432.The special nature of long-term insurance means that should an insurer go into liquidation, a simple payment of compensation may not necessarily be enough to enable policyholders to find alternative cover.  This would be a problem especially where a person had developed health problems since taking out the original policy.  The purpose of this section is to enable the Authority to include in the scheme rules a requirement for the scheme manager to seek to transfer the business of a failing insurer, so far as it relates to contracts of long-term insurance, to another company or to secure the issue of substitute policies by another insurer.
Commentary on Sections Part Xv: the Financial Services Compensation Scheme Section 216: Continuity of long-term insurance policies