Insurance Companies (Valuation of Assets) Regulations 1976
|Publication Date:||January 01, 1976|
INSURANCEThe Insurance Companies (Valuation of Assets) Regulations 1976
The Secretary of State, in exercise of his powers under sections 78 and 86 of the Insurance Companies Act 1974(a), hereby makes the following Regulations:
Citation, commencement and revocation
1.—(1) These Regulations may be cited as the Insurance Companies (Valuation of Assets) Regulations 1976 and shall come into operation on 1st May 1976.
(2) The Insurance Companies (Valuation of Assets) Regulations 1974(b) are hereby revoked.
2.—(1) In these Regulations, unless the context otherwise requires—
"the Act" means the Insurance Companies Act 1974;
"approved financial institution" means any of the following:—
(a) the Bank of England,
(b) the National Savings Bank,
(c) a trustee savings bank within the meaning of the Trustee Savings Bank Act 1969(c),
(d) a banking or discount company within the meaning of paragraph 23 of the Eighth Schedule to the Companies Act 1948(d),
(e) a banking or discount company within the meaning of the Protection of Depositors Act 1963(e),
(f) a person duly authorised by the Treasury to act for the purposes of the Exchange Control Act 1947(f) as an authorised dealer in relation to any foreign currency,
(g) Finance for Industry Limited,
the International Bank for Reconstruction and Development,
the Inter-American Development Bank,
the African Development Bank,
the Asian Development Bank, and
the Caribbean Development Bank, and
(h) the National Giro;
(a) 1974 c. 49.
(b) S.I. 1974/2203 (1974 III, p. 8615).
(c) 1969 c. 50.
(d) 1948 c. 38.
(e) 1963 c. 16.
(f) 1947 c. 14.
"asset" includes part of an asset;
"associate" has the same meaning as in section 7(6) of the Act;
"building society" means a building society within the meaning of the Building Societies Act 1962(a) or the Building Societies Act (Northern Ireland) 1967(b);
"company" includes any body corporate;
"computer equipment" means the electro-mechanical and electronic units which make up a computer configuration;
"debenture" includes debenture stock and bonds, whether constituting a charge on assets or not, and loan stock or notes;
"debenture option" means a right exercisable within a specified period, at the option of the holder of the right, to acquire or dispose of any debenture at a specified price;
"debt" includes an obligation to pay a sum of money under a negotiable instrument;
"equity share" means a share of equity share capital;
"equity share capital" has the same meaning as in section 154(5) of the Companies Act 1948;
"general business amount" has the meaning assigned to it in Regulation 15(2) below;
"general business assets" and "general business liabilities" mean respectively assets and liabilities of an insurance company which are not long term business assets or long term business liabilities;
"holding company" shall be construed in accordance with section 154 of the Companies Act 1948;
"industrial and provident society" means any society registered (or deemed to be registered) under the Industrial and Provident Societies Act 1965(c) or the Industrial and Provident Societies Act (Northern Ireland) 1969(d);
"insurance company" includes, in relation to the application of these Regulations for the purposes of section 4 of the Act, a body proposing to carry on insurance business;
"insurance liabilities" means, in relation to an insurance company, any debt due from or other liabilities of the company under any contract of insurance to which it is a party;
"intermediary" means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with an insurance company, other than a person who only publishes such invitations on behalf of, or to the order of, some other person;
"land" includes any interest in land;
"liability" includes a contingent or prospective liability and a part of a liability, but does not include a liability in respect of share capital;
"linked assets" means, in relation to an insurance company, long term business assets of the company which are, for the time being, identified in the records of the company as being assets by reference to the value of which property linked benefits are to be determined;
(a) 1962 c. 37.
(b) 1967 c. 31 (N.I.).
(c) 1965 c. 12.
(d) 1969 c. 24 (N.I.).
"long term business amount" has the meaning assigned to it in Regulation 15(2) below;
"long term business assets" and "long term business liabilities" mean respectively assets of an insurance company which are, for the time being, identified as representing the long term fund or funds maintained by the company in respect of its long term business and liabilities of the company which are attributable to its long term business;
"middle market price" means—
(a) in relation to an investment for which two prices are quoted in the official list published for the relevant market, the average of the two prices so quoted for the relevant date or, if no official list has been published for that day, for the most recent day prior to that day for which the official list has been published; and
(b) in relation to an investment for which one price is quoted in the official list published for the relevant market, the price so quoted for the relevant date or, if no official list has been published for that day, for the most recent day prior to that day for which the official list has been published; and
(c) in any other case, the nearest equivalent to the average referred to in paragraph (a) above which is published or can be reasonably ascertained from information which is published;
"price earnings ratio" means the Financial Times-Actuaries estimated price earnings ratio (net) relating to the Industrial Group;
"proper valuation" means, in relation to land, a valuation made by a qualified valuer not more than three years before the relevant date which determined the amount which would be realised at the time of the valuation on an open market sale of the land free from any mortgage or charge;
"property linked benefits" means benefits provided for under any contracts of the kind mentioned in section 83(2) of the Act, the amount of which is to be determined by reference to the value of property of any description (whether specified in the contract or not);
"qualified valuer" means a person who—
(a) is a fellow or professional associate of the Royal Institution of Chartered Surveyors or a fellow or associate of the Incorporated Society of Valuers and Auctioneers or the Rating and Valuation Association, and has knowledge and experience in the valuation of land, or
(b) is approved for the time being by the Secretary of State for the purposes of these Regulations;
"quoted" means, in relation to an investment—
(a) that there has been granted a quotation or permission to deal in respect of that investment on a stock exchange which is a recognised stock exchange within the meaning of the Companies Act 1948;
(b) that there has been granted such a quotation or permission on any stock exchange of repute outside Great Britain; or
(c) that dealings in that investment are effected in a securities market of repute outside Great Britain being a market in which prices of all securities of which there are dealings are publicly quoted and which is supervised by a public authority;
and "unquoted" shall be construed accordingly;
"related company" means, in relation to an insurance company—
(a) a dependent of the insurance company,
(b) a company of which the insurance company is a dependent, or
(c) a dependent of a company of which the insurance company is a dependent;
"relevant date" means, in relation to the valuation of any asset for any purpose for which these Regulations apply, the date when the asset falls to be valued for that purpose;
"salvage right" means any right of an insurance company under a contract of insurance to take possession of and to dispose of property by virtue of the fact that the company has made a payment or has become liable to make a payment in respect of a loss thereof;
"share" includes stock;
"share option" means a right exercisable within a specified period, at the option of the holder of the right, to acquire or dispose of any share at a specified price;
"subsidiary" shall be construed in accordance with section 154 of the Companies Act 1948.
(2) For the purposes of these Regulations, a company is a dependent of another company if—
(a) that other company, either alone or with any associate or associates, is entitled to exercise, or control the exercise of, one-third or more of the voting power at any general meeting of the first-mentioned company, or
(b) the first-mentioned company is a dependent of any company which is that other company's dependent.
(3) The Interpretation Act 1889(a) shall apply for the interpretation of these Regulations as it applies for the interpretation of an Act of Parliament and as if these Regulations and the Regulations hereby revoked were Acts of Parliament.
3.—(1) Subject to the provisions of paragraph (2) below, these Regulations apply with respect to the determination of the value of assets of insurance companies for the purposes of sections 4, 24(6), 26, 28(2)(b), 31 and 44 of the Act, any investigation to which section 14 of the Act applies and any investigation made in pursuance of a requirement under section 34 of the Act.
(2) Where an insurance company has entered into any contracts providing for the payment of property linked benefits, these Regulations shall not apply with respect to the determination of the value of the linked assets by reference to the value of which those benefits are to be determined.
(3) Any asset to which these Regulations apply (other than cash) for the valuation of which no provision is made in these Regulations shall be left out of account for the purposes specified in paragraph (1)...
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