Insurance Companies Regulations 1994
| Jurisdiction | UK Non-devolved |
| Citation | SI 1994/1516 |
1994 No. 1516
INSURANCE
The Insurance Companies Regulations 1994
Made 7th June 1994
Laid before Parliament 8th June 1994
Coming into force 1st July 1994
The Secretary of State, being a Minister designated1for the purposes of section 2(2) of the European Communities Act 19722in relation to the authorisation of the carrying on of insurance business and the regulation of such business and its conduct, in exercise of the powers conferred by that section and by sections 2(5), 5(1)(a), 7(6), 9(1)(b) and (c) and (7), 15(6), 32(1), (2) and (3), 33(1), 35(1), 60(1), 61(1), 62(1), 72(1) and (2), 74(1) and (2), 75(2) and (5), 78(1), (2), (5) and (6), 84(1), 86, 90, 96(1) and 97 of the Insurance Companies Act 19823, hereby makes the following Regulations:—
PART I
PRELIMINARY
Citation and commencement
1. These Regulations may be cited as the Insurance Companies Regulations 1994 and shall come into force on 1st July 1994.
Interpretation: general
2.—(1) In these Regulations, unless the context otherwise requires—
“the Act” means the Insurance Companies Act 1982;
“cede” and “cession”, in relation to reinsurance, include retrocede and retrocession;
“credit insurance business” means all insurance business falling within general business class 14 of Part I of Schedule 2 to the Act that is not reinsurance;
“deposit back arrangement”, in relation to any contract of reinsurance, means an arrangement whereby an amount is deposited by the reinsurer with the cedant;
“EEA margin of solvency” shall be construed in accordance with section 32 of the Act4;
“equalisation reserve” has the meaning given in regulation 76(1) below;
“guarantee fund” has the meaning given in regulation 22(1) below;
“linked long term contract” means a contract of the kind described in section 78 of the Act;
“mathematical reserves” means the provision made by an insurer to cover liabilities (excluding liabilities which have fallen due and liabilities arising from deposit back arrangements) arising under or in connection with contracts for long term business;
“minimum guarantee fund” has the meaning given in regulation 22(2) below;
“mutual” means an insurance company which is—
(a) a body corporate having no share capital (except a wholly owned subsidiary with no share capital but limited by guarantee), or
(b) a registered society;
“pure reinsurer” means—
(a) an insurance company whose head office is in the United Kingdom and whose business is restricted to reinsurance business; or
(b) an insurance company whose head office is not in the United Kingdom and whose business in the United Kingdom is restricted to reinsurance business;
“Schedule” means Schedule to these Regulations;
“the Stock Exchange” means the International Stock Exchange of the United Kingdom and the Republic of Ireland Limited;
“United Kingdom margin of solvency” shall be construed in accordance with section 32 of the Act;
“unit of account” means the unit of account known as the ECU;
and the words and expressions which are also used in the Act have the same meanings as in the Act.
(2) For the purposes of these Regulations, other than regulation 30, the rate of conversion from the ECU to the pound sterling shall, in the case of general business, be subject to a minimum of 41.66 pence per ECU.
PART II
AUTHORISATION ETC.
Benefits in kind
3.—(1) For the purposes of sections 2(5) and 15(6) of the Act, there is hereby prescribed any contract of insurance which—
(a)
(a) is a contract under which the benefits provided by the insurer are exclusively or primarily benefits in kind in the event of accident to or breakdown of a vehicle, and
(b)
(b) contains the terms specified in paragraph (2) below.
(2) The terms referred to in paragraph (1) above are—
(a)
(a) that, subject to such restrictions as may be set out in the contract, the assistance shall normally be available on demand at least throughout the mainland of Great Britain; but in no case is assistance to be available outside the United Kingdom and the Republic of Ireland except where it is provided without the payment of additional premium by a body in the country concerned with whom the insurer has entered into a reciprocal agreement;
(b)
(b) that assistance provided in the case of an accident or breakdown occurring within the United Kingdom or the Republic of Ireland shall normally be provided by the insurer’s servants or exceptionally by garages acting as the insurer’s agents or appointed by the insurer;
(c)
(c) that the assistance shall take either or both of the forms of assistance specified in paragraph (3) below.
(3) The forms of assistance referred to in paragraph (2) above are—
(a)
(a) repairs to the relevant vehicle at the place where the accident or breakdown has occurred; this assistance may also include the delivery of parts, fuel, oil, water or keys to the relevant vehicle;
(b)
(b) removal of the relevant vehicle either to the nearest or most appropriate place at which repairs may be carried out, or to—
(i) the home, point of departure or original destination within the United Kingdom of the driver and passengers provided the accident or breakdown occurred within the United Kingdom; or
(ii) the home, point of departure or original destination within the Republic of Ireland of the driver and passengers provided the accident or breakdown occurred within the Republic of Ireland or within Northern Ireland; or
(iii) the home, point of departure or original destination within Northern Ireland of the driver and passengers provided the accident or breakdown occurred within the Republic of Ireland.
This form of assistance may include the conveyance of the driver or passengers of the relevant vehicle, with the vehicle, or, where the vehicle is to be conveyed only to the nearest or most appropriate place at which repairs may be carried out, the driver and passengers may alternatively be separately conveyed to the nearest location from which they may continue their journey by other means.
(4) Paragraph (1)(a) above shall not preclude the insurer from reimbursing the policy holder for all or part of any sums paid by him in respect of assistance either because he failed to identify himself as the policy holder or because he was unable to get in touch with the insurer in order to claim the assistance.
(5) In this regulation—
“the assistance” means the benefits to be provided under a contract of the kind prescribed in paragraph (1) above;
“breakdown” means an event—
(a) which causes the driver of the relevant vehicle to be unable to start a journey in the vehicle or involuntarily to bring the vehicle to a halt on a journey because of some malfunction of the vehicle or failure of it to function, and
(b) after which the journey cannot reasonably be commenced or continued in the relevant vehicle;
“the insurer” means the insurance company providing the assistance;
“the policy holder” means the person entitled to the assistance;
“the relevant vehicle” means the vehicle (including a trailer or caravan) in respect of which the assistance is required.
Authorisation: submission of information
4.—(1) The information to be submitted pursuant to section 5(1) of the Act shall be—
(a)
(a) for long term business, the information specified in the appropriate Part of Schedule 1, and
(b)
(b) for general business, the information specified in the appropriate Part of Schedule 2.
(2) In Schedules 1 and 2 (subject to the notes at the beginning of each Schedule)—
(a)
(a) Part I is appropriate for insurance companies whose head office is in the United Kingdom,
(b)
(b) Part II is appropriate for insurance companies, other than EC companies, whose head office is in an EEA State other than the United Kingdom in respect of—
(i) direct business, or
(ii) both direct business and reinsurance,
(c)
(c) Subject to paragraph (3) below, Part III is appropriate for insurance companies whose head office is not in an EEA State in respect of—
(i) direct business, or
(ii) both direct business and reinsurance, and
(d)
(d) Part IV is appropriate for insurance companies whose head office is not in the United Kingdom in respect of reinsurance only.
(3) Notwithstanding sub-paragraph (2)(c) above, Part II of Schedule 2 is appropriate for Swiss general insurance companies.
(4) For the purposes of this regulation—
“classes of insurance business”, in Schedules 1 and 2, means the classes of insurance business specified in Schedules 1 and 2 to the Act;
“the company”, in Schedules 1 and 2, means an insurance company and includes a body that seeks to become an insurance company after authorisation;
“direct business”, in paragraph (2) above and in Schedules 1 and 2, means insurance business other than reinsurance business;
“information”, in paragraph (1) above and in Schedules 1 and 2, includes proposal and financial forecast.
(5) References in Schedule 2 to general and special policy conditions do not include specific conditions intended to meet, in an individual case, the particular circumstances of the risk to be covered.
Main agents: exceptions
5.—(1) An unlimited agent shall not be regarded as a main agent of an applicant for the purposes of section 96E(1)(b) of the Act5if—
(a)
(a) he was appointed before 1st April 1982, and
(b)
(b) for the base period and for every subsequent financial year for which a set of annual accounts has been deposited by the applicant under section 22 of the Act, the value of the agent’s business has been not more than 10 per cent. of the value of the applicant’s business.
(2) In this regulation—
“the base period” means the financial year covered by the last set of annual accounts deposited by the applicant under section 18 of the Insurance Companies Act 19746before 1st April 1982;
“unlimited agent” means a person appointed by an applicant to be the applicant’s agent in...
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