Insurers (Reorganisation and Winding Up) Regulations 2003

Publication Date:January 01, 2003

2003No. 1102

INSOLVENCY

COMPANIES

The Insurers (Reorganisation and Winding Up) Regulations 2003

14thApril2003

15thApril2003

20thApril2003

ARRANGEMENT OF REGULATIONS

PART I

General

1.

Citation and Commencement

2.

Interpretation

3.

Scope

PART II

Insolvency measures and proceedings: jurisdiction in relation to insurers

4.

Prohibition against winding up etc. EEA insurers in the United Kingdom

5.

Schemes of arrangement: EEA insurers

6.

Reorganisation measures and winding up proceedings in respect of EEA insurers effective in the United Kingdom

7.

Confirmation by the court of a creditors' voluntary winding up

PART III

Modifications of the law of insolvency: notification and publication

8.

Modifications of the law of insolvency

9.

Notification of relevant decision to the Authority

10.

Notification of relevant decision to EEA regulators

11.

Publication of voluntary arrangement, administration order, winding up order or scheme of arrangement

12.

Notification to creditors: winding up proceedings

13.

Submission of claims by EEA creditors

14.

Reports to creditors

15.

Service of notices and documents

16.

Disclosure of confidential information received from an EEA regulator

PART IV

Priority of payment of insurance claims in winding up etc.

17.

Interpretation of this Part

18.

Application of regulations 19 to 27

19.

Application of this Part: assets subject to a section 425 or Article 418 compromise or arrangement

20.

Preferential debts: disapplication of section 175 of the Insolvency Act 1986 or Article 149 of the Insolvency (Northern Ireland) Order 1989

21.

Preferential debts: long term insurers and general insurers

22.

Composite insurers: preferential debts attributable to long-term and general business

23.

Preferential debts: long term business of a non-transferring composite insurer

24.

Preferential debts: general business of a composite insurer

25.

Insufficiency of long term business assets and general business assets

26.

Composite insurers: excess of long term business assets and general business assets

27.

Composite insurers: application of other assets

28.

Composite insurers: proof of debts

29.

Composite insurers: general meetings of creditors

30.

Composite insurers: apportionment of costs payable out of the assets

31.

Summary remedy against liquidators

32.

Priority of subrogated claims by the Financial Services Compensation Scheme

33.

Voluntary arrangements: treatment of insurance debts

PART V

Reorganisation or winding up of UK insurers: recognition of EEA rights

34.

Application of this Part

35.

Application of this Part: assets subject to a section 425 compromise or arrangement

36.

Interpretation of this Part

37.

EEA rights: applicable law in the winding up of a UK insurer

38.

Employment contracts and relationships

39.

Contracts in connection with immovable property

40.

Registrable rights

41.

Third parties' rights in rem

42.

Reservation of title agreements etc.

43.

Creditors' rights to set off

44.

Regulated markets

45.

Detrimental acts pursuant to the law of an EEA State

46.

Protection of third party purchasers

47.

Lawsuits pending

PART VI

Reorganisation or winding up of third country insurers

48.

Interpretation of this Part.

49.

Application of these Regulations to a third country insurer

50.

Disclosure of confidential information: third country insurers

PART VII

Revocation and amendments

51.

Revocation of the Financial Services and Markets Act 2000 (Treatment of Assets of Insurers on Winding Up) Regulations 2001

52.

Amendment of the Insurers (Winding Up) Rules 2001 and the Insurers (Winding Up) (Scotland) Rules 2001

53.

Maintenance of separate financial records for long term and other business

54.

Excess of long term business assets

55.

Proof of debts

56.

Valuation of policies for meetings of creditors

57.

Meetings of creditors

58.

Apportionment of expenses of the liquidation

The Treasury, being a government department designated( 1) for the purposes of section 2(2) of the European Communities Act 1972( 2) in relation to the insolvency of insurers, in exercise of the powers conferred by that section, hereby make the following Regulations:

PART I

General

Citation and commencement

1. These Regulations may be cited as the Insurers (Reorganisation and Winding Up) Regulations 2003, and come into force on 20th April 2003.

Interpretation

2. - (1) In these Regulations -

"the 1985 Act" means the Companies Act 1985( 3);

"the 1986 Act" means the Insolvency Act 1986( 4);

"the 2000 Act" means the Financial Services and Markets Act 2000( 5);

"the 1989 Order" means the Insolvency (Northern Ireland) Order 1989( 6);

"administrator" has the meaning given by section 8(2) of the 1986 Act;

"Article 418 compromise or arrangement" means a compromise or arrangement sanctioned by the court in relation to a UK insurer under Article 418 of the Companies Order, but does not include a compromise or arrangement falling within Article 420 or Article 420A of that Order (reconstructions or amalgamations);

"the Authority" means the Financial Services Authority;

"branch", in relation to an EEA or UK insurer has the meaning given by Article 1(b) of the third life insurance directive or the third non-life insurance directive;

"claim" means a claim submitted by a creditor of a UK insurer in the course of -

(a) a winding up, or(b) a voluntary arrangement,

with a view to recovering his debt in whole or in part, and includes a proof of debt, within the meaning of rule 4.73(4) of the Insolvency Rules, Rule 4.079(4) of the Insolvency Rules (Northern Ireland) or in Scotland a claim made in accordance with rule 4.15 of the Insolvency (Scotland) Rules;

"the Companies Order" means the Companies (Northern Ireland) Order 1986( 7);

"creditors' voluntary winding up" has the meaning given by section 90 of the 1986 Act;

"EEA creditor" means a creditor of a UK insurer who -

(a) in the case of an individual, is ordinarily resident in an EEA State; and(b) in the case of a body corporate or unincorporated association of persons, has its head office in an EEA State;

"debt" -

(a) in relation to a winding up of a UK insurer, has the meaning given by rule 13.12 of the Insolvency Rules or Article 5 of the 1989 Order, and(b) in a case where a voluntary arrangement has effect, in relation to a UK insurer, means a debt which would constitute a debt in relation to the winding up of that insurer, except that references in paragraph (1) of rule 13.12 or paragraph (1) of Article 5 of the 1989 Order to the date on which the company goes into liquidation are to be read as references to the date on which the voluntary arrangement has effect;(c) in Scotland, - (i) in relation to the winding up of a UK insurer, shall be interpreted in accordance with Schedule 1 of the Bankruptcy (Scotland) Act 1995 as applied by Chapter 5 of Part 4 of the Insolvency (Scotland) Rules; and(ii) in a case where a voluntary arrangement has effect in relation to a UK insurer, means a debt which would constitute a debt in relation to the winding up of that insurer, except that references in Chapter 5 of Part 4 of the Insolvency (Scotland) Rules to the date of commencement of winding up are to be read as references to the date on which the voluntary arrangement has effect;

"directive reorganisation measure" means a reorganisation measure as defined in Article 2(c) of the reorganisation and winding-up directive which was adopted or imposed on or after the 20th April 2003;

"directive winding up proceedings" means winding up proceedings as defined in Article 2(d) of the reorganisation and winding-up directive which were opened on or after the 20th April 2003;

"EEA insurer" means an undertaking, other than a UK insurer, pursuing the activity of direct insurance (within the meaning of Article 1 of the first life insurance directive or the first non-life insurance directive) which has received authorisation under Article 6 from its home state regulator;

"EEA regulator" means a competent authority (within the meaning of Article 1(1) of the third life insurance directive or Article 1(k) of the third non-life insurance directive, as the case may be) of an EEA State;

"EEA State" means a State, other than the United Kingdom, which is a contracting party to the agreement on the European Economic Area signed at Oporto on 2nd May 1992;

"the first life insurance directive" means the Council Directive of 5th March 1979 on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct life assurance (No.79/276/EEC)( 8);

"the first non-life insurance directive" means the Council Directive of 24th July 1973 on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct insurance other than life assurance (No.73/239/EEC) ( 9);

"home state regulator", in relation to an EEA insurer, means the relevant EEA regulator in the EEA State where its head office is located;

"the Insolvency Rules" means the Insolvency Rules 1986( 10);

"the Insolvency Rules (Northern Ireland)" means the Insolvency Rules (Northern Ireland) 1991( 11);

"the Insolvency (Scotland) Rules" means the Insolvency (Scotland) Rules 1986( 12);

"insurance claim" means any claim in relation to an insurance debt;

"insurance creditor" means a person who has an insurance claim against a UK insurer (whether or not he has claims other than insurance claims against that insurer);

"insurance debt" means a debt to which a UK insurer is, or may become liable, pursuant to a contract of insurance to a policyholder or to any person who has a direct right of action against that insurer, and includes any premium paid in connection with a contract of insurance (whether or not that contract was concluded) which the insurer is liable to refund;

"officer", in relation to a company, has the meaning given by section 744 of the 1985 Act or Article 2 of the...

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