Would life insurers leave an independent Scotland?

Life insurers could leave Scotland if the country votes for independence from the United Kingdom in an upcoming referendum, according to former deputy solicitor to the Scottish government Hector MacQueen.

Standard Life is already considering redomiciling to London if Scotland votes for independence due to worries about problems such as which currency the country would use. Other life insurers are rumoured to be considering the move.

However, MacQueen said that some Scottish life insurers could be forced to relocate to England anyway, due to renewed legal interest in the EU directive of 29 June 1995.

This directive states that EU banks should have their head offices in the same member state as their registered office, and suggests that these should be in the same country that they carry out most of their business in.

This could affect the life insurance arms of RBS and Lloyds, both of whom are based in Scotland but are reported to be considering redomiciling to England, where they do most of their business.

Speaking at a Lloyd’s event on the insurance implications of Scottish independence, MacQueen said: “The interesting question from a Scottish economics point of view might then be: what would be remaining in Scotland of the rather large operations that lie behind Standard Life, Scottish Widows, Scottish Equitable, as fairly substantial organisations with entrenched positions?”

But at the same event, CMS Cameron McKenna partner Stephen Phillips said that the fact that life insurers had contingency plans to leave did not necessarily mean that they would carry these out.

“From that perspective, if I was a shareholder of a company, I would want to know what risks there are, how that works out, what happens with the independence negotiations,” he said.

Life insurers could leave Scotland if the country votes for independence from the United Kingdom in an upcoming referendum, according to lawyers.

Standard Life is already considering redomiciling to London if Scotland votes for independence due to worries about problems such as which currency the country would use. Other life insurers are rumoured to be considering the move.

However, MacQueen said that Scottish life insurers could be forced to relocate to England anyway, due to renewed legal interest in the EU directive of 29 June 1995.

This directive states that EU banks should have their head offices in the same member state as their registered office, and suggests that these should be in the same country that they carry out most of their business in.

This could affect the life insurance arms of RBS and Lloyds, both of whom are based in Scotland but are reported to be considering redomiciling to England, where they do most of their business.

Speaking at a Lloyd’s event on the insurance implications of Scottish independence, MacQueen said: “The interesting question from a Scottish economics point of view might then be: what would be remaining in Scotland of the rather large operations that lie behind Standard Life, Scottish Widows, Scottish Equitable, as fairly substantial organisations with entrenched positions?”

At the same event, CMS Cameron McKenna partner Stephen Phillips said that the fact that life insurers had contingency plans to leave did not necessarily mean that they would carry these out.

“From that perspective, if I was a shareholder of a company, I would want to know what risks there are, how that works out, what happens with the independence negotiations,” he said.