transferring Business will be transferred to UKLAP and the provider of the Transferring Annuities will change from UKA to UKLAP. Save as described below, no other terms and conditions of the Transferring Annuities will change as a result of the Transfer. 1.4 There are a number of co-insured policies which were created pursuant to a previous transfer scheme (the Co-Insured Policies ), but where the terms include an option to receive an annuity provided by UKA rather than UKLAP once the policy vests. This Transfer will result in UKLAP satisfying the obligations of UKA should such an option be exercised in the future. 2 THE TRANSFER 2.1 The Transfer consists of the UK Scheme, the Jersey Scheme, the Guernsey Scheme and the Isle of Man Scheme (each defined below in this section). 2.2 The Transfer in respect of UK (and any other EEA state) Transferring Annuities will be implemented through an insurance business transfer scheme under Part VII of the Financial Services and Markets Act 2000 (as amended) (the FSMA ), which enables portfolios of insurance policies to be transferred between two insurers (the UK Scheme ). 2.3 The Transfer in respect of the Jersey, Guernsey and Isle of Man Transferring Annuities will be implemented through similar transfer procedures under the laws of Jersey (the Jersey Scheme ), Guernsey (the Guernsey Scheme ) and the Isle of Man (the Isle of Man Scheme ). See also Part B below. 2.4 UKLAP will pay the costs and expenses incurred in connection with the Transfer. Policyholders will not bear any of these costs or expenses. 1 A BPA is a bulk purchase annuity contract between an insurer and trustees of defined benefit pension schemes by way of either a buy in policy or buy out policy. A buy in policy is a policy between trustees of defined benefit pension schemes and an insurer. A buy out policy is one where, subject to the satisfaction of certain conditions, the pension scheme trustees request the insurer to issue individual annuities to the beneficiaries of the relevant pension scheme. 1
3 SUMMARY OF THE UK SCHEME 3.1 The UK Scheme will require the approval of the High Court of Justice of England and Wales (the Court ). The hearing where the Court will consider whether or not to approve the UK Scheme is currently scheduled for 6 December 2016 (the Court Hearing ) at the Rolls Building, Fetter Lane, London, EC4A 1NL. If the UK Scheme is approved by the Court, it is intended that it will become effective at 00.01 a.m. (London time) on 1 January 2017 (the Effective Date ) or on such later date as certain regulatory and tax clearances have been obtained or waived, unless the Board of UKA and UKLAP decide before such date that it should take effect on a later date. If the Transfer does not take effect on or before 1 April 2017, UKA and UKLAP must apply to the Court to allow the Transfer to take effect on a later date and must consult in advance with the Prudential Regulation Authority ( PRA ), the authority responsible for the supervision and regulation of UK-registered insurance companies, and the Financial Conduct Authority ( FCA ). 3.2 Prior to the Court Hearing, policyholders and other interested parties must be notified and given time to consider the UK Scheme and each policyholder and interested party has a right to object or raise concerns if they feel they would be adversely affected if the UK Scheme were to go ahead. 3.3 The legal process to effect the UK Scheme requires the appointment of an independent expert (who must be an independent consulting actuary and not an employee of UKA or UKLAP) to give a report (the Independent Expert's Report ) to the Court on the likely effects of the Transfer on the various groups of affected policyholders. This role will be fulfilled by Mr Gordon Wood, a Fellow of the Institute and Faculty of Actuaries, and an Associate Partner in the EMEIA Insurance - Risk and Actuarial Services practice of Ernst & Young LLP (the Independent Expert ). His appointment was approved by the PRA,, after consultation with the FCA. Importantly, the Independent Expert has concluded that policyholders will not be materially adversely affected as a result of the Transfer. The Court will consider the Independent Expert s Report before deciding whether to approve the UK Scheme. See section 5 below for where to obtain copies of such documents. 4 KEY TERMS OF THE UK SCHEME 4.1 The full terms of the UK Scheme are set out in a separate legal document (the Scheme Document ). You can obtain a copy of the Scheme Document (free of charge) using the contact details in section 5 below. The following summary of the key terms of the Transfer and the Scheme Document contains important information. If you are in any doubt as to the meaning or import of the contents of this summary or the Scheme Document, you are recommended to seek your own advice from your solicitor or other professional adviser. 4.2 With effect from the Effective Date, policyholders of the Transferring Business will continue to have the same rights, benefits and obligations and be subject to the same terms and conditions in relation to those policies, save that UKLAP will be substituted as the insurer in place of UKA. This means that: 4.2.1 your annuity payments will be payable by UKLAP, and not UKA, from the Effective Date; 4.2.2 all rights, benefits, obligations or liabilities of UKA in respect of the Transferring Business (unless specifically excluded) will be transferred to UKLAP; 2
4.2.3 any pending, current or future proceedings in relation to the Transferring Annuities or Transferring Business involving UKA will be continued by or against UKLAP in place of UKA and UKLAP will be entitled to any and all defences, claims, counterclaims and rights of set-off that UKA would have had; and 4.2.4 any judgment, order or award relating to the Transferring Annuities or Transferring Business which is not fully satisfied on or before the Effective Date will become enforceable by or against UKLAP in place of UKA. 4.3 It is possible that certain of the Transferring Annuities and related assets or liabilities that would otherwise be included in the Transferring Business may transfer after the Effective Date of the relevant scheme because, for example, consents of a third party are required or legal steps are required to be taken in other jurisdictions. These are called Residual Assets and Residual Liabilities. UKA will hold any Residual Assets on trust for UKLAP and UKLAP will discharge on UKA s behalf or, failing that, indemnify UKA against any Residual Liabilities, in each case until such time as they can be transferred. 4.4 If there is an impediment to any annuities, assets or liabilities transferring to UKLAP, for example if they fall outside the jurisdiction of the UK Court and are otherwise unable to be transferred, then they may be excluded from the UK Scheme. UKA will indemnify UKLAP in respect of any such Excluded Assets or Excluded Liabilities. 4.5 We can also confirm that as a result of the Transfer: 4.5.1 there will be no changes to the way your annuity policy is administered; 4.5.2 your annuity policy number(s) will not change; 4.5.3 the terms and conditions of your annuity policy will not change, other than any references to UKA or its group will become references to UKLAP and its group; 4.5.4 the payment entitlements under your annuity policy will not change (and your payments will continue to be made to the same bank account); 4.5.5 any mandates, including direct debits, standing orders or other instructions or authorities, payable to or from UKA in respect of the Transferring Business will be payable to or from UKLAP instead; 4.5.6 documents, files and other records held by, or on behalf of, UKA relating to your Transferring Annuity will be transferred to UKLAP; and 4.5.7 UKLAP shall succeed to all rights, liabilities and obligations of UKA in respect of any personal data which relates to the Transferring Business and which is subject to the Data Protection Act 1998 and will become the Data Controller in respect of that data. 4.6 The UK Scheme is governed by English law. 5 FURTHER INFORMATION AND COPIES OF DOCUMENTS 5.1 If you have any questions or concerns about the Transfer, you can find further information, including the UK Scheme Document (and the Jersey Scheme, the Guernsey Scheme and the Isle of Man Scheme documents), the full Independent Expert's Report, the summary of the Independent Expert s Report and other relevant documentation free of charge on our website at www.aviva.co.uk/uka. 3
5.2 You can also request free copies of any of these documents or ask any further questions you may have by calling us in the UK on 08000 929 457, or from outside the UK on +44 (0) 1603 358 572. Our phone lines are open from 9am to 5pm on Monday to Friday (excluding Bank Holidays) and we will be pleased to help. You can also write to us at PO Box 3622, Norwich NR7 7XU. 5.3 In addition, these documents will be available in full to read and to take copies of, free of charge, at UKLAP s registered office at Wellington Row, York, YO90 1WR, and also at its offices at (i) Pomona Business Centre, 6 Pear Street, Sheffield, S11 8JJ, (ii) Broadlands Business Park, Old Chapel Way, Norwich, NR7 0WG, (iii) Marble Hall, Surrey Street, Norwich, NR1 3LN, (iv) The Aviva Centre, Brierly Furlong, Stoke Gifford, Bristol, Avon, BS34 8SW, and (v) 1 Park Place, Hatch Street, Dublin 2, Ireland, where, in addition, policyholders may speak to someone in person to address any questions they may have about the Transfer. PART B: JERSEY, GUERNSEY AND ISLE OF MAN POLICYHOLDERS 6 INTRODUCTION 6.1 The Transfer includes a small number of Jersey, Guernsey and Isle of Man Transferring Annuities, which will transfer under either the Jersey Scheme, Guernsey Scheme or Isle of Man Scheme (each a way of transferring portfolios of insurance policies between two insurers under the laws of the relevant jurisdiction). 6.2 The summary of the terms of the UK Scheme in this Statement applies equally to the Jersey Scheme, Guernsey Scheme and Isle of Man Scheme because each of the schemes is being effected on substantially the same terms. The summary of the Independent Expert s Report and his full report also applies equally to each such scheme. 7 THE JERSEY SCHEME 7.1 A court hearing is scheduled at The Royal Court of Jersey, The Royal Court House, Royal Square, St Helier, Jersey on 14 December 2016 at 9.00 am. The terms of the Jersey Scheme are substantially the same as described above in relation to the UK Scheme in this Summary. 7.2 The Jersey Scheme is governed by Jersey law. 7.3 You can obtain copies (free of charge) of the documents relating to the Jersey Scheme between normal working hours at the offices of Appleby (our Jersey legal advisers) at their offices at 13/14 Esplanade St Helier JE1 1BD. The documents relating to the Jersey Scheme will also be available free of charge on our website, www.aviva.co.uk/uka.you may also phone or write to us using the contact details in section 5 above. 8 THE GUERNSEY SCHEME 8.1 A court hearing is scheduled to be held on 16 December 2016 at the Royal Court of Guernsey, The Royal Court House, St Peter Port, GY1 2NZ at 9am. The terms of the Guernsey Scheme are the same as described above in relation to the UK Scheme. 8.2 The Guernsey Scheme is governed by Guernsey law. 4
8.3 You can obtain copies (free of charge) of the documents relating to the Guernsey Scheme between normal working hours at the offices of Appleby (our Guernsey legal advisers to UKA and UKLAP) at their offices at Regency Court, Glategny Esplanade, St Peter Port, Guernsey GY1 1WW, United Kingdom. The documents relating to the Guernsey Scheme will also be available free of charge on our website, www.aviva.co.uk/uka.you may also phone or write to us using the contact details in section 5 above. 9 THE ISLE OF MAN SCHEME 9.1 A court hearing will be held on a date to be confirmed in December 2016 at The High Court of Justice of the Isle of Man, Deemsters Walk, Bucks Road, Douglas, IM1 3AR. The terms of the Isle of Man Scheme are the same as described above in relation to the UK Scheme. 9.2 The Isle of Man Scheme is governed by Isle of Man law. 9.3 You can obtain copies (free of charge) of the documents relating to the Isle of Man Scheme between 9am and 5.30pm, Monday to Friday, at the offices of Cains Advocates Limited (our Isle of Man legal advisers) at their offices at Fort Anne, Douglas, Isle of Man, IM1 5PD. The documents relating to the Isle of Man Scheme will also be available free of charge on our website, www.aviva.co.uk/uka.you may also phone or write to us using the contact details in section 5 section above. 5