6 July 2007

On 8 April 2005, we (the FSA) approved the change of control application of HHG plc Life Services. We approved it subject to a number of conditions, which the new controllers agreed to, which are now no longer necessary. We have therefore removed them with effect from 6 July 2007.

We issued the following statement at the time giving further details about the scope of the application and the conditions.

Change of control of HHG plc Life Services

12 April 2005

  • Pearl Assurance Plc;
  • Pearl Assurance (Unit Funds) Limited;
  • Pearl Assurance (Unit Linked Pensions) Limited;
  • National Provident Life Limited;
  • London Life Limited;
  • London Life Linked Assurances Limited;
  • NPI Limited;
  • UKLS Financial Services Limited; and
  • Pearl ISA Limited

by:

  • Life Company Investor Group Limited ("LCIG");
  • Hugh Osmond,
  • Matthew Allen,
  • Alan McIntosh,
  • Edward Spencer-Churchill,
  • Marc Jonas,
  • Xercise Limited;
  • Sun Capital Investments Limited ("SCIL");
  • Hera Investments One Limited ("Hera");
  • Jambright Limited;
  • TDR Capital Nominees Ltd; and
  • TDR Capital LLP

The approval was given subject to a number of conditions and agreements that LCIG and their controllers have formally agreed to. The main commitments are:

  1. in order to ensure that the life companies continue to be adequately capitalised after the change of control, the new controllers will:
    • maintain a capital margin of an amount agreed with the FSA above the regulatory capital requirements determined on a pillar 1 basis;
    • maintain the existing undertaking, established at the time of demerger with AMP, relating to shareholder transfers from the Pearl with profits fund;
    • meet the requirements of the Insurance Groups Directive in the form in which they will apply from 31 December 2006 (i.e. as a "hard test" or minimum requirement).
  2. in order to ensure that the financial position is not prejudiced by LCIG's need to service its acquisition-related debt obligations in the near-term, the new controllers and the FSA have drawn up an indicative schedule for the release of shareholder capital from the group.

    In addition, the new controllers accept that no dividends are to be paid to LCIG from any of the Life Companies until after FSA has undertaken its evaluation of the Individual Capital Assessment of the group and given Individual Capital Guidance. The FSA has indicated that it expects to complete its evaluation by the end of September 2005.