FEDERAL COURT OF AUSTRALIA Asteron Life Ltd, in the matter of Asteron Life Ltd (No 2) [2011] FCA 1529 Citation: Asteron Life Ltd, in the matter of Asteron Life Ltd (No 2) [2011] FCA 1529 Parties: ASTERON LIFE LIMITED ABN 64 001 698 228 and SUNCORP LIFE & SUPERANNUATION LIMITED ABN 87 073 979 530 File number: NSD 1677 of 2011 Judge: RARES J Date of judgment: 13 December 2011 Legislation: Life Insurance Act 1995 (Cth) ss 3(1), 175, 194 Insurance Acquisitions and Takeovers Act 1991 (Cth) s 41 Cases cited: Asteron Life Limited; in the matter of Asteron Life Ltd [2011] FCA 1230 cited Date of hearing: 13 December 2011 Dates of orders: 13 and 14 December 2011 Place: Sydney Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 37 Counsel for the Applicants: Mr F Gleeson SC with Ms MV McCarthy Solicitor for the Applicants: Freehills IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1677 of 2011 IN THE MATTER OF ASTERON LIFE LIMITED IN THE MATTER OF SUNCORP LIFE & SUPERANNUATION LIMITED ASTERON LIFE LIMITED ABN 64 001 698 228 First Applicant SUNCORP LIFE & SUPERANNUATION LIMITED ABN 87 073 979 530 Second Applicant JUDGE: RARES J DATE OF ORDER: 13 DECEMBER 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. On or before noon on 14 December 2011, the Australian Prudential Regulation Authority cause to be filed and served an affidavit as to the authority of the General Manager - Diversified Institutions to sign its letter dated 21 September 2011 to the Chief Executive Officer of Suncorp Life in relation to the scheme the subject of these proceedings or otherwise evidencing the matters required to indicate the authority or approval of such matters as are required under the Life Insurance Act 1995 (Cth) for the purposes for the scheme to be confirmed by the Court. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1677 of 2011 IN THE MATTER OF ASTERON LIFE LIMITED IN THE MATTER OF SUNCORP LIFE & SUPERANNUATION LIMITED ASTERON LIFE LIMITED ABN 64 001 698 228 First Applicant SUNCORP LIFE & SUPERANNUATION LIMITED ABN 87 073 979 530 Second Applicant JUDGE: RARES J DATE OF ORDER: 14 DECEMBER 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to s 194 of the Life Insurance Act 1995 (Cth) (Act), the scheme for the transfer of the life insurance business of Asteron Life Limited to Suncorp Life & Superannuation Limited, in the form of the document annexed hereto and marked "A" (comprising the executed Transfer Deed dated 4 October 2011, which annexes the document titled "Scheme under Part 9 of the Life Insurance Act 1995 (Cth) for the transfer of the Life Business of Asteron Life Limited ABN 64 001 698 228 to Suncorp Life & Superannuation Limited ABN 87 073 979 530"), be confirmed. 2. The applicants pay the costs of the proceedings of the Australian Prudential Regulation Authority as agreed or assessed. 3. These orders be entered forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1677 of 2011 IN THE MATTER OF ASTERON LIFE LIMITED IN THE MATTER OF SUNCORP LIFE & SUPERANNUATION LIMITED ASTERON LIFE LIMITED ABN 64 001 698 228 First Applicant SUNCORP LIFE & SUPERANNUATION LIMITED ABN 87 073 979 530 Second Applicant JUDGE: RARES J DATE: 13 DECEMBER 2011 PLACE: SYDNEY REASONS FOR JUDGMENT (No 2) (Revised from the Transcript) 1 The applicants, Asteron Life Limited and Suncorp Life & Superannuation Limited applied, in an originating application filed on 6 October 2011, for an order under s 194 of the Life Insurance Act 1995 (Cth) confirming a scheme for the transfer of the life insurance business of Asteron Life to Suncorp Life. The applicants propose that the scheme should take effect on and from 1 January 2012 if it is confirmed under s 194 of the Act. 2 On 21 October 2011, I made orders under s 191 of the Act dispensing with a number of requirements relating to notification of persons who may be affected, as policy owners, were the scheme to go ahead, because there were difficulties in giving those persons notice of the application: Asteron Life Limited; in the matter of Asteron Life Ltd [2011] FCA 1230. The general nature of the scheme 3 Both applicants are life insurance companies in co-ownership within the group of companies of which Suncorp Group Limited is the ultimate holding company. Currently, Asteron Life has five statutory funds with total assets in the order of about $3.2 billion and Suncorp Life has two statutory funds with total assets of about $4 billion. In both companies those sums are gross of reinsurance. The scheme contemplates that Asteron Life's statutory funds numbers 1, 3 and 5 will be transferred into and become part of Suncorp Life's statutory fund number 1 and Asteron Life's statutory funds numbers 2 and 4 will be transferred to, and become part of, Suncorp Life's statutory fund number 2. 4 Suncorp Life's statutory fund number 1 currently contains primarily participating traditional business, with some non-participating ordinary insurance risk business, a small closed book of non-participating immediate annuity business and a very small book of non-participating traditional business. Suncorp Life's current statutory fund number 2 contains non-participating, ordinary and superannuation linked business. 5 Michael James Lubke is the appointed actuary of both Asteron Life and Suncorp Life. He explained that the proposed relocation of Asteron Life's statutory funds' current classes of business, benefit types and key product groups into Suncorp Life's statutory funds is represented in the following diagram and table: Table 1 Existing Asteron Life Statutory Fund No. Class of Business Benefit Type Key Product Groups Transfer to Suncorp Life Statutory Fund No. 1 Ordinary and Superannuation Non-Participating Term and Disability Insurance, Annuities, Traditional 1 2 Ordinary Non-Participating Investment Linked 2 Existing Asteron Life Statutory Fund No. Class of Business Benefit Type Key Product Groups Transfer to Suncorp Life Statutory Fund No. 3 Ordinary and Superannuation Non-Participating Investment Account 1 4 Superannuation Non-Participating Investment Linked 2 5 Ordinary and Superannuation Participating Traditional, Investment Account 1 The statutory context 6 Section 194 provides: "194(1) The Court may: (a) confirm a scheme without modification; or (b) confirm the scheme subject to such modifications as it thinks appropriate; or (c) refuse to confirm the scheme. (2) In deciding whether to confirm a scheme (with or without modifications), the Court must have regard to: (a) the interests of the policy owners of a company affected by the scheme; and (b) if a report relevant to all or part of the scheme has been filed with the Court under section 175—that report; and (c) any other matter the Court considers relevant." 7 The nature of the discretion conferred in s 194(1) is conditioned by the matters specified in s 194(2), to which the Court must have regard, but it is otherwise unconfined. For present purposes, s 194(2)(b) can be put to one side since s 175 refers only to the situation in which a life insurer is under judicial management. However, the Court must also have regard to the subject matter, scope and purpose of the Act in considering whether the discretion to confirm a scheme should be exercised. The objects of the Act are contained in s 3. In particular, s 3(1) provides: "3(1) The principal object of this Act is to protect the interests of the owners and prospective owners of life insurance policies in a manner consistent with the continued development of a viable, competitive and innovative life insurance industry." 8 The principal means adopted for the achievement of those objects are set out in s 3(2). These include imposing requirements on life companies designed to promote prudent management of their life insurance businesses, such as ensuring the solvency and capital adequacy of their statutory funds, and providing for the supervision by the Court of transfers and amalgamations of life insurance business (s 3(2)(b) and (f)). 9 Part 9 of the Act deals with schemes to transfer or amalgamate life insurance business. The Australian Prudential Regulation Authority (APRA) has an important role to play in the processes contemplated in Pt 9 of the Act. This includes it exercising supervisory functions, on the performance of which the Court can rely, in circumstances where confirmation of a scheme is not opposed by any policy owner or other person. First, APRA must be given a copy of the scheme and any actuarial report on which it is based in accordance with the Life Insurance Regulations 1995 (Cth) (s 191(2)(a) and reg 9.01). It can arrange for its own independent actuary to make a written report on the scheme and can give a copy of any such report to a company affected by the scheme (s 192). Secondly, APRA must approve a summary of the scheme sent to policy owners (s 191). Thirdly, APRA is entitled to be heard on any application to the Court for confirmation of the scheme (s 193(3)). When the scheme is confirmed, the company that applied for it must pay to the Commonwealth an amount equal to the expenses reasonably incurred by APRA in obtaining any actuarial report under s 192 (s 196). 10 The Regulations provide for a number of steps to ensure transparency and regularity in the process by which a scheme is propounded to policy owners and the Court. Those steps are directed to protecting the interests of policy owners and contemplate that appropriate notice of the application for confirmation of a scheme be given. This is a further means of enabling concerns of persons who may be affected to be raised with the Court. 11 APRA has been represented and has indicated that it has approved those aspects of the application that required its approval. It has raised no matter with the Court to suggest that the scheme ought not be confirmed as proposed. A difficulty arose with the form in which APRA's general manager of diversified institutions wrote a letter on 21 September 2011 signifying APRA's position with respect to the then proposed scheme. The letter stated that the general manager, in effect, personally as opposed to acting as a delegate, either approved or raised no objection to the matters that the Act required APRA to approve or state its position. Accordingly, I required that an affidavit be filed identifying the capacity in which the general manager signed the letter. The actuarial reports on the scheme 12 The scheme has been based on the actuarial and supplementary reports prepared by Mr Lubke and the actuarial and supplementary reports prepared by Anton Kapel of Towers Watson Australia Pty Ltd, who is an independent actuary. Mr Kapel's role was to review independently the opinions expressed by Mr Lubke in his reports while accepting the accuracy of the financial information set out in those reports. That is to say, Mr Kapel considered, as an independent actuary, whether he would form opinions consistent with those expressed by Mr Lubke as to the consequences of the implementation of the scheme. Mr Kapel also opined on his assessment of the materiality of the effect of the consequent changes in the financial positions of the statutory funds on policy owners. 13 Mr Lubke prepared a detailed report on 4 October 2011. He updated the financial position in his affidavits of 5 and 12 December 2011. Mr Kapel prepared reports shortly afterwards expressing substantially the same opinions as Mr Lubke on actuarial questions. 14 The capital positions of each of the Asteron Life and Suncorp Life statutory funds as at 30 September 2011 were set out in Mr Lubke's report of 5 December 2011 in the tables below. The information in these was updated with further information to reflect the position at 30 November 2011. Table 2 Asteron Life Capital Position as at 30 September 2011 Statutory Fund No. 1 A$m Statutory Fund No. 2 A$m Statutory Fund No. 3 A$m Statutory Fund No. 4 A$m Statutory Fund No. 5 A$m Shareholders Fund A$m Total Assets (gross of reinsurance) 1,247.6 53.2 22.4 1,812.3 142.6 11.4 Gross Policy Liabilities (49.6) 49.3 18.6 1,770.1 115.4 - Other Liabilities # 188.4 1.9 0.4 11.5 10.2 0.5 Capital Adequacy Margin 1,027.7 1.0 0.7 16.9 7.3 10.1 Capital Adequacy Requirement (CAR) 1,166.4 52.2 19.7 1,798.5 132.9 10.6 Excess Assets above CAR 81.2 1.0 2.7 13.7 9.7 0.8 Excess Assets Ratio % 7.0% 1.9% 13.6% 0.8% 7.3% 7.7% Excess Assets Ratio % as at 30 June 2011 * 8.8% 2.0% 13.2% 0.7% 11.5% 6.5% Target Surplus Requirement (TSR) 93.3 0.3 1.3 10.6 11.5 0.3 Excess Assets above CAR and TSR (12.1) 0.7 1.4 3.1 (1.8) 0.6 Target Surplus Ratio % 87% 326% 210% 129% 84% 325% Target Surplus Ratio % as at 30 June 2011 * 110% 346% 203% 113% 132% 279% * The ratios in this table as at 30 June 2011 reflect the transfers into or out of the funds processed in August 2011 following completion of the 30 June 2011 liability valuations, as recommended in Mr Lubke's Financial Condition Report to the Board. # For the Participating business in Statutory Fund No. 5, Other Liabilities includes policy owner retained profits. Table 3 Suncorp Life's Capital Position as at 30 September 2011 Statutory Fund No. 1 A$m Statutory Fund No. 2 A$m Shareholders Fund A$m Participating Non-Participating Non-Participating Non-Participating Total Assets (gross of reinsurance) 2,239.5 329.2 1,425.2 17.4 Gross Policy Liabilities 1,708.4 54.1 1,407.0 - Other Liabilities # 424.6 42.7 4.5 6.4 Capital Adequacy Margin 11.7 213.9 36.0 10.0 Capital Adequacy Requirement (CAR) 2,144.7 310.7 1417.5 16.4 Excess Assets above CAR 94.9 18.5 7.7 1.0 Excess Assets Ratio % 4.4% 6.0% 0.5% 5.9% Excess Assets Ratio % as 4.3% 6.5% 0.6% 11.9% at 30 June 2011 * Target Surplus Requirement (TSR) 112.8 20.1 8.4 1.0 Excess Assets above CAR and TSR (17.9) (1.6) (0.7) 0.0 Target Surplus Ratio % 84% 92% 91% 96% Target Surplus Ratio % 101% 100% 105% 132% as at 30 June 2011 * * The ratios shown in this table as at 30 June 2011 reflect the transfers into or out of the funds processed in August 2011 following completion of the 30 June 2011 liability valuations, as recommended in Mr Lubke's Financial Condition Report to the Board. # For the SLSL Participating Business in Statutory Fund No. 1, Other Liabilities includes policy owner retained profits. 15 The capital adequacy requirement in the tables is the amount set by APRA as the minimum prudential amount of capital that should be held in a fund. Based on Mr Lubke's reports, as at 30 September 2011 and 30 November 2011, each of Asteron Life's statutory funds hold more capital than set for their respective capital adequacy requirements. That extra capital or margin is reflected in the excess assets ratio in each of tables 2 and 3. Because Asteron Life and Suncorp Life are in common ownership, they have applied a common policy that, provided the target surplus ratio for each statutory fund is maintained in a range between 75% and 110% of the target surplus requirement, no specific management action will be immediately required. Where the target surplus ratio in a statutory fund is greater than 110%, the policy allows the relevant life company to withdraw money from that fund and put it into a shareholders fund. Thus, the target surplus requirement is an internally set requirement, over and above the minimum capital that a life company is required by APRA to have in its statutory funds in order to protect the interests of policy owners. 16 As would be expected, the total assets of the statutory funds will vary from time to time depending on conditions in the various markets in which those funds may be invested. In recent months, there has been some deterioration in world markets generally. Over that period the statutory funds of both applicants have been supplemented by injections of capital from Suncorp group members so as to cause each of their statutory funds to exceed the target surplus requirement. 17 Mr Lubke stated that the practice of each of Asteron Life and Suncorp Life is to perform six monthly semi-annual reviews, the next being due to happen on around 31 December 2011. On these reviews each statutory fund's capital position is reviewed and either supplemented by extra capital from elsewhere in the group or, where it is more than adequate, by withdrawing capital. Mr Lubke said, and I accept, that if on such a review it is necessary for a capital injection to be made to meet the target surplus requirement of any fund, the practice of Suncorp group and each of the applicants is to make that injection at that time. He said that if the need for a capital injection arises on the next review it is likely that the injection will occur and the sums necessary will be available to do so to the extent necessary. 18 The consolidated statement of the Suncorp Group's financial position as at 30 June 2011 indicates that the group had total equity of $14 billion. The group had a surplus of about $1.25 billion available to make such capital injections above what it had set as its internal target for the conduct of its overall business. That surplus included $77 million in the group's life company assets. The evidence suggests that if the scheme had been implemented on 30 November 2011, in the order of $8 million would have had to be injected to ensure that each of the two Suncorp Life statutory funds would have met its target surplus requirement. 19 Having regard to these matters and the evidence before me, I am satisfied that if the scheme is approved, and takes effect on and from 1 January 2012, Suncorp Group will place Suncorp Life's statutory funds in a position where they will hold not less than 100% of their target surplus requirement as at that date. Thus, if there is any further deterioration in the general market position affecting the total assets, gross of reinsurance, in either of Suncorp Life's statutory funds prior to 1 January 2012, Suncorp Group will be able to, and will, ensure that any sum needed to meet that fund's target surplus requirement will be injected. Procedural and formal matters 20 The applicants had provided to APRA by 5 October 2011 all the relevant documents required by s 191(2)(a) of the Act and reg 9.01 including the transfer deed, scheme document, appointed actuary's report on which the scheme was based and the independent actuary's report to which I have referred. Notice of the applicants' intention to make this application in the form approved by APRA was published in the Commonwealth Gazette on 19 October 2011 and in newspapers circulating throughout Australia on the next day in accordance with s 191(2)(b) and reg 9.02(1). 21 On 17 October 2011, a scheme summary was sent to the 216,919 Asteron Life policy owners at the address maintained for each owner in its policy registers and related databases. However, 7,165 mail-out packs were not posted because Asteron Life had no record of a current mailing address for the relevant policy owner as at close of business on 12 October 2011. I dispensed with the requirement that those persons be given notice by the orders I made on 21 October 2011 under s 191(5). By close of business on 25 November 2011, approximately 3,470 of the scheme summaries had been returned to Asteron Life as undeliverable. The company then applied its returned mail procedures and obtained a new address for 459 of those persons and posted the scheme summaries to the newly found addresses on 30 November 2011. 22 During the period between 24 October and 14 November 2011, a copy of the scheme document, appointed actuary's report and independent actuary's report were made available by both Asteron Life and Suncorp Life for inspection by policy owners in advertised locations in each state and territory. No one attended those locations during this period to inquire about the scheme and no one requested copies of the scheme documents at those locations. 23 The companies also established a call centre to deal with inquiries by policy owners. 1,234 phone calls were received by call centre staff who were assigned to support toll-free numbers published in the scheme summaries. But of these calls, only 87 related to the scheme itself. All of the inquiries were able to be answered by the call centre staff and none of the 87 callers indicated that they would appear at the Court to object to the proposed scheme when this matter was listed for hearing. A small number visited the website established by the applicants and a smaller number downloaded documents from the website. Seven phone calls were received by the solicitors for the applicants in relation to the scheme, but again none of those callers indicated that they intended to appear today in opposition to the scheme. 24 In addition, about 140 email inquiries were received by Asteron Life from policy owners, of which 33 related to the scheme, but none of those persons indicated that they intended to appear to object to the scheme. Neither Asteron Life nor Suncorp Life received any letters in relation to the scheme. Suncorp Life did not receive any emails in relation to the scheme. 25 As at 5 December 2011, no owner of any policy issued by either of the applicants had contacted the solicitors for the applicants to inform them that they intended to appear or asked to be heard on this application, and no one appeared this morning when the matter was called. Suncorp Portfolio Services Limited, which is the trustee of the Suncorp Master Trust and Suncorp Defined Benefit Fund, has invested in a number of policies issued by Asteron Life that supports the benefit entitlements of members of those funds. It has confirmed it does not object to the scheme. 26 The procedural and formal matters that were intended by the Act and Regulations to bring the scheme to the notice of policy owners and to deal with their inquiries have been satisfied. This enables the scheme to be considered for confirmation on its merits. Conditions precedent in the scheme 27 The scheme is contained in a transfer deed made on 4 October 2011 between each of the applicants. It is subject to four conditions precedent. The first condition precedent was confirmation by the Court. The second condition precedent was the receipt of written advice from, or on behalf of, the Treasurer of the Commonwealth to the effect that the Treasurer has made a decision under the Insurance Acquisitions and Takeovers Act 1991 (Cth) that the Commonwealth Government has no objection to the proposed transfer of the life business of Asteron Life to Suncorp Life. That condition was satisfied on 21 September 2011 by a notice of go-ahead decision signed by a delegate of the Minister under s 41(1) of the Insurance Acquisitions and Takeovers Act. 28 The third condition precedent was that each of the applicants receive a certificate from Mr Lubke to the effect that: (a) as at 30 June 2011 each of the seven statutory funds complied with APRA Life Prudential Standard 2.04, being the solvency standard, and APRA Life Prudential Standard 3.04, being the capital adequacy standard. (On 1 December 2011, Mr Lubke signed and provided to each of the applicants such a certificate.); (b) there has not been in the period between 30 June 2011 until immediately prior to 1 January 2012 any material change in the circumstances of either company that would adversely affect their respective solvency and capital adequacy positions. (As I have noted, Mr Lubke anticipates that that condition is likely to be able to be satisfied without difficulty.) 29 The fourth condition precedent was that Suncorp Group Limited, as the parent company of each of the applicants, approved the scheme and provided to those companies reasonable evidence of that approval. Once again, that condition has been satisfied by a resolution of the Suncorp Group board that is in evidence. The effect of the scheme 30 The effect of the scheme will be as follows. In broad terms, the policy and other liabilities in Asteron Life statutory funds numbers 1, 3 and 5, which are in the order of $250 million, will be transferred to the Suncorp Life statutory fund number 1, that currently has policy and other liabilities in the order of $2.3 billion. Likewise, the policy and other liabilities referrable to Asteron Life statutory funds 2 and 4, which are in the order of $2 billion, will be transferred to the Suncorp Life statutory fund number 2, that currently has a policy and other liabilities in the order of $1.5 billion. First, each Asteron Life policy referable to its statutory fund number 1 will become a Suncorp Life policy referable to Suncorp Life's statutory fund number 1 maintained in the existing Suncorp Life ordinary or superannuation non-participating sub-fund. The assets, liabilities and any shareholders' capital and retained profits of the Asteron Life statutory fund number 1 will become assets, liabilities and shareholders' capital and retained profits of Suncorp Life's statutory fund number 1. 31 Secondly, each Asteron Life policy referable to its statutory fund numbers 2 or 4 will become a Suncorp Life policy referable to its statutory fund number 2, and the assets, liabilities and any shareholders' capital and retained profits of the Asteron Life statutory funds numbers 2 and 4 will become assets, liabilities and shareholders' capital and retained profits of the Suncorp Life statutory fund number 2. 32 Thirdly, each Asteron Life policy referable to its statutory fund number 3 will become a Suncorp Life policy referable to its statutory fund number 1, and the assets, liabilities and shareholders' capital and retained profits of the Asteron Life statutory fund number 3 will become assets, liabilities and shareholders' capital and retained profits of the Suncorp Life statutory fund number 1. 33 Finally, each Asteron Life policy referable to its statutory fund number 5 will become a Suncorp Life policy referable to its statutory fund number 1 and be maintained in a sub-fund consistent with the sub-fund structures that have existed in Asteron Life statutory fund number 5. The assets, liabilities and any retained profits of the Asteron Life statutory fund number 5 will become assets, liabilities and retained profits of the Suncorp Life statutory fund number 1. 34 As a result of these matters, each owner of an Asteron Life policy will become the owner of a Suncorp Life policy with the same rights and obligations. The total assets of the Asteron Life shareholders fund, of about $12.4 million, will remain with Asteron Life. The scheme leaves unaffected the terms and conditions of the policies held by the Asteron Life policy owners, and the Suncorp Life policy owners. All the costs of the scheme will be met by a related company of Asteron Life, Asteron Pty Limited. Conclusion 35 As is apparent from the financial positions of the applicants and the various statutory funds, depicted above, the implementation of the scheme is likely to leave substantially unaffected the rights and liabilities of policy owners currently holding Asteron Life and Suncorp Life policies when the transfer to Suncorp Life occurs. That position was confirmed by both Mr Lubke and Mr Kapel. 36 In essence, Mr Lubke concluded that the effect of the scheme on policy owners of both companies would be as follows. He opined that there would be no adverse effect on the contractual benefits, and rights or benefit expectations of Asteron Life and Suncorp Life policy owners. Mr Lubke considered that each of Suncorp Life's statutory funds numbers 1 and 2 and Suncorp Life as a whole, would be in a sound financial position, and there would be no adverse affects on the benefits or security of Asteron Life policy owners or existing Suncorp Life policy owners in any material respect. I am satisfied that that opinion is soundly based. It is also supported by Mr Kapel's opinion to the same effect which I accept. 37 Having considered all the evidence, I am satisfied that, subject to ensuring that APRA has given its approval and is otherwise satisfied under the Act that the scheme can be implemented, the interests of current and prospective policy owners of both Asteron Life and Suncorp Life will not be in any way adversely affected by confirmation of the scheme without modification under s 194(1)(a) of the Act. The implementation of the scheme will have no material or other adverse effect on any policy owner of either applicant. For those reasons it will be appropriate to make an order confirming the scheme if evidence as to APRA's general manager's authority is received tomorrow. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 14 December 2011