Insurance Companies Act 1982 (repealed)

• (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 ;

• (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 or the registrar of companies in Northern Ireland or with both such registrars, 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 (1)(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) 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 specified 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 30(4) above.

Scope of Prevention of Fraud (Investments) Acts

79

The agreements and arrangements mentioned in section 13(1) of the Prevention of Fraud (Investments) Act 1958 and section 12(1) of the Prevention of Fraud (Investments) Act (Northern Ireland) 1940 (misleading statements etc. inducing persons to invest money) and in the definition of “dealing in securities ” in section 26(1) of that Act of 1958 and section 22(1) of that Act of 1940 shall not include contracts of insurance.

Capital redemption business

80

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

81

• (1) Any person guilty of an offence under section 72, 73 or 74 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.

• (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 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.

PART IV — Special Classes of Insurers

Industrial assurance business

82

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

• (2) Where an insurance company carries on any industrial assurance business, the company shall deposit with the Industrial Assurance Commissioner and the Industrial Assurance Commissioner for Northern Ireland a copy of any document which relates to industrial assurance business and which is deposited with the Secretary of State under section 22(1), (2) and (6) above or which is supplied by the company to the Secretary of State under section 22(5) above.

• (3) The provisions of sections 22 and 23(1) above shall have effect in relation to any document mentioned in subsection (2) above as if references in those provisions to the Secretary of State included references to the Commissioner and the Commissioner for Northern Ireland.

• (4) Where any document required to be deposited by a company under subsection (4) of section 42 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 the Commissioner for Northern Ireland, and section 71(4) above shall have effect in relation to this subsection as it has effect in relation to that subsection.

• (5) Where any business proposed to be transferred as mentioned in section 49 above is or includes industrial assurance business that section and section 50(4) above shall have effect as if references to the Secretary of State included references to the Commissioner and the Commissioner for Northern Ireland.

• (6) Where any apportionment is made between the industrial assurance business and any other business carried on by the company in respect of management expenses, income from investments, gains or losses on the disposal of investments, appreciation or depreciation in the value of investments, or taxation, the auditor shall include in his report a special report as to the propriety or otherwise of the apportionment; and a copy of every report of the auditor shall be furnished to the Commissioner and the Commissioner for Northern Ireland.

• (7) 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; but 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 in Great Britain before 1st January 1924 or in Northern Ireland before 1st January 1925, to the prejudice of persons interested in contracts entered into by the company before that date.

• (8) 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

83

• (1) The requirements referred to in section 15(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 and the auditor shall furnish a certificate in the prescribed form to the Committee 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 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, 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 86 below.

Lloyd's underwriters-financial resources

84

• (1) Subject to such modifications as may be prescribed and to any determination made by the Secretary of State in accordance with regulations, sections 32, 33 and 35 above shall apply to the members of Lloyd's taken together as they apply to an insurance company to which Part II of this Act applies and whose head office is in the United Kingdom.

• (2) The powers conferred on the Secretary of State by sections 38 to 41, 44 and 45 above shall be exercisable in relation to the members of Lloyd's if there is a breach of an obligation imposed by virtue of subsection (1) above.

Lloyd's underwriters-transfer of business

85

• (1) Sections 49 to 52 above shall apply in relation to transfers to and from members of Lloyd's if, and only if, the conditions specified in subsection (2) below are satisfied.

• (2) The conditions referred to in subsection (1) above are—

• (a) that the transfer is not one where both the transferor and the transferee are members of Lloyd's ;

• (b) that the Committee of Lloyd's have by resolution authorised one person to act in connection with the transfer for the members concerned as transferor or transferee ;

• (c) that a copy of the resolution has been given to the Secretary of State.

• (3) Where sections 49 and 50 or sections 51 and 52 above apply in relation to a transfer to or from members of Lloyd's they shall apply as if—

• (a) references to insurance companies to which Part II of this Act applies, or to persons authorised under section 3 or 4 of this Act, included references to members of Lloyd's; and

• (b) anything done in connection with the transfer by theperson authorised in accordance with subsection (2)(b) above had been done by the members for whom he acted.

Statement of business by Committee of Lloyd's

86

• (1) The Committee of Lloyd's 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 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 the United Kingdom

87

• (1) The provisions specified in subsection (2) below, if, apart from this section they would not so apply, shall apply in relation to an insurance company incorporated outside the United Kingdom which carries on insurance business within Great Britain or, as the case may be, Northern Ireland as they apply in relation to overseas companies within the meaning of section 406 of the Companies Act 1948 or, as the case may be, companies to which Part X of the Companies Act (Northern Ireland) 1960 applies.

• (2) The provisions referred to in subsection (1) above are—

• (a) sections 407, 409, 411 to 415 and 425(2) of the Companies Act 1948,

• (b) sections 9 to 11 and 37 of the Companies Act 1976,

• (c) sections 356, 358 to 364 and 373 of the Companies Act (Northern Ireland) 1960, and

• (d) Articles 11 to 13 of the Companies (Northern Ireland) Order 1978.

Unregistered companies

88

• (1) Every insurance company to which Part II of this Act applies, being a company which is not registered under the Companies Act 1948, under the Companies Act (Northern Ireland) 1960 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 2£p 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 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.

Insurance companies formed before 1967 in contravention of section 434 of the Companies Act 1948

89

• (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 the Insurance Companies Act 1974 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

90

• (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 and for the purposes of different enactments.

Criminal proceedings

Criminal liability of directors

91

• (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

92

• (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 the 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) In a case in which an unincorporated body is charged with an offence under this Act—

• (a) in England or Wales, section 33 of the Criminal Justice Act 1925 and Schedule 3 to the Magistrates' Courts Act 1980 (procedure on charge of offence against a corporation);

• (b) in Northern Ireland, section 18 of the Criminal Justice Act (Northern Ireland) 1945 and Schedule 4 to the Magistrates' Courts (Northern Ireland) Order 1981 (procedure on charge of offence against a corporation)

shall have effect 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 74 of the Criminal Procedure (Scotland) Act 1975 (proceedings on indictment against bodies corpora(e) shall have effect as if that body were a body corporate.

Restriction on institution of prosecutions

93

Proceedings in respect of an offence under this Act shall not be instituted—

• (a) in England or Wales, except by or with the consent of the Secretary of State, the Industrial Assurance Commissioner or the Director of Public Prosecutions,

• (b) in Northern Ireland, except by or with the consent of the Secretary of State, the Department of Commerce for Northern Ireland or the Director of Public Prosecutions for Northern Ireland.

Summary proceedings

94

• (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 127 of the Magistrates' Courts Act. 1980, 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.

• (4) Subject to the limitation in subsection (3) above and notwithstanding anything in section 331 of the Criminal Procedure (Scotland) Act 1975, the proceedings referred to in that subsection 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.

• (5) Subsection (3) of section 331 of the said Act of 1975 shall apply for the purposes of subsections (3) and (4) above as it applies for the purposes of that section.

• (6) Notwithstanding anything in Article 19(1) of the Magistrates' Courts (Northern Ireland) Order 1981, a complaint relating to an offence under this Act which is triable by a court of summary jurisdiction in Northern Ireland may be so tried if it is made 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 for Northern Ireland, the Secretary of State or the Department of Commerce for Northern Ireland, as the case may be, to justify the proceedings comes to his or that Department's knowledge.

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

Interpretation

Insurance business

95

For the purposes of this Act “insurance business” includes—

• (a) the effecting and carrying out, by a person not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidentally to some other business carried on by the person effecting them) in return for the payment of one or more premiums ;

• (b) the effecting and carrying out of tontines;

• (c) the effecting and carrying out, by a body (not being a body carrying on a banking business) that carries on business which is insurance business apart from this paragraph, of—

• (i) capital redemption contracts;

• (ii) contracts to manage the investments of pension funds (other than funds solely for the benefit of its own officers or employees and their dependants or, in the case of a company, partly for the benefit of those persons and partly for the benefit of officers or employees and their dependants of its subsidiary or holding company or a subsidiary of its holding company);

• (d) the effecting and carrying out of contracts to pay annuities on human life.

General interpretation

96

• (1) In this Act, unless the context otherwise requires—

• “actuary” means an actuary possessing the prescribed qualifications;

• “annuities on human life” does not include superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of persons engaged or who have been engaged in any particular profession, trade or employment, or of the dependants of such persons ;

• “body corporate” does not include a corporation sole or a Scottish firm but includes a body incorporated outside the United Kingdom;

• “chief executive” has the meaning given in section 7 above;

• “contract of insurance” includes any contract the effecting of which constitutes the carrying on of insurance business by virtue of section 95 above ;

• “controller” has the meaning given in section 7 above ;

• “court” means the High Court of Justice in England or, in the case of an insurance company registered or having its head office in Scotland, the Court of Session or, in the case of an insurance company registered or having its head office in Northern Ireland, the High Court of Justice in Northern Ireland ;

• “deed of settlement”, in relation to an insurance company, includes any instrument constituting the company;

• “director” includes any person occupying the position of director by whatever name called ;

• “enactment” includes an enactment of the Parliament of Northern Ireland and a Measure of the Northern Ireland Assembly;

• “financial year” means, subject to section 69 above, each period of twelve months at the end of which the balance of the accounts of the insurance company is struck or, if no such balance is struck, the calendar year;

• “former Companies Acts” means the Companies Act 1929 or the Companies Act (Northern Ireland) 1932 and any enactment repealed by that Act of 1929 or, as the case may be, that Act of 1932 or by the Companies (Consolidation) Act 1908;

• “general business” has the meaning given in section 1 above;

• “holding company” shall be construed in accordance with section 154 of the Companies Act 1948 or section 148 of the Companies Act (Northern Ireland) 1960;

• “industrial assurance business” has the meaning given in section 1(2) of the Industrial Assurance Act 1923 or Articles 2(2) and 3(1) of the Industrial Assurance (Northern Ireland) Order 1979 ;

• “insolvent” means, in relation to an insurance company at any relevant date, that if proceedings had been taken for the winding up of the company the court could, in accordance with the provisions of sections 222 and 223 or section 399 of the Companies Act 1948 or, as the case may be, sections 210 and 211 or section 349 of the Companies Act (Northern Ireland) 1960, hold or have held that the company was at that date unable to pay its debts;

• “insurance company” means a person or body of persons (whether incorporated or not) carrying on insurance business;

• “life policy” means any instrument by which the payment of money is assured on death (except death by accident only) or the happening of any contingency dependent on human life, or any instrument evidencing a contract which is subject to payment of premiums for a term dependent on human life ;

• “long term business” has the meaning given in section 1 above;

• “long term policy holder” means a policy holder in respect of a policy the effecting of which by the insurer constituted the carrying on of long term business; “main agent” has the meaning given in section 7 above ;

• “manager ”, except in section 56, has the meaning given in section 7 above;

• “margin of solvency ”. “United Kingdom margin of solvency ” and " Community margin of solvency shall be construed in accordance with section 32 above;

• “mortgage”, in relation to Scotland, means a heritable security within the meaning of section 9(8) of the Conveyancing and Feudal Reform (Scotland) Act 1970 ;

• “ordinary long-term insurance business” means long term business that is not industrial assurance business ;

• “policy ”— in relation to ordinary long-term insurance business and industrial assurance business, includes an instrument evidencing a contract to pay an annuity upon human life; in relation to insurance business of any other class includes any policy under which there is for the time being an existing liability already accrued or under which a liability may accrue ; and in relation to capital redemption business, includes any policy, bond, certificate, receipt or other instrument evidencing the contract with the company ;

• “policy holder” means the person who for the time being is the legal holder of the policy for securing the contract with the insurance company or, in relation to capital redemption business, means the person who for the time being is the legal holder of the policy, bond, certificate, receipt or other instrument evidencing the contract with the company, and— in relation to such ordinary long-term insurance business or industrial assurance business as consists in the granting of annuities upon human life, includes an annuitant; and in relation to insurance business of any kind other than such as is mentioned in the foregoing paragraph or capital redemption business, includes a person to whom, under a policy, a sum is due or a periodic payment is payable ;

• “prescribed” means prescribed by regulations under this Act;

• “registered society” means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969 ;

• “registrar of companies” has the meaning given in section 455 of the Companies Act 1948 and “registrar of companies in Northern Ireland” means the registrar of companies within the meaning of section 399(1) of the Companies Act (Northern Ireland) 1960 ;

• “subsidiary ”, except in section 57, shall be construed in accordance with section 154 of the Companies Act 1948 or section 148 of the Companies Act (Northern Ireland) 1960:

• “supervisory authority”, in relation to a member State other than the United Kingdom, means the authority responsible in that State for supervising insurance companies;

• “underwriter” includes any person named in a policy or other contract of insurance as liable to pay or contribute towards the payment of the sum secured by the policy or contract;

• “valuation regulations” means regulations under section 90 above;

• “vessel” includes hovercraft.

• (2) References in this Act to a fund or funds maintained in respect of long term business are references to a fund or funds maintained under section 28(1)(b) above and in sections 48(3) and 55(6) above include references to a fund or funds maintained under section 3(1) of the Insurance Companies Act 1958 or section 14(1) of the Insurance Companies Act (Northern Ireland) 1968.

• (3) A person shall not be deemed to be within the meaning of any provision of this Act a person in accordance with whose directions or instructions the directors of a company or other body corporate or any of them are accustomed to act by reason only that the directors of the company or body act on advice given by him in a professional capacity.

• (4) Any reference in this Act to an enactment of the Parliament of Northern Ireland or a Measure of the Northern Ireland Assembly shall include a reference to any enactment re-enacting it with or without modifications.

Supplementary

Regulations and orders

97

• (1) The Secretary of State may make regulations under this Act for any purpose for which regulations are authorised or required to be made thereunder.

• (2) Regulations under this Act may make different provision for cases of different descriptions.

• (3) Any power conferred by this Act to make regulations shall be exercisable by statutory instrument.

• (4) Any statutory instrument containing regulations under this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Annual report by Secretary of State

98

The Secretary of State shall cause a general annual report of matters within this Act to be laid before Parliament.

Savings, transitionals, consequential amendments and repeals

99

• (1) The saving and transitional provisions specified in Schedule 4 to this Act shall have effect.

• (2) The enactments mentioned in Schedule 5 to this Act shall have effect subject to the amendments there specified, being amendments consequential on the provisions of this Act.

• (3) The enactments mentioned in Schedule 6 to this Act are hereby repealed to the extent specified in the third column of that Schedule.

Short title, commencement and extent

100

• (1) This Act may be cited as the Insurance Companies Act 1982.

• (2) Subject to Schedule 4 to this Act, this Act shall come into force at the expiration of the period of three months beginning with the date on which it is passed.

• (3) This Act extends to Northern Ireland.

SCHEDULE 1

SCHEDULE 2

PART I — Classes

PART II — Groups of Classes

SCHEDULE 3

1

Subject to the following provisions of this Schedule, the premium limit for the purposes of section 7(6) above is the aggregate of the amounts of gross premiums shown in the annual accounts relating to the business of the applicant in the United Kingdom last deposited under section 22 above as receivable in respect of general business in the financial year to which the accounts relate.

2

If the accounts so deposited relate to a financial year which is not a period of 12 months, the aggregate of the amounts of gross premiums shown in the accounts as receivable in that financial year shall be divided by the number of months in that financial year and multiplied by twelve.

3

If no accounts have been deposited under section 22 above the aggregate amount of gross premiums shall be the amount or, if more than one amount, the lower or lowest amount, shown in respect of gross premiums relating to the business of the applicant in the United Kingdom in the financial forecast last submitted by the applicant in accordance with regulations made for the purposes of section 5(1)(o) above.

SCHEDULE 4

Saving for requirements, directions and powers under the Companies Act 1967

1

The repeal by the Insurance Companies Amendment Act 1973 of sections 65, 68 and 80 and subsection (1)(f) of section 109 of the Companies Act 1967 shall not affect—

• (a) any requirement or direction imposed or given under any of those sections before 25th July 1973 ;

• (b) the giving of a direction under the said section 68 in any case in which a notice has been served under subsection (3) of that section before that date ; or

• (c) the exercise by an officer of any powers under the said section 109 in a case in which he has been authorised before that date to exercise them ;

and the said Act of 1967 shall have effect in relation to any such requirement, direction or powers as if the said Act of 1973, the Insurance Companies Act 1974 and this Act had not been passed.

Periodic actuarial investigations under section 18 above in relation to any period of twelve months beginning before 1st October 1982

2

In relation to any period of twelve months beginning before 1st October 1982, section 18 of this Act shall have effect as if—

• (a) for subsection (1)(a) there were substituted—

(a) shall, once in every three years or at such shorter intervals as may be prescribed by the deed of settlement of the company or by its regulations or byelaws, cause an investigation to be made into its financial condition in respect of that business, including a valuation of its liabilities in respect thereof, by the person who for the time being is its actuary under section 19(1) below or any corresponding enactment previously in force ; and

;

• (b) subsection (2) were omitted.

Adjustments of established surplus for purposes of section 30(1) above

3

For the purposes of section 30(1) of this Act, where an established surplus corresponds partly but not wholly with a previously established surplus which was the latest to be established before 1st January 1982—

• (a) an adjustment shall be made to that previously established surplus so as to make it as nearly as may be comparable with the first-mentioned surplus, and

• (b) the relevant minimum shall be determined on the basis of that adjustment and an analogous adjustment of the allocation from that previously established surplus.

Margins of solvency

4

The requirements of sections 32 and 33 of this Act (or of regulations made for the purposes of those sections) shall not apply until 15th March 1984 in relation to long term business if the company concerned—

• (a) was carrying on long term business in the United Kingdom immediately before 1st January 1982, and

• (b) has not after that date obtained an authorisation under the Insurance Companies Act 1981 for a class of long term business for which on 1st January 1982 it was not authorised under that Act, and

• (c) does not after the commencement of this Act obtain an authorisation under this Act for a class of long term business for which on 1st January 1982 it was not authorised under the Insurance Companies Act 1981.

5

So long as paragraph 4 above applies to a company and a class of long term business carried on by it, then, in relation to that company and that business, the grounds for withdrawal of authorisation set out in section 11(2) of this Act shall be deemed to include the grounds set out in section 28(1 )(a) and (2) of the Insurance Companies Act 1974 as in force immediately before 1st January 1982.

Postponement of coming into force of section 36 above

6

If no regulations under section 27 of the Insurance Companies Act 1974 have come into operation before the expiration of the period mentioned in section 100(2) above section 36 of this Act shall not take effect until the first regulations under the said section 27 or 36 come into operation.