Insurance Companies (Winding-Up) Rules 1985
| Jurisdiction | UK Non-devolved |
| Citation | SI 1985/95 |
| Year | 1985 |
1985 No. 95 (L. 2)
COMPANIES
The Insurance Companies (Winding-Up) Rules 198525thJanuary 1985
8thFebruary 1985
1stMarch 1985
The Lord Chancellor, in exercise of the powers conferred on him by section 365(1) of the Companies Act 1948 (a) and section 59 of the Insurance Companies Act 1982 (b), with the concurrence of the Secretary of State for Trade and Industry, and after consulting the committee appointed under section 10 of the Insolvency Act 1976 (c), hereby makes the following Rules:—
Citation and commencement
1. These Rules may be cited as the Insurance Companies (Winding-Up) Rules 1985 and shall come into operation on 1st March 1985.
Interpretation
2.—(1) In these Rules, unless the context or subject-matter otherwise requires:—
"the Act of 1923" means the Industrial Assurance Act 1923 (d);
"the Act of 1948" means the Companies Act 1948;
"the Act of 1982" means the Insurance Companies Act 1982;
"company" means an insurance company which is being wound up;
"excess of the long term business assets" means the amount, if any, by which the value as at the date of the winding-up order of the assets representing the fund or funds maintained by the company in respect of its long term business exceeds the value as at that date of the liabilities of the company attributable to that business;
"excess of the other business assets" means the amount, if any, by which the value as at the date of the winding-up order of the assets of the company which do not represent the fund or funds maintained by the company in respect of its long term business exceeds the value as at that date of the liabilities of the company (other than liabilities in respect of share capital) which are not attributable to that business;
"general business policy" means a policy the effecting of which by the company constitutes the carrying on of general business;
"the Industrial Assurance Acts" means the Act of 1923 and the Industrial Assurance and Friendly Societies Act 1929 (e);
"insurance company" means an insurance company to which Part II of the Act of 1982 applies;
(a) 1948 c.38.
(b) 1982 c.50.
(c) 1976 c.60.
(d) 1923 c.8.
(e) 1929 c.28.
"linked liability" means any liability under a policy the effecting of which constitutes the carrying on of long term insurance business the amount of which is determined by reference to:—
(a) the value of property of any description (whether or not specified in the policy),
(b) fluctuations in the value of such property,
(c) income from any such property, or
(d) fluctuations in an index of the value of such property;
"linked policy" means a policy which provides for linked liabilities and a policy which when made provided for linked liabilities shall be deemed to be a linked policy even if the policy holder has elected to convert his rights under the policy so that at the date of the winding-up order there are no longer linked liabilities under the policy;
"long term policy" means a policy the effecting of which by the company constitutes the carrying on of long term business;
"non-linked policy" means a policy which is not a linked policy;
"other business", in relation to a company carrying on long term business, means such of the business of the company as is not long term business;
"the principal Rules" means the Companies (Winding-up) Rules 1949 (a), as amended (b);
"stop order" in relation to a company means an order of the court, made under section 56(2) of the Act of 1982, ordering the Liquidator to stop carrying on the long term business of the company;
"unit" in relation to a linked policy means any unit (whether or not described as a unit in the policy) by reference to the numbers and value of which the amount of the linked liabilities under the policy at any time is measured.
(2) Unless the context otherwise requires words or expressions contained in these Rules bear the same meaning as in the principal Rules, the Act of 1948, the Act of 1982, or any statutory modification thereof respectively.
Application
3.—(1) These Rules apply to proceedings for the winding-up of an insurance company which commence on or after the date on which these Rules come into operation.
(2) These Rules supplement the principal Rules which continue to apply to the proceedings in the winding-up of an insurance company under the Act of 1948 as they apply to proceedings in the winding-up of any company under that Act but in the event of conflict between these Rules and the principal Rules these Rules prevail.
Appointment of Liquidator
4. Upon the consideration of the resolutions and determinations of the first meetings of creditors and contributories the court, as well as hearing the Official Receiver and any creditor or contributory in accordance with Rule 58(4) of the principal Rules, shall also hear the Policyholders Protection Board.
(a) S.I. 1949/330.
(b) The amending instruments are S.I. 1957/973, 1962/296, 1967/1341, 1971/2073, 1972/1404, 1974/1237, 1975/214, 1977/365, 1395, 1978/543, 1979/209, 1592, 1980/2031, 1981/788, 1309, 1983/727 and 1645.
Separation of long term and other business in winding-up
5.—(1) This Rule applies in the case of a company carrying on long term business.
(2) The assets of the company which in accordance with sections 55(3) and (4) of the Act of 1982 are available for meeting the liabilities of the company attributable to its long term business shall, in pursuance of section 257 of the Act of 1948, be applied in discharge of those liabilities as though those assets and those liabilities were the assets and liabilities of a separate company.
(3) The assets of the company which in accordance with sections 55(3) and (4) of the Act of 1982 are available for meeting the liabilities of the company attributable to its other business shall, in pursuance of section 257 of the Act of 1948, be applied in discharge of those liabilities as though those assets and those liabilities were the assets and liabilities of a separate company.
Valuation of general business policies
6. Except in relation to amounts which have fallen due for payment before the date of the winding-up order, the holder of a general business policy shall be admitted as a creditor in relation to his policy without proof for an amount equal to the value of the policy and for this purpose the value of a policy shall be determined in accordance with Schedule 1.
Valuation of long term policies
7.—(1) This Rule applies in relation to a company's long term business where no stop order has been made.
(2) In relation to a claim under a policy which has fallen due for payment before the date of the winding-up order, a policy holder shall be admitted as a creditor without proof for such amount as appears from the records of the company to be due in respect of that claim
(3) In all other respects a policy holder shall be admitted as a creditor in relation to his policy without proof for an amount equal to the value of the policy and for this purpose the value of a policy of any class shall be determined in the manner applicable to policies of that class provided by Schedules 2, 3 and 4.
(4) This Rule applies in relation to a person entitled to apply for a free paid-up policy under section 24 of the Act of 1923 and to whom no such policy has been issued before the date of the winding-up order (whether or not it was applied for) as if such a policy had been issued immediately before the date of the winding-up order—
(a) for the minimum amount determined in accordance with section 24(2) of the Act of 1923, or
(b) if the Liquidator is satisfied that it was the practice of the company during the five years immediately before the date of the winding-up order to issue policies under the said section 24 in excess of the minimum amounts so determined, for the amount determined in accordance with that practice.
8.—(1) This Rule applies in relation to a company's long term business where a stop order has been made.
(2) In relation to a claim under a policy which has fallen due for payment on or after the date of the winding-up order and before the date of the stop order, a policy holder shall be admitted as a creditor without proof for such amount as appears from the records of the company and of the Liquidator to be due in respect of that claim.
(3) In all other respects a policy holder shall be admitted as a creditor in relation to his policy without proof for an amount equal to the value of the policy and for this purpose the value of a policy of any class shall be determined in the manner applicable to policies of that class provided by Schedule 5.
(4) Paragraph (4) of Rule 7 applies for the purposes of this Rule as if references to the date of the winding-up order (other than that in sub-paragraph (b) of that paragraph) were references to the date of the stop order.
Attribution of assets and liabilities to the long term business
9.—(1) This Rule applies in the case of a company carrying on long term business if at the date of the winding-up order there are liabilities of the company in respect of which it is not clear from the accounting and other records of the company whether they are or are not attributable to the company's long term business.
(2) The Liquidator shall, in such manner and according to such accounting principles as he shall determine, identify the liabilities referred to in paragraph (1) as attributable or not attributable to a company's long term business and those liabilities shall for the purposes of the winding-up be deemed as at the date of the winding-up order to be so attributable or not as the case may be.
(3) In making his determination under this Rule the Liquidator may determine that some liabilities are attributable to the company's long term business and that others are not or he may determine that a part of a liability is attributable to the company's long term business and that the remainder of that liability is not and he may use one method for some of the liabilities and the other method for...
To continue reading
Request your trial