Insurance Companies Amendment Act 1973
| Year | 1973 |
Insurance CompaniesAmendment Act 1973
1973 CHAPTER 58
An Act to amend the law relating to insurance companies and the carrying on of insurance business; and to validate certain group policies.
[25th July 1973]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Authorisation of insurance companies
1 Margin of solvency and minimum paid up share capital required for authorisation.
(1) The Secretary of State may by order amend section 62 of the Companies Act 1967 to (4) of that section (margin of solvency and minimum paid up share capital required for authorisation of insurance company) whether as in force at the passing of this Act or as amended by a previous order under this subsection.
(2) The power to make orders under subsection (1) above includes power to vary or revoke a previous order, and an order under that subsection may make different provision in relation to different cases or circumstances.
(3) For the purposes of the said section 62 the value of any assets and the amount of any liabilities shall, subject to subsection (4) below, be determined in accordance with any applicable regulations made under section 32 below (hereafter referred to as ‘valuation regulations’).
(4) For the purposes of the said section 62 the amount of the liabilities at any time of any long term business carried on by the company, society or body in question shall be taken to be—
(a ) an amount equal to the total amount at that time standing to the credit of the fund or funds maintained by the company, society or body in respect of its long term business; or
(b ) the amount of those liabilities at that time as determined in accordance with any applicable valuation regulations,
whichever is the greater.
2 No authorisation for insurance company under control etc. of unfit persons.
(1) The Secretary of State shall not issue under section 61 of the Act of 1967 an authorisation with respect to an incorporated company if it appears to him that any director, controller or manager of the company is not a fit and proper person to be a director, controller or manager of the company, as the case may be.
(2) In this section ‘controller’, in relation to a company, means—
(a ) a managing director of the company or of a body corporate of which it is a subsidiary;
(b ) a chief executive of the company or of a body corporate, being an insurance company, of which it is a subsidiary;
(c ) a person—
(i) in accordance with whose directions or instructions the directors of the company or of a body corporate of which it is a subsidiary (or any of them) are accustomed to act; or
(ii) who, 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 company or of a body corporate of which it is a subsidiary.
(3) In this section ‘manager’, in relation to a company, means a person (other than a chief executive) employed by the company who, under the immediate authority of a director or chief executive of the company—
(a ) exercises managerial functions; or
(b ) is responsible for maintaining accounts or other records of the company,
not being a person whose functions relate exclusively to business conducted from a place of business outside Great Britain.
(4) Subject to subsection (6) below, in this section ‘chief executive’, in relation to a company or a body corporate of which it is a subsidiary, means a person employed by the company or body who, either alone or jointly with one or more other persons, is responsible under the immediate authority of the directors for the conduct of the whole of the insurance business of that company or body.
(5) In this section ‘associate’, in relation to any person, means—
(a ) the wife or husband or minor son or daughter of that person;
(b ) any company of which that person is a director;
(c ) any person who is an employee or partner of that person;
(d ) if that person is a company—
(i) any director of that company;
(ii) any subsidiary of that company;
(iii) any director or employee of any such subsidiary;
and for the purposes of this subsection ‘son’ includes stepson and adopted son, ‘daughter’ includes step-daughter and adopted daughter and ‘minor’, in relation to Scotland, includes pupil.
(6) In relation to a company incorporated outside Great Britain—
(a ) the reference in paragraph (a ) of subsection (2) above to a managing director of the company includes a reference to a person who is a managing director of that company in respect of so much of its insurance business as is carried on within Great Britain; and
(b ) the reference in paragraph (b ) of that subsection to a chief executive of the company includes a reference to a person employed by the company who, either alone or jointly with one or more other persons, is responsible (whether or not under the immediate authority of the directors) for the conduct of the whole of the insurance business carried on by the company within Great Britain but, if he is responsible also for the conduct of insurance business carried on by it elsewhere, only if there is no other person subordinate to him who is responsible for the conduct of the whole of the insurance business carried on by it within Great Britain.
(7) The foregoing provisions of this section shall have effect in relation to a registered society or unincorporated body as they have effect in relation to an incorporated company.
Accounts and statements
3 Periodic actuarial investigation of company with long term business.
(1) In subsection (1) of section 5 of the Insurance Companies Act 1958 (hereafter referred to as ‘the Act of 1958’) references to an investigation into the financial condition of a company and to a valuation of its liabilities shall be construed as references to an investigation into its financial condition, and to a valuation of its liabilities, in respect of its long term business only; and in subsection (2) of that section the reference to a statement of a company's insurance business shall be construed as a reference to a statement of its long term business only.
(2) The contents of any abstract or statement to be made under the said section 5 shall be such as may be prescribed.
(3) For the purposes of any investigation to which the said section 5 applies the value of any assets and the amount of any liabilities shall be determined in accordance with any applicable valuation regulations.
(4) Any such investigation shall be made by the person who for the time being is the company's actuary under subsection (5) below.
(5) Every insurance company to which the Act of 1958 applies which carries on long term business shall—
(a ) if it is carrying on such business at the passing of this Act, within one month of the passing of this Act, and
(b ) if it subsequently begins to carry on such business, within one month of its beginning to do so,
appoint an actuary as actuary to the company; and whenever an appointment under this subsection comes to an end the company shall as soon as practicable make a fresh appointment.
(6) A company making an appointment under subsection (5) above shall within fourteen days serve on the Secretary of State a written notice stating that fact and the name and qualifications of the person appointed, and if an appointment under that subsection comes to an end the company shall within fourteen days serve on the Secretary of State a written notice stating that fact and the name of the person concerned.
4 Deposit of documents with Secretary of State.
(1) The documents to which subsection (1) of section 8 of the Act of 1958 applies (documents required to be deposited with the Secretary of State) shall include any report of the auditor of the company made in pursuance of section 9 of the Act of 1958 but one of the copies of any such report deposited under that subsection shall be signed by the auditor and not by the persons mentioned in that subsection.
(2) The documents to which the said subsection (1) applies shall also include a statement of the names and connection with the company of any persons who, during the period to which the other documents deposited under that subsection relate—
(a ) were authorised by the company to issue, or to the knowledge of the company have issued, any such invitation in relation to the company as is mentioned in subsection (1)(a ) of section 43 below; and
(b ) were connected with the company as provided by regulations under that section;
and any such statement shall be deposited at the same time as the other documents required to be deposited under the said subsection (1).
(3) The number of copies of any document required to be deposited under the said subsection (1) shall be five instead of four.
(4) The persons by whom one copy of any such document except an auditor's report is required to be signed shall cease to include a manager of the company but—
(a ) shall include a chief executive, if any, of the company;
(b ) in the case of an abstract or statement under section 5 of the Act of 1958 shall include the actuary who made the investigation to which the abstract relates or by...
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