Insurance Companies (Amendment) Regulations 1994

JurisdictionUK Non-devolved
CitationSI 1994/3132

1994 No. 3132

INSURANCE

The Insurance Companies (Amendment) Regulations 1994

Made 7th December 1994

Laid before Parliament 8th December 1994

Coming into force 30th December 1994

The Secretary of State, being a Minister designated1for the purposes of section 2(2) of the European Communities Act 19722in relation to compulsory insurance in respect of, and other means of providing for, civil liability in relation to motor vehicles and trailers, the transfer of insurance contracts other than contracts of life assurance from one insurance undertaking to another, and in relation to the authorisation of the carrying on of insurance business and the regulation of such business and its conduct, the specification of insurers who may effect insurance required under or by virtue of any enactment, and the transfer of contracts of life assurance from one insurance undertaking to another and in relation to anything supplemental or incidental to those matters, in exercise of his powers under the said section 2(2) and of all other powers enabling him in that behalf, hereby makes the following Regulations:—

1 GENERAL

GENERAL

S-1 Citation, commencement and extent

Citation, commencement and extent

1.—(1) These Regulations may be cited as the Insurance Companies (Amendment) Regulations 1994 and shall come into force on 30th December 1994.

(2) These Regulations extend to Northern Ireland.

S-2 Interpretation

Interpretation

2.—(1) In these Regulations—

the 1982 Act” means the Insurance Companies Act 19823;

“the commencement date” means 30th December 1994.

(2) In these Regulations expressions which are used in the 1982 Act have the same meanings as in that Act.

2 AMENDMENTS OF THE 1982 ACT

AMENDMENTS OF THE 1982 ACT

S-3 Extended meaning of “member State” for purposes of Act

Extended meaning of “member State” for purposes of Act

3.—(1) After subsection (6) of section 2 of the 1982 Act (restriction on carrying on insurance business) insert—

S-7

“7 In relation to any time before it becomes a member State, each of the following, namely, Austria, Iceland, Norway and Sweden, shall be treated as if it were a member State for all purposes of this Act.

S-8

8 In relation to any time before it becomes a member State, Finland shall be treated as if it were a member State for all purposes of this Act relating to the carrying on of long term business or the provision of long term insurance.”

(2) In subsection (1) of section 96 of that Act (general interpretation), after the definitions of “margin of solvency” and related expressions insert—

“‘member State’ shall be construed in accordance with section 2(7) and (8) above;”.

S-4 Insurance companies to which Part II of Act applies

Insurance companies to which Part II of Act applies

4. For subsections (1) and (1A)4of section 15 of the 1982 Act (insurance companies to which Part II applies) substitute—

S-1

“1 Subject to the provisions of this section, this Part of this Act applies to—

(a) all insurance companies, whether established within or outside the United Kingdom, which carry on insurance business within the United Kingdom; and

(b) all UK companies which carry on business in a member State other than the United Kingdom.

S-1A

1A Except as otherwise provided by Part I of Schedule 2F to this Act, this Part of this Act except—

(a) sections 47A, 47B, 52A, 52B, 54 to 59 and Schedule 2B; and

(b) section 49 and Schedule 2C so far as relating to the transfer of policies which evidence contracts of reinsurance,

does not apply to an EC company in so far as it is carrying on insurance business through a branch in respect of which such of the requirements of Part I of Schedule 2F to this Act as are applicable have been complied with.”

S-5 Restriction on transactions with connected persons

Restriction on transactions with connected persons

5.—(1) In subsection (5) of section 31 of the 1982 Act (restriction on transactions with connected persons), omit the words from “and for the purposes of this subsection” to the end.

(2) After that subsection insert—

S-5A

“5A For the purposes of subsection (5) above a person controls a company if he is—

(a) a person in accordance with whose directions or instructions the directors of the insurance company or of a body corporate of which it is a subsidiary are accustomed to act; or

(b) person who either alone or with any associate or associates is entitled to exercise, or control the exercise of, 15 per cent. or more of the voting power at any general meeting of the insurance company or of a body corporate of which it is a subsidiary;

and for the purposes of this subsection ‘associate’ shall be construed in accordance with section 96C(4) below as it has effect for the purpose of determining for the purposes of this Act whether any person is a controller of an insurance company other than a UK company.”

S-6 Adequacy of assets

Adequacy of assets

6.—(1) In subsection (3) of section 35A of the 1982 Act5(adequacy of assets), for the words “its liabilities under the contract in respect of linked benefits” substitute the words “such of its liabilities under the contract in respect of linked benefits as are not covered by contracts of reinsurance”.

(2) In subsection (4) of that section, in the definition of “linked long term contract”, after the word “means” insert the words “(subject to subsection (5) below)”.

(3) After that subsection insert—

S-5

“5 In subsection (3) above ‘linked long term contract’ does not include a contract the effecting of which constitutes the carrying on of long term business of class VII(a).”

S-7 Transfers of insurance business

Transfers of insurance business

7.—(1) In paragraph 2(2)(a) of Schedule 2C to the 1982 Act6(transfers of insurance business), for the words from “published” to the end of sub-paragraph (i) substitute the words

“published in the London, Edinburgh and Belfast Gazettes and, except where the court has otherwise directed—

(i) in two national newspapers in the United Kingdom;”.

(2) In paragraph 3(4) of that Schedule, for paragraph (b) substitute—

“(b)

“(b) where the United Kingdom is the State of the commitment the Secretary of State certifies that—

(i) the transferee company is not precluded by Schedule 2F to this Act from covering the commitment; and

(ii) the supervisory authority in the EEA State in which the establishment is situated agrees to the transfer;”.

(3) In paragraph 7(1)(a) of that Schedule, for the words from “published” to the end of sub-paragraph (i) substitute the words

“published in the London, Edinburgh and Belfast Gazettes and, if he thinks fit—

(i) in two national newspapers in the United Kingdom which have been so approved;”.

(4) In paragraph 8(1) of that Schedule, omit the word “and” immediately before paragraph (d) and after that paragraph insert and

“(e)

“(e) in the opinion of the Secretary of State the circumstances of the case justify the giving of his approval”.

(5) In paragraph 8(4) of that Schedule, omit the words “other than the United Kingdom”, in the second place where they occur, and for paragraph (b) substitute—

“(b)

“(b) where the United Kingdom is the State in which the risk is situated, he is satisfied that—

(i) the transferee is not precluded by Schedule 2F to this Act from covering the risk; and

(ii) the supervisory authority in the EEA State in which the establishment is situated agrees to the transfer;”.

(6) In paragraph 8(5) of that Schedule, for the words from “the transferee is” to the end substitute—

“(a)

“(a) the transferee is, or will be immediately after the approval—

(i) authorised under section 3 or 4 above to carry on; or

(ii) an EC company which is not precluded by Part I of Schedule 2F to this Act from carrying on,

general business of the class or classes to be transferred by the instrument; and

(b)

(b) every policy included in the transfer evidences a contract which was entered into before the date of the application,

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

(7) In subsection (1) of section 52A of that Act7(issue of certificates by the Secretary of State), after paragraph insert—

“(aa)

“(aa) a company which is authorised in accordance with Article 27 of the first long term insurance Directive, or Article 23 of the first general insurance Directive, is to transfer to a UK company all its rights and obligations under such long term or general policies, or long term or general policies of such descriptions, as may be so specified; or”.

(8) In section 52B of that Act8(effect of transfers authorised in other EEA States)—

(a)

(a) in subsection (1)(c), for the words “a non-EC company whose head office is not in an EFTA state” substitute the words “a company which is authorised in accordance with Article 27 of the first long term insurance Directive, or Article 23 of the first general insurance Directive,”; and

(b)

(b) in subsection (4), omit the word “direct”.

S-8 Information for policy holders of UK insurers and EC companies

Information for policy holders of UK insurers and EC companies

8.—(1) In paragraph 1(1) of Schedule 2E to the 1982 Act9(information for policy holders of UK insurers and EC companies), after the words “Subject to sub-paragraph (2)” insert the words “and paragraph 5”.

(2) At the beginning of paragraph 2(1) of that Schedule insert the words “Subject to paragraph 5 below,”.

(3) After paragraph 4 of that Schedule insert—

General

S-5

5.—(1) In the case of a contract involving two or more other parties, this Schedule shall have effect as if a separate contract were being or had been entered into by the insurer with each of those parties.

(2) Paragraphs 1 and 2 of this Schedule shall not apply in relation to a contract unless the other party to the contract is habitually resident in the United Kingdom at the time when the contract is entered into.

(3) In this paragraph ‘other party’, in relation to a contract, means a party to the contract other than the...

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