Policyholders Protection Act 1997

JurisdictionUK Non-devolved
Citation1997 c. 18
Year1997
(1) For section 3 of the 1975 Act there shall be substituted—
    (3) Insurance companies to which this Act applies.
  • “(1) The functions of the Board under this Act shall be exercisable in relation to policyholders and others who have been or may be prejudiced in consequence of the inability of insurance companies to meet their liabilities under policies issued or securities given by them only in cases where the insurance companies in question are insurance companies to which this Act applies.
  • (2) An insurance company is one to which this Act applies if it is—
  • (a) authorised under section 3 or 4 of the Insurance Companies Act 1982 to carry on insurance business of any class in the United Kingdom,
The functions of the Board under this Act shall be exercisable in relation to policyholders and others who have been or may be prejudiced in consequence of the inability of insurance companies to meet their liabilities under policies issued or securities given by them only in cases where the insurance companies in question are insurance companies to which this Act applies.authorised under section 3 or 4 of the an EC company which is lawfully carrying on insurance business of any class in the United Kingdom, oran EC company not falling within paragraph (b) above which provides general insurance or long term insurance in the United Kingdom.(2) Schedule 1 to this Act (consequential amendments) shall have effect.(1) For section 4 of the 1975 Act there shall be substituted—
    (4) Protection confined to insurance under qualifying policies of protected risks or commitments.
  • “(1) A policyholder is eligible for the assistance or protection of the Board in accordance with any provision of sections 6 to 16 below only in respect of the insurance under a qualifying policy of a protected risk or commitment.
  • (2) The following are qualifying policies for the purposes of this Act—
  • (a) a policy of insurance issued by an insurance company authorised under section 3 or 4 of the Insurance Companies Act 1982 through an establishment in—
  • (i) the United Kingdom,
  • (ii) another EEA State, or
  • (iii) the Channel Islands or the Isle of Man, and
A policyholder is eligible for the assistance or protection of the Board in accordance with any provision of sections 6 to 16 below only in respect of the insurance under a qualifying policy of a protected risk or commitment.the United Kingdom,another EEA State, orthe Channel Islands or the Isle of Man, anda policy of insurance issued by an EC company through an establishment in an EEA State.in the case of a policy falling within subsection (2) (a) (i) above, if it is situated in an EEA State, the Channel Islands or the Isle of Man;in the case of a policy falling within subsection (2) (a) (ii) or (2) (b) above, if it is situated in the United Kingdom;in the case of a policy falling within subsection (2) (a) (iii) above, if it is situated in the United Kingdom, the Channel Islands or the Isle of Man.(2) Schedule 2 to this Act (consequential amendments) shall have effect.(3) This section shall not have effect in relation to a policy, or security, where the contract which the policy evidences, or which governs the security, was entered into before the day on which this section comes into force.was entered into before the day on which this section comes into force, andcontinues in force beyond an anniversary of its inception which falls on or after the day on which this section comes into force,(1) Section 16 of the 1975 Act (which enables the Board to take measures to protect policyholders of companies in financial difficulties) shall be amended as follows.for “policyholders of a company in financial difficulties who are eligible for protection under this section” there shall be substituted “ those who are qualifying persons in relation to a company in financial difficulties ”, andfor “such policyholders” there shall be substituted “ such persons ”.(3) In subsection (3) (power to secure or facilitate transfer of business of company in financial difficulties on terms including reducing liabilities or benefits under any policies) , for the words from “the liabilities” to “policies) ” there shall be substituted “ any of the things to which any of those who are qualifying persons in relation to the company in financial difficulties are entitled in their capacity as such) ”.(4) In subsection (5) (power to assist company in financial difficulties conditionally on reduction of liabilities or benefits under any of its policies) , for the words from “any liabilities” to “the company” there shall be substituted “ of the things to which any of those who are qualifying persons in relation to the company are entitled in their capacity as such ”.for “any policyholders of” there shall be substituted “ any of those who are qualifying persons in relation to ”, andfor “the policyholders” there shall be substituted “ the persons ”.(6) After subsection (8B) there shall be inserted—
  • “(8C) For the purposes of this section, a person is a qualifying person in relation to a company in financial difficulties if—
  • (a) he is a policyholder of the company who is eligible for protection under this section,
  • (b) he is a security holder in respect of a security given by the company who is eligible for protection under this section, or
  • (c) he is a person to whom the company is liable to pay any sum in respect of his entitlement to the benefit of a judgment under the provisions mentioned in paragraphs (a) and (b) of section 7 above.
he is a policyholder of the company who is eligible for protection under this section,he is a security holder in respect of a security given by the company who is eligible for protection under this section, orhe is a person to whom the company is liable to pay any sum in respect of his entitlement to the benefit of a judgment under the provisions mentioned in paragraphs (a) and (b) of section 7 above.(7) After subsection (9) there shall be inserted—
  • “(9A) A security holder in respect of a security given by a company in financial difficulties is eligible for protection under this section if—
  • (a) it is a security to which section 6 above applies, and
  • (b) it would have been a United Kingdom policy at the relevant time if it had been an insurance policy and the contract governing the security had been a contract of insurance.
it is a security to which section 6 above applies, andit would have been a United Kingdom policy at the relevant time if it had been an insurance policy and the contract governing the security had been a contract of insurance.(1) Section 16 of the 1975 Act shall be amended as follows.(2) In subsection (1) (definition of company in financial difficulties) , in paragraph (c) (application made for sanctioning compromise or arrangement providing for reducing liabilities or benefits under company’s policies) , after “reducing” there shall be

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