Transfer of Business

Client Profile

Family Assurance Friendly Society Limited (“Family”) and Foresters Friendly Society (“Foresters”) are both large UK Friendly Societies with long histories. In 2013, Family identified that the POIS with-profits business was no longer core to its strategy, at the same time as Foresters started identifying potential acquisitions to help grow its business. The Societies agreed a transfer of the POIS business in principle and the regulators then required an Independent Actuary to report on the likely impact of the transfer on the policyholders of both Societies, and in particular how it would affect the security of their benefits and their fair treatment. This report is required to assist the regulators and Boards of the Societies in deciding whether to sanction the Transfer.

Foresters Friendly Society


The Independent Actuary is appointed to ensure that policyholders’ interests are met by the transfer and, whilst this does ultimately align with the aims of two mutuals involved in the transfer, it can be a difficult path to follow as improving the interests of one group of policyholders will often reduce those of other groups. Ultimately the outcome of the work could have been a “yes”, “only if” or “no” and it is important that the Independent Actuary is just that, whilst also maintaining good relationships with the parties involved.

As SDA had not been involved in any previous work with either of the Societies and yet has substantial expertise on friendly societies and transfers of business, Steve Dixon was appointed as Independent Actuary and worked closely with Alison Carr and other team members to carry out the work required.


The work involved:

  • detailed examination of financial results, previous schemes, service agreements, governance arrangements and outsourcing contracts and the Scheme document
  • review of proposed Scheme document
  • review of proposed policyholder communications
  • liaison with the PRA and FCA where appropriate
  • discussions with the societies’ legal teams

The work was largely desk-based and carried out at SDA’s offices, with regular phone calls with both Societies. This allowed the work to be carried out effectively with minimum of disruption for both Societies. Despite the large amount of information that needed to be read, understood and queried, the report was finalised in four months during the busiest part of the year for SDA and the Societies. Follow up work was carried out at short notice later in the year on specific issues raised by the regulators and we were pleased to see the transfer take place shortly after.

Despite the regulatory nature of the project, we do not believe that the actuary’s role is simply to produce a report. We believe that, as well as providing the report required by the regulators, we assisted both Societies and their advisers in ensuring that all aspects of the transfer had been fully considered and documented and helped them in their thinking about future plans.