Reliance Mutual to acquire Hearts of Oak

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Reliance Mutual Insurance Society is acquiring Hearts of Oak Friendly Society following proposals in the December Pre-Budget report to change tax law and protect friendly society policyholders on a transfer of engagements.

Under previous rules, friendly society policyholders lost the tax-exempt status of their life or endowment policies when the business is transferred to an insurance company, rather than to another friendly society. But the Treasury said in December it would change the rules in the Finance Bill 2007 to allow tax-exempt life and endowment policies to maintain their status if business is transferred to an insurance company. It is thought those changes were made so companies like Hearts of Oak, for example, which had closed books of business, could transfer their books to another organisati...

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