The London-based insurance giant said that the Hong Kong branch office, which has become "one of the leading insurers" in the Special Administrative Region, would transfer its business to two other Hong Kong-based Prudential entities, one of which is a new life insurance company, in an effort to better align this branch’s business "more closely with Prudential’s other Asian operations".
The move will end a corporate structure that has been in place since 1964, Prudential said, and affect some 800,000 life and general insurance customers in Hong Kong.
The company noted that the Prudential Assurance Company Ltd (PAC), which oversees the running of the Hong Kong branch that is to be moved, had undertaken similar reorganisations in the past, most recently in Singapore, Australia, New Zealand and Canada, during the 1990s.
The proposed transfer is subject to court approval in Hong Kong, and, because PAC is a UK-based company, UK court approval as well.
Prudential said it was able to announce its timetable for the "domestication" scheme after courts had given their approval to it, following hearings held in Hong Kong and London earlier this month. It had flagged up the approaching change in its half-year results back in August. The aim is to complete the transfer by 1 January 2014, Prudential said.
Transfer of policies
Life insurance policies that were originally taken out by customers of the Hong Kong branch will be transfered to the new Hong Kong life insurance operation.
As for the assets supporting the life insurance policies, these form part of an entity called the PAC long-term fund, and under the proposed transfer arrangement, a "certain amount" of these assets, and Hong Kong liabilities, will be transferred to the new life insurance company, Prudential said.
