Re MetLife Insurance Limited [2007] FCA 1327

FEDERAL COURT OF AUSTRALIA

Re MetLife Insurance Limited [2007] FCA 1327

INSURANCE – life insurance – scheme to transfer part of the life insurance business of one insurer to another – procedural requirements complied with – actuarial evidence suggested no disadvantage to policy holders – APRA did not oppose scheme confirmation – terms of insurance contracts not altered except beneficially for taxation and social security purposes – Court's discretion to confirm not limited to supervising procedural compliance – interests of policy holders are of primary concern – objections by some transferor insurer policy holders to transfer – original scheme rejected for failing to accommodate valid concerns of objectors – modified scheme with opt out facility for objectors approved COURTS – nature of Court's discretion to confirm scheme for transfer of life insurance business Life Insurance Act 1995 (Cth), Div 3 Pt 6, Pts 2, 3, 4, 6, 9, ss 3, 9, 11, 12A, 93, 190, 191, 192, 193, 194, 195

Re MetLife Insurance Limited and Challenger Life No. 2 Limited [2007] FCA 937 related Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 applied Re Application of Commonwealth Life Ltd [2003] FCA 637 cited Re Royal & Sun Alliance Life Assurance Ltd (2000) 104 FCR 37 cited Re MLC Lifetime Co Ltd and MLC Ltd (No 2) [2006] FCA 1367 cited METLIFE INSURANCE LIMITED ABN 75 004 274 882 and CHALLENGER LIFE NO. 2 LIMITED ABN 44 072 486 938 NSD 836 OF 2007

GYLES J

10 AUGUST 2007

SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 836 OF 2007

METLIFE INSURANCE LIMITED ABN 75 004 274 882

First Applicant

CHALLENGER LIFE NO. 2 LIMITED ABN 44 072 486 938

Second Applicant

JUDGE: GYLES J DATE OF ORDER: 10 AUGUST 2007

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. Pursuant to s 194 of the Life Insurance Act 1995 (Cth), the Scheme in the form of the document annexed hereto and marked "A" (comprising the document entitled "Scheme – Life Insurance Act 1995 Part 9") be confirmed, subject to the modifications set out in Orders 2 and 3. 2. Modifications to the Scheme 2.1 A new Section 3A is incorporated into the Scheme following Section 3: 3A.1 On the Confirmation Date MetLife will issue the New MRF Policies to MTP and those policies will come into force on the Confirmation Date. 3A.2 For each Relevant Policyholder and MRF Member for whom MetLife has a current address as at Confirmation Date, within 1 Business Day of the Confirmation Date, MetLife must post the Notice to that address. 3A.3 Immediately after the Return Date, MetLife must debit each fixed rate option sub-account kept in relation to each Opt Out MRF Member under an Old MRF Policy with an amount equal to the current account balance shown in MetLife's records as at the Return Date and credit an equivalent amount to a sub-account kept in relation to each Opt Out MRF Member under the corresponding New MRF Policy. 2.2 The definitions of 'MetLife Policy', 'Pre 2004 Policy' and 'Transfer Deed' in Section 10 of the Scheme are modified by inserting: (a) as a new sentence "However a MetLife Policy does not include an Excluded Policy." at the end of the definition of MetLife Policy; (b) as a new sentence "However, a Life Policy does not include an Excluded Policy." at the end of the definition of Pre 2004 Policy; (c) "as amended by the Orders" at the end of the definition of Transfer Deed; (d) as a new definition immediately after the definition of MRF, "MTP means MetLife Trustee Pty Limited ABN 80 115 534 453". 2.3 The following definitions are inserted in Section 10 of the Scheme in the relevant alphabetical order: Confirmation Date means the date this Scheme is confirmed by the Court.