Affected market: Insurance and pension funding
On the basis of the information available to it, the OFT has decided
that the completed transaction between Unum Limited and Swiss Life (UK)
plc does not qualify for investigation under the mergers provisions of
the Enterprise Act 2002 (the Act), because the transaction does not lead
to two enterprises ceasing to be distinct, as defined in section 26 of
the Act. A relevant merger situation has, therefore, not been created.
The reasons for concluding that the transaction between Unum and Swiss
Life will not lead to two enterprises ceasing to be distinct are
summarised as follows:
- The arrangements are limited to the reinsurance and administration of
group income protection (GIP) claims only. The agreements do not
involve the transfer to Unum of the Swiss Life GIP, group life (GL),
group critical illness (GCI) businesses or policies.
- The transaction does not involve the transfer of existing Swiss Life
policies or renewal rights. Customers will continue to make premium
payments to Swiss Life.
- Swiss Life will remain primarily liable to the policyholders.
- Swiss Life has notified policyholders that Claims Services
International Ltd ([note 1]) (CSI) will be responsible for the
administration of existing claims. However, customers with an
employee wishing to submit a new claim will continue to contact Swiss
Life in the first instance. Swiss Life will then use its GIP policy
records to check that a claim is technically eligible (ie the
individual is covered by a valid policy) before passing the claim to
- No Swiss Life assets or liabilities will be transferred to Unum, save
to the extent that the economic effect of the reinsurance agreement
will be to transfer claims liabilities and related reserves to Unum.
- Unum has confirmed that no Swiss Life employees will be transferred to
Unum under any of the agreements.
- Under the arrangements Swiss Life will retain all policy records.
- Unum will have full control over the administration of the claims, but
will have no control over the terms of the GIP policies themselves.
This means that Unum will, in particular, be unable to depart from or
amend the existing terms and conditions of the policies.
- Only limited information relating to GIP claims and closed GIP claims
will be exchanged. The parties state that any data received by CSI
from Swiss Life in addition to that provided to all bidders competing
for renewal business will be purely administrative, and will be
irrelevant to the quotation formulation. No details relating to
current and previous premium rates, risk profiles, profitability
assessments or renewal dates will be passed to Unum by Swiss Life.
- Unum will have no access to information relating to the GIP policies,
other than certain limited information about those Swiss Life GIP
policies under which claims have been or are in the future made. This
information will be limited to the data that is necessary for CSI to
establish that a claim is valid under a particular policy and to
manage and pay the claim, as agent for Swiss Life. Swiss Life will
continue to make the important initial decisions as to claims
- All information relating to Swiss Life claims that is to be
transferred under the arrangements will be provided to CSI. Under the
reinsurance agreement, Unum is only permitted to use such information
for the purposes of administering the claims. This information will
not be available to Unum's financial underwriters or sales team.
- The agreements do not contain any restrictive covenants preventing
Swiss Life from writing GIP, GCI or GL policies in the UK.
- In relation to the Network Partner agreement, Swiss Life will not be
obliged to offer pooled business through Unum, nor will Unum have an
obligation to quote for such business. In addition, under the Network
no employees will transfer to Unum from Swiss Life
no existing policies will be transferred
no assets or liabilities will be transferred and
there will be no transfer of customer records of existing Swiss Life
- A wholly owned subsidiary of Unum, responsible for
its claims handling function.