Insurance Companies Act 1982 (repealed)

• (1) The Secretary of State may, in the case of a company on which a requirement has been imposed under section 39 above or under section 31 of the Insurance Companies Act 1974, impose an additional requirement that the whole or a specified proportion of the assets to which the requirement under that section applies shall be held by a person approved by him for the purposes of the requirement under this section as trustee for the company.

• (2) Section 39(4) above shall apply also to a requirement under this section.

• (3) Assets of a company held by a person as trustee for a company shall be taken to be held by him in compliance with a requirement imposed under this section if, and only if, they are assets in whose case the company has given him written notice that they are to be held by him in compliance with such a requirement or they are assets into which assets in whose case the company has given him such written notice have, by any transaction or series of transactions, been transposed by him on the instructions of the company.

• (4) No assets held by a person as trustee for a company in compliance with a requirement imposed under this section shall, so long as the requirement is in force, be released except with the consent of the Secretary of State.

• (5) If a mortgage or charge is created by a company at a time when there is in force a requirement imposed on the company by virtue of this section, being a mortgage or charge conferring a security on any assets which are held by a person as trustee for the company in compliance with the requirement, the mortgage or charge shall, to the extent that it confers such a security, be void against the liquidator and any creditor of the company.

Limitation of premium income

41

• (1) The Secretary of State may require a company to take all such steps as are requisite to secure that the aggregate of the premiums—

• (a) to be received by the company in consideration of the undertaking by it during a specified period of liabilities in the course of carrying on general business or any specified part of such business ; or

• (b) to be received by it in a specified period in consideration of the undertaking by the company during that period of liabilities in the course of carrying on long term business or any specified part of such business,

shall not exceed a specified amount.

• (2) A requirement under this section may apply either to the aggregate premiums to be received as mentioned in subsection (1) above or to the aggregate of those premiums after deducting any premiums payable by the company for reinsuring the liabilities in consideration of which the first-mentioned premiums are receivable.

Actuarial investigations

42

• (1) The Secretary of State may require a company which carries on long term business—

• (a) to cause the person who for the time being is its actuary under section 19(1) above or any corresponding enactment previously in force to make an investigation into its financial condition in respect of that business, or any specified part of that business, as at a specified date;

• (b) to cause an abstract of that person's report of the investigation to be made; and

• (c) to prepare a statement of its long term business or of that part thereof as at that date.

• (2) For the purposes of any investigation made in pursuance of a requirement under this section the value of any assets andthe amount of any liabilities shall be determined in accordance with any applicable valuation regulations.

• (3) The form and contents of any abstract or statement made in pursuance of a requirement under this section shall be the same as for an abstract or statement made under section 18 above and subsection (2) of that section shall apply to an investigation made in pursuance of this section as it applies to an investigation to which subsection (1)(b) of that section relates.

• (4) Five copies of any abstract or statement made in pursuance of a requirement under this section shall be deposited by the company with the Secretary of State on or before such date as he may specify, and one of those copies shall be a copy signed by the persons required to sign copies of abstracts or statements made under the said section 18 which are deposited under section 22 above.

Acceleration of information required by accounting provisions

43

• (1) The Secretary of State may require any documents which under section 22 above are required to be deposited with him by a company within the period specified in that section to be deposited with him on or before a specified date before the end of that period, being a date not earlier than three months before the end of that period and not earlier than one month after the date on which the requirement is imposed.

• (2) The Secretary of State may require any statement which under section 25 above is required to be deposited with him by a company within a period prescribed under that section to be deposited with him on or before a specified date before the end of that period.

Power to obtain information and require production of documents

44

• (1) The Secretary of State may require a company to furnish him, at specified times or intervals, with information about specified matters being, if he so requires, information verified in a specified manner.

• (2) The Secretary of State may—

• (a) require a company to produce, at such time and place as he may specify, such books or papers as he may specify; or

• (b) authorise any person, on producing (if required so to do) evidence of his authority, to require a company to produce to him forthwith any books or papers which that person may specify.

• (3) Where by virtue of subsection (2) above the Secretary of State or a person authorised by him has power to require the production of any books or papers from any company. the Secretary of State or that person shall have the like power to require production of those books or papers from any person who appears to him to be in possession of them; but where any person from whom such production is required claims a hen on books or papers produced by him, the production shall be without prejudice to the lien.

• (4) Any power conferred by or by virtue of subsections (2) and (3) above to require a company or other person to produce books or papers shall include power—

• (a) if the books or papers are produced—

• (i) to take copies of them or extracts from them; and

• (ii) to require that person, or any other person who is a present or past director, controller or auditor of, or is or was at any time employed by, the company in question, to provide an explanation of any of them;

• (b) if the books or papers are not produced, to require the person who was required to produce them to state, to the best of his knowledge and belief, where they are.

• (5) A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.

• (6) In this section “books or papers” includes accounts, deeds, writings and documents.

Residual power to impose requirements for protection of policy holders

45

• (1) The Secretary of State may require a company to take such action as appears to him to be appropriate for the purpose of protecting policy holders or potential policy holders of the company against the risk that the company may be unable to meet its liabilities or, in the case of long term business, to fulfil the reasonable expectations of policy holders or potential policy holders.

• (2) The power conferred by this section shall not be exercised in such a way as to restrict the company's freedom to dispose of its assets except where it is exercised—

• (a) after the Secretary of State has given a direction under section 11 above or section 11 of the Insurance Companies Act 1981; or

• (b) on the ground that it appears to the Secretary of State that the company has failed to satisfy an obligation to which it is or was subject by virtue of section 33, 34 or 35 above or section 26B, 26C or 26D of the Insurance Companies Act 1974; or

• (c) where the ground for intervention arises out of the submission by the company to the Secretary of State of an account or statement specifying, as the amount of any liabilities of the company, an amount appearing to the Secretary of State to have been determined otherwise than in accordance with valuation regulations or, where no such regulations are applicable, generally accepted accounting concepts, bases and policies or other generally accepted methods appropriate for insurance companies.

Notice of proposed exercise of powers on ground of unfitness of certain persons

46

• (1) Before exercising with respect to a company any power or powers conferred by sections 38 to 45 above on the ground that he would be prohibited from issuing an authorisation to the company because of the unfitness of a person for the position held by him (not being that of controller of the company), the Secretary of State shall serve on that person a written notice stating—

• (a) that the Secretary of State is considering exercising a power or powers conferred by those sections and the ground on which he is considering the exercise of the power or powers ; and

• (b) that the person on whom the notice is served may, within the period of one month from the date of service of the 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.

• (2) Unless the Secretary of State, after considering any representations made in accordance with subsection (1) above by the person served with a notice under that subsection, decides not to exercise the power or powers in relation to which the notice was served, he shall before exercising the power or powers serve on the company a written notice—

• (a) containing the matters mentioned in paragraphs (a) and (b) of that subsection, taking references to the person there mentioned as references to the company; and

• (b) specifying the power or powers which he proposes to exercise and, if the power or one of them is that conferred by section 45 above, specifying the manner of its proposed exercise.

• (3) A notice under this section shall give particulars of the ground on which the Secretary of State is considering the exercise of the power or powers in question.

• (4) Where representations are made in accordance with this section the Secretary of State shall take them into consideration before exercising the power or powers in question.

• (5) A requirement imposed on a company in the exercise of any power or powers to which this section applies may be framed so as to come into effect after the expiration of a specified period (or such longer period as the Secretary of State may allow) unless before the expiration of that period the person whose fitness is in question has ceased to hold the position concerned.

Rescission, variation and publication of requirements

47

• (1) The Secretary of State may rescind a requirement imposed under sections 38 to 45 above if it appears to him that it is no longer necessary for the requirement to continue in force, and may from time to time vary any such requirement.

• (2) No requirement imposed by virtue of subsection (5) of section 37 above shall be varied after the expiration of the period of five years mentioned in that subsection except in a manner which relaxes that requirement.

• (3) Where a requirement is imposed under section 40 above or any such requirement is rescinded or varied the Secretary of State shall forthwith serve—

• (a) except where paragraph (b) below applies, on the registrar of companies or on the registrar of companies in Northern Ireland or on both ;

• (b) if the requirement is imposed on a registered society, on the appropriate registrar as defined by section 73(1) of the Industrial and Provident Societies Act 1965 in the case of a society registered in Great Britain or on the registrar as defined by section 101(1) of the Industrial and Provident Societies Act (Northern Ireland) 1969 in the case of a society registered in Northern Ireland;

a written notice stating that fact and, in the case of a notice of the imposition of a requirement, setting out the terms of the requirement, in the case of a notice of the rescission of a requirement, identifying the requirement and, in the case of a notice of a variation of a requirement, identifying the requirement and setting out the terms of the variation.

• (4) A notice served in pursuance of subsection (3) above on the registrar of companies or the registrar of companies in Northern Ireland shall be open to inspection, and a copy thereof may be procured by any person on payment of such fee as the Secretary of State or, in the case of a notice served on the registrar of companies in Northern Ireland, the Department of Commerce for Northern Ireland may direct; and every document purporting to be certified by the registrar of companies or the registrar of companies in Northern Ireland to be a copy of such a notice shall be deemed to be a copy of that notice and shall be received in evidence as if it were the original notice unless some variation between it and the original is proved.

• (5) Section 71(1) of the said Act of 1965 (which empowers the Treasury to make regulations respecting, among other things, the inspection of documents kept by the appropriate registrar under that Act) and section 97(1) of the said Act of 1969 (which confers corresponding powers on the Department of Commerce for Northern Ireland) shall have effect as if the reference to documents so kept included a reference to notices served in pursuance of subsection (3) above on the appropriate registrar or, as the case may be, on the registrar.

Power of Secretary of State to bring civil proceedings on behalf of insurance company

48

• (1) Section 37(1) of the Companies Act 1967 (power of Secretary of State to bring civil proceedings on behalf of body corpora(e) shall have effect in relation to an insurance company to which this Part of this Act applies (whether or not a body corporate) as if the reference to any information or document obtained under the provisions there mentioned included a reference to any information or document obtained under this Act or any enactment repealed by this Act or by the Insurance Companies Act 1974.

• (2) The Secretary of State may bring civil proceedings in the name and on behalf of an insurance company to which this Part of this Act applies (whether or not a body corporate) under subsection (1) of section 163 of the Companies Act (Northern Ireland) 1960 and that subsection shall have effect in relation to such an insurance company as if the reference to any information or document obtained under the provisions there mentioned included a reference to any information or document obtained under this Act or any enactment repealed by this Act or by the Insurance Companies Act 1980 and any reference to the Department of Commerce for Northern Ireland were a reference to the Secretary of State.

• (3) Where under a judgment given or decree pronounced in proceedings brought by virtue of section 37(1) of the said Act of 1967 or section 163(1) of the said Act of 1960 on behalf of an insurance company a sum is recovered in respect of a loss of assets representing a fund or funds maintained by the company in respect of its long term business the court shall direct that the sum shall be treated for the purposes of this Act as assets of that fund or those funds and this Act shall have effect accordingly.

Transfers of long term business

Sanction of court for transfer of long term business

49

• (1) Where it is proposed to carry out a scheme under which the whole or part of the long term business carried on in the United Kingdom 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 determine 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, Edinburgh and Belfast Gazettes and, except where the court has otherwise directed, in two national newspapers stating that the application has been 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 the United Kingdom of the companies concerned for a period of not less than twenty-one days beginning with the date of the first publication of a notice in accordance with paragraph (a) above.

• (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 or 4 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 or section 197 or section 199 of the Companies Act (Northern Ireland) 1960 (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 both registered or both have their head offices in Scotland ; and

• (b) the High Court of Justice in Northern Ireland if the transferor company and the transferee company are both registered or both have their head offices in Northern Ireland; and

• (c) either the High Court of Justice in England or the Court of Session if either the transferor company or the transferee company is registered or has its head office in Scotland ; and

• (d) either the High Court of Justice in England or the High Court of Justice in Northern Ireland if either the transferor company or the transferee company is registered or has its head office in Northern Ireland; and

• (e) either the Court of Session or the High Court of Justice in Northern Ireland if the transferor company or the transferee company is registered or has its head office in Scotland and the other such company is registered or has its head office in Northern Ireland.

Provisions supplementary to section 49

50

• (1) Where the court makes an order under section 49 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, section 56(4) of the Finance Act 1946, section 75 of the Companies Act (Northern Ireland) 1960 and section 27(4) of the Finance (No. 2) Act (Northern Ireland) 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 49 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 or the Companies Act (Northern Ireland) 1960.

Transfers of general business

Approval of transfers of general business

51

• (1) Where it is proposed to execute an instrument by which an insurance company to which this Part of this Act applies (“the transferor ”) is to transfer to another body (“the transferee ”) all its rights and obligations under such general policies, or general policies of such descriptions, as may be specified in the instrument, the transferor may apply to the Secretary of State for his approval of the transfer.

• (2) The Secretary of State shall not determine an application made under subsection (1) above unless he is satisfied that—

• (a) a notice approved by him for the purpose has been published in the London, Edinburgh and Belfast Gazettes and, if he thinks fit, in two national newspapers which have been so approved; and

• (b) except in so far as he has otherwise directed, a copy of the notice has been sent to every affected policy holder and every other person who claims an interest in a policy included in the transfer and has given written notice of his claim to the transferor ; and

• (c) copies of a statement setting out particulars of the transfer and approved by him for the purpose have been available for inspection at one or more places in the United Kingdom for a period of not less than thirty days beginning with the date of the first publication of the notice in accordance with paragraph (a) above.

• (3) The notice referred to in subsection (2) above shall include a statement that written representations concerning the transfer may be sent to the Secretary of State before a specified day, which shall not be earlier than sixty days after the day of the first publication of the notice in accordance with paragraph (a) above; and the Secretary of State shall not determine the application until after considering any representations made to him before the specified day.

• (4) The Secretary of State shall not approve a transfer on an application under subsection (1) above unless he is satisfied that—

• (a) every policy included in the transfer evidences a contract which—

• (i) was entered into before the date of the application ; and

• (ii) imposes on the insurer obligations the performance of which will constitute the carrying on of insurance business in the United Kingdom; and

• (b) the transferee is, or immediately after the approval will be, authorised under section 3 or 4 above to carry on in the United Kingdom insurance business of the appropriate class or classes ;

and unless in his opinion the transferee's financial resources and the other circumstances of the case justify the giving of his approval.

• (5) On determining an application made under subsection (1) above, the Secretary of State shall—

• (a) publish a notice of his decision in the London, Edinburgh and Belfast Gazettes and in such other manner as he may think fit, and

• (b) send a copy of that notice to the transferor, the transferee and every person who made representations in accordance with the notice referred to in subsection (2) above;

and if he refuses the application he shall inform the transferor and the transferee in writing of the reasons for his refusal.

• (6) Any notice or other document authorised or required to be given or served under this section or section 52 below may, without prejudice to any other method of service, be served by post; and a letter containing the notice or other document 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 the United Kingdom.

• (7) In this section “general policy” means a policy evidencing a contract the effecting of which constituted the carrying on of general business ; and for the purposes of this section a policy holder is an “affected policy holder” in relation to a proposed transfer if—

• (a) his policy is included in the transfer, or

• (b) his policy is with the transferor and the Secretary of State has certified, after consulting the transferor, that in the opinion of the Secretary of State the policy holder's rights and obligations under the policy will or may be materially affected by the transfer.

Effect of approval under section 51

52

• (1) Subject to subsection (2) below, an instrument giving effect to a transfer approved by the Secretary of State under section 51 above shall be effectual in law—

• (a) to transfer to the transferee all the transferor's rights and obligations under the policies included in the instrument, and

• (b) if the instrument so provides, to secure the continuation by or against the transferee of any legal proceedings by or against the transferor which relate to those rights or obligations,

notwithstanding the absence of any agreements or consents which would otherwise be necessary for it to be effectual in law for those purposes.

• (2) Except in so far as the Secretary of State may otherwise direct, a policy holder whose policy is included in such an instrument shall not be bound by it unless he has been given written notice of its execution by the transferor or the transferee.

Winding up

Winding up of insurance companies under Companies Acts

53

The court may order the winding up, in accordance with the Companies Act 1948 or, as the case may be, the Companies Act (Northern Ireland) 1960, of an insurance company to which this Part of this Act applies and the provisions of that Act of 1948 or, as the case may be, that Act of 1960 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

54

• (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 by this Act or by the Insurance Companies Act 1974 ; or

• (c) that the company, being under the obligation imposed by section 12 of the Companies Act 1976 with respect to the keeping of accounting records, has failed to satisfy that obligation or to produce records kept in satisfaction of that obligation and that the Secretary of State is unable to ascertain its financial position.

• (2) The Secretary of State may present a petition for the winding up, in accordance with the Companies Act (Northern Ireland) 1960, 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 210 and 211 or section 349 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 by this Act or by the Insurance Companies Act 1980 ; or

• (c) that the company, being under an obligation imposed by Article 25 of the Companies (Northern Ireland) Order 1978 with respect to the keeping of accounting records, has failed to satisfy that obligation or to produce records kept in satisfaction of that obligation and that the Secretary of State is unable to ascertain its financial position;

and subsection (3) of section 163 of the said Act of 1960 shall have effect in relation to such an insurance company as if any reference to the Department of Commerce for Northern Ireland were a reference to the Secretary of State.

• (3) In any proceedings on a petition to wind up an insurance company presented by the Secretary of State under subsection (1) or (2) 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 22 above ; or

• (ii) any statement of the company last deposited under section 25 above,

relate; or

• (b) at any date or time specified in a requirement under section 42 or 44 above,

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

• (4) 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 Companies Act 1948 or, as the case may be, the Companies Act (Northern Ireland) 1960, 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.

• (5) 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

55

• (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 29(1) above shall not have effect in relation to the winding up of a company to which section 28(1) above applies but, subject to subsection (4) below and to rules made by virtue of section 59(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 or, as the case may be, paragraphs (1) and (2) of Article 73 of the Companies (Northern Ireland) Order 1978 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 or section 299 (1) of the Companies Act (Northern Ireland) 1960 (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 companies in liquidation

56

• (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 or, in the case of a special manager appointed in proceedings in Northern Ireland, subsections (2) and (3) of section 236A of the Companies Act (Northern Ireland) 1960 (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 section 263 of the said Act of 1948 or, as the case may be, section 236A of the said Act of 1960.

• (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 or, as the case may be, section 227(1) of the said Act of 1960 (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 49 above.

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

Subsidiary companies

57

• (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 the 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

58

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

59

• (1) Rules may be made under section 365 of the Companies Act 1948 or section 317 of the Companies Act (Northern Ireland) 1960 (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 section 365 of the said Act of 1948 or, as the case may be, section 317 of the said Act of 1960 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 55 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, or, as the case may be, section 287 of the said Act of 1960;

• (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 55 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 etc.

Approval of proposed managing director or chief executive of insurance company

60

• (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 section 60 does not apply. 62 Duty to notify change of director, controller or manager

61

• (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 60 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.

62

• (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.

Change of manager etc. of company from outside United Kingdom

63

• (1) In relation to an insurance company whose head office is in a member State other than the United Kingdom, excluding a company whose business in the United Kingdom is restricted to reinsurance.—

• (a) section 60 above shall have effect as if the references to a managing director or chief executive were references to a principal United Kingdom executive ;

• (b) section 61 above shall not apply ;

• (c) section 62 above shall have effect as if references to a director or manager were references to a principal United Kingdom executive, an employee within section 8(4)(c) above or an authorised United Kingdom representative.

• (2) In relation to any other insurance company whose head office is outside the United Kingdom—

• (a) section 60 above shall have effect as if the references to a chief executive included references to a principal United Kingdom executive ; and

• (b) section 62 above shall have effect as if the references to a director included references to a principal United Kingdom executive and to an authorised United Kingdom representative.

• (3) In this section—

• “principal United Kingdom executive” means an officer or employee within section 8(4)(b) or 9(6) above; and

• “authorised United Kingdom representative” means a representative fulfilling the requirements of section 10 above or an individual representative of the kind described in subsection (5) of that section.

Duty to notify change of main agent

64

• (1) 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 main agent of the company and, if a main agent is a body corporate or a firm, of the fact that any person has become or ceased to be a director of the body or partner of the firm.

• (2) A notice under this section shall be given before the expiration of the period of fourteen days beginning with the day next following that on which the change comes to the knowledge of the insurance company.

Miscellaneous

Documents deposited with Secretary of State.

65

• (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 22 above, including any document obtained under subsection (5) of that section ;

• (b) any document deposited with him under section 42(4) or 50(4) above.

• (2) Subject to subsection (3) below, any document deposited under this section or section 25(5) or 26(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 23(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.

Documents deposited in Northern Ireland.

66

Any insurance company which is required to prepare and deliver accounts under Article 3 or 11 of the Companies (Northern Ireland) Order 1978 shall deposit with the registrar of companies in Northern Ireland one copy of—

• (a) any document deposited with the Secretary of State under section 22(1). 22(2). 22(6). 42(4) or 50(4) above;

• (b) any document supplied by the company to the Secretary of State under section 22(5) above.

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

67

• (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.

• (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 17 to 20, 25, 28 to 31, 42, 55, 56 and 59(2) of this Act and section 21 of the Policyholders Protection Act 1975 and Schedule 3 to that Act.

Power to modify Part II in relation to particular companies

68

• (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 16 to 22, 23(1) and 25 to 36 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 31 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 alter insurance company's financial year

69

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

70

• (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.

• (2) 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.

• (3) Any notice to be served on any person by the Secretary of State under section 46, 60 or 61 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 the United Kingdom.

Offences under Part II

71

• (1) Any person who—

• (a) makes default in complying with sections 28 to 30 or 62(1) above; or

• (b) in purported compliance with a requirement imposedunder section 44 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 22 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 19(2) or 26(1) above;

• (iii) any document deposited with the Secretary of State under section 25(4) or 42(4) above ;

• (iv) any statement sent out under section 49(3)(b) above or made available under section 51(2)(c) 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—

• (i) in England and Wales and Northern Ireland, to a fine not exceeding £1,000 or, if it is greater, the prescribed sum within the meaning of section 32 of the Magistrates' Courts Act 1980 ;

• (ii) in Scotland, to a fine not exceeding £1,000 or, if it is greater, the prescribed sum within the meaning of section 289B of the Criminal Procedure (Scotland) Act 1975 ;

and for the purposes of the application of this subsection in Northern Ireland, the provisions of the Magistrates' Courts Act 1980 which relate to the sum mentioned in paragraph (b)(i) above shall extend to Northern Ireland.

• (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 26, 29(7), 31, 38, 39, 40, 41, 44, 45, 49(4), 50(4) or 61(1) above,

shall be guilty of an offence and liable, on summary conviction in England and Wales and Scotland to a fine not exceeding level 5 on the standard scale and, on summary conviction in Northern Ireland to a fine not exceeding £400.

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

• (a) section 22(1) or (2), 24(1), 25(4) or 42(4) above ; or

• (b) a requirement imposed under section 43 or 44(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 61 or 62(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 44(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.

• (7) An insurance company shall not be guilty of an offence by reason of its default in complying with section 16 or 51 (other than subsection (2)(c) above.

PART III — Conduct of Insurance Business

Insurance advertisements

72

• (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

73

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

74

• (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 the United Kingdom insurance business of a class comprising the effecting of contracts of that description.

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

Statutory notice by insurer in relation to long term policy

75

• (1) Subject to subsection (5) below, no insurance company to which Part II of this Act applies and no member of Lloyd's shall enter into a contract the effecting of which constitutes the carrying on of ordinary long-term insurance business 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 76 below.

• (3) 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 76(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 76 and 77 below “insurer” and “statutory notice” have the same meaning as in this section.

Right to withdraw from transaction in respect of long term policy

76

• (1) A person who has received a statutory notice from an insurer in relation to any contract to which section 75(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

77

• (1) For the purposes of section 76 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 7 of the Interpretation Act 1978 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

78

• (1) Regulations may be made, as respects the matters specified in subsection (2) below, in relation to contracts the effecting of which constitutes the carrying on of ordinary long-term insurance business and which—

• (a) are entered into by insurance companies to which Part II of this Act applies or by members of Lloyd's; and

• (b) are contracts under which the benefits payable to thepolicy 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 ;