Insurance Companies Act 1958

JurisdictionUK Non-devolved
Citation1958 c. 72


Insurance Companies Act , 1958

(6 & 7 Eliz. 2) CHAPTER 72

An Act to consolidate the Assurance Companies Acts, 1909 to 1946, and the enactments amending those Acts with corrections and improvements made under the Consolidation of Enactments (Procedure) Act, 1949.

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:—

Preliminary

Preliminary

S-1 Companies to which Act applies.

1 Companies to which Act applies.

(1) Subject to the provisions of this section, this Act applies to all insurance companies, whether established within or outside Great Britain, which carry on within Great Britain insurance business of all or any of the following classes, that is to say, life assurance business, industrial assurance business, fire insurance business, accident insurance business, bond investment business, motor vehicle insurance business, and marine, aviation and transit insurance business.

(2) Subject to the provisions of this section, this Act also applies to any insurance company, whether established within or outside Great Britain, which carries on within Great Britain employers' liability insurance business and no other insurance business of a class specified in the foregoing subsection.

(3) A company as defined by section four hundred and fifty-five of the Companies Act, 1948, which carries on insurance business of a class specified in subsection (1) of this section in any part of the world other than Great Britain shall for the purposes of that subsection be deemed to be a company carrying on such business within Great Britain.

(4) Where this Act applies to an insurance company by reason that it carries on insurance business of a class specified in subsection (1) of this section, and the company also carries on employers' liability insurance business, it shall not, in relation to its employers' liability insurance business, be bound by the provisions of this Act.

(5) This Act does not apply to any insurance company which is registered under the Acts relating to friendly societies or to trade unions; and the Board of Trade may, on the application of an unregistered trade union originally established before the first day of July, eighteen hundred and ninety, extend to it the exemption conferred by this subsection, and may on the application of an unregistered friendly society extend to it the said exemption if it appears to the Board, after consulting the Chief Registrar of Friendly Societies, that the society is one to which it is inexpedient that this Act should apply.

(6) This Act does not apply to a member of Lloyd's, or of any other association of underwriters approved by the Board of Trade, who carries on insurance business of any class, provided that he complies with the requirements set out in the First Schedule to this Act and applicable to business of that class.

Restriction on carrying on of insurance business

Restriction on carrying on of insurance business

S-2 Minimum paid up share capital.

2 Minimum paid up share capital.

(1) Subject to the provisions of subsections (5) and (6) of section one of this Act and of the Second Schedule thereto, no person shall carry on in Great Britain insurance business of a class specified in subsection (1) of the said section one, or employers' liability insurance business and no other insurance business of a class so specified, except a company incorporated, whether under the Companies Act, 1948, or otherwise, and having a paid up share capital of not less than fifty thousand pounds:

Provided that this subsection shall not apply to any insurance company which, immediately before the twenty-ninth day of October, nineteen hundred and forty-five, was carrying on in Great Britain insurance business of a class specified in section one of this Act in compliance with such of the provisions of the Assurance Companies Act, 1909, as then applied to the company and to that class of business.

(2) If any person contravenes the provisions of the foregoing subsection, then—

(a ) in a case where that person is not a body corporate, he shall be liable on summary conviction to imprisonment for a term not exceeding three months, or on conviction on indictment to imprisonment for a term not exceeding two years; and

(b ) in a case where that person is a body corporate—

(i)the body corporate may be wound up by the court under the Companies Act, 1948, on a petition of the Board of Trade presented by leave of the court; and
(ii)any director, manager, secretary or other officer or agent of the body corporate shall be liable to the penalty provided in paragraph (a ) of this subsection unless he proves that the contravention occurred without his knowledge or that he used all due diligence to prevent the occurrence thereof

(3) Subject to the provisions of the Second Schedule to this Act, the statutory declaration required by section one hundred and nine of the Companies Act, 1948, to be delivered to the registrar of companies before a company to which that section applies commences business shall, in the case of a company (other than a company to which this Act does not apply) registered after the fifth day of March, nineteen hundred and forty-six, the objects whereof include the carrying on of insurance business of a class specified in subsection (1) of section one of this Act, or of employers' liability insurance business and no other insurance business of a class so specified, include a statement that not less than fifty thousand pounds of the company's share capital has been paid up.

Accounts, etc.

Accounts, etc.

S-3 Separation of funds relating to certain classes of business.

3 Separation of funds relating to certain classes of business.

(1) Subject to the provisions of this Act, where an insurance company to which this Act applies—

(a ) carries on, together with other business, insurance business of one only of the classes to which this section applies, or

(b ) carries on, with or without other business, insurance business of two or more of the said classes,

the receipts of that class of insurance business, or of each of those classes of insurance business, as the case may be, shall be entered in a separate account and shall be carried to and form a separate insurance fund with an appropriate name:

Provided that nothing in this subsection shall require the investments of any such fund to be kept separate from the investments of any other fund.

(2) Subject as aforesaid, a fund of any particular class—

(a ) shall be as absolutely the security of the policy holders of that class as though it belonged to a company carrying on no other business than insurance business of that class;

(b ) shall not be liable for any contracts of the company for which it would not have been liable had the business of the company been only that of insurance of that class; and

(c ) shall not be applied, directly or indirectly, for any purposes other than those of the class of business to which the fund is applicable.

(3) This section shall not apply in the case of a company carrying on life assurance business or industrial assurance business and established before the ninth day of August, eighteen hundred and seventy, by the terms of whose deed of settlement the whole of the profits of all the business carried on by the company are paid exclusively to the life policy holders, and on the face of whose life policies there distinctly appears the liability, in respect of the other business, of the life assurance fund or the industrial assurance fund, or, in the case of a company carrying on both life and industrial assurance business, of either or both of those funds, as the case may be.

(4) Nothing in paragraph (b ) of subsection (2) of this section shall affect the liability of the life assurance fund or the industrial assurance fund of a company established before the ninth day of August, eighteen hundred and seventy, for contracts entered into by the company before that date.

(5) This section applies to insurance business of the following classes, namely, life assurance business, industrial assurance business, bond investment business and employers' liability insurance business.

S-4 Preparation of annual accounts and balance sheets.

4 Preparation of annual accounts and balance sheets.

4. Every insurance company to which this Act applies shall, at the expiration of each financial year of the company, prepare in the prescribed form a revenue account for the year, a balance sheet and, except where the company carries on insurance business of one class only and no other business, a profit and loss account.

S-5 Periodic investigation of certain companies by actuary.

5 Periodic investigation of certain companies by actuary.

(1) Every insurance company to which this Act applies, being a company which carries on life assurance business, industrial assurance business or bond investment business,—

(a ) shall, once in every five years, or at such shorter intervals as may be prescribed by the deed of settlement of the company, or by its regulations or byelaws, cause an investigation to be made into its financial condition, including a valuation of its liabilities, by an actuary, and

(b ) when such an investigation has been made, or when at any other time an investigation into the financial condition of the company has been made with a view to the distribution of...

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