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The 'Bermuda Scheme' & the 'UK Transfer'
The previous Club structure utilised three companies, UK Bermuda, UK Europe, and IPIR. UK Bermuda was the holding company and the Club of which all insureds are Members.
Although many Members were insured directly by UK Bermuda, (through its respective branches in the UK, Hong Kong, Singapore, and Japan), substantial numbers were already insured by the subsidiary, UK Europe. Originally, both UK Bermuda and UK Europe were reinsured by the UK Club’s wholly owned subsidiary International P&I Reinsurance Company (IPIR).
In September 2012, Members received a package of information explaining both the Bermuda Scheme and the UK Transfer. Examples of the documents contained in that package are found below. To aid understanding a set of ‘frequently asked questions’ were also published. These “FAQs” are also provided below.
As UK Bermuda is a company incorporated in Bermuda, the transfer had to be sanctioned by the Supreme Court of Bermuda. Under the terms of the Bermuda Scheme current and past Members who were creditors of UK Bermuda were invited to support the Scheme by voting (by proxy or in person) at a meeting on 29 October 2012. Their individual voting entitlement was calculated by reference to a pre-populated claims form.
In respect of UK Bermuda’s UK branch the transfer used a court-approved scheme under Part VII of the Financial Services and Markets Act 2000. This UK Transfer did not require any action unless a Member wished to object.
Members approved the re-structure at the Club’s Annual General Meeting held in Paris on 29 October 2013. The sanctioning of the UK Transfer by the High Court under the Part VII process was granted on the 31st October. On the 9th November the Supreme Court in Bermuda also sanctioned the transfer of UK Club (Bermuda)’s business to UK Club (Europe).
Further information regarding the UK Transfer and the Bermuda Scheme can be found below.
NOTICE IS HEREBY GIVEN that on 31 October 2012 the High Court of Justice made an Order (“the Order”) under Part VII of the Financial Services and Markets Act 2000 (“FSMA”) in connection with the insurance business transfer scheme (“the Scheme”) between (i) The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited (“UKB”) and (ii) The United Kingdom Mutual Steam Ship Assurance Association (Europe) Limited (“UKE” and, together with UKB, the “Club”).
We have been informed by certain EEA state regulators that members who have a policy which has transferred from The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited to The United Kingdom Mutual Steam Ship Assurance Association (Europe) Limited under the Scheme, where the EEA state of commitment or state where the risk is situated is in Austria, Belgium, Czech Republic, Hungary, Norway, Poland and Sweden may under the local law of such state have a right to cancel their policy as a result of the Scheme as set out below:
Section 109 of the Financial Services and Markets Act 2000 (‘FSMA’) requires that an application in respect of a proposed insurance business transfer be accompanied by a report from a suitably qualified person (the ‘Independent Expert’) on the proposed terms of that transfer. This document is a summary of that full report (the ‘Report’) on the Transfer but should not replace a full reading of the Report as, taken in isolation, it could be misleading. The Report complies with the applicable rules on expert evidence and with the guidance for such reports set out in Chapter 18 of the FSA Supervision Handbook. The form of the Report has been approved by the FSA in accordance with Section 109 of FSMA and in the context of the Transfer. This summary and the Report have been prepared solely for the purposes of the FSMA requirements in the context of the Transfer. This summary is subject to the same limitations as those set out in the Report, and in the event of any real or perceived conflict between this summary and the Report, the Report shall prevail.
Claim no. 5279 of 2012 in the High Court of Justice Chancery Division Companies Court in the matter of Part VII of the Financial Services and Markets Act 2000 and in the matter of: (1) The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited (2) The United Kingdom Mutual Steam Ship Assurance Association (Europe) Limited
Section 109 of the Financial Services and Markets Act 2000 (‘FSMA’) requires that a scheme report must accompany an application to the High Court of England and Wales (‘the Court’) to approve an insurance business transfer scheme. This scheme report should be produced by a suitably qualified independent person (the ‘Independent Expert’) who has been nominated or approved by the Financial Services Authority (‘FSA’). The scheme report should address the question of whether any policyholders impacted by the insurance business transfer are adversely affected to a material extent.
We are writing to you to inform you of the proposed transfer of the insurance and reinsurance business of The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited (‘UKB’) to The United Kingdom Mutual Steam Ship Assurance Association (Europe) Limited (‘UKE’). UKB and UKE are together referred to herein as the ‘Club’.
This letter is being sent to you as the Club has identified you as a reinsurer of UKB and/or UKE or a broker of such reinsurer.
This letter is being sent to in your capacity as a member of the International Group of P&I Associations (the ‘International Group’) and as a signatory to the International Group Pooling Agreement (the ‘Pooling Agreement’). UKB and UKE are both signatories to the Pooling Agreement.
OUTLINEA Special General Meeting of The United Kingdom Mutual Steam Ship Assurance Association (Bermuda)Limited (UKB) will be held on the 22nd January 2013 in Bermuda. Papers for the meeting are...
On the 9th November the Supreme Court in Bermuda also sanctioned the transfer of UK Club (Bermuda)’s business to UK Club (Europe). UK Club (Bermuda) will become the reinsurer of UK Europe and continue to be the holding company controlled by its members. The new structure will take effect from February 2013 and does not impact members in the 2012 policy year.
The action you should take is set out in the Notice. Whether or not you intend to be present at the Scheme Meeting, you are requested to complete and return the Claim Form and Form of Proxy enclosed with this document in accordance with the instructions and notes contained therein so as to arrive by 5:00 pm (Greenwich Mean Time) on 23 October 2012. Claim Forms and Forms of Proxy may also be handed to the Chairman at the place of the Scheme Meeting before the commencement of the Scheme Meeting.
PROPOSAL IN RELATION TO A SCHEME OF ARRANGEMENT pursuant to Section 99 of the Companies Act 1981 of Bermuda between The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited and its SCHEME CREDITORS (as defined in the Scheme of Arrangement) In an endeavour to ensure that insurance brokers are in a position to advise their clients as to the action they should take, a copy of this document has been sent to all brokers identified by The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited (the “Company” or “UKB”) and known to have placed business with or on behalf of the Company or to have had dealings with the Company. Further copies of this document can be obtained at the offices of Thomas Miller, 90 Fenchurch Street, London, England EC3M 4ST.