Carey Olsen has advised the BT Pension Scheme trustees on the
establishment of the largest ever Guernsey insurance captive
designed to cover 25% of the scheme's exposure to the risk of
increased life expectancy.
The BT Pension Scheme is the UK's biggest corporate final
salary scheme and the transaction is one of the largest ever
established and covers scheme liabilities currently valued at
around $16 billion. The longevity insurance and reinsurance
transaction involved the Guernsey captive as insurer and the
Prudential Insurance Company of America (PICA) as reinsurer.
Carey Olsen partner, Konrad Friedlaender, senior associate,
James Stockwell and associate, Paula Fry, advised the BT Pension
Scheme trustees on all the Guernsey legal and regulatory issues
with establishing the captive and the insurance and reinsurance
transaction. Ogier advised PICA in Guernsey. Carey Olsen
worked with Allen & Overy as lead counsel on the insurance and
Advocate Friedlaender said that in common with most providers of
defined benefit pension arrangements, trustees endeavour to obtain
certainty around the very substantial risks to the scheme and its
funding of increasing life expectancy of members and their
"The BT Pension Scheme's captive has reinsured the
longevity risk with PICA in a scheme that is regarded as
'ground-breaking in terms of size and structure'. Not
only is this arrangement entirely unique and extremely high value,
it also augers well for Guernsey as a jurisdiction in being able to
attract this business and to service structures of this
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