b'INSURANCE REGULATORY|US/NAICThe Allstate CD transaction was complex and dealtUK Improvements to Part VII with the transfer of automobile insurance, a highlyTransfer Processregulated insurance product. As such, insurers, policyholders and state regulators should considerAs mentioned in the introductory section, Part VII of the success of this transaction as a positive stepthe UKs Financial Services and Markets Act of 2000 supporting the wider adoption of restructuringenables UK insurers to transfer blocks of business to mechanisms and potentially also amelioratingother legal entities. By some estimates, there have skepticism regarding the practicality ofbeen over 300 Part VII Transfers completed in the restructuring activities.UK to date. In addition to the requirements found in the Part VII Transfer laws, UK insurers are guided in Turning to IBT transactions, the second US IBT wastheir restructuring activities by the UKs Prudential approved on August 26, 2021. Like the first IBT, theRegulatory Authority (PRA) and Financial Conduct second IBT was approved in Oklahoma and involvedAuthority (FCA). These regulatory bodies publish the transfer of Excess Casualty Reinsuranceguidance setting forth the criteria insurers must Association (ECRA) pooled assumed reinsurancemeet when undertaking a Part VII Transfer (PRAs written by Sentry Insurance Company (SIC), aPart VII guidance is referred to as the PRA Wisconsin-domiciled insurer, to National LegacyStatement of Policy and FCAs guidance is Insurance Company (NLIC), an Oklahomareferred to as FCA Finalised Guidance). domiciled subsidiary of Randall & Quilter Investment Holdings, Ltd. SIC transferred its currentThe PRA Statement of Policy and the FCA Finalised and future ECRA assumed reinsurance liabilities,Guidance function as somewhat of a roadmap to obligations and continued expenses to NLIC forguide UK insurers as they navigate a Part VII approximately $2.9 million. An important aspect ofTransfer. In July of 2021, both PRA and FCA the Oklahoma regulators approval of the transferpublished proposed revisions and solicited was that the transfer would not affect the policycomments to their respective guidance materials, terms, or negatively impact policy administration orostensibly necessitated by Brexit (PRAs revisions other rights and obligations arising under theare accessible here, and FCAs are available here). pooled business. Both PRAs and FCAs revisions are geared towards process improvements that increase protections for Oklahomas second IBT also highlights the value ofall stakeholders involved in a Part VII Transfer. As of restructuring activities. Though SICs portion of theJanuary 2022, PRA adopted its revisions into its total ECRA reinsurance liabilities was small, ranging2022 Statement of Policy, while FCA is still from 0.369% to 0.593%, depending on policy year,processing its revisions and has not yet the transfer of the business presented thepromulgated a revised FCA Finalised Guidance. opportunity for SIC to hand off the business to an entity which was, among other things, better suited to handle administration of the policies. 82|Global Insurance Industry Year in Review 2021'