Insurance Companies Act 1974 (repealed 5.11.1993)

• (1) Where it is proposed to carry out a scheme under which the whole or part of the long term business carried on by an insurance company to which this Part of this Act applies (" the transferor company ") is to be transferred to another body whether incorporated or not (" the transferee company") the transferor company or transferee company may apply to the court, by petition, for an order sanctioning the scheme.

• (2) The court shall not entertain an application under this section unless the petition is accompanied by a report on the terms of the scheme by an independent actuary and the court is satisfied that the requirements of subsection (3) below have been complied with.

• (3) The said requirements are—

• (a) that a notice has been published in the London and Edinburgh Gazettes and, except where the court has otherwise directed, in two national newspapers stating that the application is to be made and giving the address of the offices at which, and the period for which, copies of the documents mentioned in paragraph (d) below will be available as required by that paragraph;

• (b) except where the court has otherwise directed, that a statement—

• (i) setting out the terms of the scheme ; and

• (ii) containing a summary of the report mentioned in subsection (2) above sufficient to indicate the opinion of the actuary on the likely effects of the scheme on the long term policy holders of the companies concerned,

has been sent to each of those policy holders and to every member of those companies;

• (c) that a copy of the petition, of the report mentioned in subsection (2) above and of any statement sent out under paragraph (b) above has been served on the Secretary of State and that a period of not less than twenty-one days has elapsed since the date of service;

• (d) that copies of the petition and of the report mentioned in subsection (2) above have been open to inspection at offices in Great Britain of the companies concerned for a period of not less than twenty-one days beginning with the date on which the notice mentioned in paragraph (a) above was published as required by that paragraph.

• (4) Each of the companies concerned shall, on payment of such fee as may be prescribed by rules of court, furnish a copy of the petition and of the report mentioned in subsection (2) above to any person who asks for one at any time before an order sanctioning the scheme is made on the petition.

• (5) On any petition under this section—

• (a) the Secretary of State, and

• (b) any person (including any employee of the transferor company or the transferee company) who alleges that he would be adversely affected by the carrying out of the scheme,

shall be entitled to be heard.

• (6) The court shall not make an order sanctioning the scheme unless it is satisfied that the transferee company is, or immediately after the making of the order will be, authorised under section 3 above to carry on long term business of the class or classes to be transferred under the scheme.

• (7) No such transfer as is mentioned in subsection (1) above shall be carried out unless the scheme relating to the transfer has been sanctioned by the court in accordance with this section; and no order shall be made under section 206 or 208 of the Companies Act 1948 (compromises and arrangements between a company and its creditors or members) in respect of so much of any compromise or arrangement as involves any such transfer.

• (8) In this section "the court" means the High Court of Justice in England except that it means—

• (a) the Court of Session if the transferor company and the transferee company are registered or have their head offices in Scotland ; and

• (b) either the High Court of Justice in England or the Court of Session if one only of those companies is registered or has its head office in Scotland.

• (9) This section does not apply to any scheme if the transferor company and transferee company are registered or have their head offices in Northern Ireland; and subsection (7) above does not apply if either of those companies is registered or has its head office in Northern Ireland and the scheme has been sanctioned by the High Court of Justice in Northern Ireland.

• (10) Subsection (7) above does not apply to a transfer of long term business carried on elsewhere than in Great Britain but, save as aforesaid, this section applies whether or not the long term business is carried on in Great Britain and whether or not the scheme involves the transfer of any other part of the transferor company's undertaking or the amalgamation of that company with one or more other companies.

Provisions supplementary to s. 42

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• (1) Where the court makes an order under section 42 above sanctioning a scheme the court may, either by that order or by any subsequent order, make provision for all or any of the following matters—

• (a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of the transferor company;

• (b) the allotting or appropriation by the transferee company of any shares, debentures, policies or other like interests in that company which under the scheme are to be allotted or appropriated by that company to or for any person ;

• (c) the continuation by or against the transferee company of any legal proceedings pending by or against the transferor company;

• (d) the dissolution, without winding up, of the transferor company;

• (e) such incidental, consequential and supplementary matters as are necessary to secure that the scheme shall be fully and effectively carried out.

• (2) Where any such order provides for the transfer of property or liabilities, that property shall, by virtue of the order, be transferred to and vest in, and those liabilities shall, by virtue of the order, be transferred to and become the liabilities of, the transferee company, and in the case of any property, if the order so directs, freed from any mortgage or charge which is by virtue of the scheme to cease to have effect.

• (3) For the purposes of any provision requiring the delivery of an instrument of transfer as a condition for the registration of a transfer of any property (including in particular section 75 of the Companies Act 1948 and section 56(4) of the Finance Act 1946) an order which by virtue of this section operates to transfer any property shall be treated as an instrument of transfer.

• (4) Where a scheme is sanctioned by an order of the court under section 42 above the transferee company shall, within ten days from the date on which the order is made or such longer period as the Secretary of State may allow, deposit two office copies of the order with the Secretary of State.

• (5) In this section " property " includes property, rights and powers of every description, " liabilities " includes duties and "shares " and " debentures " have the same meaning as in the Companies Act 1948.

Insolvency and winding up

Margin of solvency for general business

44

• (1) An insurance company to which this Part of this Act applies, being a company which carries on (whether within or outside Great Britain) general business, shall be deemed for the purposes of sections 222 and 399 of the Companies Act 1948 (winding up of company unable to pay its debts) to be unable to pay its debts if—

• (a) at any time in its first financial year the value of its assets does not exceed the amount of its liabilities by, £50,000; or

• (b) at any time after the expiration of that year the value of its assets does not exceed the amount of its liabilities by the amount which is the relevant amount for the purposes of section 4(1)(a) above ;

and the provisions of this Act as to winding up shall have effect accordingly.

• (2) For the purposes of this section—

• (a) in computing the amount of the liabilities of an insurance company, all contingent and prospective liabilities shall be taken into account but not liabilities in respect of share capital; and

• (b) the general premium income of an insurance company in any year shall be taken to be the net amount, after deduction of any premiums paid by the company for reinsurance, of the premiums received by the company in that year in respect of insurance business other than long term business.

• (3) For the purposes of this section the value of any assets and the amount of any liabilities shall, subject to subsections (4) and (5) below, be determined in accordance with any applicable valuation regulations, and subsection (2)(a) above shall have effect subject to any such regulations made by virtue of section 78(2) below.

• (4) In the case of an insurance company which carries on long term business as well as general business the amount of the liabilities of its long term business at any time shall, for the purposes of this section, be taken to be—

• (a) an amount equal to the total amount at that time standing to the credit of the fund or funds maintained by the company in respect of its long term business ; or

• (b) the amount of those liabilities at that time as determined in accordance with any applicable valuation regulations,

whichever is the greater.

• (5) Regulations made for the purposes of this section may require that, in every balance sheet prepared under section 13 above by an insurance company carrying on general business, there shall be included a certificate—

• (a) in such form and signed by such persons as may be prescribed by the regulations ; and

• (b) containing such a statement with respect to the assets and liabilities of the company as may be so prescribed;

and if any such company fails to comply with the regulations so made the value of its assets shall, in any proceedings under this section for the winding up of the company, be deemed, until the contrary is proved, not to exceed the amount of its liabilities by the amount required by subsection (1) above.

• (6) Nothing in this section shall be taken as affecting the manner in which, on a winding up, any assets or liabilities are required to be dealt with whether by virtue of section 47 below or otherwise.

Winding up of insurance companies under Companies Act 1948

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The court may order the winding up, in accordance with the Companies Act 1948, of an insurance company to which this Part of this Act applies and the provisions of that Act shall apply accordingly subject to the modification that the company may be ordered to be wound up on the petition of ten or more policy holders owning policies of an aggregate value of not less than £10,000:

Winding up on petition of Secretary of State

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• (1) The Secretary of State may present a petition for the winding up, in accordance with the Companies Act 1948, of an insurance company to which this Part of this Act applies, being a company which may be wound up by the court under the provisions of that Act, on the ground—

• (a) that the company is unable to pay its debts within the meaning of sections 222 and 223 or section 399 of that Act;

• (b) that the company has failed to satisfy an obligation to which it is or was subject by virtue of this Act or any enactment repealed thereby; or

• (c) that the company, being under the obligation imposed by section 147 of the said Act of 1948 with respect to the keeping of proper books of account, has failed to satisfy that obligation or to produce books kept in satisfaction of that obligation and that the Secretary of State is unable to ascertain its financial position.

• (2) In any proceedings on a petition to wind up an insurance company presented by the Secretary of State under subsection (1) above, evidence that the company was insolvent—

• (a) at the close of the period to which—

• (i) the accounts and balance sheet of the company last deposited under section 18 above; or

• (ii) any statement of the company last deposited under section 21 above, relate; or

• (b) at any date or time specified in a requirement under section 34 or 36 above,

shall be evidence that the company continues to be unable to pay its debts, unless the contrary is proved.

• (3) If, in the case of an insurance company to which this Part of this Act applies, being a company which may be wound up by the court under the provisions of the said Act of 1948, it appears to the Secretary of State that it is expedient in the public interest that the company should be wound up, he may, unless the company is already being wound up by the court, present a petition for it to be so wound up if the court thinks it just and equitable for it to be so wound up.

• (4) Where a petition for the winding up of an insurance company to which this Part of this Act applies is presented by a person other than the Secretary of State, a copy of the petition shall be served on him and he shall be entitled to be heard on the petition.

Winding up of insurance companies with long term business

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• (1) No insurance company to which this Part of this Act applies which is an unincorporated body and carries on long term business shall be made the subject of bankruptcy proceedings or, in Scotland, sequestration proceedings.

• (2) No insurance company to which this Part of this Act applies which carries on long term business shall be wound up voluntarily.

• (3) Section 24(1) above shall not 'have effect in relation to the winding up of a company to which section 23(1) above applies but, subject to subsection (4) below and to rules made by virtue of section 51(2) below, in any such winding up—

• (a) the assets representing the fund or funds maintained by the company in respect of its long term business shall be available only for meeting the liabilities of the company attributable to that business;

• (b) the other assets of the company shall be available only for meeting the liabilities of the company attributable to its other business.

• (4) Where the value of the assets mentioned in either paragraph of subsection (3) above exceeds the amount of the liabilities mentioned in that paragraph the restriction imposed by that subsection shall not apply to so much of those assets as represents the excess.

• (5) In relation to the assets falling within either paragraph of subsection (3) above the creditors mentioned in subsections (1) and (2) of section 246 of the Companies Act 1948 shall be only those who are creditors in respect of liabilities falling within that paragraph; and any general meetings of creditors summoned for the purposes of that section shall accordingly be separate general meetings of the creditors in respect of the liabilities falling within each paragraph.

• (6) Where under section 333(1) of the said Act of 1948 (defalcations of directors etc. disclosed in course of winding up) a court orders any money or property to be repaid or restored to a company or any sum to be contributed to its assets then, if and so far as the wrongful act which is the reason for the making of the order related to assets representing a fund or funds maintained by the company in respect of its long term business, the court shall include in the order a direction that the money, property or contribution shall be treated for the purposes of this Act as assets of that fund or those funds and this Act shall have effect accordingly.

Continuation of long term business of insurance company in liquidation

48

• (1) This section has effect in relation to the winding up of an insurance company to which this Part of this Act applies, being a company carrying on long term business.

• (2) The liquidator shall, unless the court otherwise orders, carry on the long term business of the company with a view to its being transferred as a going concern to another insurance company, whether an existing company or a company formed for that purpose; and, in carrying on that business as aforesaid, the liquidator may agree to the variation of any contracts of insurance in existence when the winding up order is made but shall not effect any new contracts of insurance.

• (3) If the liquidator is satisfied that the interests of the creditors in respect of liabilities of the company attributable to its long term business require the appointment of a special manager of the company's long term business, he may apply to the court, and the court may on such application appoint a special manager of that business to act during such time as the court may direct, with such powers, including any of the powers of a receiver or manager, as may be entrusted to him by the court.

• (4) Subsections (2) and (3) of section 263 of the Companies Act 1948 (special manager to give security and receive remuneration) shall apply to a special manager appointed under subsection (3) above as they apply to a special manager appointed under that section.

• (5) The court may, if it thinks fit and subject to such conditions (if any) as it may determine, reduce the amount of the contracts made by the company in the course of carrying on its long term business.

• (6) The court may, on the application of the liquidator, a special manager appointed under subsection (3) above or the Secretary of State, appoint an independent actuary to investigate the long term business of the company and to report to the liquidator, the special manager or the Secretary of State, as the case may be, on the desirability or otherwise of that business being continued and on any reduction in the contracts made in the course of carrying on that business that may be necessary for its successful continuation.

• (7) Notwithstanding section 245(1) of the said Act of 1948 (which requires a liquidator to obtain the sanction of the court or committee of inspection for the bringing of legal proceedings in the name of and on behalf of the company) the liquidator may without any such sanction make an application in the name of and on behalf of the company under section 42 above.

• (8) In this section " the court" means the court having jurisdiction to wind up the company.

Subsidiary companies

49

• (1) Where the insurance business or any part of the insurance business of an insurance company has been transferred to an insurance company to which this Part of this Act applies under an arrangement in pursuance of which the first-mentioned company (in this section called the subsidiary company) or the creditors thereof has or have claims against the company to which the transfer was made (in this section called the principal company), then, if the principal company is being wound up by or under the supervision of the court, the court shall, subject to the provisions of this section, order the subsidiary company to be wound up in conjunction with the principal company, and may by the same or any subsequent order appoint the same person to be liquidator for the two companies, and make provision for such other matters as may seem to the court necessary, with a view to the companies being wound up as if they were one company.

• (2) The commencement of the winding up of the principal company shall, save as otherwise ordered by the court, be the commencement of the winding up of the subsidiary company.

• (3) In adjusting the rights and liabilities of the members of the several companies between themselves, the court shall have regard to the constitution of the companies, and to the arrangements entered into between the companies, in the same manner as the court has regard to the rights and liabilities of different classes of contributories in the case of the winding up of a single company, or as near thereto as circumstances admit.

• (4) Where any company alleged to be subsidiary is not in process of being wound up at the same time as the principal company to which it is subsidiary, the court shall not direct the subsidiary company to be wound up unless, after hearing all objections (if any) that may be urged by or on behalf of the company against its being wound up, the court is of opinion that the company is subsidiary to the principal company, and that the winding up of the company in conjunction with the principal company is just and equitable.

• (5) An application may be made in relation to the winding up of any subsidiary company in conjunction with a principal company by any creditor of, or person interested in, the principal or subsidiary company.

• (6) Where a company stands in the relation of a principal company to one company, and in the relation of a subsidiary company to some other company, or where there are several companies standing in the relation of subsidiary companies to one principal company, the court may deal with any number of such companies together or in separate groups, as it thinks most expedient, upon the principles laid down in this section.

Reduction of contracts as alternative to winding up

50

In the case of an insurance company which has been proved to be unable to pay its debts, the court may, if it thinks fit, reduce the amount of the contracts of the company on such terms and subject to such conditions as the court thinks just, in place of making a winding up order.

Winding up rules

51

• (1) Rules may be made under section 365 of the Companies Act 1948 (general rules about winding up) for determining the amount of the liabilities of an insurance company to policy holders of any class or description for the purpose of proof in a winding up and generally for carrying into effect the provisions of this Part of this Act with respect to the winding up of insurance companies.

• (2) Without prejudice to the generality of subsection (1) above, rules under the said section 365 may make provision for all or any of the following matters—

• (a) the identification of the assets and liabilities falling within either paragraph of subsection (3) of section 47 above;

• (b) the apportionment between the assets falling within paragraphs (a) and (b) of that subsection of the costs, charges and expenses of the winding up and of any debts of the company having priority under section 319 of the said Act of 1948;

• (c) the determination of the amount of liabilities of any description falling within either paragraph of that subsection for the purpose of establishing whether or not there is any such excess in respect of that paragraph as is mentioned in subsection (4) of section 47 above;

• (d) the application of assets within paragraph (a) of the said subsection (3) for meeting the liabilities within that paragraph;

• (e) the application of assets representing any such excess as is mentioned in the said subsection (4).

Changes of director, controller or manager

Approval of proposed managing director or chief executive of insurance company

52

• (1) No insurance company to which this Part of this Act applies shall appoint a person as managing director or chief executive of the company unless—

• (a) the company has served on the Secretary of State a written notice stating that it proposes to appoint that person to that position and containing such particulars as may be prescribed; and

• (b) either the Secretary of State has, before the expiration of the period of three months beginning with the date of service of that notice, notified the company in writing that there is no objection to that person being appointed to that position or that period has elapsed without the Secretary of State having served on the company a written notice of objection.

• (2) A notice served by a company under subsection (1)(a) above shall contain a statement signed by the person proposed to be appointed that it is served with his knowledge and consent.

• (3) The Secretary of State may serve a notice of objection under subsection (1) above on the ground that it appears to him that the person proposed to be appointed is not a fit and proper person to be appointed to the position in question, but before serving such a notice the Secretary of State shall serve on the company and on that person a preliminary written notice stating—

• (a) that the Secretary of State is considering the service on the company of a notice of objection on that ground; and

• (b) that the company and that person may, within the period of one month from the date of service of the preliminary notice, make written representations to the Secretary of State and, if the company or that person so requests, oral representations to an officer of the Department of Trade appointed for the purpose by the Secretary of State.

• (4) The Secretary of State shall not be obliged to disclose to the company or to the person proposed to be appointed any particulars of the ground on which he is considering the service on the company of a notice of objection.

• (5) Where representations are made in accordance with this section the Secretary of State shall take them into consideration before serving the notice of objection.

Approval of person proposing to become controller of insurance company where s. 52 does not apply

53

• (1) No person shall become a controller of an insurance company to which this Part of this Act applies otherwise than by virtue of an appointment in relation to which section 52 above has effect unless—

• (a) he has served on the Secretary of State a written notice stating that he intends to become a controller of that company and containing such particulars as may be prescribed; and

• (b) either the Secretary of State has, before the expiration of the period of three months beginning with the date of service of that notice, notified him in writing that there is no objection to his becoming a controller of the company or that period has elapsed without the Secretary of State having served on him a written notice of objection.

• (2) The Secretary of State may serve a notice of objection under subsection (1) above on the ground that it appears to him that the person concerned is not a fit and proper person to be a controller of the company, but before serving such a notice the Secretary of State shall serve on that person a preliminary written notice stating—

• (a) that the Secretary of State is considering the service on him of a notice of objection on that ground ; and

• (b) that that person may, within the period of one month from the date of service of the preliminary notice, make written representations to the Secretary of State and, if that person so requests, oral representations to an officer of the Department of Trade appointed for the purpose by the Secretary of State.

• (3) The Secretary of State shall not be obliged to disclose to any person any particulars of the ground on which he is considering the service on him of a notice of objection.

• (4) Where representations are made in accordance with this section the Secretary of State shall take them into consideration before serving the notice of objection.

Duty to notify change of director, controller or manager

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• (1) A person who becomes or ceases to be a controller of an insurance company to which this Part of this Act applies shall, before the expiration of the period of seven days beginning with the day next following that on which he does so, notify the insurance company in writing of that fact and of such other matters as may be prescribed ; and a person who becomes a director or manager of any such insurance company shall, before the expiration of the period of seven days beginning with the day next following that on which he does so, notify the insurance company in writing of such matters as may be prescribed.

• (2) An insurance company to which this Part of this Act applies shall give written notice to the Secretary of State of the fact that any person has become or ceased to be a director, controller or manager of the company and of any matter of which any such person is required to notify the company under subsection (1) above; and that notice shall be given before the expiration of the period of fourteen days beginning with the day next following that on which that fact or matter comes to the company's knowledge.

Miscellaneous

Documents deposited with Secretary of State

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• (1) The Secretary of State shall deposit with the registrar of companies one copy of—

• (a) any document deposited with the Secretary of State under section 18 above, including any "document obtained under subsection (5) of that section;

• (b) any document deposited with him under section 34(4) or 43(4) above.

• (2) Subject to subsection (3) below, any document deposited under this section or section 21(5) or 22(3) above with the registrar of companies shall be open to inspection and copies thereof may be procured by any person on payment of such fees as the Secretary of State may direct.

• (3) Subsection (2) above shall not apply to any document if it is a copy of a document in respect of which a dispensation has been granted under section 19(2) above.

• (4) Every document deposited with the Secretary of State under this Part of this Act and certified by the registrar of companies to be a document so deposited shall be deemed to be a document so deposited; and every document purporting to be certified by the registrar of companies to be a copy of a document so deposited shall be deemed to be a copy of that document and shall be received in evidence as if it were the original document unless some variation between it and the original is proved.

Power to treat certain business as or as not being ordinary long-term insurance business

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• (1) The Secretary of State may, on the application or with the consent of an insurance company to which this Part of this Act applies, by order direct that for the purposes of the application to the company of all or any of the provisions to which this section applies—

• (a) business of a kind specified in the order, not being ordinary long-term insurance business, shall be treated as being such business ; or

• (b) ordinary long-term insurance business of a kind so specified shall be treated as not being such business.

• (2) An order under subsection (1)(b) above may direct that the business specified in the order shall be treated as falling within a specified class of business relevant for the purposes of Part I of this Act.

• (3) An order under this section may be subject to conditions and may be varied or revoked at any time by the Secretary of State.

• (4) The provisions to which this section applies are sections 13 to 16, 21, 23 to 26, 34, 44, 47, 48 and 51(2) of this Act.

Power to modify Part II in relation to particular companies

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• (1) The Secretary of State may, on the application or with the consent of an insurance company to which this Part of this Act applies, by order direct that all or any of the provisions to which this section applies shall not apply to the company or shall apply to it with such modifications as may be specified in the order.

• (2) An order under this section may be subject to conditions.

• (3) An order under this section may be revoked at any time by the Secretary of State; and the Secretary of State may at any time vary any such order on the application or with the consent of the company to which it applies.

• (4) The provisions to which this section applies are sections 13 to 18, 19(1), 21 to 27 and 44 of this Act, the provisions of regulations made for the purposes of any of those sections and the provisions of any valuation regulations.

• (5) In relation to section 26 above, subsection (1) above shall have effect as if the reference to an insurance company to which this Part of this Act applies included a reference to any subordinate company within the meaning of that section of any such insurance company.

Power to amend s. 44

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• (1) The Secretary of State may by order amend subsections (1) and (2) of section 44 above by substituting for any amount specified in or to be determined in accordance with those subsections (whether as originally enacted or as amended by a previous order under this section) an amount specified in or to be determined in accordance with the order.

• (2) No amendment of the said section 44 made by an order under this section shall come into force before the expiration of the period of twelve months beginning with the date on which the order is made.

• (3) The power to make orders under this section includes power to vary or revoke a previous order, and an order under this section may make different provision in relation to different cases or circumstances.

Power to alter insurance company's financial year

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The Secretary of State may extend or shorten, for the purposes of this Part of this Act, the duration of any financial year of an insurance company to which this Part of this Act applies.

Service of notices

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• (1) Any notice which is by this Part of this Act required to be sent to any policy holder may be addressed and sent to the person to whom notices respecting that policy are usually sent, and any notice so addressed and sent shall be deemed to be notice to the holder of the policy:

Provided that where any person claiming to be interested in a policy has given to the company notice in writing of his interest, any notice which is by this Part of this Act required to be sent to policy holders shall also be sent to that person at the address specified by him in his notice.

• (2) Any notice to be served on any person by the Secretary of State under section 38, 39, 52 or 53 above may be served by post, and a letter containing that notice shall be deemed to be properly addressed if it is addressed to that person at his last known residence or last known place of business in Great Britain.

Offences under Part II

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• (1) Any person who—

• (a) makes default in complying with sections 23 to 25 or 54(1) above or with any requirement imposed under section 29 above ; or

• (b) in purported compliance with a requirement imposed under section 36 above furnishes information which he knows to be false in a material particular or recklessly furnishes information which is false in a material particular; or

• (c) causes or permits to be included in—

• (i) any document copies of which are, by section 18 of this Act, required to be deposited with the Secretary of State;

• (ii) any notice, statement or certificate served or furnished under or by virtue of section 15(2), 22(1) or 23(4) above;

• (iii) any document deposited with the Secretary of State under section 21(4) or 34(4) above;

• (iv) any statement sent out under section 42(3)(b) above,

a statement which he knows to be false in a material particular or recklessly causes or permits to be so included any statement which is false in a material particular,

shall be guilty of an offence.

• (2) Any person guilty of an offence under subsection (1) above shall be liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

• (b) on summary conviction, to a fine not exceeding £400.

• (3) Subject to the following provisions of this section—

• (a) any insurance company which makes default in complying with, or with a requirement imposed under, any provision of this Part of this Act, being a default for which no penalty is provided by the foregoing provisions of this section; and

• (b) any other person who makes default in complying with, or with a requirement imposed under, section 22, 24(6), 26, 30, 31, 32, 33, 36, 37, 42(4), 43(4) or 53(1) above,

shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £400.

• (4) Where a person continues to make default in complying with—

• (a) section 18(1) or (2), 20(1), 21(4) or 34(4) above; or

• (b) a requirement imposed under section 35 or 36(1) above,

after being convicted of that default he shall be guilty of a further offence and liable on summary conviction to a fine not exceeding £40 for each day on which the default so continues.

• (5) A person shall not be guilty of an offence by reason of his default in complying with section 53 or 54(1) above if he proves that he did not know that the acts or circumstances by virtue of which he became or ceased to be a controller of the body in question were such as to have that effect.

• (6) Where a person is charged with an offence in respect of his default in complying with a requirement imposed under section 36(2) or (3) above to produce any books or papers it shall be a defence to prove that they were not in his possession or control and that it was not reasonably practicable for him to comply with the requirement.

PART III — Conduct of Insurance Business

Insurance advertisements

62

• (1) Regulations may be made as to the form and contents of insurance advertisements.

• (2) Regulations under this section may make different provision in relation to insurance advertisements of different classes or descriptions.

• (3) Subject to subsection (4) below, any person who issues an insurance advertisement which contravenes regulations under this section shall be guilty of an offence.

• (4) A person who in the ordinary course of his business issues an advertisement to the order of another person, being an advertisement the issue of which by that other person constitutes an offence under subsection (3) above, shall not himself be guilty of the offence if he proves that the matters contained in the advertisement were not (wholly or in part) devised or selected by him or by any person under his direction or control.

• (5) In this section "insurance advertisement" means an advertisement inviting persons to enter into or to offer to enter into contracts of insurance, and an advertisement which contains information calculated to lead directly or indirectly to persons entering into or offering to enter into such contracts shall be treated as an advertisement inviting them to do so.

• (6) In this section "advertisement" includes every form of advertising, whether in a publication or by the display of notices or by means of circulars or other documents or by an exhibition of photographs or cinematograph films or by way of sound broadcasting or television, and references to the issue of an advertisement shall be construed accordingly.

• (7) For the purposes of this section an advertisement issued by any person on behalf of or to the order of another person shall be treated as an advertisement issued by that other person ; and for the purposes of any proceedings under this section an advertisement inviting persons to enter into or to offer to enter into contracts with a person specified in the advertisement shall be presumed, unless the contrary is proved, to have been issued by that person.

Misleading statements etc. inducing persons to enter into contracts of insurance

63

Any person who, by any statement, promise or forecast which he knows to be misleading, false or deceptive, or by any dishonest concealment of material facts, or by the reckless making (dishonestly or otherwise) of any statement, promise or forecast which is misleading, false or deceptive, induces or attempts to induce another person to enter into or offer to enter into any contract of insurance with an insurance company shall be guilty of an offence.

Intermediaries in insurance transactions

64

• (1) Regulations may be made for requiring any person who—

• (a) invites another person to make an offer or proposal or to take any other step with a view to entering into a contract of insurance with an insurance company; and

• (b) is connected with that company as provided in the regulations,

to give the prescribed information with respect to his connection with the company to the person to whom the invitation is issued.

• (2) Regulations may be made for requiring any person who, in the course of carrying on any business or profession, issues any such invitation as is mentioned in subsection (1)(a) above in relation to an insurance company which is not an authorised insurer in respect of the contract in question to inform the person to whom the invitation is issued that the company is not such an insurer as aforesaid.

In this subsection "authorised insurer", in relation to a contract of any description, means a person entitled to carry on in Great Britain insurance business of a class comprising the effecting of contracts of that description.

• (3) Regulations under this section may make different provision in relation to different cases or circumstances.

• (4) Any person who contravenes regulations under this section shall be guilty of an offence.

Statutory notice by insurer in relation to long term policy

65

• (1) Subject to subsection (5) below, no insurance company to which Part II of this Act applies and no member of Lloyd's or of any other association of underwriters approved for the purposes of Part I of this Act by the Secretary of State shall enter into a contract of a kind mentioned in section 83(2) below unless that company or member (" the insurer ") either—

• (a) has sent by post to the other party to the contract a statutory notice in relation to that contract; or

• (b) does so at the time when the contract is entered into.

• (2) For the purposes of this section a statutory notice is a notice which—

• (a) contains such matters (and no others) and is in such form as may be prescribed for the purposes of this section and complies with such requirements (whether as to type, size, colour or disposition of lettering, quality or colour of paper, or otherwise) as may be prescribed for securing that the notice is easily legible; and

• (b) has annexed to it a form of notice of cancellation of the prescribed description for use under section 66 below.

• (3) Regulations made for the purposes of subsection (2) above may make different provision—

• (a) in relation to contracts of different classes or descriptions;

• (b) in relation to cases where the statutory notice is sent before the contract is entered into and in relation to other cases;

and the Secretary of State may, on the application of any insurer, alter the requirements of any regulations made for the purposes of subsection (2)(a) above so as to adapt those requirements to the circumstances of that insurer or to any particular kind of contract proposed to be entered into by that insurer.

• (4) Any insurer who contravenes this section shall be guilty of an offence but, without prejudice to section 66(2) below, no contract shall be invalidated by reason of the fact that the insurer has contravened this section in relation to that contract.

• (5) Subsection (1) of this section does not apply to any contract the effecting of which by the insurer constitutes the carrying on of industrial assurance business; and regulations may exempt from that subsection contracts of any other class or description.

• (6) In sections 66 and 67 below "insurer" and "statutory notice " have the same meaning as in this section.

Right to withdraw from transaction in respect of long term policy

66

• (1) A person who has received a statutory notice from an insurer in relation to any contract to which section 65(1) above applies may before the expiration of—

• (a) the tenth day after that on which he received the notice; or

• (b) the earliest day on which he knows both that the contract has been entered into and that the first or only premium has been paid,

whichever is the later, serve a notice of cancellation on the insurer.

• (2) A person to whom an insurer ought to have, but has not, sent a statutory notice in relation to any such contract as aforesaid may serve a notice of cancellation on the insurer but if the insurer sends him a statutory notice in relation to that contract before he has served a notice of cancellation under this subsection, then, without prejudice to his right to serve a notice of cancellation under subsection (1) above, his right to do so under this subsection shall cease.

• (3) A notice of cancellation may, but need not, be in the form annexed to the statutory notice and shall have effect if, however expressed, it indicates the intention of the person serving it to withdraw from the transaction in relation to which the statutory notice was or ought to have been sent.

• (4) Where a person serves a notice of cancellation, then—

• (a) if at the time when the notice is served the contract has been entered into, the notice shall operate so as to rescind the contract;

• (b) in any other case, the service of the notice shall operate as a withdrawal of any offer to enter into the contract which is contained in, or implied by, any proposal made to the insurer by the person serving the notice of cancellation and as notice to the insurer that any such offer is withdrawn.

• (5) Where a notice of cancellation operates to rescind a contract or as the withdrawal of an offer to enter into a contract—

• (a) any sum which the person serving the notice has paid in connection with the contract (whether by way of premium or otherwise and whether to the insurer or to a person who is the agent of the insurer for the purpose of receiving that sum) shall be recoverable from the insurer by the person serving the notice;

• (b) any sum which the insurer has paid under the contract shall be recoverable by him from the person serving the notice.

• (6) Any sum recoverable under subsection (5) above shall be recoverable as a simple contract debt in any court of competent jurisdiction.

Service of notice of cancellation

67

• (1) For the purposes of section 66 above a notice of cancellation—

• (a) shall be deemed to be served on the insurer if it is sent by post addressed to any person specified in the statutory notice as a person to whom a notice of cancellation may be sent, and is addressed to that person at an address so specified; and

• (b) where paragraph (a) above applies, shall be deemed to be served on the insurer at the time when it is posted.

• (2) Subsection (1) above shall have effect without prejudice to the service of a notice of cancellation (whether by post or otherwise) in any way in which the notice could be served apart from that subsection, whether the notice is served on the insurer or on a person who is the agent of the insurer for the purpose of receiving such a notice.

• (3) A notice of cancellation which is sent by post to a person at his proper address, otherwise than in accordance with subsection (1) above, shall be deemed to be served on him at the time when it is posted.

• (4) So much of section 26 of the Interpretation Act 1889 as relates to the time when service is deemed to have been effected shall not apply to a notice of cancellation.

Linked long term policies

68

• (1) Regulations may be made, as respects the matters specified in subsection (2) below, in relation to contracts of the kinds mentioned in section 83(2) below which—

• (a) are entered into by insurance companies to which Part II of this Act applies or by members of Lloyd's or of any other association of underwriters approved for the purposes of Part I of this Act by the Secretary of State; and

• (b) are contracts under which the benefits payable to the policy holder are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contract) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified).

• (2) Regulations under this section may make provision for—

• (a) restricting the descriptions of property or the indices of the value of property by reference to which benefits under the contracts may be determined;

• (b) regulating the manner in which and the frequency with which property of any description is to be valued for the purpose of determining such benefits and the times at which reference is to be made for that purpose to any index of the value of property;

• (c) requiring insurers under the contracts to appoint valuers for carrying out valuations of property of any description for the purpose of determining such benefits (being valuers who comply with the prescribed requirements as to qualifications and independence from the insurer) and to furnish the Secretary of State with, the prescribed information in relation to such appointments;

• (d) requiring insurers under the contracts to furnish, in such manner and at such times or intervals as may be prescribed, such information relating to the value of the benefits under the contracts as may be prescribed, whether by sending notices to policy holders, depositing statements with the Secretary of State or the registrar of companies, publication in the press or otherwise;

• (e) requiring insurers under the contracts to furnish to the Secretary of State, in such manner and at such times or intervals as may be prescribed, such information certified in such manner as may be prescribed with respect to so much of their business as is concerned with the contracts or with any class or description of the contracts, and enabling the Secretary of State to publish such information in such ways as he thinks appropriate.

• (3) Regulations made for the purposes of subsection (2)(d) above may, in relation to notices required to be sent to policy holders, impose requirements (whether as to type, size, colour or disposition of lettering, quality or colour of paper, or otherwise) for securing that such notices are easily legible.

• (4) Regulations under this section may make different provision in relation to different cases or circumstances; and the Secretary of State may, on the application of any insurer, alter the requirements of any regulations under this section so as to adapt those requirements to the circumstances of that insurer or to any particular kind of contract entered into or proposed to be entered into by that insurer.

• (5) Regulations under this section may, to such extent as may be speckled therein, apply in relation to contracts entered into before the coming into operation of the regulations, including contracts entered into before the passing of this Act.

• (6) Regulations under this section shall not apply in relation to any contract the effecting of which by the insurer constitutes the carrying on of industrial assurance business or to any contract entered into by an insurance company to which Part II of this Act applies by reason only that the policy holder is eligible to participate in any established surplus as defined in section 25(4) above.

Scope of Prevention of Fraud (Investments) Act 1958

69

The agreements and arrangements mentioned in section 13(1) of the Prevention of Fraud (Investments) Act 1958 (misleading statements etc. inducing persons to invest money) and in the definition of " dealing in securities " in section 26(1) of that Act shall not include contracts of insurance.

Capital redemption business

70

Where an insurance company to which Part II of this Act applies carries on capital redemption business in the case of which the premiums in return for which a contract is effected are payable at intervals of less than six months, the company shall not give the holder of any policy issued after 2nd December 1909 any advantage dependent on lot or chance:

Penalties and offences under Part III

71

• (1) Any person guilty of an offence under section 62, 63 or 64 above shall be liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

• (b) on summary conviction, to a fine not exceeding £400.

• (2) Any person who makes default in complying with, or with a requirement imposed under, any other provision of this Part of this Act shall be guilty of an offence and liable on summary conviction to a fine not exceeding £400.

PART IV — Special Classes of Insurers

Industrial assurance business

72

• (1) In its application to industrial assurance business this Act shall have effect subject to the modifications specified in this section.

• (2) The power to make regulations for the purposes of section 13 above so far as it relates to revenue accounts, section 14 above so far as it relates to the form and contents of abstracts and statements and section 16 above shall, in relation to industrial assurance business, be exercisable by the Industrial Assurance Commissioner.

• (3) The provisions of sections 18 and 19(1) above shall have effect in relation to any document which relates to industrial assurance business as if references in those provisions to the Secretary of State included references to the Commissioner.

• (4) The power conferred by section 19(2) above shall be exercisable by the Commissioner in the case of a document which relates only to industrial assurance business.

• (5) Where any document required to be deposited by a company under subsection (4) of section 34 above relates to industrial assurance business the company shall also, within the time required under that subsection, deposit one copy of that document with the Commissioner, and section 61(4) above shall have effect in relation to this subsection as it has effect in relation to that subsection.

• (6) Where any business proposed to be transferred as mentioned in section 42 above is or includes industrial assurance business that section and section 43(4) above shall have effect as if references to the Secretary of State included references to the Commissioner.

• (7) The power to make orders under section 57 above as respects section 13 above so far as it relates to revenue accounts, sections 14, 16 and 18 above and the provisions of regulations made for the purposes of any of those sections (other than valuation regulations) shall, in relation to industrial assurance business, be exercisable by the Commissioner.

• (8) The power conferred by section 59 above shall be exercisable by the Commissioner in the case of a company which carries on in Great Britain no insurance business except industrial assurance business.

• (9) Where any expenses of management, or interest on investments, or sums on account of depreciation of securities, are apportioned between the industrial assurance business and any other business carried on by the company the auditor shall include in Ins report a special report as to the propriety or otherwise of the apportionment; and a copy of every report of die auditor shall be furnished to the Commissioner.

• (10) The provisions of this Act relating to industrial assurance business shall have effect notwithstanding anything in the memorandum or articles of association or rules or special Act of any insurance company carrying on such business:

Provided that nothing in this Act shall affect the liability of the industrial assurance fund or of the ordinary long-term insurance fund, in the case of a company established before 1st January 1924, to the prejudice of persons interested in contracts entered into by the company before that date.

• (11) The Commissioner shall include in his annual report under section 44 of the Industrial Assurance Act 1923 a report on his proceedings under .this Act. and that section shall have effect accordingly.

Requirements to be complied with by Lloyd's underwriters etc.

73

• (1) The requirements referred to in section 12(4) above are as follows.

• (2) Every underwriter shall, in accordance with the provisions of a trust deed approved by the Secretary of State, carry to a trust fund all premiums received by him or on his behalf in respect of any insurance business.

• (3) Premiums received in respect of long term business shall in no case be carried to the same trust fund under this section as premiums received in respect of general business, but the trust deed may provide for carrying the premiums received in respect of all or any classes of long term business and all or any classes of general business either to a common fund or to any number of separate funds.

• (4) The accounts of every underwriter shall be audited annually by an accountant approved by the Committee of Lloyd's or the managing body of the association, as the case may be, and the auditor shall furnish a certificate in the prescribed form to the Committee or managing body and the Secretary of State.

• (5) The said certificate shall in particular state whether in the opinion of the auditor the value of the assets available to meet the underwriter's liabilities in respect of insurance business is correctly shown in the accounts, and whether or not that value is sufficient to meet the liabilities calculated—

• (a) in the case of liabilities in respect of long term business, by an actuary ; and

• (b) in the case of other liabilities, by the auditor on a basis approved' by the Secretary of State.

• (6) Where any liabilities of an underwriter are calculated by an actuary under subsection (5) above, he shall furnish a certificate of the amount thereof to the Committee of Lloyd's or the managing body of the association, as the case may be, and to the Secretary of State, and shall state in his certificate on what basis the calculation is made; and a copy of his certificate shall be annexed to the auditor's certificate.

• (7) The underwriter shall, when required by the Committee of Lloyd's or the managing body of the association, as the case may be, furnish to them such information as they may require for the purpose of preparing the statement of business which is to be deposited with the Secretary of State under section 74 below.

Statement of business by Committee of Lloyd's etc.

74

• (1) The Committee of Lloyd's, and the managing body of every association of underwriters approved by the Secretary of State for the purposes of Part I of this Act, shall deposit every year with the Secretary of State a statement in the prescribed form summarising the extent and character of the insurance business done by the members of Lloyd's or of the association, as the case may be, in the twelve months to which the statement relates.

• (2) Regulations made for the purposes of this section may require the statement to deal separately with such classes or descriptions of business as may be specified in the regulations.

Companies established outside Great Britain

75

• (1) Regulations may provide that, in their application to an insurance company established in a country outside Great Britain, sections 4, 5 and 44 above shall have effect subject to such adaptations of the references to sums of money and to paid up share capital as appear to the Secretary of State to be necessary having regard to the currency of that country or the law relating to companies in force in that country.

• (2) The following provisions of the Companies Act 1948, that is to say, sections 407, 409 to 415 and 425, if, apart from this subsection they would not so apply, shall apply in relation to an insurance company incorporated outside Great Britain which carries on insurance business within Great Britain as they apply in relation to oversea companies within the meaning of section 406 of that Act.

Unregistered companies

76

• (1) Every insurance company to which Part II of this Act applies, being a company which is not registered under the Companies Act 1948 or under the former Companies Acts—

• (a) if it has not incorporated in its deed of settlement section 10 of the Companies Clauses Consolidation Act 1845, shall keep a shareholders address book in accordance with the provisions of that section and shall, on the application of any shareholder or policy holder of the company, furnish to him a copy of the book on payment of a sum not exceeding 2½p. for every hundred words required to be copied;

• (b) shall cause a sufficient number of copies of its deed of settlement to be printed and shall, on the application of any shareholder or policy holder of the company, furnish to him one of those copies on payment of a sum not exceeding 5p.

• (2) Any insurance company which makes default in complying with this section shall be guilty of an offence and liable on summary conviction to a fine not exceeding £400.

Insurance companies formed before 1967 in contravention of s. 434 of Companies Act 1948

77

• (1) Section 434 of the Companies Act 1948 (which in certain cases forbids the formation otherwise than under that Act of a company, association or partnership consisting of more than twenty persons) shall be deemed not to have invalidated the formation of any insurance company which immediately before 3rd November 1966 was carrying on in Great Britain insurance business of any class relevant for the purposes of Part I of this Act and was carrying on business of that class on 25th July 1973.

• (2) In subsection (1) above the reference to the said section 434 includes a reference to any corresponding enactment previously in force.

PART V — Supplementary Provisions

Valuation regulations

Power to make valuation regulations

78

• (1) Regulations may be made with respect to the determination of the value of assets and the amount of liabilities in any case in which the value or amount is required by any provision of this Act to be determined in accordance with valuation regulations.

• (2) Without prejudice to the generality of subsection (1) above, regulations under this section may provide that, for any specified purpose, assets or liabilities of any specified class or description shall be left out of account or shall be taken into account only to a specified extent.

• (3) Regulations under this section may make different provision in relation to different cases or circumstances.

Criminal proceedings

Criminal liability of directors

79

• (1) Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, chief executive, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of that offence and liable to be proceeded against and punished accordingly.

• (2) For the purposes of this section a person shall be deemed to be a director of a body corporate if he is a person in accordance with whose directions or instructions the directors of the body corporate or any of them act.

Criminal proceedings against unincorporated bodies

80

• (1) Proceedings for an offence alleged to have been committed under this Act by an unincorporated body shall be brought in the name of that body (and not in that of any of its members) and, for the purposes of any such proceedings, any rules of court relating to file service of documents shall have effect as if that body were a corporation.

• (2) A fine imposed on an unincorporated body on its conviction of an offence under this Act shall be paid out of the funds of that body.

• (3) Section 33 of the Criminal Justice Act 1925 and Schedule 2 to the Magistrates' Courts Act 1952 (procedure on charge of offence against a corporation) shall have effect in a case in which an unincorporated body is charged in England or Wales with an offence under this Act in like manner as they have effect in the case of a corporation so charged.

• (4) In relation to any proceedings on indictment in Scotland for an offence alleged to have been committed under this Act by an unincorporated body, section 40 of the Criminal Justice (Scotland) Act 1949 (proceedings on indictment against bodies corporate) shall have effect as if that body were a body corporate.

Restriction on institution of prosecutions

81

Proceedings in respect of an offence under this Act shall not, in England or Wales, be instituted except by or with the consent of the Secretary of State, the Industrial Assurance Commissioner or the Director of Public Prosecutions.

Summary proceedings

82

• (1) Summary proceedings for any offence under this Act may (without prejudice to any jurisdiction exercisable apart from this subsection) be taken against a body corporate at any place at which the body has a place of business, and against any other person at any place at which he is for the time being.

• (2) Notwithstanding anything in section 104 of the Magistrates' Courts Act 1952, an information relating to an offence under this Act which is triable by a magistrates' court in England and Wales may be so tried if it is laid at any time within three years after the commission of the offence and within twelve months after the date on which evidence sufficient, in the opinion of the Director of Public Prosecutions, the Secretary of State or the Industrial Assurance Commissioner, as the case may be, to justify the proceedings comes to his knowledge.

• (3) Summary proceedings in Scotland for an offence under this Act shall not be commenced after the expiration of three years from the commission of the offence but, subject to the foregoing limitation and notwithstanding anything in section 23 of the Summary Jurisdiction (Scotland) Act 1954, such proceedings may be commenced at any time within twelve months after the date on which evidence sufficient in the opinion of the Lord Advocate to justify the proceedings comes to his knowledge or, where such evidence was reported to him by the Secretary of State or the Industrial Assurance Commissioner, within twelve months after the date on which it came to the knowledge of the Secretary of State or Commissioner; and subsection (2) of the said section 23 shall apply for the purpose of this subsection as it applies for the purpose of that section.

• (4) For the purposes of this section a certificate of the Director of Public Prosecutions, the Lord Advocate, the Secretary of State or the Industrial Assurance Commissioner, as the case may be, as to the date on which such evidence as aforesaid came to his knowledge shall be conclusive evidence.

Interpretation

Definitions of classes of insurance business

83

• (1) In this Act "industrial assurance business" has the meaning given in section 1(2) of the Industrial Assurance Act 1923.

• (2) In this Act "ordinary long-term insurance business'' means business of any of the following kinds, namely,—

• (a) effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life;

• (b) effecting and carrying out contracts of insurance against risks of the persons insured sustaining injury as the result of an accident or of an accident of a specified class or dying as the result of an accident or of an accident of a specified class or becoming incapacitated in consequence of disease or of disease of a specified class, being contracts that are expressed to be in effect for a period of not less than five years or without limit of time and either are not expressed to be terminable by the insurer before the expiration of five years from the taking effect thereof or are expressed to be so terminable before the expiration of that period only in special circumstances therein mentioned; and

• (c) effecting and carrying out contracts of insurance, whether effected by the issue of policies, bonds or endowment certificates or otherwise, whereby, in return for one or more premiums paid to the insurer, a sum or a series of sums is to become payable to the insured in the future, not being such contracts as fall within either of the foregoing paragraphs;

but does not include industrial assurance business.

• (3) In this Act "liability insurance business" means the business of effecting and carrying out contracts of insurance against risks of the persons insured incurring liabilities to third parties, not being risks arising out of, or in connection with the use of, motor vehicles or out of, or in connection with the the use of, vessels or aircraft or risks incidental to the construction, repair or docking of vessels or aircraft.

• (4) In this Act " marine, aviation and transport insurance business " means, subject to subsection (9) below, the business of effecting and carrying out contracts of insurance—

• (a) upon vessels or aircraft, or upon the machinery, tackle, furniture or equipment of vessels or aircraft;

• (b) upon goods, merchandise or property of any description whatever on board of vessels or aircraft;

• (c) upon the freight of, or any other interest in or relating to, vessels or aircraft;

• (d) against damage arising out of, or in connection with, file use of vessels or aircraft, including third-party risks;

• (e) against risks incidental to the construction, repair or docking of vessels, including third-party risks;

• (f) against transit risks (whether the transit is by sea, inland water, land or air, or partly one and partly another), including risks incidental to the transit insured from the commencement of the transit to the ultimate destination covered by the insurance; or

• (g) against any other risks insurance against which is customarily undertaken in conjunction with, or as incidental to, the undertaking of such business as falls within this definition by virtue of any of the foregoing paragraphs.

• (5) In this Act " motor vehicle insurance business " means, subject to subsection (9) below, the business of effecting and carrying out contracts of insurance against loss of, or damage to, or arising out of or in connection with the use of, motor vehicles, inclusive of third-party risks but exclusive of transit risks.

• (6) In this Act " pecuniary loss insurance business " means the business of effecting and carrying out contracts of insurance against any of the following risks, namely,—

• (a) risks of loss to the persons insured arising from the insolvency of debtors of theirs or from the failure (otherwise than through insolvency) of debtors of theirs to pay their debts when due;

• (b) risks of loss to the persons insured arising from their having to perform contracts of guarantee entered into by them;

• (c) risks of loss to the persons insured attributable to interruptions of the carrying on of business carried on by them or to reductions of the scope of businesses so carried on;

• (d) risks of loss to the persons insured attributable to then incurring unforeseen expense; and