Sovereign to pay $82m

The company confirmed its application to the Supreme Court to seek leave to appeal a Court of Appeal judgment on its historical tax treatment of reinsurance arrangements had been declined.

“This decision brings an end to the proceedings,” a spokeswoman said. “The issue is a long-running one involving the technical application of the income tax rules to reinsurance contracts. There is no allegation of tax avoidance.”

She said Sovereign had disclosed the issue in its financial statements since 2004.

“Full disclosure has also been made to Sovereign’s financial strength rating agency, AM Best, and the outcome of the Court of Appeal proceedings will not impact the company’s financial strength rating.”