Insurance Companies (Amendment No. 2) Regulations 1994
| Jurisdiction | UK Non-devolved |
1994 No. 3133
INSURANCE
The Insurance Companies (Amendment No. 2) Regulations 1994
Made 7th December 1994
Laid before Parliament 8th December 1994
Coming into force 31th December 1994
The Secretary of State, being a Minister designated1for the purposes of section 2(2) of the European Communities Act 19722in relation to the authorisation of the carrying on of insurance business and the regulation of such business and its conduct, in exercise of the powers conferred by that section and by sections 5(1)(a), 17, 18, 20, 21, 32(1), (2) and (3), 33(1), 35(1), 62(1B), 78(1), (2) and (5), 90, 96(1) and 97 of the Insurance Companies Act 19823, hereby makes the following Regulations:—
Citation and commencement
1.—(1) These Regulations may be cited as the Insurance Companies (Amendment No. 2) Regulations 1994 and shall come into force on 31st December 1994.
(2) The Insurance Companies Regulations 19944(“the 1994 Regulations”) and the Insurance Companies (Accounts and Statements) Regulations 19835(“the 1983 Regulations”) shall have effect subject to the following amendments.
AMENDMENTS OF THE 1994 REGULATIONS
Interpretation: general
2. In paragraph (1) of regulation 2 of the 1994 Regulations (interpretation: general), for the definition of “the Act” substitute—
““the Act” means the Insurance Companies Act 1982 and includes amendments made to that Act by the Insurance Companies (Amendment) Regulations 19946”.
Localisation
3. In paragraphs (1) and (2) of regulation 31 of the 1994 Regulations (localisation), for the words “the European Community” wherever they occur substitute “any member State.”
Exclusions from regulations 27 to 31
4. In regulation 32(1)(a) of the 1994 Regulations (exclusions from regulations 27 to 31), for the words “European Community” substitute the words “member States”.
Particulars of changes of director, controller or manager etc.
5.—(1) Regulation 34 of, and Schedule 6 to, the 1994 Regulations (particulars of changes of director, controller or manager etc.) shall be amended as follows.
(2) In regulation 34, for the words “and 62(1) of the Act” substitute “62(1) and 62(1B) of the Act”.
(3) In paragraphs 4 and 7 of Schedule 6, for “62(1)” substitute “62(1B)”.
(4) In paragraph 10 of Schedule 6, for the words “or 62(1) of the Act” substitute “, 62(1) or 62(1B) of the Act”.
Linked contracts
6.—(1) Regulation 43 of the 1994 Regulations (linked contracts) shall be amended as follows.
(2) In paragraph (4)(a), omit the words “or fluctuations in” and after the words “property of any description” insert the words “or by reference to fluctuations in, or in an index of, property of any description, by reference”.
(3) Omit paragraph (4)(b).
(4) In paragraph (4)(c), after the words “to which Part II of the Act applies” insert the words “which fall within sub-paragraph 3(b) above”.
(5) In paragraph (4)(d), after the words “contracts entered into by an EC company” insert the words “which fall within sub-paragraph 3(b) above”.
(6) After paragraph (8) add—
“9 Until 1st September 1995, paragraph 1 of Schedule 10 shall have effect as if listed securities included all debentures in respect of which there has been granted and not withdrawn a listing on any stock exchange in an EEA State which is a stock exchange within the meaning of the law of that EEA State and “unlisted securities” shall be construed accordingly.”
Interpretation: Part VIII
7.—(1) Regulation 44 of the 1994 Regulations (interpretation: Part VIII) shall be amended as follows.
(2) In paragraph (1), in the definition of “approved securities”, after the words “debentures issued” in sub-paragraph (c) insert “prior to 31st December 1994”.
(3) In paragraph (1), in the definition of “listed”, for the words “a member State” substitute “an EEA State”.
(4) In paragraph (1), omit the definition of “regulated subordinated debt”.
(5) In paragraph (1), after the definition of “stock lending transaction” insert—
““subordinated debt” means any debt which, on a winding up of the debtor, ranks for payment after the claims of general creditors and is not to be repaid until the claims of all the general creditors outstanding at the time have been settled;”.
(6) In paragraph (3)(b), after the words “an approved credit institution” insert “and the amount of the guarantee when added to the aggregate exposure (as defined in regulation 57(3)) to the approved credit institution does not exceed the maximum admissible value prescribed by regulation 57 of, and Schedule 12 to, these Regulations”.
Valuation of assets and liabilities of dependants for the purposes of regulation 46
8. In paragraph (2)(b) of regulation 47 of the 1994 Regulations (valuation of assets and liabilities of dependants for the purposes of regulation 46), for the word “paragraphs” substitute “sub-paragraphs”.
Debts and other rights
9.—(1) Regulation 48 of the 1994 Regulations (debts and other rights) shall be amended as follows.
(2) For paragraph (1) substitute—
“1 The value of any secured debt due, or to become due, to an insurance company, other than a debt to which regulation 46(4) above or paragraphs (2), (3) or (6) of this regulation applies, shall be—
(a) in the case of any such debt which is due, or will become due, within twelve months of the relevant date (including any debt which would become due within that period if the company were to exercise any right to which it is entitled to require payment of the same), the amount which can reasonably be expected to be recovered in respect of that debt (due account being taken of the nature and quality of the security and the terms and conditions for payment thereof); and
(b) in the case of any other such debt, the amount which would reasonably be paid by way of consideration for an immediate assignment of the debt (due account being taken of the nature and quality of the security and the terms and conditions for payment thereof).”
(3) For sub-paragraph (c) of paragraph (6) substitute—
“(d)
“(d) from a company of which it is a dependant where such debt is subordinated debt, or”
(4) In paragraph (8), after the words “shall apply to a debt” insert the words “(save in so far as the debt represents an unconditional right to a specified amount)”.
(5) After paragraph (10) insert—
“11 Nothing in this regulation shall apply to listed investments.”
Listed investments
10. In regulation 53 of the 1994 Regulations (listed investments), after paragraph (3) add—
“4 The value of any listed debenture which (wholly or in part) has the effect of a derivative contract to which regulation 55(3) below does not apply shall not exceed an amount which would reasonably be paid by way of consideration for an immediate assignment of the unconditional right (if any) to receive a specified amount under the terms of the debenture.”
Derivative contracts
11. In sub-paragraph (iv) of paragraph (4)(a) of Regulation 55 of the 1994 Regulations (derivative contracts), after the words “an index” insert the words “of such assets” and after sub-paragraph (iv) insert—
“(v)
“(v) a national index of retail prices published by or under the authority of a government of a state belonging to Zone A as defined in Council Directive 89/647/EECof 18 December 19897on a solvency ratio for credit institutions; or”.
Assets to be taken into account only to a specified extent
12.—(1) Regulation 57 of the 1994 Regulations (assets to be taken into account only to a specified extent) shall be amended as follows.
(2) For paragraphs (1) to (8) substitute—
“1 Assets of an insurance company shall only be taken into account to the extent that its aggregate exposure to assets of a particular description does not exceed the maximum admissible value for assets of that description. Where its aggregate exposure to assets of a particular description exceeds the maximum admissible value for assets of that description, assets shall be left out of account in accordance with paragraph (8C) below.
2 The “aggregate exposure” of an insurance company to assets of a particular description shall mean an amount in respect of such assets actually held by the company (if any) calculated in accordance with paragraph (4) below adjusted in accordance with paragraphs (5) to (8B) below.
3 The “maximum admissible value” means—
(a) for a company carrying on general business, whether or not also carrying on long term business, in the case of general business assets of a description specified in Part I of Schedule 12, an amount equal to the percentage of the general business amount specified in Schedule 12 for assets of that description;
(b) for a company carrying on only long term business, for all assets of a description specified in Part I of Schedule 12, an amount equal to the percentage of the long term business amount specified in Schedule 12 for assets of that description;
(c) for a company carrying on general business and long term business, in the case of long term business assets of a description specified in Part I of Schedule 12, an amount equal to the percentage of the long term business amount specified...
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