22 November 2004
Despite its name, Scottish Re is not based in Scotland.In fact, it has no Scottish connections at all. Its American parent, when founding the company, plunged for Scotland because, according to Scottish Re’s PR, “it suggests prudence with money”. Its UK legal counsel is also suitably monikered. George Scott joined the company in February this year after four years as a senior legal counsel with Royal & SunAlliance (RSA). He is Scottish Re’s first and only in-house lawyer based in the UK, though the company has a general counsel in its US headquarters in North Carolina.
Scottish Re Group is a global reinsurance firm specialising in life and general reinsurance, with divisions in Bermuda, the Cayman Islands, the US, the UK and Ireland. It was founded in 1998 as Scottish Annuity & Life Holdings, and has since been acquiring businesses across the world at a steady rate.
Scottish Re’s UK branch, Scottish Re Holdings, came on board with the acquisition of World-Wide Reassurance in December 2001, which has been writing reinsurance business for 40 years from its Windsor base. By taking over World-Wide, Scottish Re significantly expanded its global capabilities and the company now targets international business from Windsor.
Scott was brought on board by global general counsel Paul Goldean when it became clear that a legal capability was needed on this side of the Atlantic. At first sight, the move from a global insurer to a global reinsurer might not seem that great. But Scott says that the change has been quite significant.
“There have been some challenges and there’s still a lot to do, but I’m enjoying it,” he says, explaining that he now has a much wider remit than his role at RSA, which was primarily concerned with mergers and acquisitions.
At Scottish Re, acquiring new business and businesses is still a prime part of Scott’s remit, but he also fulfils the functions of
a company secretary and sits on the management board in that role. Additionally, he looks after the heavy compliance requirements of the reinsurer and sits among the actuaries, right in the centre of day-to-day life at the company.
As the only lawyer in the UK, Scott’s external advisers are particularly important. His principal contact is corporate insurance partner Nick Bugler at LeBoeuf Lamb Greene & MacRae, who was working for Scottish Re prior to Scott’s arrival.
LeBoeuf advises Scottish Re on a variety of areas, including regulation and corporate work.
“I find them superb,” says Scott, adding that he had little knowledge of LeBoeuf prior to his arrival at Scottish Re. Now he will call Bugler for a second opinion on matters that are being dealt with in-house. “It’s very useful to have a sounding board,” Scott explains.
Scottish Re has less litigation to deal with than a general insurer, and legal work is principally concerned with searching for new business to add to the current capability. The company will either buy the entirety of a company in a standard acquisition, or simply the closed business of another reinsurer which is continuing to write in another sector.
One such acquisition is ongoing at the moment in the US. Scottish Re is acquiring the closed books of ING Re’s individual life reinsurance business, as ING is no longer writing that business. The transaction has little effect in the UK, although Scott has been involved in liaising with the Financial Services Authority (FSA) here.
In Europe, the company is constantly looking at potential subjects for merger or acquisition. LeBoeuf has recently been advising Scottish Re on its first annuity deals in the UK and Northern Ireland, working on all the relevant documentation.
But the firm has also been busy helping Scottish Re comply with new regulatory rules that have arrived as a result of the FSA taking over as the regulator of the general insurance industry in January.
“We’re working hard to make sure we’re compliant with the new rules,” says Scott. “We set up a compliance committee to make
sure we’re addressing improvements in a productive fashion.”
For regulatory purposes, life reinsurance is classed as general insurance, thus affecting Scottish Re significantly. So far, the FSA has not had a great deal to do with the industry, and Scott feels the authority has a major challenge ahead.
“They’ve got a big challenge bringing together all the regulatory regimes that they’ve inherited,” he states. “They’re very good at producing very lengthy documents.”
The industry, too, is facing its own challenges, according to Scott, who says that insurers are gradually modernising the way in which they work. More lawyers are being brought in and Scottish Re’s tiny UK legal department could well expand in the future as requirements dictate.
George Scott, Scottish Re
|Organisation||Scottish Re Holdings|
|Turnover||£70m (UK); expected to be $2.1bn (£1.13bn) worldwide in 2005|
|Annual UK legal spend||Approximately $250,000 (£134,900)|
|Employees||60 (UK), 300 (worldwide)|
|Legal counsel and company secretary||George Scott|
|Reporting to||Chief executive David Huntley; dotted reporting line to executive vice-president and general counsel of Scottish Re Group Paul Goldean|
|Main law firms||Clarks (Reading), LeBoeuf Lamb Greene & MacRae and Mylles & Co (property)|