The High Court has sanctioned the first transfer of business out of a Lloyd’s syndicate since the formation of Equitas ten years ago, opening the prospect of a new method to obtain finality for nontrading syndicates.

Lloyd’s managing agency Spectrum Syndicate Management Ltd gained Court approval on May 24th 2006 to transfer the liabilities from Syndicate 982 to Sterline Life under Part V11 of the UK’s Financial Services and Markets Act 2000 (FSMA) – the firs time the method has been used to transfer liabilities out of a Lloyd’s syndicate.

The Part V11 business transfer is the statutory portfolio transfer mechanism contained within the FSMA. It enables Court sanction to be granted for some or all of the insurance contracts of one insurance company, or Lloyd’s syndicate, to be transferred to another insurer along with all rights and duties under those policies.