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A note to advisers: Next steps in sale of annuity book to Rothesay Life

03 February 2017

Zurich UK Life has begun the next stage of transferring a tranche of its legacy annuity business to Rothesay Life, under what is called a Part VII Transfer.

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What has happened?

Zurich UK Life has begun the next stage of transferring a tranche of its legacy annuity business to Rothesay Life, under what is called a Part VII Transfer. The proposed arrangement was originally announced in May 2015 and at the time concerned just over 28,000 policies (with total liabilities of £1.2bn). The scope of this transfer has since grown by a further 3,000 policies. On 30 January 2017, the UK Court approved that Zurich can notify its impacted annuity customers to outline the proposals and, importantly, explain how they can object if they wish to do so. We will begin to do this on 7 February 2017. We want to make sure you are aware of this, and informed of clients’ circumstances and rights should any of them contact you concerning this matter.

What does this mean for your clients?

You may have clients impacted by this proposed transfer, and they may come to you for information. Below is a full Q&A which covers the key questions we believe may be asked. We have also attached an explanatory statement which has been sent to impacted customers. The headline impact of this transfer, if it is fully approved, will be that the legal ownership of this portfolio will transfer from Zurich Assurance Ltd to Rothesay Life. As a result Rothesay Life will become responsible for the administration and payment of the in-scope annuities. The guaranteed benefits of the policies will not be affected. Rothesay Life has been proposed following a rigorous process to ensure an appropriate firm for this transaction.

Why is Zurich transferring this tranche of business?

Zurich UK Life has not actively marketed its annuity business since 2005, choosing instead to focus on growing its core business. This decision is in line with Zurich's UK and Group strategy. The Court will only sanction the transfer if it is satisfied customers are not materially affected by the transaction.

What’s next?

Following the customer notification period, if the transfer is approved by the Court, the in-scope annuities will transfer from Zurich Assurance to Rothesay Life on 6 June 2017. Please find attached below an explanatory statement and a Q&A for your information. Impacted customers will be directed to a dedicated website which will be live from 7 February 2017: http://www.zurich.co.uk/annuitytransfer

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