The UK High Court has blocked the transfer of a £12bn portfolio of annuities from Prudential to Rothesay Life.

The court halted what would have been the largest annuity transfer ever, involving nearly 400,000 policy holders, on Friday (16 August).

Justice Snowden blocked the transfer after concluding that Rothesay Life did not have the same reputation and financial stability as Prudential, which may have influenced people's decision to purchase the Prudential annuities initially.

This is despite an independent expert, that was appointed to report to the High Court, concluding that the deal would not result in “any material adverse effect on policyholders' security or benefits”.

Rothesay Life said that it was “disappointed” by the High Court's ruling and that it and Prudential were committed to “a long-term relationship irrespective of the outcome of the proposed insurance business transfer”.

“Whilst it is not the preferred or optimal outcome for either party, it will not have a material impact on Rothesay Life as a whole,” it added.

It also noted that neither the Prudential Regulation Authority or the Financial Conduct Authority opposed the deal.

Rothesay Life and Prudential entered into the transaction on 14 March 2018, with the firms hoping that this would be followed by an insurance business transfer.

Rothesay Life and Prudential have been granted leave to appeal by the High Court.

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