In a note issued at the end of last year, liquidators said policyholders will have three options regarding the handling of their assets, following the court’s decision to grant them the power to distribute the resources as they see fit.
Provided no objections are raised, the options include having their assets transferred to a different insurance provider; sold/liquidated/redeemed by the joint liquidators and redeemed; or having ownership of the assets transferred to them directly.
The life and pensions company was put into liquidation in November last year, after two of its principals were prosecuted by the Swedish Economic Crime Authority.
In the notice, liquidators said they were in confidential negotiations with several companies who may be interested in purchasing the company’s business.
“If such a sale can be concluded then this will likely be in the best interests of the policyholders, as policies can continue and costs and expenses will be minimised,” the note said. “Whilst the joint liquidators continue to work towards achieving such a sale, work has continued on confirming an alternative distribution method in order to prevent any unnecessary delay to distributions.”
“Problematic”
The court decided against pooling the assets for distribution on the grounds that this this would be “problematic” given the substantial number of illiquid assets held by the company, including €12m in shares in unlisted companies and approximately €35m in funds which have been suspended and cannot at this time be redeemed.
Because Victory Life has no “significant assets” which are not attributable to policyholders, the court has said that money will need to be made available to pay the expenses of the liquidation.
Additionally, it has directed that the joint liquidators retain 7.8% from each distribution in order to use for the liquidation. It has also ruled that it “would not be appropriate” to charge the normal exit fee of 1-8%.
The order against Victory Life was initially sought by the BVI Financial Services Commission “in response to concerns with respect to serious breaches of the company’s regulatory obligations and the prosecution of two of the company’s principals by the Swedish Economic Crime Authority”.
Russell Crumpler of KPMG (BVI) and Kris Beighton of KPMG in the Cayman Islands were appointed as the company’s joint liquidators.
Due to the order, all assets were frozen “until the BVI court can determine the position with regards to ownership, rights and control of each of those accounts”.
Victory Life & Pensions was founded in 1988 and has assets and policyholders in multiple jurisdictions. It spent the first 15 years making “special tax-driven products for private clients”.
In 1997, the firm said it launched its first version of a deposit portfolio bond “as a spin-off on earlier tax driven products”. Claiming that “small is beautiful”, the company said it does not “strive to be the largest competitor in the offshore insurance market, we are keen on maintaining our flexibility and being the preferred alternative for our clients”.
The company also states that, while its “key word is flexibility”, its “workplace emphasizes integrity and ethics”.
