In The Application Of Xl Re Europe [2004] FCA 974

FEDERAL COURT OF AUSTRALIA

In The Application Of Xl Re Europe [2004] FCA 974

INSURANCE – application to Court for confirmation of scheme of transfer – transfer of insurance business – compliance with legislative requirements

Insurance Act 1973 (Cth) ss 17B, 17C, 17D 17E, 32

IN THE APPLICATION OF XL RE EUROPE ARBN 087 708 192 AND XL RE LTD ARBN 094 352 048 N 940 OF 2004 MOORE J 27 JULY 2004 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 940 OF 2004

IN THE APPLICATION OF:

XL RE EUROPE ARBN 087 708 192 AND

XL RE LTD ARBN 094 352 048

APPLICANTS

JUDGE: MOORE J

DATE: 27 JULY 2004

PLACE: SYDNEY

THE COURT ORDERS THAT: 1. Pursuant to section 17F of the Insurance Act 1973 (Cth), the scheme for the transfer of the Australian insurance business of XL Re Europe ARBN 087 708 192 to XL Re Ltd ARBN 094 352 048, a copy of which is exhibit 'LMMD1' to the affidavit of Lisette Maureen Meredith Douglas, sworn on 16 June 2004, be confirmed. 2. The applicants pay the Australian Prudential Regulation Authority's costs of the proceedings. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 940 OF 2004

IN THE APPLICATION OF:

XL RE EUROPE ARBN 087 708 192 AND

XL RE LTD ARBN 094 352 048

APPLICANTS

JUDGE: MOORE J

DATE: 27 JULY 2004

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT 1 This is an application under s 17E of the Insurance Act 1973 (Cth) ("the Act") for an order confirming the transfer of the Australian insurance business of XL Re Europe ("the former insurance company") to XL Re Ltd ("the new insurance company"). The application was filed on 16 June 2004. Section 17E is found in Division 3A of the Act which concerns the transfer and amalgamation of insurance business. Relevantly, no part of the insurance business of a general insurer may be transferred to another general insurer unless the scheme for the transfer is confirmed by the Federal Court: see s 17B. 2 It is convenient first to set out the statutory requirements that generally apply to such an application. First, it is necessary that the scheme set out the terms of the agreement or deed under which the proposed transfer is carried out and the particulars of any other arrangements necessary to give effect to the scheme: s 17B(3). There are a number of statutory preconditions to the making of an application: s 17C(2). Continuing the enumerated conditions, they are secondly, a copy of the scheme and any actuarial report on which the scheme is based has been given to be Australian Prudential Regulation Authority ("APRA"), thirdly, notice of intention to make the application has been published by the applicant in accordance with the relevant prudential standards and fourthly, the approval summary of the scheme has been given to every affected policyholder. Fifthly, notice of intention must include, in relation to each body corporate affected by the scheme, details of place and time in which an affected policyholder may obtain a copy of the scheme: s 17C(3). Generally, APRA may, but need not, arrange for an independent actuary to make a written report on the scheme: s 17D(1). Sixthly, the application for confirmation must be made in accordance with the prudential standards: s 17E(2).