The Lloyds banking group has taken the decision of transferring the asset and liabilities off Halifax Insurance Ireland Ltd and Halifax Assurance Ireland Ltd to two St. Andrews -based companies. The life and nonlife insurance activities of the two companies shall be transferred to St Andrews Insurance plc and St Andrews Life Assurance plc. The employees who handle administration of the policies in the market shall be handed over to Wipro Outsourcing Services Ireland Ltd. The petition has been brought forth and the transfer shall be effected very soon.
A representative of the group approached the Commercial Court and requested for speedy completion of formalities related to the transfer. The court has admitted the case and has given orders for advertisement and publicity of the petitions filed by the companies. The court has also passed other orders related to this case and has insisted that all the employees and should get clear and precise information of what the companies are proposing to do. The petition shall be heard by the court on October 11 2012.
The two companies were actively involved in the sale of payment protection insurance policies until July 2010 when the Group decided to stop issuing PPI policies fearing regulatory action and the possibility of public backlash due to the negative publicity surrounding PPI. As of May 2012, HIIL has issued around 633,776 PPI policies to customers living in and outside the UK. 2267 policies have been issued to customers living outside the UK out of which 242 are living in Ireland. HAIL sold most of its policies jointly with HIIL. As of May 2012, the company had independently sold just 2700 policies and had jointly underwritten 435,790 policies with HIIL. HAIL has around 2558 policy customers living outside UK.
The transfer is inevitable considering the fact that these two companies were significantly involved in sale of PPI policies and did not participate in any other line of business. The option of transferring the companies to third parties was considered but was rejected due to fears that the policyholders would suffer and would have to compromise on quality of service. The group decided to shift the companies to London-based companies within the group to ensure the rights and liabilities of the policyholders remained unchanged. The petition also included a report of an independent actuary that certified that the policyholders shall benefit from the transaction and need not worry about adverse consequences.