http://www.bailii.org/ew/cases/EWHC/Ch/2016/944.html

The court made an order sanctioning an insurance business transfer scheme (pursuant to Part VII of the FSMA 2000). One issue which the court was required to consider was the treatment of two guarantees, entered into in 1989 and 1995, in favour of the Institute of London Underwriters ("ILU") for the benefit of policyholders in the transferring company (whose policies were signed and issued through the ILU). Under the guarantees, if the transferor company had been unable to make full payment to the policyholders covered by the guarantees, the guarantor would pay the outstanding balance. When the transferor company was sold to Enstar in 2009, the guarantors were not released. However, they now argued that they should not be covered by the scheme, but instead they should be replaced with guarantees from Enstar (on the basis that the scheme was being proposed for the benefit of the Enstar group).

That argument was rejected by Snowden J. The variation of the guarantees should not be treated in the same way as the transfer of outwards reinsurance protection (which are routinely transferred under a scheme). Instead, it was necessary for the court to rely on section 112(1)(d) of FSMA, which allows the court to make an order "with respect to such incidental, consequential and supplementary matters as are, in its opinion, necessary to secure that the scheme is fully and effectively carried out". The writing of policies with the benefit of the ILU guarantees was an integral part of the transferor's business and it was part of the policyholder's legitimate expectations that those guarantees should continue to be available: "In such circumstances, it seems to me an entirely natural use of language, and in accordance with the overall purpose of Part VII FSMA, which clearly requires the court to have regard to the interests of policyholders, to conclude that the Scheme would not be fully and effectively carried out if the benefit to policyholders of the ILU Guarantees associated with their policies was lost as a result of the transfer".

Furthermore, the judge said that section 112(1)(d)  should not be read narrowly. It did not matter that the PRA, FCA and Independent Expert had not indicated that discontinuation of the guarantees was a matter which required them to object to the scheme. Section 112(1)(d) empowered the court to do what was necessary to secure that the scheme was "fully" carried out ie the court can go beyond the bare minimum without which the Independent Expert would withdraw his support.