Friendly Societies (Amendment) Regulations 1993

JurisdictionUK Non-devolved
CitationSI 1993/2519

1993No. 2519

FRIENDLY SOCIETIES

The Friendly Societies (Amendment) Regulations 1993

18thOctober1993

21stOctober1993

1stJanuary1994

ARRANGEMENT OF REGULATIONS

General

1. Citation, commencement, interpretation and extent

Amendments of 1992 Act

2. Securing compliance with Community obligations

3. Combinations of long term and general business

4. Covering of commitments situated in another member State

5. Transfers of long term business

6. Law applicable to contracts of insurance

7. Interpretation of 1992 Act

Information Provisions

8. Statements in respect of long term business

9. Statements and underwriting accounts in respect of general business

10. Regulations 8 and 9: supplementary provisions

11. Notification of non-provision of insurance

12. Default in complying with regulations 8 to 11

13. Transitional provision

The Friendly Societies Commission, being a Department designated ( a) for the purposesof section 2(2) of the European Communities Act 1972 ( b) in relation to the authorisation of the carrying on by friendly societies of insurance business and the regulation of such business and its conduct and in relation to anything supplemental or incidental to such matters, in exercise of the powers conferred on it by that section and of all other powers enabling it in that behalf, hereby makes the following Regulations:

General

Citation, commencement, interpretation and extent

1. -(1) These Regulations may be cited as the Friendly Societies (Amendment) Regulations 1993, and shall come into force on 1st January 1994.

(2) In these Regulations "the 1992 Act" means the Friendly Societies Act 1992 ( c).

(3) These Regulations extend to Northern Ireland.

(a) S.I. 1992/3197.

(b) 1972 c.68.

(c) 1992 c. 40.

Amendments of 1992 Act

Securing compliance with Community obligations

2.-(1) After section 36 of the 1992 Act there shall be inserted the following section-

"Directions for deeming conditions to have been imposed.

36A.-(1) Subsection (2) below applies where-

(a) it appears to the Commission that there has been or is, on the part of an authorised friendly society to which section 37(2) or (3) below applies or its committee of management, a failure to satisfy the 8th criterion in section 50(3) below; and
(b) the Commission proposes, on that ground, to impose conditions under section 36 above on the society's authorisation.

(2) If the Commission considers it expedient to do so in order to protect the interests of members of the society, the Commission may direct that, for the period-

(a) beginning with service of notice of the proposal underparagraph 7(1) or 8(2) of Schedule 13 to this Act, and
(b) ending with service of the Commission's decision notice,

the proposed conditions shall be deemed to have been imposed under section 36 above on the society's authorisation.

(3) In subsection (2) above "the Commission's decision notice" means-

(a) in relation to a notice of the proposal under paragraph 7(1) of Schedule 13 to this Act, notice of the Commission's decision under paragraph 7(5) of that Schedule or notice of an alternative proposal under paragraph 8(2) of that Schedule;
(b) in relation to a notice of the proposal under paragraph 8(2) of that Schedule, notice of the Commission's decision under paragraph 8(6) of that Schedule or notice of an alternative proposal under the said paragraph 8(2).

(4) The Commission may revoke a direction under this section if it is satisfied that the direction is no longer needed for the purpose for which it was imposed.

(5) The provisions of this Act (so far as applicable)-

(a) apply in relation to a decision of the Commission to give a direction under this section as they apply in relation to a decision of the Commission to impose conditions under section 36 above, and
(b) apply to conditions which, by virtue of such a direction, are deemed to have been imposed under that section as they apply to conditions so imposed."

(2) After the 7th criterion in subsection (3) of section 50 of that Act (the criteria of prudent management) there shall be inserted the following criterion-

"8. In the case of a society to which section 37(2) or (3) above applies, direction and management which, in addition to satisfying the other requirements as to direction and management, is such as to secure compliance with any obligation imposed on the society by any provision (whether of the law of any part of the United Kingdom or of the law of another member State) giving effect to any of the general insurance or life Directives."

(3) In subsection (5) of that section, for the words "the other 6 criteria" there shall be substituted the words "the other 7 criteria".

Combinations of long term and general business

3.-(1) In subsection (1) of section 37 of the 1992 Act (restrictions on combinations of business), for the words "Subject to subsection (8) below" there shall be substituted the words "Subject to subsections (1A) and (7A) below".

(2) After that subsection there shall be inserted the following subsection-

"(1A) Nothing in subsection (1) above shall prevent an authorised friendly society to which subsection (2) or (3) below applies from carrying on, or being authorised to carry on, both long term business and general business of either or both of classes 1 and 2 of Head B of Schedule 2 to this Act."

(3) For subsection (8) of that section there shall be substituted the following subsections-

"(7A) Where a friendly society to which subsection (2) or (3) above applies was on 15th March 1979 carrying on long term and general business in the United Kingdom, the society may (if authorised to do so) carry on any class (or part of a class) of long term or general business.

(8) Where a friendly society to which subsection (2) or (3) above applies is authorised by virtue of subsection (1A) or (7A) above to carry on long term and general business in the United Kingdom-

(a) the Commission shall (whether or not other conditions are imposed) impose such conditions on the society's authorisation as the Commission thinks fit for securing that the society's long term business and general business are kept separate; and(b) those conditions shall, subject to the exceptions mentioned in subsection (9) below, require that the assets representing the funds maintained in respect of the society's long term business or, as the case may be, its general business are to be generally applicable for the purposes of that business only."

Covering of commitments situated in another member State

4.-(1) In subsection (9) of section 57 of the 1992 Act (covering of risks situated in another member State), after the words "in this section" there shall be inserted the words "and section 57A below".

(2) After that section there shall be inserted the following section-

"Covering of commitments situated in another member State.

57A-(1) Where a friendly society intends to cover any commitments which are situated in a member State other than the United Kingdom-

(a) through an establishment in the United Kingdom, or
(b) through an establishment in a member State other than that in which the commitments will be situated,

it shall before doing so give notice of its intention to the Commission.

(2) The notice shall indicate-

(a) the member State in which the insurance is to be provided;
(b) the nature of the commitments which the society intends to cover;
(c) the member State in which the establishment through which the commitments will be covered is situated.

(3) Where the society intends to cover commitments situated in more than one member State, the information specified above may be contained in a single notice but must be set out separately for each member State.

(4) Where a friendly society has duly notified the Commission of its intention to cover commitments situated in another member State where administrative authorisation is required to do so then, if the original notice related-

(a) only to commitments in respect of which such authorisation is required; or
(b) only to commitments in respect of which such authorisation is not required,

and the society subsequently intends to extend its activities to commitments falling within the other category, it shall before doing so (without prejudice to the generality of the preceding provisions of this section) comply with subsections (1) to (3) above in relation to those commitments.

(5) A friendly society with the intention mentioned in subsection (1) above may apply to the Commission for a certificate attesting-

(a) that the society possesses the minimum margin of solvency calculated in accordance with Article 19 of the first life Directive, and
(b) that by virtue of this Act and the society's authorisation under section 32 above, issued in accordance with Article 6(1) of that Directive, the society is able to operate outside the member State of establishment.

(6) A friendly society with the intention mentioned in subsection (1) above in respect of commitments to be covered through an establishment in the United Kingdom may apply to the Commission for a certificate-

(a) indicating the classes of insurance business which the society is authorised to carry on in the United Kingdom; and
(b) stating that the Commission does not object to the society covering the commitments through such an establishment.

(7) The Commission shall, if it thinks an application under subsection (5) or (6) above ought to be granted, issue the certificate.

(8) If the Commission refuses such an application it shall give notice to the society of its decision and of the reasons for it.

(9) In this section-

"commitment" does not include a commitment represented by insurance business of class VII of Head A of Schedule 2 to this Act;

"friendly society" means a friendly society to which section 37(2) above applies."

Transfers of long term business

5. After paragraph 15 of Schedule 15 to the 1992 Act (amalgamations...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT