The High Court judgment on the PAC Rothesay transfer is here. I won’t comment for now, except to say it was a complete joke, even by the standards of such things.
Let Battle Commence
A page with a timeline for and sources on the Prudential-Rothesay Part VII transfer.
Eumaeus’ judgment
The judges’ summary, in allowing the Appeal by The Prudential Life Assurance Company Ltd and Rothesay Life PLC for the Part VII transfer, is partly transcribed below. Note (i) it is my transcript, I can’t guarantee its accuracy and (ii) as the Chancellor says, the summary forms no part of the judgment.
Eumaeus’s verdict is below.
The Prudential Life Assurance Company Ltd –v- Rothesay Life PLC
Rothesay appeal
The main event is today, and potentially for the following two days. You can watch by following the link here, cunningly disguised as A3-2019-2407 & A3-2019-2409. Starts at 10:00.
I have been leafing through Malleus Maleficarum, the 15th century guide to prosecuting witches, which contains a mass of detail about the correct legal process to be followed. Even if the judges in witchcraft cases knew about the scientific evidence we know today (i.e. witches don’t exist), they would have to ignore it, and follow the legal process set out, for example examining the body of the witch for “devil’s marks”.
Likewise, any scientific evidence that the illiquidity premium does not exist will be ignored in the current case. Whatever the Witchfinder General (you know who I mean) says about the existence of such things, must be considered to be the case. See e.g. here.
On the power of expensive lawyers
Dan McCrum of the FT has a further piece here about how various agents, including the German regulators, tried to stifle his investigation of Wirecard. The article is behind a paywall, but is summarised almost verbatim by Tyler Durden at Zerohedge here.
Many of the issues have already been picked up in mainstream media, but there are two that deserve more comment.
Part VIIs after Prudential/Rothesay
A thoughtful article in Lexology here.
Single point of failure
Wikipedia: “A single point of failure is a part of a system that, if it fails, will stop the entire system from working”. Right. You try to avoid this in any decent system, building in redundancy at every critical point. The classic example is a chain, where any single link is a single point of failure. You can build in redundancy by, e.g., adding a second chain. So long as each chain on its own can support the weight, nothing bad will happen if one chain breaks (bad luck if both break, though).
Something like that principle of redundancy was meant to be part of the life insurance Part VII regime. You have the PRA which approves the default model of the insurer. The FCA is meant to look at the same thing from the point of view of the policyholder (the PRA being a prudential regulator, as I pointed out to the court here, see page 5). The Independent Expert provides further assurance with his/her ‘independent’ report. Finally, the court itself forms a judgment.
However, that principle seems to have been disastrously weakened in the light of the recent judgment by Justice Zacaroli.
In the matter of matching adjustment
Here is an edited version of the transcript from the hearings on 22 and 25 November 2019, relating to the oral submissions by Martin Moore QC, Tom Weitzman, and myself (‘Dr Buckner’).
I have lightly edited my submission only, to remove repetitions and to make minor corrections. I also added the diagrams which the judge and I would have seen while I was referring to them, but not the rest of the Court (although the applicants had copies for their own reference).
I will comment next week.
Judgment day
In the matter of the Equitable Life company etc (4 December 2019) here.
Posting without comment for the moment.
DB