The Insurance Companies Regulations 1994

• (1) If the provision for claims outstanding at the end of the reference period exceeds the provision for claims outstanding at the beginning of the reference period, the amount of the excess shall be added to the amount of claims paid in the reference period.

• (1) If the provision for claims outstanding at the beginning of the reference period exceeds the provision for claims outstanding at the end of the reference period, the amount of the excess shall be deducted from the amount of claims paid in the reference period.

• (3) For the purposes of this paragraph, the expressions “amount of claims paid” and “provision for claims outstanding” have, in relation to a reference period, the same meaning as they have in paragraph 10 of Schedule 3 in relation to a financial year.

4

The aggregate obtained under paragraph 3(1) or (2) above shall be divided by the number of months in the reference period and multiplied by twelve.

5

If the amount arrived at under paragraph 4 above is more than 7 million units of account, it shall be divided into two portions, the former consisting of 7 million units of account and the latter comprising the excess.

6

Where there has been a division into two portions pursuant to paragraph 5 above, there shall be calculated and added together 26 per cent. and 23 per cent. of the two portions respectively; and where there has been no such division, there shall be calculated 26 per cent. of the amount arrived at under paragraph 4 above.

7

In the case of general business consisting of health insurance based on actuarial principles, paragraph 6 above shall apply with the substitution of “8 2/3 per cent.” for “26 per cent.” and “7 2/3 per cent.” for “23 per cent.”, but only if all the necessary conditions are satisfied.

8

The necessary conditions for the purposes of paragraph 7 above are the same as those set out in paragraph 8 of Schedule 3.

9

In a case of the kind mentioned in paragraph 9 of Schedule 3, that paragraph shall apply (with the necessary modifications) so as to produce separate sums under paragraphs 6 and 7 above.

10

The sum arrived at under paragraph 6 or 7 above or the aggregate of the sums arrived at under those paragraphs, as the case may be, shall be multiplied by the same percentage as is applicable for the purposes of paragraph 15 of Schedule 3.

SCHEDULE 5 — MINIMUM GUARANTEE FUND

Long term business

1

Subject to paragraph 7 below, the minimum guarantee fund for long term business shall be—

• (a) in the case of a pure reinsurer which—

• (i) is the wholly-owned subsidiary of an insurance company carrying on long term business, and

• (ii) carries on only such reinsurance business as is ceded to it by that company, 200,000 units of account,

• (b) in the case of a mutual, 600,000 units of account, and

• (c) in any other case, 800,000 units of account.

General business

2

Subject to paragraphs 3 to 7 below, the minimum guarantee fund for general business shall be the amount shown in the table below as applicable to the general business class for which the relevant company is authorised (or the highest such amount if the company is authorised for more than one class).

GENERAL BUSINESS CLASS	AMOUNT
Class 10, 11, 12, 13, 14 or 15	400,000 units of account
Class 1, 2, 3, 4, 5, 6, 7, 8, 16 or 18	300,000 units of account
Class 9 or 17	200,000 units of account

3

In the case where the risks covered fall within class 14 of Part I of Schedule 2 to the Act and where the annual amount of premiums or contributions of the company due in respect of that class for each of the preceding three financial years exceeded 2,500,000 units of account or 4 per cent. of the total amount of premiums or contributions receivable by the company, for the amount of units of account given in the table in paragraph 2 above there shall be substituted the amount of 1,400,000 units of account.

4

Where a company carrying on credit insurance business is required to increase the amount of units of account pursuant to paragraph 3 above, the company shall have:—

• a period of three years in which to bring the fund up to 1,000,000 units of account;

• a period of five years to bring the fund up to 1,200,000 units of account;

• a period of seven years to bring the fund up to 1,400,000 units of account;

such periods to run from the date on which the criteria set out in paragraph 3 are fulfilled.

5

A company authorised for part of a class shall, for the purposes of paragraph 2 above, be regarded as authorised for the whole of the class.

6

In the case of a mutual, the minimum guarantee fund required by paragraphs 2 to 5 above shall be reduced by 25 per cent.

Long term and general business

7

In relation to a United Kingdom or EEA margin of solvency maintained under section 32(2)(b) or (3)(b) of the Act, the minimum guarantee fund for long term business or general business shall be one-half of the amount arrived at by applying the foregoing provisions of this Schedule.

SCHEDULE 6 — CHANGE OF CONTROL ETC.

PART I — INTERPRETATION

For the purposes of this Schedule—

• “authority” means a licence or equivalent authorisation which may only be granted if the applicant fulfils criteria specified in legislation or by a supervisory or judicial authority or by a self-regulating organisation or professional body to carry on any business activity;

• “court” means any court wheresoever in the world;

• “group of companies” means a holding company and subsidiary within the meaning of section 736 of the Companies Act 1985[^f00047];

• “position holder” includes a proposed position holder.

PART II — SPECIFIED PARTICULARS AND NOTICES

1

In the case of an authorised insurance company notifying the Secretary of State pursuant to section 60(1) of the Act of an individual who is the company’s proposed managing director, chief executive or principal United Kingdom executive the particulars to be provided are those set out in A to G of Part III of this Schedule together with Notice 1 in Part III of this Schedule.

2

In the case of an individual notifying the Secretary of State pursuant to section 61(1) of the Act that he is a proposed controller (other than a managing director of either the authorised insurance company or a parent company of it or chief executive of either the authorised insurance company or a parent of it which is an insurance company), the particulars to be provided are those set out in A to G of Part III of this Schedule and those set out in F2, F3 and H in Part IV of this Schedule together with Notice 2 in Part III of this Schedule.

3

In the case of an individual notifying the Secretary of State pursuant to section 61(1) of the Act that he is the proposed managing director of a parent company of the authorised insurance company or chief executive of a parent company which is an insurance company, the particulars to be provided are those set out in A to G of Part III of this Schedule and those set out in H2 to H6 of Part IV of this Schedule together with Notice 2 in Part III of this Schedule.

4

In the case of an individual who is a newly appointed director, manager, authorised United Kingdom representative or employee within section 8(4)(c) of the Act, the particulars to be provided, pursuant to section 62(1) of the Act, are those set out in A to G of Part III of this Schedule together with Notice 3 in Part III of this Schedule.

5

In the case of an authorised insurance company notifying the Secretary of State pursuant to section 60(1) of the Act that it proposes to appoint a body corporate who is the company’s proposed managing director, chief executive or principal United Kingdom executive the particulars to be provided are those set out in A to E, F1 and G of Part IV of this Schedule together with Notice 1 in Part IV of this Schedule.

6

• (1) In the case of a body corporate notifying the Secretary of State pursuant to section 61(1) of the Act that it is a proposed controller (other than a managing director or chief executive of the authorised insurance company), the particulars to be provided are those set out in A to I of Part IV of this Schedule together with Notice 2 in Part IV of this Schedule.

• (2) Where several of the same group of companies are serving notice pursuant to section 61(1) of the Act—

• (a) the particulars set out in A to F of Part IV of this Schedule may be provided by one member company only;

• (b) that member company should be the one likely to be most active in exercising control of the authorised insurance company;

• (c) the company providing these particulars shall give the required particulars in respect of all companies in the group other than existing controllers of the authorised insurance company (whether proposed corporate controllers or not);

• (d) where historical information is sought, the member company shall give it in respect of companies which are currently part of the group whether or not they were part of the group at the relevant time;

• (e) every proposed corporate controller shall provide Notice 2 in Part IV of this Schedule.

• (3) Where the company in respect of which the notification is made is proposed as a controller of more than one authorised insurance company, the particulars set out in A to E, F1 and G of Part IV of this Schedule need be provided only once.

7

In the case of a body corporate which is a newly appointed director, manager, authorised United Kingdom representative or employee within section 8(4)(c) of the Act, the particulars to be provided, pursuant to section 62(1) ofthe Act, are those set out in A to E, F1 and G of Part IV of this Schedule together with Notice 3 in Part IV of this Schedule.

8

In the case of a person notifying an authorised insurance company pursuant to section 62(1) of the Act that he has become a controller, or a shareholder controller of any description, the particulars to be provided are those set out in Part V of this Schedule.

9

In the case of a person notifying an authorised insurance company pursuant to Section 62(1) of the Act that he has ceased to be a controller, or a shareholder controller of any description, the particulars to be provided are those set out in Part VI of this Schedule.

10

Where pursuant to section 60(1), 61(1) or section 62(1) of the Act, notification is to be given, or particulars are to be provided, to an authorised insurance company or to the Secretary of State by or in respect of a partnership, the particulars to be provided by or on behalf of the partnership shall be those of each individual partner or body corporate partner as if such partner was the position holder.

PART III

APPOINTMENT OF INDIVIDUAL — PARTICULARS TO BE PROVIDED

A: Particulars of authorised insurance company

A1

Name of authorised insurance company in respect of which the notification is being given.

A2

The proposed or assumed position to which the notification relates.

A3

If the proposed position is that of controller, the provision of section 96C of the Act by virtue of which the individual serving notice would become a controller.

B: Partnerships

B1

If the notification is being given because the individual is a member of a partnership, the name of the partnership.

C: Personal details of individual

C1

Full name (which shall be given in the order surname/forenames and including title and any name by which commonly known).

C2

Any previous names by which known (including name before marriage).

C3

Any trading names used as a sole trader in the last ten years.

C4

Date of birth (which shall be given in the order day/month/year).

C5

Place of birth (including town and where appropriate the London borough).

C6

Private address or addresses.

C7

If other than the particulars specified in response to C6 above, the address or addresses of any residence outside the United Kingdom in the last five years and the dates of such residence.

C8

Nationality, including a statement as to whether it was acquired by birth or naturalisation, and if by naturalisation a statement when so acquired. In the case of dual nationality, the details of each nationality.

D: Experience

D1

Relevant United Kingdom and overseas qualifications.

D2

Details of all employment or occupation over the last ten years, including names and addresses of employers, dates of employment or occupation (months and years), positions held, summary of responsibilities and reasons for leaving. Any intervals between employment or occupation shall be explained.

E: Other business interests

E1

Details of all directorships currently held.

E2

Details of all other directorships held during the last ten years.

E3

Details of all bodies corporate in which the individual or a partnership in which the individual is a partner is entitled to exercise, or control the exercise of, 10 per cent. or more of the voting power at any general meeting, together with a brief description of his activities.

F: Reputation and Character

Notes:

Information shall be provided in this section in respect of events whether they occurred in the United Kingdom or elsewhere.

• This information is required only in respect of events which occurred within the ten years immediately prior to the notification.

F1

Details of any authority (as defined) held from any supervisory body as an individual to carry on business.

F2

Details of any draft or formal application made for an authority from a supervisory body to carry on business other than an authority already mentioned in response to F1 above. If any application was, for any reason, refused or withdrawn, particulars of the refusal or withdrawal.

F3

Details of any conviction for any offence involving fraud or other dishonesty or under legislation relating to companies, building societies, industrial and provident societies, credit unions, friendly societies, insurance, banking or other financial services, consumer credit or consumer protection. Details shall include the court where the conviction took place, the offence, the penalty imposed and the date of the conviction. By virtue of article 3(a)(iii) of the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975[^f00048], spent convictions shall be disclosed.

F4

Details of other convictions, including full particulars of the court where the conviction took place, the offence, the penalty imposed and the date of the conviction.

F5

• Details of any case of failure to satisfy a judgment debt under a court order within a year of the making of the order.

F6

• Details of any compromise or arrangement with creditors or other failure to satisfy creditors in full.

F7

• Details of the presentation of any petition for the bankruptcy of the individual and the appointment of any receiver, or any administrator of the individual’s estate or of any person performing a similar function.

F8

• Details of the winding up of any company, or the subsidiary of any company, of which the individual is or was a controller within 5 years of the commencement of the winding up.

F9

Details of any adjudication by a court making the individual liable for any fraud, misfeasance or wrongful trading or other misconduct in respect of the formation or management of any company, partnership or unincorporated association.

F10

Details of any dismissal from any office or employment or from any fiduciary office or position of trust whether or not remunerated (unless already notified in response to D2 above).

F11

• Details of any refusal of entry to any professional body or trade association or any case where an application was not made following an initial approach to any professional association or trade association.

F12

• Details of any disqualification by a court from acting as a director or being concerned in the management of a company.

F13

• Details of any case of warning, censure, prosecution, criticism or court order made at the instigation of any regulatory body.

G: Other details

G1

Any other details relevant to the Secretary of State’s consideration of the notification.

NOTICES

Notes:

• Insert name of individual

** Insert name of authorised insurance company

Insert name of partnership

† Delete as appropriate

§ Insert date of appointment (in the order day/month/year)

Notice 1 [image omitted]

Notice 2 [image omitted]

Notice 3 [image omitted]

PART IV — APPOINTMENT OF BODY CORPORATE

PARTICULARS TO BE PROVIDED

A: Particulars of authorised insurance company

A1

Name or names of the authorised insurance company or companies in respect of which notice is being given.

A2

The proposed or assumed position to which the notification relates.

A3

Provision of section 96C of the 1982 Act by virtue of which the body corporate serving notice would become a position holder.

B: Partnerships

B1

If the notification is being given because the body corporate is a partner in a partnership, the name of the partnership.

C: Corporate particulars of the position holder

C1

Name.

C2

Any other corporate or trading name used in the past ten years.

C3

Date of incorporation; the date shall be given in the order day/month/year.

C4

Country of incorporation.

C5

Where the company is an oversea company within the meaning of Part XXIII of the Companies Act 1985 or Part XXIII of the Companies (Northern Ireland) Order 1986, the company’s United Kingdom registered number and the date of registration.

C6

Registered number.

C7

Address of registered office.

C8

Address of principal place of business in the United Kingdom.

C9

Where the company is an oversea company within the meaning of Part XXIII of the Companies Act 1985 or Part XXIII of the Companies (Northern Ireland) Order 1986, the name and address of the person authorised to accept service of documents.

C10

Summary of the share ownership identifying those owning more than 10 per cent. of the shares, a group structure chart, identifying the principal companies in the group, and details of any proposed changes in the share ownership.

C11

Any reports, resolutions and other circulars issued to shareholders during the last four years.

D: Management details of the position holder

The full names (including titles and names by which commonly known) and addresses of—

D1

the directors, together with details of the positions within the company held by each director;

D2

the secretary (if any);

D3

the chief executive (if any).

E: Professional support of position holder

E1

Name and address of principal banker.

E2

Name and address of auditor.

F: Financial aspects of the position holder

F1

Audited accounts (and, where appropriate, audited group accounts) should be provided for the last three financial years (if available). If the most recent audited accounts are more than six months out of date, management accounts or interim accounts (neither of which need be audited) shall be provided showing the current financial position and the current results.

F2

Terms on which the position of controller is to be acquired.

F3

Full details of all financial transactions which have been, or will be, entered into to enable the proposed controller to attain control.

G: Conduct of business by the position holder

Note:

• This information shall be provided in respect of any such events within the last ten years both in the United Kingdom and elsewhere.

G1

Nature of the position holder’s business.

G2

• Details of any authority (as defined) held from a supervisory body to carry on business.

G3

• Details of any draft or formal application made for an authority from a supervisory body to carry on business other than an authority already mentioned in response to F2 above. If any such application was, for any reason, refused or withdrawn, particulars of the refusal or withdrawal.

G4

• Details of any case of failure to satisfy a judgement debt under a court order within a year of the making of the order.

G5

• Details of any compromise or arrangement with creditors or other failure to satisfy creditors in full.

G6

• Details of the appointment of any receiver or administrative receiver or the substantial equivalent of any such person including whether that person is still acting under the appointment.

G7

• Details of any petition served on the position holder for an administration order or the substantial equivalent.

G8

• Details of any case of warning, censure, prosecution, criticism, or court order made at the instigation of any regulatory body.

G9

• Details of any refusal of entry to any professional body or trade association or of any case where an application was not made following an initial approach to any professional body or trade association.

G10

Details of any current, pending or proposed litigation, which is likely to proceed, whether in the United Kingdom or elsewhere, and which may have a material effect on the position holder.

H: Exercise of controllership

Notes:

These particulars shall not apply if the notification is made as part of an application for authorisation.

• These particulars are required only if the information is known when this notice is served.

H1

Reasons for seeking to become a controller of the authorised insurance company.

H2

Intended changes (if any) to the business strategy of the authorised insurance company; a proposed business plan if there are intended changes.

H3

• Any intended appointments of, removals of, or changes in the responsibilities of, the directors, the chief executive, managers and main agent (as defined in section 96E of the Act) of the authorised insurance company.

H4

• Intended changes (if any) to the sources of business of the authorised insurance company (insurance brokers, agents, own employees or direct selling).

H5

• Intended changes (if any) to the authorised insurance company’s guiding principles concerning reinsurance.

H6

• Details of any transactions or arrangements in which the proposed controller is engaged or expects to engage with the authorised insurance company (excluding receipt of dividends).

I. Other details

I1

Any other details relevant to the Secretary of State’s consideration of this notification.

Notices

Notes:

• Insert name of body named at C1 above

** Insert name of the authorised insurance company

Insert name of partnership

† Delete as appropriate

§ Insert date of appointment (in the order day/month/year)

Notice 1 [image omitted]

Notice 2 [image omitted]

Notice 3 [image omitted]

PART V — PERSON BECOMING CONTROLLER OR SHAREHOLDER CONTROLLER OF ANY DESCRIPTION

PARTICULARS TO BE PROVIDED AND NOTICE

1

Name of authorised insurance company.

2

Name of person in respect of which notification is being given.

3

Position assumed and details of the circumstances by which that position was assumed.

4

In the case of a United Kingdom company, if the position assumed is that of shareholder controller of any description provided for by section 96C(3) of the Act—

• (a) the appropriate shareholder controller description; and

• (b) the percentage of shares or voting power which he or it (alone or with any associate or associates) holds or is entitled to exercise or control.

5

Date of original notification of details of proposed appointment or intention to become a controller: the date shall be given in the order day/month/year.

6

Date position assumed: the date shall be given in the order day/month/year.

PART VI — PERSON CEASING TO BE CONTROLLER OR SHAREHOLDER CONTROLLER OF ANY DESCRIPTION

PARTICULARS TO BE PROVIDED AND NOTICE

1

Name of insurance company.

2

Name of person ceasing to be a controller or (if a United Kingdom company) a shareholder controller of any description.

3

Date person ceased to be a controller or a shareholder controller of any description: the date shall be given in the order day/month/year.

4

Reason for ceasing to be a controller or a shareholder controller of any description.

5

If the person remains a shareholder controller of any description provided for by section 96C(3) of the Act, the percentage of the shares or voting power which he will (alone or with any associate or associates) be entitled to exercise or control.

SCHEDULE 7 — STATUTORY NOTICE: NON-INVESTMENT CONTRACTS

SCHEDULE 8 — STATUTORY NOTICE: INVESTMENT CONTRACTS

SCHEDULE 9 — NOTICE OF CANCELLATION

NOTICE OF CANCELLATION

SCHEDULE 10 — PERMITTED LINKS

PART I — DESCRIPTIONS OF PROPERTY BY REFERENCE TO WHICH BENEFITS MAY BE DETERMINED

1

Securities (other than derivative contracts) which are listed.

2

Unlisted securities (other than derivative contracts) in aggregate up to a maximum of 10 per cent. of the property linked benefits.

3

Land (including any interest in land) in an EEA State, Australia, Canada, the Channel Islands, Gibraltar, Hong Kong, the Isle of Man, New Zealand, the Republic of South Africa, Singapore and the United States of America.

4

Loans—

• (a) which are fully secured by mortgage or charge on land (or any interest in land) which—

• (i) is situated in any of the countries specified in paragraph 3 above, and

• (ii) in the case of a loan made to a person other than a body corporate, is not used wholly or mainly for domestic purposes, and

• (b) of which the rate of interest and the due dates for the payment of interest and the repayment of principal can be fully ascertained from the terms of any agreement relating to the loan.

5

Units in—

• (a) a unit trust scheme falling within Council Directive 85/611/EEC of 20 December 1985 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investments in transferable securities;

• (b) an authorised unit trust scheme other than authorised unit trust schemes falling within sub-paragraph (a) above;

• (c) a recognised scheme within the meaning of sections 86, 87 and 88 of the Financial Services Act 1986[^f00049] other than recognised schemes falling within sub-paragraph (a) above.

6

Approved securities.

7

Loans to or deposits with an approved credit institution, an approved financial institution or an approved investment firm.

8

Income due or to become due in respect of property of any of the descriptions specified in the foregoing paragraphs of this Schedule.

9

Permitted derivative contracts.

10

Cash.

11

Units, by whatever name called, in a real or notional fund (not being a scheme or undertaking of a kind mentioned in paragraph 5 above) which is limited to the descriptions of property mentioned above and which under the contract is to be managed either—

• (a) wholly by the insurer; or

• (b) wholly or to any extent by another person being a person for whose acts and omissions in managing the fund the insurer assumes responsibility towards the policy holder as if they were the acts or omissions of the insurer, and otherwise (if at all) by the insurer.

PART II — INDICES BY REFERENCES TO WHICH BENEFITS MAY BE DETERMINED

12

An approved index.

PART III — INTERPRETATION

13

Unless the context otherwise requires, words or expressions contained in this Schedule bear the same meaning as in Part VIII of these Regulations.

14

For the purposes of this Schedule, “approved index” means either—

• (a) an index which is—

• (i) calculated independently;

• (ii) published at least once every week;

• (iii) based on constituents, each of which is property falling within paragraphs 1 to 8 or 10 above; and

• (iv) calculated on a basis which is made available to the public and which includes both the rules for including and excluding constituents and the rules for valuation which must use an arithmetic average of the value of the constituents; or

• (b) an index in respect of which a derivative contract is listed.

15

• (1) For the purposes of this Schedule, “permitted derivative contract” means a derivative contract to which sub-paragraph (2) below applies—

• (a) which is held for the purposes of reduction of investment risks or efficient portfolio management, and which—

• (i) is held in connection with property falling within paragraphs 1 to 8 or 10 above for such purposes; or

• (ii) has the equivalent effect to such a contract held in connection with such assets for such purposes;

• (b) in respect of which, having regard to its assets and liabilities, the insurer will have, so far as can reasonably be foreseen, and in the appropriate fund maintained by it, assets at the settlement date which match its obligations under that contract and from which it will fulfil those obligations; and

• (c) which—

• (i) is listed; or

• (ii) the insurer has entered into with an approved counterparty and which it reasonably believes may be readily closed out by entering into a further permitted derivative contract with an approved counterparty.

• (2) This sub-paragraph applies to—

• (a) a contract for differences under which the amount payable by either party is calculated by reference to fluctuations in the value of any property falling within paragraphs 1 to 10 of Part I above or in an approved index; or

• (b) a futures contract or option, in each case providing for the acquisition or disposal of property, all of which is property falling within paragraphs 1 to 10 of Part I above.

16

Benefits payable under any contract to which regulation 43 applies shall not be determined by reference to—

• (a) property of any of the descriptions specified in paragraph 2, 5(b), 5(c) or 7 above if the value of such property is determined, either wholly or partly, by reference to the value of, or the income from, fluctuations in the value of property other than property of the descriptions in Part I of this Schedule;

• (b) property of the description in paragraph 2 above unless the securities are realisable in the short term without any diminution in value.

SCHEDULE 11 — VALUE OF DEPENDANTS

PART I — THE SUPPLEMENTARY AMOUNT

1

Subject to paragraph 2(1) below, the supplementary amount in relation to assets of a relevant description held by a dependant of the insurance company shall be determined in accordance with the following formula—

$$A=BC×D$ in which— A is the supplementary amount; B is the amount by which the value of assets of that description held by the dependant, excluding any long term business assets of the dependant if it is an insurance company, exceeds the permitted limit applicable to the dependant in relation to those assets; C is the aggregate of the amount specified in B above and of the amounts by which the value of assets of the same description held by other relevant dependants, excluding any long term business assets of a dependant which is an insurance company, exceeds respectively the permitted limits applicable to such other relevant dependants in relation to those assets; D is— where the insurance company holds no assets of the same description of the relevant class, the amount of the permitted limit that would be applicable to the insurance company in relation to such assets were it to hold them; and where the insurance company holds assets of the same description of the relevant class, the amount by which the permitted limit applicable to the insurance company in relation to those assets exceeds the value of those assets.$

2

• (1) Where for the purpose of determining any supplementary amount in accordance with paragraph 1 above the insurance company cannot reasonably ascertain—

• (a) the value of any asset of a relevant dependant, or

• (b) the amount of the permitted limit applicable in relation to any asset of a relevant dependant,

the asset in question shall be left out of account for that purpose.

• (2) In this Part of this Schedule—

• “relevant dependant” means— where this Schedule is being applied in relation to the determination of the value of a share in, or debt due or to become due from, a dependant of the insurance company which is a long term business asset of the insurance company, any dependant of the insurance company— a share in which, or in any company of which it is a dependant, is a long term business asset of the insurance company, or from which a debt is due, or will become due, to the insurance company which is a long term business asset of that company; and in any other case, any dependant of the insurance company— a share in which, or in any company of which it is a dependant, is a general business asset of the insurance company, or from which a debt is due, or will become due, to the insurance company which is a general business asset of that company.

PART II — FURTHER PROVISIONS AND MODIFICATIONS OF THE REGULATIONS APPLICABLE WITH RESPECT TO THE DETERMINATION OF THE VALUE OF DEPENDANTS

3

• (1) This paragraph applies where, for the purpose of ascertaining the value of the assets of the subject company under regulation 47 above, any determination falls to be made in accordance with the said regulation 47 of the value of the assets of a dependant of the insurance company, a share in which, or a debt due or to become due from which, is an asset of the subject company; and references herein to a determination of the value of assets of a dependant to which this paragraph applies are references to any such determination.

• (2) Regulation 47(4) shall not apply with respect to a determination of the value of assets of a dependant to which this paragraph applies.

• (3) Where, in the case of a determination of the value of assets of a dependant to which this paragraph applies—

• (a) the dependant is an insurance company and has general business assets of a relevant description or is not an insurance company and has assets of a relevant description,

• (b) the value of such assets exceeds the permitted limit applicable to the dependant in relation to those assets, and

• (c) any controller of the dependant has no assets of the same description of the relevant class, or has assets of the same description of the relevant class and their value is less than the permitted limit applicable to that controller in relation to those assets;

then, for the purposes of such determination, there shall be added to the permitted limit applicable to the dependant in relation to the assets referred to in sub-paragraph (a) above an amount equal to the supplementary amount or, if there is more than one such controller, to the aggregate of the supplementary amounts, determined with respect to any such controller in accordance with Part I of this Schedule, subject, where the controller is not the insurance company, to the modifications specified in sub-paragraph (5) below.

• (4) In this paragraph, “a controller” means, in relation to a dependant—

• (a) the insurance company,

• (b) the subject company, if it is an insurance company, and

• (c) a dependant of the insurance company which is an insurance company and of which the subject company is a dependant.

• (5) Where sub-paragraph (3) above is being applied in relation to a controller, other than the insurance company—

• (a) Part I of this Schedule, as applied in accordance with the said sub-paragraph (3), shall have effect as if, for the reference to the insurance company, there were substituted references to the controller, and

• (b) the references to assets being of a relevant class in the said sub-paragraph (3) and in Part I of this Schedule, as so applied, shall be construed as referring to long term business assets of the controller, if the said sub-paragraph (3) is being applied in connection with the determination of the value of a long term business asset of the controller, and to general business assets of the controller, in any other case.

4

The modifications of these Regulations applicable (in addition to that specified in paragraph 3(2) above) with respect to the determination of the value of the assets of the subject company where it is not an insurance company are as follows—

• (a) these Regulations shall apply to the subject company as if it were an insurance company and its assets were being valued for the purpose specified in regulation 45(1);

• (b) regulation 45(2) shall not apply; and

• (c) regulation 57 shall not apply.

5

In this Schedule, “subject company” means the dependant of the insurance company the value of whose assets is being determined in accordance with regulation 47(2) or (3) (as the case may be).

SCHEDULE 12 — ASSETS TO BE TAKEN INTO ACCOUNT ONLY TO A SPECIFIED EXTENT

PART I

1

A piece of land or a number of pieces of such land to which in the most recent proper valuation of such pieces of land an aggregate value is ascribed which is greater than the aggregate of the value of each of such pieces of land valued separately

2

Debts due, or which will become due, to the insurance company from an individual (other than an individual who is connected with the insurance company within the meaning of section 31(5) of the Act), being debts which are fully secured on any dwelling or any land appurtenant thereto owned or to be purchased by the individual and used or to be used by him for his own residence

3

Unsecured debts, other than listed debentures or debts from an approved counterparty, which are debts due, or which will become due, (including debts which would become due if the company were to exercise any right to which it is entitled to require payment or repayment of the same) from a regulated institution and any of its connected companies (not being a dependant of the insurance company)

4

Unsecured debts, other than listed debentures or debts from a regulated institution, which are debts due, or which will become due, to the insurance company (including debts which would become due if the company were to exercise any right to which it is entitled to require payment or repayment of the same) from—

• (a) any one company and any of its connected companies (not being a dependant of the insurance company)

5

Debts due, or which will become due, to the insurance company from an individual (other than debts specified in regulation 48(3) above or paragraph 2 or 4 (b) above)

6

The aggregate of debts, other than debentures, of the description in paragraph (4) above

7

Listed equity shares in any one company and any of its connected companies (not being a dependant of the insurance company)

8

Listed shares (including listed equity shares) and listed debentures in any one company and any of its connected companies (not being a dependant of the insurance company or an approved counterparty)

9

Unlisted shares in and unlisted regulated subordinated debt due from any one company and any of its connected companies (not being a dependant of the insurance company)

10

The aggregate of unlisted debentures of the descriptions in paragraphs 3 and 4 above and of unlisted shares and debt of the descriptions in paragraph 9 above

11

Holdings in an authorised unit trust scheme or a recognised scheme (other than a scheme falling within Council Directive 85/611/EEC of 20 December 1985 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities[^f00050])

12

Subject to paragraph 13 below, shares held in or secured or unsecured debts (including debts which would become due if the company were to exercise any right to which it is entitled to require payment or repayment of the same) or the value of rights under derivative contracts due, or which will become due, from—

• (a) an individual, or

• (b) any one company and any of its connected companies (not being a dependant of the insurance company), or

• (c) any one unincorporated body of persons

13

Shares, debts and rights under derivative contracts to which the limitations in paragraph 12 apply, the holdings of which exceed 5% but which in aggregate are taken into account for no more than 40% of the business amount

14

Shares, debts and rights under derivative contracts to which the limitations in paragraph 12 and 13 apply which are issued by any one approved credit institution and any of its connected companies together with deposits held in that institution and any of its connected companies (not being a dependant of the insurance company)

15

Cash

16

Computer equipment

17

Office machinery (other than computer equipment), furniture, motor vehicles and other equipment

PART II

18

In this Schedule, a company is connected with another company if it is—

• (a) a subsidiary of that other company, or

• (b) the holding company of that other company, or

• (c) a subsidiary of the holding company of that other company.

SCHEDULE 13 — RELEVANT CO-INSURANCE OPERATIONS

1

An insurance operation is a relevant co-insurance operation for the purposes of regulation 63 above if—

• (a) it is not a reinsurance acceptance, and

• (b) it relates to any of the classes specified in paragraph 2 below, and

• (c) it satisfies all the conditions specified in paragraph 3 below.

2

The classes referred to in paragraph 1(b) above are—

• class 3 (land vehicles),

• class 4 (railway rolling stock),

• class 5 (aircraft),

• class 6 (ships),

• class 7 (goods in transit),

• class 8 (fire and natural forces),

• class 9 (damage to property),

• class 10 (motor vehicle liability),

• class 11 (aircraft liability),

• class 12 (liability for ships),

• class 13 (general liability), excluding risks which concern damage arising from nuclear sources or from medicinal products,

• class 14 (credit),

• class 15 (suretyship), and

• class 16 (miscellaneous financial loss),

as specified in Part I of Schedule 2 to the Act.

3

The conditions referred to in paragraph 1(c) above are—

• (a) that the risk is covered by a single contract at an overall premium and for the same period by two or more insurers, each for his own part;

• (b) that the risk is situated (within the meaning of paragraph 4 below) within an EEA State;

• (c) that at least one of the insurers participating in the operation does so through a head office or branch established in an EEA State other than that in which the leading insurer’s head office (or if the leading insurer is participating through a branch, that branch) is established.

4

For the purposes of paragraph 3(b) above, a risk is situated in an EEA State—

• (a) in the case of insurance relating to immovable property, if the property is situated in an EEA State,

• (b) in the case of insurance relating to a registered vessel, aircraft or vehicle (including railway rolling stock), if the vessel, aircraft or vehicle is registered in an EEA State, and

• (c) in any other case, if the policy holder is incorporated or has his habitual residence in an EEA State.

SCHEDULE 14 — METHODS OF CALCULATING THE EQUALISATION RESERVE FOR CREDIT INSURANCE BUSINESS

Method No. 1

1

In respect of credit insurance business the company shall maintain an equalisation reserve to which shall be charged any technical deficit arising in that business for a financial year.

2

Such reserve shall in each financial year receive 75 per cent. of any technical surplus arising on credit insurance business, subject to a limit of 12 per cent. of the net premiums or contributions until the reserve has reached 150 per cent. of the highest annual amount of net premiums or contributions received during the previous five financial years.

Method No. 2

1

In respect of credit insurance business the company shall set up an equalisation reserve to which shall be charged any technical deficit arising in that business for a financial year.

2

The minimum amount of the equalisation reserve shall be 134 per cent. of the average of the premiums or contributions received annually during the previous five financial years after subtraction of the cessions and addition of the reinsurance acceptances.

3

Such reserve shall in each of the successive financial years receive 75 per cent. of any technical surplus arising in that class until the reserve is at least equal to the minimum amount calculated in accordance with paragraph 2.

Method No. 3

1

Subject to paragraph 2(g) below, an equalisation reserve shall be maintained for credit insurance business for the purpose of offsetting any above-average claims ratio for a financial year in that business.

2

The equalisation reserve shall be calculated on the basis of the method set out below.

• (a) All calculations shall relate to income and expenditure for the insurer’s own account.

• (b) An amount in respect of any claims shortfall for each financial year shall be placed to the equalisation reserve until it has reached, or is restored to, the required amount.

• (c) There shall be deemed to be a claims shortfall if the claims ratio for a financial year is lower than the average claims ratio for the reference period. The amount in respect of the claims shortfall shall be arrived at by multiplying the difference between the two ratios by the earned premiums for the financial year.

• (d) The required amount shall be equal to six times the standard deviation of the claims ratio in the reference period from the average claims ratio, multiplied by the earned premiums for the financial year.

• (e) Where claims for any financial year are in excess, an amount in respect thereof shall be taken from the equalisation reserve. Claims shall be deemed to be in excess if the claims ratio for the financial year is higher than the average claims ratio. The amount in respect of the excess claims shall be arrived at by multiplying the difference between the two ratios by the earned premiums for the financial year.

• (f) Irrespective of claims experience, 3.5 per cent. of the required amount of the equalisation reserve shall be first placed to that reserve each financial year until its required amount has been reached or restored.

• (g) The length of the reference period shall be not less than 15 years and not more than 30 years. No equalisation reserve need be maintained if no underwriting loss has been noted during the reference period.

• (h) The required amount of the equalisation reserve and the amount to be taken from it may be reduced if the average claims ratio for the reference period in conjunction with the expenses ratio show that the premiums include a safety margin.

Method No. 4

1

Subject to paragraph 2(g) below, an equalisation reserve shall be maintained for credit insurance business for the purpose of offsetting any above-average claims ratio for a financial year in that business.

2

The equalisation reserve shall be calculated on the basis of the method set out below.

• (a) All calculations shall relate to income and expenditure for the insurer’s own account.

• (b) An amount in respect of any claims shortfall for each financial year shall be placed to the equalisation reserve until it has reached the maximum required amount.

• (c) There shall be deemed to be a claims shortfall if the claims ratio for a financial year is lower than the average claims ratio for the reference period. The amount in respect of the claims shortfall shall be arrived at by multiplying the difference between the two ratios by the earned premiums for the financial year.

• (d) The maximum required amount shall be equal to six times the standard deviation of the claims ratio in the reference period from the average claims ratio, multiplied by the earned premiums for the financial year.

• (e) Where claims for any financial year are in excess, an amount in respect thereof shall be taken from the equalisation reserve until it has reached the minimum required amount. Claims shall be deemed to be in excess if the claims ratio for the financial year is higher than the average claims ratio. The amount in respect of the excess claims shall be arrived at by multiplying the difference between the two ratios by the earned premiums for the financial year.

• (f) The minimum required amount shall be equal to three times the standard deviation of the claims ratio in the reference period from the average claims ratio, multiplied by the earned premiums for the financial year.

• (g) The length of the reference period shall be not less than 15 years and not more than 30 years. No equalisation reserve need be maintained if no underwriting loss has been noted during the reference period.

• (h) Both required amounts of the equalisation reserve and the amount to be placed to it or the amount to be taken from it may be reduced if the average claims ratio for the reference period in conjunction with the expenses ratio show that the premiums include a safety margin and that safety margin is more than one-and-a-half times the standard deviation of the claims ratio in the reference period. In such a case the amounts in question shall be multiplied by the quotient of one-and-a-half times the standard deviation and the safety margin.

SCHEDULE 15 — INSURANCE STATISTICS: EFTA STATES AND EFTA COMPANIES

The statements and underwriting account to be provided under regulation 80 are to be given in the form set out in Forms 82 to 85.

SCHEDULE 16 — INSURANCE STATISTICS: OTHER MEMBER STATES

The statements to be provided under regulation 81 are to be given in the form set out in Forms 91 to 94.

SCHEDULE 17 — REVOCATIONS

Number	Title
S.I. 1981/1654	The Insurance Companies Regulations 1981
S.I. 1982/675	The Insurance Companies (Amendment) Regulations 1982
S.I. 1983/396	The Insurance Companies (Advertisements) (Amendment) (No. 2) Regulations 1983
S.I. 1985/1419	The Insurance Companies (Amendment) Regulations 1985
S.I. 1988/673	The Insurance Companies (Amendment) Regulations 1988
S.I. 1990/1160	The Insurance Companies (Legal Expenses Insurance) (Application for Authorisation) Regulations 1990
S.I. 1990/1181	The Insurance Companies (Credit Insurance) Regulations 1990
S.I. 1991/1999	The Insurance Companies Regulations 1981 (Amendment) Regulations 1991
S.I. 1991/2511	The Insurance Companies (Linked Contracts) (Amendment) Regulations 1991
S.I. 1992/445	The Insurance Companies (Amendment) Regulations 1992
S.I. 1993/1092	The Insurance Companies (Cancellation No. 2) Regulations 1993

Signed

Neil Hamilton, — Parliamentary Under-Secretary of State, — Department of Trade and Industry — 7th June 1994

Explanatory note

(This Note is not part of the Regulations)

The Insurance Companies Act 1982 (“the Act”), which consolidated the Insurance Companies Acts 1974 and 1981, contains provision for the regulation of insurance companies. The Act incorporates provisions which implemented Council Directives 73/239/EEC (O.J. No. L228, 16.8.73, p.3) and 79/267/EEC (O.J. No. L63, 13.3.79, p.1) relating to non-life and life insurance. It has been amended inter alia by regulations made under section 2(2) of, and paragraph 2(2) of Schedule 2 to, the European Communities Act 1972 (“the 1972 Act”) to implement the provisions of Council Directives 88/357/EEC (O.J. No. L172, 4.7.88, p.1) and 90/619/EEC (O.J. No. L330, 29.11.90, p.50).

The Act is to be further amended, with effect from 1st July 1994, by the Insurance Companies (Third Insurance Directives) Regulations 1994 (“the Third Directives Regulations”) to implement Council Directives 92/49/EEC (O.J. No. L228, 11.8.92, p.1) and 92/96/EEC (O.J. No. L360, 9.12.92, p.1) (“the Third Directives”).

The Insurance Companies Regulations 1994, which come into force on 1st July 1994, are made primarily under the Act and consolidate the Insurance Companies Regulations 1981 (S.I. 1981/1654) (“the 1981 Regulations”), as amended, with further amendments principally to implement the Third Directives. They also consolidate in part the Insurance Companies (Credit Insurance) Regulations 1990 (S.I. 1990/1181) and regulation 13 of the Insurance Companies (Amendment) Regulations 1992 (S.I. 1992/2890), as amended by S.I. 1993/174, made under the 1972 Act pursuant to Council Directives 87/343/EEC (O.J. No. L185, 4.7.87, p.72), 88/357/EEC and 90/619/EEC.

Part I contains citation, commencement and interpretation provisions.

Part II consolidates regulations 23, 24, 29 and 30 of the 1981 Regulations, which related to matters concerned with authorisation. Regulation 3 (made under sections 2(5) and 15(6) of the Act) prescribes contracts under which the benefits are exclusively or primarily benefits in kind, the effecting and carrying out of which contracts is not subject to authorisation and regulation under the Act. Regulation 4 (made under section 5(1) of the Act), together with Schedules 1 and 2, covers the information to be submitted by an applicant for authorisation. In the case of an applicant whose head office is in the United Kingdom, information on policy conditions and, for general business, tariffs is no longer to be provided. The information to be provided in support of an application for authorisation by a non-EC company with its head office in an EEA State, or by a Swiss general insurance company, is revised. Regulation 5 (made under section 96E(1)(b) of the Act) prescribes certain agents who are excluded from the provisions of the Act which apply to main agents. Regulation 6 (made under section 9(1) of the Act) prescribes the assets which an applicant for authorisation must have in the United Kingdom if the applicant is a company whose head office is not in an EEA State or is not an applicant to which section 8 of the Act applies.

Part III (made under section 9(1) of the Act) reproduces the existing law in Part III (regulations 14 to 22) of the 1981 Regulations. It regulates the making of a deposit by a company whose head office is not in an EEA State or is not an applicant to which section 8 of the Act applies.

Part IV largely reproduces the existing law contained in Part II (regulations 3 to 13) of the 1981 Regulations and deals with the margin of solvency (that is, the excess of the value of a company’s assets over the amount of its liabilities) which an insurance company is required under the Act to maintain. The value and amount in question are to be determined in accordance with regulations made under section 90 of the Act and referred to as “valuation regulations”.

Regulations 17 to 21 are made under section 32 of the Act, which provides for the amount of the margin to be prescribed or determined in accordance with regulations. The required margin for various classes of long term business (principally life assurance and annuities) is to be determined in accordance with the detailed rules in regulations 18 to 21. Provision is newly made for long term classes VIII and IX. The required margin for general business (non-life business) is the higher of the results given by the methods of calculation set out in Schedules 3 and 4 (regulation 17). Regulation 22 (made under section 33 of the Act), together with Schedule 5, sets out the minimum level of the “guarantee fund” (generally one third of the required margin of solvency).

Regulations 23 to 26 in Part IV are valuation regulations made under section 90 of the Act. By virtue of regulation 23(1), these particular valuation regulations are not available for valuing the assets which cover the company’s liabilities; but if the liabilities are covered, they are available for valuing the amount by which the liabilities are exceeded. With that limitation, regulation 23(2) allows half the amount of unpaid capital to be valued so long as a quarter of the capital is paid up (with analogous provisions for a mutual) and regulation 23(3) allows a mutual carrying on general business to value uncalled contributions, subject to the restrictions in sub-paragraphs (a) and (b). With the same limitation, regulations 23(4), 24, 25 and 26 make provision for what are known as the implicit items in the margin of solvency for long term business. A new provision is made in regulation 23 for the valuation of liabilities in respect of cumulative preference shares.

Part V (made under section 35 of the Act) consolidates and amends regulations 25, 25A, 25B, 25C and 26 to 28 of the 1981 Regulations. Regulations 27 to 30 regulate matching (the extent to which an insurance company must hold its assets in a currency appropriate to its liabilities), while regulations 31 to 33 regulate localisation (the extent to which an insurance company must hold assets in specific places). The matching regulations are revised so that regulation 27 provides for the requirements which are common to both long term and general business, while regulations 28 to 30 deal with matching of particular liabilities and provide for certain exceptions. Regulation 31 amends the localisation requirements so that a company to which Part II of the Act applies will have freedom to localise anywhere in the European Community the assets it holds to cover liabilities. Regulation 32 provides for exclusions from regulation 31, while regulation 33 will maintain a requirement on certain non-EC companies to localise assets within the United Kingdom.

Part VI and Schedule 6 (made under sections 60(1), 61(1) and 62(1) of the Act) replace regulations 31 to 36 of the 1981 Regulations and specify the particulars which have to be notified in connection with a change of director, controller, manager, etc. The particulars to be notified in relation to particular changes are listed in Schedule 6 and the former Forms A to D in Schedule 6 to the 1981 Regulations are discontinued.

Part VII consolidates with amendments Part VII of the 1981 Regulations. Regulations 35 to 37 (made under section 72 of the Act) amend regulations 65, 65A, 65B, 65C and 66 of the 1981 Regulations and provide for certain matters and words to be included in insurance advertisements. The requirement to include a statement relating to protection under the Policyholders Protection Act 1975 is disapplied in the case of advertisements issued by insurance companies whose head office is in an EEA State, while other matters are simplified. Regulations 38 to 40 consolidate regulations 67 to 69 of the 1981 Regulations and provide for certain information to be given by an intermediary to a person whom he invites to enter into certain insurance contracts. The reference in former regulation 67 to a “significant interest in shares” is amended in regulation 38, while regulation 39(2) (formerly regulation 68(2)) is amended to exclude its application where an invitation is issued in relation to a contract with a permitted insurer. Regulations 41 and 42, together with Schedules 7 to 9, consolidate regulations 70 and 71 of, and Schedules 10 to 12, to the 1981 Regulations, which were amended by the Insurance Companies (Cancellation No. 2) Regulations 1993 (S.I. 1993/1092) inter alia to implement the Third Directives. Regulation 43, together with Schedule 10, consolidates and amends regulation 72 of and Schedule 13 to the 1981 Regulations and provides that benefits under a linked long term contract may only be linked to the investment performance of certain prescribed assets or indices (known as “permitted links”). The list of permitted links in Schedule 10 is amended principally to permit links in approved derivative contracts, to unlisted securities and unit trusts. Specified indices are also replaced by a definition of an approved index.

Parts VIII and IX are valuation regulations made under section 90 of the Act. They reproduce with amendments the law previously in force in Parts V and VI of the 1981 Regulations.

In Part VIII, a number of new definitions have been added, for example to allow for the valuation of assets in the context of derivative contracts or stock lending transactions, and for assets relating to a regulated financial institution. The definition of a secured debt is revised. The definition of a dependant has been amended in line with the definition of a subsidiary in the Companies Act 1985. Of the amendments to the kinds of assets that may be valued, regulation 48 (debt and other rights) is substantially revised. A new regulation (regulation 55) covering the valuation of rights under a derivative contract is added. Regulation 57 is, as a consequence of changes made to Part VIII, in particular in the case of derivative contracts and stock lending transactions, substantially revised to introduce the concept of aggregate exposure. The extent that assets held by a company may be taken into account to cover its liabilities is determined on the basis that if the company’s aggregate exposure to assets of any one description exceeds the maximum admissible value determined by reference to the limits in Schedule 12, assets of that description and, to the extent necessary, any other assets equal in value to the excess shall be left out of account. Schedule 11 reproduces existing law. Schedule 12 is amended principally to comply with the Third Directives.

In Part IX, a new regulation (regulation 61) requires a company which has an obligation under a derivative contract to provide for the effect of possible adverse changes in the value of assets to which the contract relates. Regulation 62 is also new and provides for the determination of a company’s general business liabilities in compliance with Council Directive 92/49/EEC. Another new regulation (regulation 65) implements the obligations under Council Directive 92/96/EEC relating to the method of calculating a company’s long term liabilities. Several amendments are made to the determination of the rates of interest to be used for calculating liabilities when assessing the assumed yield on existing assets and on sums to be invested in the future (regulation 69). Regulation 75 (nature and term of assets representing long term liabilities), formerly regulation 55, has been clarified, in particular by referring specifically to the adequacy of the assets to meet the liabilities as determined in accordance with regulations 65 to 74.

Part X and Schedule 14 (made under section 2(2) of the 1972 Act) consolidate with amendments regulations 3 and 4 of and Schedule 1 to S.I. 1990/1181. These Regulations implement Council Directive 87/343/EEC (O.J. No. L185,4.7.87, p.72) which amended, as regards credit insurance and suretyship insurance, Council Directive 73/239/EEC. They do so by imposing a general obligation upon insurers carrying on credit insurance business to establish an equalisation reserve for the purpose of providing against above average fluctuations in claims, in accordance with one of four specified methods which they may select (regulation 76 and Schedule 14). The provisions no longer apply to EC companies. Regulation 78 makes failure to comply with regulation 76 an offence.

Part XI (made under section 2(2) of the 1972 Act), together with Schedules 15 and 16, provide for the return of certain statistical information which is required to be furnished to other EEA supervisory authorities under Council Directives 88/357/EEC and 90/619/EEC and the Third Directives. Regulation 80 and Schedule 15 consolidate with amendments regulation 13 of, and Schedules 1 and 2 to, S.I. 1992/2890 and requires a return to be made in relation to the provision of insurance by a UK company in an EFTA State and by an EFTA company in an EEA State through an establishment in the United Kingdom. Regulation 81 and Schedule 16 implement corresponding provisions of the Third Directives and requires a return to be made by a UK company which carries on insurance business through a branch in another member State or provides insurance in another member State. Regulation 82 makes failure to comply with regulation 80 or 81 an offence, and regulation 83 applies regulations 80 to 82 to Lloyd's.

In Part XII, regulation 84 provides for the case where another member State fails to implement (whether fully or substantially) the Third Directives before 1st July 1994. In that circumstance, a company whose head office is in a member State will be treated (pending such full or substantial implementation) as if its head office were in an EFTA State.

A Compliance Cost Assessment is available, copies of which have been placed in the libraries of both Houses of Parliament. Copies are also available from the Insurance Division of the Department of Trade and Industry, Room 817, 10-18 Victoria Street, London SW1H 0NN. A similar assessment was provided with the draft Insurance Companies (Third Insurance Directives) Regulations 1994 laid before Parliament on 24th May 1994 for approval by resolution of each House.

Footnotes

[^f00001]: S.I. 1975/427, S.I. 1976/2141.

[^f00002]: 1972 c. 68.

[^f00003]: 1982 c. 50.

[^f00004]: Section 32 was amended by S.I. 1994/1696, reg. 14.

[^f00005]: Section 96E(1)(b) was inserted by S.I. 1994/1696, reg. 54.

[^f00006]: 1974 c. 49.

[^f00007]: Section 9(1) was amended by S.I. 1994/1696, reg. 9.

[^f00008]: Section 9(2)(a) was amended by S.I. 1994/1696, reg. 9.

[^f00009]: Section 32(3)(b) was amended by S.I. 1994/1696, reg. 14.

[^f00010]: S.I. 1965/1776 amended by S.I. 1969/1894, rule 4 and by S.I. 1982/1111, rule 113.

[^f00011]: 1989 c. 40.

[^f00012]: 1982 c. 53.

[^f00013]: 1985 c. 6.

[^f00014]: Section 62(1) was substituted by S.I. 1994/1696, reg. 36.

[^f00015]: 1986 c. 60.

[^f00016]: Section 736 was substituted by the Companies Act 1989 (c. 40), section 144(1).

[^f00017]: S.I. 1986/1032 (N.I.6.).

[^f00018]: Section 75(5B) was inserted by S.I. 1993/1327, reg. 2(3).

[^f00019]: Section 75(1) was substituted by S.I. 1993/1327, reg. 2(1) and further substituted by S.I. 1994/1696, reg. 43.

[^f00020]: 1974 c. 39; as amended by S.I. 1983/1878, article 4, Schedule Part II.

[^f00021]: 1986 c. 60.

[^f00022]: O.J. No. L386, 30.12.89, p.1.

[^f00023]: O.J. No. L141, 11.6.93, p.27.

[^f00024]: O.J. No. L386, 30.12.89, p.14.

[^f00025]: 1986 c. 53.

[^f00026]: Paragraph 9 of Part I of Schedule 1 was amended by S.I. 1990/349, art. 2(2).

[^f00027]: 1965 c. 12.

[^f00028]: 1969 c. 24 (N.I.).

[^f00029]: Paragraph 7 of Part I of Schedule 1 was amended by S.I. 1988/496, art. 2.

[^f00030]: S.I. 1976/87; revoked by S.I. 1981/1654.

[^f00031]: S.I. 1974/2203; revoked by S.I. 1976/87.