Royal London welcomes mutual shares legislation
9 March 2015
Royal London, the largest mutual life, pensions and investment company in the UK welcomes the passage of the Mutuals’ Deferred Shares Bill through its final stage in the House of Commons on Friday. It will now receive Royal Assent.
The Bill, which started as a Private Member’s Bill in the Lords, enables mutual insurers and friendly societies to raise capital by issuing Deferred Shares. The new shares qualify as restricted tier one capital for regulatory purposes including the requirements of Solvency II. The capital raised will enable mutuals to develop new products, to achieve economies of scale and widen mutual ownership. Shareholders will be members of a mutual society, though importantly will have only one vote each.
Tim Harris, Group Finance Director of Royal London said:
"We very much welcome this landmark legislation which affirms the important role mutual insurers like Royal London play in providing valuable insurance and savings products to our customers.
The Bill provides greater financial flexibility for mutual insurers, further enhancing the 'toolkit' available to manage their financial resources. The sponsors of the Bill are to be congratulated for helping promote and maintain diversity of provision of financial services in the UK, and providing a level playing field for mutual insurers, so they can continue to put the interests of their customers first in everything they do."
Economic Secretary to the Treasury, Andrea Leadsom, said, in closing the Third Reading debate “we will consult the Prudential Regulation Authority and regulators as soon as possible after Royal Assent to ensure that the procedures are right. We will progress with this as soon as the legislative timetable permits.”
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About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £82.3 billion. Group businesses serve around 5.3 million policy holders and employ 2,829 people. (Figures quoted are as at 31 December 2014).
The Group is currently moving all of its UK businesses under a new version of the Royal London brand. The Group's independent wrap platform will remain branded Ascentric.