(1) A UK company shall secure—
(a) that its liabilities under contracts of insurance entered into by it, other than liabilities in respect of linked benefits, are covered by assets of appropriate safety, yield and marketability having regard to the classes of business carried on; and
(b) without prejudice to the generality of paragraph (a) above, that its investments are appropriately diversified and adequately spread and that excessive reliance is not placed on investments of any particular category or description.
(2) A UK company which has entered into a linked long term contract shall secure that, as far as practicable, its liabilities under the contract in respect of linked benefits are covered as follows—
(a) if those benefits are linked to the value of units in an undertaking for collective investments in transferable securities or to the value of assets contained in an internal fund, by those units or assets;
(b) if those benefits are linked to a share index or other reference value not mentioned in paragraph (a) above, by units which represent that reference value, or by assets of appropriate safety and marketability which correspond, as nearly as may be, to the assets on which that reference value is based.
(3) A UK company which has entered into a linked long term contract shall also secure that such of its liabilities under the contract in respect of linked benefits as are not covered by contracts of reinsurance are covered by assets of a description prescribed by regulations under section 78 below.
(4) In this section—
'linked benefits’, in relation to a contract of insurance, means benefits payable to the policy holder which are determined by reference to the value of or the income from property of any description (whether or not specified in the contract) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified);
'linked long term contract’ means (subject to subsection (5) below) a contract of insurance—
(a) the effecting of which constitutes the carrying on of long term business; and
(b) under which linked benefits are payable to the policy holder.
(5) In subsection (3) above 'linked long term contract’ does not include a contract the effecting of which constitutes the carrying on of long term business of class VII(a).
(1) Before entering into a contract of insurance the effecting of which constitutes the carrying on of long term business, a UK company shall satisfy itself that the aggregate of—
(a) the premiums payable under the contract and the income which will be derived from them; and
(b) any other resources of the company which will be available for the purpose,
will be sufficient, on reasonable actuarial assumptions, to meet all commitments arising under or in connection with the contract.
(2) A UK company shall not rely on other resources for the purposes of subsection (1) above in such a way as to jeopardise the solvency of the company in the long term.
A contract entered into after the coming into force of this section by an insurance company to which this Part of this Act applies shall be void if—
(a) it is a contract under which the company undertakes a liability the amount, or maximum amount, of which is uncertain at the time when the contract is entered into; and
(b) it is not a contract of insurance or a contract of a class or description exempted by regulations from the operation of this section.
(1) The powers conferred on the Treasury by sections 38 to 45 below shall be exercisable in relation to any insurance company to which this Part of this Act applies and shall be exercisable in accordance with the following provisions of this section.
(2) The powers conferred by sections 38 and 41 to 45 below shall be exercisable on any of the following grounds—
(a) that the Treasuryconsider the exercise of the power to be desirable for protecting policy holders or potential policy holders of the company against the risk that the company may be unable to meet its liabilities or, in the case of long term business, to fulfil the reasonable expectations of policy holders or potential policy holders;
(aa) that the company is a UK or non-EC company and it appears to the Treasurythat any of the criteria of sound and prudent management is not or has not been or may not be or may not have been fulfilled with respect to the company;
(b) that it appears to the Treasury—
(i) that the company has failed to satisfy an obligation to which it is or was subject by virtue of this Act or any enactment repealed by this Act or by the Insurance Companies Act 1974;
(ia) that the company has failed to satisfy an obligation to which it is subject by virtue of any provision of the law of another member State giving effect to the general or long term insurance Directives;
(ii) that a company of which it is a subsidiary has failed to satisfy an obligation to which it is or was subject by virtue of section 29(7) above or section 24(6) of the Insurance Companies Act 1974 or section 8(6) of the Insurance Companies Amendment Act 1973; or
(iii) that a subordinate company within the meaning of section 31 above of the company has failed to satisfy an obligation to which it is or was subject by virtue of that section or section 26 above or section 22 or 26 of the Insurance Companies Act 1974 or of section 6 or 10 of the said Act of 1973;
(c) that it appears to the Treasurythat the company has furnished misleading or inaccurate information to the Treasury under or for the purposes of any provision of this Act or any enactment repealed by this Act or by the Insurance Companies Act 1974;
(d) that the Treasury are not satisfied that adequate arrangements are in force or will be made for the reinsurance of risks against which persons are insured by the company in the course of carrying on business, being risks of a class in the case of which the Treasury consider that such arrangements are required;
(e) that there exists a ground on which the Treasury would be prohibited, by section 5(1B) or (1C), 7, 8 or 9 above, from issuing an authorisation with respect to the company if it were applied for;
(f) that it appears to him that there has been a substantial departure from any proposal or forecast submitted to the Treasury by the company in accordance with section 5 above;
(g) that the company has ceased to be authorised to effect contracts of insurance, or contracts of a particular description, an EFTA State where it has its head office or an EEA State where it has in accordance with section 9(2) above made a deposit.
(h) that the company is a Swiss general insurance company which has ceased to be authorised to effect contracts of insurance, or contracts of a particular description, in Switzerland.
(3) The powers conferred on the Treasury by sections 39 and 40 and 40Abelow shall not be exercisable in relation to an insurance company except—
(a) where the Treasuryhavegiven (and not revoked) a direction in respect of the company under section 11 or 12Aabove or section 11 of the Insurance Companies Act 1981; or
(b) on the ground that it appears to the Treasury that the company has failed to satisfy an obligation to which it is or was subject by virtue of section 33, 34 or 35 above or section 26B, 26C or 26D of the Insurance Companies Act 1974; or
(c) on the ground that a submission by the company to the Treasury of an account or statement specifies, as the amount of any liabilities of the company, an amount appearing to the Treasury to have been determined otherwise than in accordance with valuation regulations or, where no such regulations are applicable, generally accepted accounting concepts, bases and policies or other generally accepted methods appropriate for insurance companies.
or
(d) on the grounds that the company is a UK or non-EC company and it appears to the Treasury that the company has failed to satisfy an obligation to which it is or was subject by virtue of section 32 or 35A above.
(4) The power conferred on the Treasury by sub-sections (2) to (4) of section 44 below shall also be exercisable on the ground that the Treasury considerthe exercise of that power to be desirable in the general interests of persons who are or may become policy holders of insurance companies to which this Part of this Act applies, and references in those subsections to a company include references to any body (whether incorporated or not) which appears to the Treasury to be an insurance company to which this Part of this Act applies.
(4A) The powers conferred on the Treasury by sections 43A and 44 below shall be exercisable in respect of a UK or non-EC company to obtain information to enable the Treasury to perform their functions under this Act.
(5) Any power conferred on the Treasury by section 38, 41, 42, 44(1) or 45 below shall also be exercisable, whether or not any of the grounds specified in subsections (2) and (4) above exists, in relation to—
(a) any body in respect of which the Treasuryhave issued an authorisation;
(b) any insurance company to which this Part of this Act applies in the case of which a person has become a controller within the meaning of section 96C(1)(c), (d) or (e) below,
(c) any UK company in a case where a person has notified an intention to acquire a notifiable holding in accordance with section 61A(1) below,
if that power is exercised before the expiration of the period of five years beginning with the date on which the authorisation was issued or that person became such a controller or acquired such a holding, as the case may be; but no requirement imposed by virtue of this sub-section shall continue in force after the expiration of the period of ten years beginning with that date.
(6) The power conferred on the Treasury by section 45 below shall not be exercisable except in a case in which they consider that the purpose mentioned in that section cannot be appropriately achieved by the exercise of the powers conferred by sections 38 to 44 below or by the exercise of those powers alone.
(7) The Treasury shall, when exercising any power conferred by sections 38 to 45 below, state the ground on which they are exercising it or, if they are exercising it by virtue of subsection (5) above, that they are so exercising it; but this subsection shall not apply where the Treasuryhave given notice under section 46 below of the proposed exercise of the power.
(8) The grounds specified in subsections (2)(b) to (g) and (4) above are without prejudice to the ground specified in sub-section (2)(a) above.
(9) This section shall apply in relation to the powers conferred on the Treasury by section 44 below as it applies in relation to the powers conferred by that section on the Treasury, except that—
(a) in subsection (2)—
(i) the references in paragraphs (a), (aa) and (b) to the Treasury shall be construed as references to the Secretary of State,
(ii) in paragraph (c), the first reference to the Treasury shall be construed as a reference to the Secretary of State, and
(iii) paragraphs (d) to (f) shall not apply;
(b) in subsections (4) and (4A), the references to the Treasury shall be construed as references to the Secretary of State;
(c) subsection (5) shall not apply; and
(d) in subsection (7) the references to the Treasury shall be construed as references to the Secretary of State; and the words from “but this” to the end shall not apply.
(1) The Treasury may require a company—
(a) not to make investments of a specified class or description;
(b) to realise, before the expiration of a specified period (or such longer period as the Treasury may allow), the whole or a specified proportion of investments of a specified class or description held by the company when the requirement is imposed.
(2) A requirement under this section may be framed so as to apply only to investments which are (or, if made, would be) assets representing a fund or funds maintained by the company in respect of its long term business or so as to apply only to other investments.
(3) A requirement under this section shall not apply to the assets of a company so far as their value exceeds—
(a) in the case of a company
(i) whose head office is in an EFTA State, or
(ii) which has in accordance with section 9(2) above made a deposit in an EEA State other than the United Kingdom, or
(iii) which is a Swiss general insurance company,
the amount of the liabilities of the business carried on by the company in the United Kingdom;
(b) in any other case, the amount of the liabilities of the company;
that value and amount being determined in accordance with any applicable valuation regulations.
(1) The Treasurymay require—
(a) in the case of a UK company, that assets of the company of a value which at any time is equal to the whole or a specified proportion of the amount of its EC liabilities shall be maintained in the European Community; and
(b) in the case of an insurance company which is not a UK company, that assets of a value which at any time is equal to the whole or a specified proportion of the amount of its domestic liabilities shall be maintained in the United Kingdom.
(2) The Treasury may direct that for the purposes of any requirement under this section assets of a specified class or description shall or shall not be treated
(a) in the case of a UK company, as assets maintained in the European Community; and
(b) in the case of an insurance company which is not a UK company, as assets maintained in the United Kingdom
(3) The Treasury may direct that for the purposes of any requirement under this section the EC or domestic liabilities of a company, or such liabilities of any class or description, shall be taken to be the net liabilities after deducting any part of them which is reinsured.
(4) A requirement imposed under this section may be framed so as to come into effect immediately after the day on which it is imposed or so as to come into effect after the expiration of a specified period (or such longer period as the Treasury may allow).
(5) In this section—
(a) any reference to an EC liability is a reference to a liability of the business carried on by the company in the European Community; and
(b) any reference to a domestic liability is a reference to a liability of the business carried on by the company in the United Kingdom.
(6) Subject to subsection (7) below, in computing the amount of any liabilities for the purposes of this section all contingent and prospective liabilities shall be taken into account but not liabilities in respect of share capital.
(7) For the purposes of this section the value of any assets and the amount of any liabilities shall be determined in accordance with any applicable valuation regulations; and subsection (6) above shall have effect subject to any such regulations made by virtue of section 90(2) below.
(1) The Treasury may, in the case of a company on which a requirement has been imposed under section 39 above or under section 31 of the Insurance Companies Act 1974, impose an additional requirement that the whole or a specified proportion of the assets to which the requirement under that section applies shall be held by a person approved by the Treasuryfor the purposes of the requirement under this section as trustee for the company.
(2) Section 39(4) above shall apply also to a requirement under this section.
(3) Assets of a company held by a person as trustee for a company shall be taken to be held by him in compliance with a requirement imposed under this section if, and only if, they are assets in whose case the company has given him written notice that they are to be held by him in compliance with such a requirement or they are assets into which assets in whose case the company has given him such written notice have, by any transaction or series of transactions, been transposed by him on the instructions of the company.
(4) No assets held by a person as trustee for a company in compliance with a requirement imposed under this section shall, so long as the requirement is in force, be released except with the consent of the Treasury.
(5) If a mortgage or charge is created by a company at a time when there is in force a requirement imposed on the company by virtue of this section, being a mortgage or charge conferring a security on any assets which are held by a person as trustee for the company in compliance with the requirement, the mortgage or charge shall, to the extent it confers such a security, be void against the liquidator and any creditor of the company.
(1) If on the application of the Treasury it appears to the court that any of the grounds set out in section 37(3) above are established in relation to a UK company, the court may grant an injunction restraining, or in Scotland an interdict prohibiting, the company from disposing of or otherwise dealing with any of its assets to the value of its EC liabilities.
(2) Where a court makes an order under subsection (1) above, it may by subsequent orders make provision for such incidental, consequential and supplementary matters as are necessary to enable the Treasury to perform their functions under this Act.
(3) The jurisdiction conferred by this section shall be exercisable by the High Court and the Court of Session.
(4) In this section “EC liabilities” has the same meaning as in section 39 above.
(1) The Treasurymay require a company to take all such steps as are requisite to secure that the aggregate of the premiums—
(a) to be received by the company in consideration of the undertaking by it during a specified period of liabilities in the course of carrying on general business or any specified part of such business; or
(b) to be received by it in a specified period in consideration of the undertaking by the company during that period of liabilities in the course of carrying on long term business or any specified part of such business.
shall not exceed a specified amount.
(2) A requirement under this section may apply either to the aggregate premiums to be received as mentioned in subsection (1) above or to the aggregate of those premiums after deducting any premiums payable by the company for reinsuring the liabilities in consideration of which the first-mentioned premiums are receivable.
(1) The Treasury may require a company which carries on long term business—
(a) to cause the person who for the time being is its actuary under section 19(1) above or any corresponding enactment previously in force to make an investigation into its financial condition in respect of that business, or any specified part of that business, as at a specified date; and
(b) to cause an abstract of that person’s report of the investigation to be made; . . .
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) For the purposes of any investigation made in pursuance of a requirement under this section the value of any assets and the amount of any liabilities shall be determined in accordance with any applicable valuation regulations.
(3) The form and contents of any abstract . . . made in pursuance of a requirement under this section shall be the same as for an abstract . . .made under section 18 above and subsection (2) of that section shall apply to an investigation made in pursuance of this section as it applies to an investigation to which subsection (1)(b) of that section relates.
(4) The required copies of any abstract . . . made in pursuance of a requirement under this section shall be deposited by the company with the Treasuryon or before such date as they may specify, . . ..
(5) In subsection (4) above, the reference to the required copies, in relation to any abstract, is to —
(a) three copies of the abstract, or
(b) one printed copy of the abstract and one copy of it in a form approved for the purposes of this subsection by the Treasury.
(6) Where copies of any abstract are required under subsection (4) above to be deposited with the Treasury, one of the copies or, as the case may be, the printed copy shall be signed by the person required to sign copies of abstracts made under section 18 above which are deposited under section 22 above.
43 Acceleration of information required by accounting provisions.
(1) The Treasury may require any documents which under section 22 above are required to be deposited with them by a company within the period specified in that section to be deposited with them on or before a specified date before the end of that period, being a date not earlier than three months before the end of that period and not earlier than one month after the date on which the requirement is imposed.
(2) The Treasury may require any statement which under section 25 above is required to be deposited with them by a company within a period prescribed under that section to be deposited with them on or before a specified date before the end of that period.
(1) The Treasury may appoint one or more competent persons to make an investigation into and report to the Treasury on—
(a) whether the criteria of sound and prudent management are fulfilled with respect to any insurance company which is a UK or non-EC company ; or
(b) where a person has notified the Treasury under section 60 or 61 below of his intention to become a controller of any such company, whether those criteria would be so fulfilled if that person became such a controller;
and the Treasury shall give written notice of any such appointment to the company.
(2) It shall be the duty of every person who is or was a director, manager, controller, agent, actuary, auditor or solicitor of a company which is under investigation—
(a) to produce to the persons appointed under subsection (1) above, within such time and at such place as they may require, all documents relating to the company which are in his custody or power;
(b) to attend before the persons so appointed at such time and place as they may require; and
(c) otherwise to give those persons all assistance in connection with the investigation which he is reasonably able to give;
and those persons may take copies of or extracts from any documents produced to them under paragraph (a) above.
(3) For the purpose of exercising his powers under this section a person appointed under subsection (1) above may enter any premises occupied by a company which is being investigated by him under this section; but he shall not do so without prior notice in writing unless he has reasonable cause to believe that if such a notice were given any documents whose production could be required would be removed, tampered with or destroyed.
(4) A person exercising powers by virtue of an appointment under this section shall, if so required, produce evidence of his authority.
(5) A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.
(6) However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—
(a) no evidence relating to the statement may be adduced, and
(b) no question relating to it may be asked,
by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.
(7) Subsection (6) above applies to any offence other than—
(a) an offence under section 71(1)(b) or (3) below;
(b) an offence under section 5 of the Perjury Act 1911 (false statements made otherwise than on oath);
(c) an offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made otherwise than on oath); or
(d) an offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (false statements made otherwise than on oath).
44 Power to obtain information and require production of documents.
(1) The Treasurymay require a company to furnish them, at specified times or intervals, with information about specified matters being, if the Treasury so require, information verified in a specified manner.
(2) The Treasury may—
(a) require a company to produce, at such time and place as the Treasury may specify, such documents as the Treasury may specify; or
(b) authorise any person, on producing (if required so to do) evidence of his authority, to require a company to produce to him forthwith any documents which that person may specify.
(2A) Subsections (1) and (2) above shall have effect as if any reference to a company included a reference to any person who is or has been a controller, officer, agent or employee of a UK or non-EC company and to any body corporate which is or has been—
(a) a parent undertaking or subsidiary undertaking of such a company;
(b) a subsidiary undertaking of a parent undertaking of such a company; or
(c) a parent undertaking of a subsidiary undertaking of such a company.
(2B) The Treasury may require a UK or non-EC company to furnish them, at a specified time, with a report by a specified person, being an actuary or accountant or other person with relevant professional skills, on any matter about which the Treasuryhave required, or could require, the company to provide information under subsection (1) above.
(3) Where by virtue of subsection (2) above the Treasuryhave or a person authorised by them has power to require the production of any documents from any company, the Treasury or that person shall have the like power to require production of those documents from any person who appears to them or, as the case may be, him to be in possession of them; but where any person from whom such production is required claims a lien on documents produced by him, the production shall be without prejudice to the lien.
(4) Any power conferred by or by virtue of subsections (2), (2A) and (3)above to require a company or other person to produce documents shall include power—
(a) if the documents are produced—
(i) to take copies of them or extracts from them; and
(ii) to require that person, or any other person who is a present or past director, controller or auditor of, or is or was at any time employed by, the company in question, to provide an explanation of any of them;
(b) if the documents are not produced, to require the person who was required to produce them to state, to the best of his knowledge and belief, where they are.
(4A) Any person authorised by the Treasury may, on producing if required evidence of his authority, enter any premises occupied by—
(a) a UK or non-EC company on which a requirement under subsection (1) or (2) above has been imposed; or
(b) a person on whom or a body on which such a requirement has been imposed by virtue of subsection (2A) above,
for the purpose of obtaining the information or documents required to be furnished or produced and exercising the powers conferred by subsection (4) above.
(5) A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.
(5A) However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—
(a) no evidence relating to the statement may be adduced, and
(b) no question relating to it may be asked,
by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.
(5B) Subsection (5A) above applies to any offence other than—
(a) an offence under section 71(1)(b), (3) or (4) below;
(b) an offence under section 5 of the Perjury Act 1911 (false statements made otherwise than on oath);
(c) an offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made otherwise than on oath); or
(d) an offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (false statements made otherwise than on oath).
(6) In this section “document” includes information recorded in any form; and, in relation to information recorded otherwise than in legible form, the power to require its production includes power to require the production of a copy of the information in legible form.
(7) This section shall apply to the Secretary of State and persons authorised by him as it applies to the Treasury and persons authorised by them; and for this purpose references in this section to the Treasury shall be construed as references to the Secretary of State.
(1) A justice of the peace may issue a warrant under this section if satisfied on information on oath given by or on behalf of the Treasury, or by a person authorised to exercise powers under section 44 above, that there are reasonable grounds for believing that there are on any premises documents whose production has been required under section 44(2) to (4) above and which have not been produced in compliance with the requirement.
(2) A justice of the peace may also issue a warrant under this section if satisfied on information on oath given by or on behalf of the Treasury, or by a person authorised to exercise powers under section 44 above—
(a) that there are reasonable grounds for believing that an offence has been committed for which the penalty on conviction on indictment is imprisonment for a term of not less than two years and that there are on any premises documents relating to whether the offence has been committed,
(b) that the Treasuryor, as the case may be, the authorised person havepower to require the production of the documents under section 44(2) to (4) above, and
(c) that there are reasonable grounds for believing that if production was so required the documents would not be produced but would be removed from the premises, hidden, tampered with or destroyed.
(3) A warrant under this section shall authorise a constable, together with any other person named in it and any other constables—
(a) to enter the premises specified in the information, using such force as is reasonably necessary for the purpose;
(b) to search the premises and take possession of any documents appearing to be such documents as are mentioned in subsection (1) or (2), as the case may be, or to take, in relation to any such documents, any other steps which may appear to be necessary for preserving them or preventing interference with them;
(c) to take copies of any such documents; and
(d) to require any person named in the warrant to provide an explanation of them or to state where they may be found.
(4) f in the case of a warrant under subsection (2) the justice of the peace is satisfied on information on oath that there are reasonable grounds for believing that there are also on the premises other documents relevant to the investigation, the warrant shall also authorise the actions mentioned in subsection (3) to be taken in relation to such documents.
(5) A warrant under this section shall continue in force until the end of the period of one month beginning with the day on which it is issued.
(6) Any documents of which possession is taken under this section may be retained—
(a) for a period of three months; or
(b) if within that period proceedings to which the documents are relevant are commenced against any person for any criminal offence, until the conclusion of those proceedings.
(7) In the application of this section to Scotland for the references to a justice of the peace substitute references to a justice of the peace or a sheriff, and for the references to information on oath substitute references to evidence on oath.
(8) In this section “document” includes information recorded in any form.
(9) The powers conferred by this section shall be exercisable in relation to information on oath given by or on behalf of the Secretary of State as they are exercisable in relation to information on oath given by or on behalf of the Treasury; and for this purpose the reference in subsection (2)(b) to the Treasury shall be construed as a reference to the Secretary of State.
45 Residual power to impose requirements for protection of policy holders.
(1) The Treasury may require a company to take such action as appears to the Treasury to be appropriate—
(a) for the purpose of protecting policy holders or potential policy holders of the company against the risk that the company may be unable to meet its liabilities or, in the case of long term business, to fulfil the reasonable expectations of policy holders or potential policy holders; or
(b) in the case of a UK or non-EC company, for the purpose of ensuring that the criteria of sound and prudent management are fulfilled with respect to the company.
(2) The power conferred by this section shall not be exercised in such a way as to restrict the company’s freedom to dispose of its assets except where it is exercised—
(a) after the Treasuryhavegiven a direction under section 11 or 12A above or section 11 of the Insurance Companies Act 1981; or
(b) on the ground that it appears to the Treasury that the company has failed to satisfy an obligation to which it is or was subject by virtue of section 33, 34 or 35 above or section 26B, 26C or 26D of the Insurance Companies Act 1974; or
(c) where the ground for intervention arises out of the submission by the company to the Treasury of an account or statement specifying, as the amount of any liabilities of the company, an amount appearing to the Treasury to have been determined otherwise than in accordance with valuation regulations or, where no such regulations are applicable, generally accepted accounting concepts, bases and policies or other generally accepted methods appropriate for insurance companies or.
(d) on the grounds that the company is a UK or non-EC company and it appears to the Treasury that the company has failed to satisfy an obligation to which it is or was subject by virtue of section 32 or 35A above.
46 Notice of proposed exercise of powers on ground of unfitness of certain persons.
(1) Before exercising with respect to a company any power or powers conferred by sections 38 to 45 above on the ground that theywould be prohibited from issuing an authorisation to the company because of the unfitness of a person for the position held by him (not being that of controller of the company), the Treasury shall serve on that person a written notice stating—
(a) that the Treasuryare considering exercising a power or powers by those sections and the ground on which they are considering the exercise of the power or powers; and
(b) that the person on whom the notice is served may, within the period of one month from the date of service of the notice, make written representations to the Treasury and, if that person so requests, oral representations to an officer of the Treasury appointed for the purpose by the Treasury.
(2) Unless the Treasury , after considering any representations made in accordance with subsection (1) above by the person served with a notice under that subsection, decide not to exercise the power or powers in relation to which the notice was served, they shall before exercising the power or powers serve on the company a written notice—
(a) containing the matters mentioned in paragraphs (a) and (b) of that subsection, taking references to the person there mentioned as references to the company; and
(b) specifying the power or powers which they propose to exercise and, if the power or one of them is that conferred by section 45 above, specifying the manner of its proposed exercise.
(3) A notice under this section shall give particulars of the ground on which the Treasuryare considering the exercise of the power or powers in question.
(4) Where representations are made in accordance with this section the Treasury shall take them into consideration before exercising the power or powers in question.
(5) A requirement imposed on a company in the exercise of any power or powers to which this section applies may be framed so as to come into effect after the expiration of a specified period (or such longer period as the Treasury may allow) unless before the expiration of that period the person whose fitness is in question has ceased to hold the position concerned.
47 Rescission, variation and publication of requirements.
(1) The Treasury may rescind a requirement imposed under sections 38 to 45 above if it appears to themthat it is no longer necessary for the requirement to continue in force, and may from time to time vary any such requirement.
(1A) The Secretary of State may rescind a requirement imposed by him under section 44 above if it appears to him that it is no longer necessary for the requirement to continue in force, and may from time to time vary any such requirement.
(2) No requirement imposed by virtue of subsection (5) of section 37 above shall be varied after the expiration of the period of five years mentioned in that subsection except in a manner which relaxes that requirement.
(3) Where a requirement is imposed under section 40 above or any such requirement is rescinded or varied the Treasury shall forthwith serve—
(a) except where paragraph (b) below applies, on the registrar of companies or on the registrar of companies in Northern Ireland or on both;
(b) if the requirement is imposed on a registered society, on the appropriate registrar as defined by section 73(1) of the Industrial and Provident Societies Act 1965 in the case of a society registered in Great Britain or on the registrar as defined by section 101(1) of the Industrial and Provident Societies Act (Northern Ireland) 1969 in the case of a society registered in Northern Ireland;
a written notice stating that fact and, in the case of a notice of the imposition of a requirement, setting out the terms of the requirement, in the case of a notice of the rescission of a requirement, identifying the requirement and, in the case of a notice of a variation of a requirement, identifying the requirement and setting out the terms of the variation.
(4) A notice served in pursuance of subsection (3) above on the registrar of companies or the registrar of companies in Northern Ireland shall be open to inspection, and a copy thereof may be procured by any person on payment of such fee as the Secretary of State or, in the case of a notice served on the registrar of companies in Northern Ireland, the Department of Commerce for Northern Ireland may direct; and every document purporting to be certified by the registrar of companies or the registrar of companies in Northern Ireland to be a copy of such a notice shall be deemed to be a copy of that notice and shall be received in evidence as if it were the original notice unless some variation between it and the original is proved.
(5) Section 71(1) of the said Act of 1965 (which empowers the Treasury to make regulations respecting, among other things, the inspection of documents kept by the appropriate registrar under that Act) and section 97(1) of the said Act of 1969 (which confers corresponding powers on the Department of Commerce for Northern Ireland) shall have effect as if the reference to documents so kept included a reference to notices served in pursuance of subsection (3) above on the appropriate registrar or, as the case may be, on the registrar.
Schedule 2B to this Act (which, subject to certain exceptions, restricts the disclosure of information obtained under or by virtue of this Act) shall have effect.
(1) A requirement imposed under section 43A or 44(2) to (4) above shall not compel the production by any person of a document which he would in an action in the High Court or, in Scotland, in the Court of Session be entitled to refuse to produce on grounds of legal professional privilege or authorise the taking of possession of any such document which is in his possession.
(2)
48 Power of Secretary of State to bring civil proceedings on behalf of insurance company.
(1) Section 438(1) of the Companies Act (power of Secretary of State to bring civil proceedings on behalf of body corporate) shall have effect in relation to an insurance company to which this Part of this Act applies (whether or not a body corporate) as if the reference to any information or document obtained under the provisions there mentioned included a reference to any information or document obtained under this Act or any enactment repealed by this Act or by the Insurance Companies Act 1974.
(2) The Secretary of State may bring civil proceedings in the name and on behalf of an insurance company to which this Part of the Act applies (whether or not a body corporate) under Article 431(1) of the Companies (Northern Ireland) Order 1986 and that subsection shall have effect in relation to such an insurance company as if the reference to any information or document obtained under the provisions there mentioned included a reference to any information or document obtained under this Act or any enactment repealed by this Act or by the Insurance Companies Act 1980 and any reference to the Department of Commerce for Northern Ireland were a reference to the Secretary of State.
(2A) The Treasury may exercise the powers conferred on the Secretary of State by virtue of subsections (1) and (2) above; and sections 451A(2) and 452(1) of the Companies Act 1985 shall apply in relation to the Treasury as they apply in relation to the Secretary of State.
(3) Where under a judgment given or decree pronounced in proceedings brought by virtue of section 438(1) of the Companies Act or Article 431(1) of the said Order of 1986 on behalf of an insurance company a sum is recovered in respect of a loss of assets representing a fund or funds maintained by the company in respect of its long term business the court shall direct that the sum shall be treated for the purposes of this Act as assets of that fund or those funds and this Act shall have effect accordingly.
49A Transfer of long term business to friendly society.
(1) Section 49 above applies, with the following adaptations, to a transfer of business to an incorporated friendly society or registered friendly society authorised under Part IV of the Friendly Societies Act 1992.
(2) In subsection (3)(c) (service of documents), after the words “the Secretary of State" there shall be inserted the words “and on the Friendly Societies Commission".
(3) In subsection (5) (persons entitled to be heard on petition), in paragraph (a) after the words “the Secretary of State" there shall be inserted the words “and the Friendly Societies Commission".
(4) In subsection (6) (requirement that transferee company be authorised to carry on long term business), for the words “authorised under section 3 or 4 above" there shall be substituted the words “authorised under Part IV of the Friendly Societies Act 1992."
(1) This section applies where–
(a) it is proposed to carry out a scheme under which the whole or part of any long term business (other than reinsurance) carried on in the United Kingdom by an insurance company to which this Part of this Act applies (“the transferor company") is to be transferred to another insurance company (“the transferee company");
(b) all of the policies comprised in the business proposed to be transferred were written in the course of the provision of services in a member State other than the United Kingdom; and
(c) the head office of the transferee company is situated in a member State.
(2) In any case where this section applies, section 49 above shall have effect as if–
(a) in paragraph (a) of subsection (3), for the words “in the London, Edinburgh and Belfast Gazettes and, except where the court has otherwise directed, in two national newspapers" there were substituted the words “in two national newspapers in the United Kingdom, and in such publications or in such manner in the member State of the commitment as the court has directed,";
(b) in paragraph (d) of that subsection, for the words “at offices in the United Kingdom of the companies concerned" there were substituted the words “at offices in the United Kingdom of the transferor company and at such place in the member State of the commitment as the court has directed": and
(c) for the provisions of subsections (6) to (6B) there were substituted the following provisions of this section.
(3) Where the establishment of the transferee company to which the policies are to be transferred is situated in the United Kingdom, the court shall not make an order sanctioning the scheme unless it is satisfied that–
(a) the transferee company fulfils the conditions in Articles 11, 12, 14 and 16 of the second long term insurance Directive in the member State of the commitment:
(b) the supervisory authorities of that member State agree to the transfer; and
(c) the transferee company is, or immediately after the making of the order will be, authorised under section 3 or 4 above to carry on long term business of the class or classes to be transferred under the scheme.
(4) Where the establishment of the transferee company to which the policies are to be transferred is situated in a member State other than the United Kingdom, the court shall not make an order sanctioning the scheme unless–
(a) it is satisfied that the supervisory authorities of the member State where the establishment of the transferee company to which the policies are to be transferred is situated agree to the transfer; and
(b) where the member State of the commitment is not the member State in which the establishment is situated, it is also satisfied that–
(i) the establishment fulfils the conditions in Articles 11, 12, 14 and 16 of the second long term insurance Directive in the member State of the commitment;
(ii) the law of that member State provides for the possibility of such a transfer; and
(iii) the supervisory authorities of that member State agree to the transfer.
(5) Where the head office of the transferee company is situated in a member State other than the United Kingdom, the court shall not make an order sanctioning the scheme unless the supervisory authorities of that member State certify that the transferee company possesses the necessary margin of solvency after taking the proposed transfer into account.
(6) Where the court makes an order sanctioning the scheme, it shall direct that–
(a) notice of the making of any order, or the execution of any instrument, giving effect to the transfer shall be published in the member State of the commitment; and
(b) the notice shall specify a period during which any policy holder affected may cancel the policy;
and such an instrument or order shall not bind such a policy holder if either such a notice is not so published or the policy holder cancels the policy during the period so specified.
(1) Where the court makes an order under section 49 above sanctioning a scheme the court may, either by that order or by any subsequent order, make provision for all or any of the following matters—
(a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of the transferor company;
(b) the allotting or appropriation by the transferee company of any shares, debentures, policies or other like interests in that company which under the scheme are to be allotted or appropriated by that company to or for any person;
(c) the continuation by or against the transferee company of any legal proceedings pending by or against the transferor company;
(d) the dissolution, without winding up, of the transferor company;
(e) such incidental, consequential and supplementary matters as are necessary to secure that the scheme shall be fully and effectively carried out.
(2) Where any such order provides for the transfer of property or liabilities, that property shall, by virtue of the order, be transferred to and vest in, and those liabilities shall, by virtue of the order, be transferred to and become the liabilities of, the transferee company, and in the case of any property, if the order so directs, freed from any mortgage or charge which is by virtue of the scheme to cease to have effect.
(3) For the purposes of any provision requiring the delivery of an instrument of transfer as a condition for the registration of a transfer of any property (including in particular section 183(1) of the Companies Act, section 56(4) of the Finance Act 1946, Article 193(1) and (2) of the Companies (Northern Ireland) Order 1986 and section 27(4) of the Finance (No. 2) Act (Nothern Ireland) 1946) an order which by virtue of this section operates to transfer any property shall be treated as an instrument of transfer.
(4) Where a scheme is sanctioned by an order of the court under section 49 above the transferee company shall, within ten days from the date on which the order is made or such longer period as the Secretary of State may allow, deposit two office copies of the order with the Secretary of State.
(5) In this section “property” includes property, rights and powers of every description, “liabilities” includes duties and “shares” and “debentures” have the same meaning as in the Companies Act or the Companies (Northern Ireland) Order 1986
(1) Where it is proposed to execute an instrument by which an insurance company to which this Part of this Act applies (“the transferor”) is to transfer to another body (“the transferee") all its rights and obligations under such general policies, or general policies of such descriptions, as may be specified in the instrument, the transferor may apply to the Secretary of State for his approval of the transfer.
(2) The Secretary of State shall not determine an application made under subsection (1) above unless he is satisfied that—
(a) a notice approved by him for the purpose has been published in the London, Edinburgh and Belfast Gazettes and, if he thinks fit, in two national newspapers which have been so approved; and
(b) except in so far as he has otherwise directed, a copy of the notice has been sent to every affected policy holder and every other person who claims an interest in a policy included in the transfer and has given written notice of his claim to the transferor; and
(c) copies of a statement setting out particulars of the transfer and approved by him for the purpose have been available for inspection at one or more places in the United Kingdom for a period of not less than thirty days beginning with the date of the first publication of the notice in accordance with paragraph (a) above.
(3) The notice referred to in subsection (2) above shall include a statement that written representations concerning the transfer may be sent to the Secretary of State before a specified day, which shall not be earlier than sixty days after the day of the first publication of the notice in accordance with paragraph (a) above; and the Secretary of State shall not determine the application until after considering any representations made to him before the specified day.
(4) The Secretary of State shall not approve a transfer on an application under subsection (1) above unless he is satisfied that—
(a) every policy included in the transfer evidences a contract which—
(i) was entered into before the date of the application; and
(ii) imposes on the insurer obligations the performance of which will constitute the carrying on of insurance business in the United Kingdom; and
(b) the transferee is, or immediately after the approval will be, authorised under section 3 or 4 above to carry on in the United Kingdom insurance business of the appropriate class or classes;
and unless in his opinion the transferee’s financial resources and the other circumstances of the case justify the giving of his approval.
(4A) Without prejudice to the generality of subsection (4) above, the Secretary of State shall not approve a transfer on an application under subsection (1) above to an insurance company whose head office is situated in another member State or to a Swiss general insurance companyunless—
(a) the supervisory authorities of that State or, as the case may be, of Switzerland certify that it possesses the necessary margin of solvency after taking the proposed transfer into account; or
(b) every policy included in the proposed transfer evidences a contract of reinsurance.
(4B) Notwithstanding the provisions of subsection (4)(a)(ii) and (b) above, the Secretary of State may approve a transfer on an application under subsection (1) above to an insurance company established in another member State, where he is satisfied that–
(a) the transfer relates to policies covering risks situated in the United Kingdom,
(b) the transferee is entitled in accordance with section 81B below to provide insurance in the United Kingdom in respect of those risks through that establishment, and
(c) the supervisory authorities of the member State of that establishment agree to the transfer.
(5) On determining an application made under subsection (1) above, the Secretary of State shall—
(a) publish a notice of his decision in the London, Edinburgh and Belfast Gazettes and in such other manner as he may think fit, and
(b) send a copy of that notice to the transferor, the transferee and every person who made representations in accordance with the notice referred to in subsection (2) above;
and if he refuses the application he shall inform the transferor and the transferee in writing of the reasons for his refusal.
(6) Any notice or other document authorised or required to be given or served under this section or section 52 below may, without prejudice to any other method of service, be served by post; and a letter containing the notice or other document shall be deemed to be properly addressed if it is addressed to that person at his last known residence or last known place of business in the United Kingdom.
(7) In this section “general policy” means a policy evidencing a contract the effecting of which constituted the carrying on of general business; and for the purposes of this section a policy holder is an “affected policy holder” in relation to a proposed transfer if—
(a) his policy is included in the transfer, or
(b) his policy is with the transferor and the Secretary of State has certified, after consulting the transferor, that in the opinion of the Secretary of State the policy holder’s rights and obligations under the policy will or may be materially affected by the transfer.
(1) Subject to subsection (2) below, an instrument giving effect to a transfer approved by the Secretary of State under section 51 above shall be effectual in law—
(a) to transfer to the transferee all the transferor’s rights and obligations under the policies included in the instrument, and
(b) if the instrument so provides, to secure the continuation by or against the transferee of any legal proceedings by or against the transferor which relate to those rights or obligations.
notwithstanding the absence of any agreements or consents which would otherwise be necessary for it to be effectual in law for those purposes.
(2) Except in so far as the Secretary of State may otherwise direct, a policy holder whose policy is included in such an instrument shall not be bound by it unless he has been given written notice of its execution by the transferor or the transferee.
(1) Where it is proposed to execute an instrument by which—
(a) an EC company, or a non-EC company whose head office is in an EFTA State, is to transfer—
(i) to a UK company; or
(ii) to a non-EC company whose solvency is supervised by the Treasury in accordance with Article 29 or 30 of the first long term insurance Directive or Article 25 or 26 of the first general insurance Directive,
all its rights and obligations under such long term or general policies, or long term or general policies of such descriptions, as may be specified in the instrument; or
(aa) a company which is authorised in accordance with Article 27 of the first long term insurance Directive, or Article 23 of the first general insurance Directive, is to transfer to a UK company all its rights and obligations under such long term or general policies, or long term or general policies of such descriptions, as may be so specified; or
(b) a Swiss general insurance company is to transfer to a UK company all its rights and obligations under such general policies, or general policies of such descriptions, as may be so specified,
the Treasurymay, if they are satisfied that the transferee possesses the necessary margin of solvency after taking the proposed transfer into account, issue a certificate to that effect.
(2) In this section “general policy” means a policy evidencing a contract the effecting of which constituted the carrying on of general business, other than reinsurance; 'long term policy’ means a policy evidencing a contract the effecting of which constitutes the carrying on of long term business, other than reinsurance.
52B Effect of transfers authorised in other EEA States.
(1) This section applies where—
(a) an EC company transfers to another body all its rights and obligations under any UK policies and the transfer is authorised in its home State in accordance with—
(i) Article 11 of the third long term insurance Directive, or
(ii) Article 12 of the third general insurance Directive;
(b) a non-EC company whose head office is in an EFTA State transfers to another body all its rights and obligations under any UK policies and the transfer is authorised in an EEA State other than the United Kingdom in accordance with—
(i) Article 6 of the second long term insurance Directive, or
(ii) Article 11 of the second general insurance Directive; or
(c) a company which is authorised in accordance with Article 27 of the first long term insurance Directive, or Article 23 of the first general insurance Directive transfers to another body all its rights and obligations under any UK policies and the transfer is authorised in a member State other than the United Kingdom in accordance with—
(i) Article 31a of the first long term insurance Directive (as amended by Article 49 of the third long term insurance Directive), or
(ii) Article 28a of the first general insurance Directive (as amended by Article 53 of the third general insurance Directive).
(2) If notice of the execution of the instrument giving effect to the transfer is published in such manner as the Treasury may from time to time direct, the instrument shall be effectual in law—
(a) to transfer to the transferee all the transferor’s rights and obligations under the UK policies included in the instrument, and
(b) if the instrument so provides, to secure the continuation by or against the transferee of any legal proceedings by or against the transferor which relate to those rights or obligations,
notwithstanding the absence of any agreements or consents which would otherwise be necessary for it to be effectual in law for those purposes.
(3) Directions under this section may make different provision for different cases or descriptions of case.
(4) A policy which evidences a contract of . . . insurance is a UK policy for the purposes of this section if the law applicable to it is the law of any part of the United Kingdom.
53 Winding up of insurance companies under Companies Acts.
The court may order the winding up, in accordance with the Insolvency Act 1986 or, as the case may be, the Insolvency (Northern Ireland) Order 1989, of an insurance company to which this Part of this Act applies and the provisions of thethat Act of 1986 or, as the case may be, that Order of 1989 shall apply accordingly subject to the modification that the company may be ordered to be wound up on the petition of ten or more policy holders owning policies of an aggregate value of not less than £10,000.
Such a petition shall not be presented except by leave of the court, and leave shall not be granted until a prima facie case has been established to the satisfaction of the court and until security for costs for such amount as the court may think reasonable has been given.
(1) The Treasury may present a petition for the winding up, in accordance with Part IV or V of the Insolvency Act 1986, of an insurance company to which this Part of this Act applies, being a company which may be wound up by the court under the provisions of that Act, on the ground—
(a) that the company is unable to pay its debts within the meaning of sections 123 or sections 222 to 224 of that Act;
(b) that the company has failed to satisy an obligation to which it is or was subject by virtue of this Act or any enactment repealed by this Act or by the Insurance Companies Act 1974; or
(bb) that the company is a UK company and has failed to satisfy an obligation to which it is subject by virtue of any provision of the law of another EEA State which—
(i) gives effect to the general or long term insurance Directives; or
(ii) is otherwise applicable to the insurance activities of the company in that State;
(c) that the company, being under the obligation imposed by sections 221 and 222 of the Companies Act with respect to the keeping of accounting records, has failed to satisfy that obligation or to produce records kept in satisfaction of that obligation and that the Treasuryareunable to ascertain its financial position.
(2) The Treasury may present a petition for the winding up, in accordance with the Part V or VI of the Insolvency (Northern Ireland) Order 1989, of an insurance company to which this Part of this Act applies, being a company which may be wound up by the court under the provisions of that Act, on the ground—
(a) that the company is unable to pay its debts within the meaning of Article 103 or Articles 186 to 188 of that Order
(b) that the company has failed to satisfy an obligation to which it is or was subject by virtue of this Act or any enactment repealed by this Act or by the Insurance Companies Act 1980; or
(bb) that the company is a UK company and has failed to satisfy an obligation to which it is subject by virtue of any provision of the law of another EEA State which—
(i) gives effect to the general or long term insurance Directives; or
(ii) is otherwise applicable to the insurance activities of the company in that State;
(c) that the company, being under an obligation imposed by Articles 229 to 231 of thePart V or VI of the Insolvency (Northern Ireland) Order 1989 with respect to the keeping of accounting records, has failed to satisfy that obligation or to produce records kept in satisfaction of that obligation and that the Treasuryare unable to ascertain its financial position;
and Article 433 of the said Order of 1986 shall have effect in relation to such an insurance company as if any reference to the Department of Commerce for Northern Ireland were a reference to the Treasury.
(3) In any proceedings on a petition to wind up an insurance company presented by the Treasury under subsection (1) of (2) above, evidence that the company was insolvent—
(a) at the close of the period to which—
(i) the accounts and balance sheet of the company last deposited under section 22 above; or
(ii) any statement of the company last deposited under section 25 above,
relate; or
(b) at any date or time specified in a requirement under section 42 or 44 above,
shall be evidence that the company continues to be unable to pay its debts, unless the contrary is proved.
(4) If, in the case of an insurance company to which this Part of this Act applies, being a company which may be wound up by the court under the provisions of the Insolvency Act 1986 or, as the case may be, the Insolvency (Northern Ireland) Order 1989, it appears to the Treasury that it is expedient in the public interest that the company should be wound up, the Treasury may, unless the company is already being wound up by the court, present a petition for it to be so wound up if the court thinks it just and equitable for it to be so wound up.
(4A) The Secretary of State may exercise the powers conferred on the Treasury by subsections (1) to (4) above, and for this purpose those subsections shall be construed as if references to the Treasury were references to the Secretary of State.
(5) Where a petition for the winding up of an insurance company to which this Part of this Act applies is presented by a person other than the Treasury, a copy of the petition shall be served on theTreasury and they shall be entitled to be heard on the petition.
55 Winding up of insurance companies with long term business.
(1) No insurance company to which this Part of this Act applies which is an unincorporated body and carries on long term business shall be made the subject of bankruptcy proceedings or, in Scotland, sequestration proceedings.
(2) No insurance company to which this Part of this Act applies which carries on long term business shall be wound up voluntarily.
(3) Section 29(1) above shall not have effect in relation to the winding up of a company to which section 28(1) above applies but, subject to subsection (4) below and to rules made by virtue of section 59(2) below, in any such winding up—
(a) the assets representing the fund or funds maintained by the company in respect of its long term business shall be available only for meeting the liabilities of the company attributable to that business;
(b) the other assets of the company shall be available only for meeting the liabilities of the company attributable to its other business.
(4) Where the value of the assets mentioned in either paragraph of subsection (3) above exceeds the amount of the liabilities mentioned in that paragraph the restriction imposed by that subsection shall not apply to so much of those assets as represents the excess.
(5) In relation to the assets falling within either paragraph of subsection (3) above the creditors mentioned in section 168(2) of the Insolvency Act 1986 or, as the case may be, Article 143(2) of the Insolvency (Northern Ireland) Order 1989 shall be only those who are creditors in respect of liabilities falling within that paragraph; and any general meetings of creditors summoned for the purposes of that section shall accordingly be separate general meetings of the creditors in respect of the liabilities falling within each paragraph.
(6) Where under section 212 of the Insolvency Act 1986 or Article 176 of the Insolvency (Northern Ireland) Order 1989 (defalcations of directors etc. disclosed in course of winding up) a court orders any money or property to be repaid or restored to a company or any sum to be contributed to its assets then, if and so far as the wrongful act which is the reason for the making of the order related to assets representing a fund or funds maintained by the company in respect of its long term business, the court shall include in the order a direction that the money, property or contribution shall be treated for the purposes of this Act as assets of that fund or those funds and this Act shall have effect accordingly.
56 Continuation of long term business of insurance companies in liquidation.
(1) This section has effect in relation to the winding up of an insurance company to which this Part of this Act applies, being a company carrying on long term business.
(2) The liquidator shall, unless the court otherwise orders, carry on the long term business of the company with a view to its being transferred as a going concern to another insurance company, whether an existing company or a company formed for that purpose; and, in carrying on that business as aforesaid, the liquidator may agree to the variation of any contracts of insurance in existence when the winding up order is made but shall not effect any new contracts of insurance.
(3) If the liquidator is satisfied that the interests of the creditors in respect of liabilities of the company attributable to its long term business require the appointment of a special manager of the company’s long term business, he may apply to the court, and the court may on such application appoint a special manager of that business to act during such time as the court may direct, with such powers, including any of the powers of a receiver or manager, as may be entrusted to him by the court.
(4) Section 177(5) of the Insolvency Act 1986 or, in the case of a special manager appointed in proceedings in Northern Ireland, Article 151(5) of the Insolvency (Northern Ireland) Order 1989 (special manager to give security and receive remuneration) shall apply to a special manager appointed under subsection (3) above as they apply to a special manager appointed under section 177 of the said Act of 1986 or, as the case may be, Article 151 of the said Order of 1989
(5) The court may, if it thinks fit and subject to such conditions (if any) as it may determine, reduce the amount of the contracts made by the company in the course of carrying on its long term business.
(6) The court may, on the application of the liquidator, a special manager appointed under subsection (3) above , the Treasuryor the Secretary of State, appoint an independent actuary to investigate the long term business of the company and to report to the liquidator, the special manager , the Treasuryor the Secretary of State, as the case may be, on the desirability or otherwise of that business being continued and on any reduction in the contracts made in the course of carrying on that business that may be necessary for its successful continuation.
(7) Notwithstanding section 167 of, and Schedule 4 to, the Insolvency Act 1986 or, as the case may be, Article 142 of, and Schedule 2 to, the Insolvency (Northern Ireland) Order 1989 (which requires a liquidator to obtain the sanction of the court or a specified committee for the bringing of legal proceedings in the name of and on behalf of the company) the liquidator may without any such sanction make an application in the name of and on behalf of the company under section 49 above.
(8) In this section “the court” means the court having jurisdiction to wind up the company.
(1) Where the insurance business or any part of the insurance business of an insurance company has been transferred to an insurance company to which this Part of this Act applies under an arrangement in pursuance of which the first-mentioned company (in this section called the subsidiary company) or the creditors thereof has or have claims against the company to which the transfer was made (in this section called the principal company), then, if the principal company is being wound up by or under the supervision of the court, the court shall, subject to the provisions of this section, order the subsidiary company to be wound up in conjuction with the principal company, and may by the same or any subsequent order appoint the same person to be liquidator for the two companies, and make provision for such other matters as may seem to the court necessary, with a view to the companies being wound up as if they were one company.
(2) The commencement of the winding up of the principal company shall, save as otherwise ordered by the court, be the commencement of the winding up of the subsidiary company
(3) In adjusting the rights and liabilities of the members of the several companies between themselves, the court shall have regard to the constitution of the companies, and to the arrangements entered into between the companies, in the same manner as the court has regard to the rights and liabilities of different classes of contributories in the case of the winding up of a single company, or as near thereto as circumstances admit.
(4) Where any company alleged to be subsidiary is not in process of being wound up at the same time as the principal company to which it is subsidiary, the court shall not direct the subsidiary company to be wound up unless, after hearing all objections (if any) that may be urged by or on behalf of the company against its being wound up, the court is of the opinion that the company is subsidiary to the principal company, and that the winding up of the company in conjunction with the principal company is just and equitable.
(5) An application may be made in relation to the winding up of any subsidiary company in conjunction with a principal company by any creditor of, or person interested in, the principal or subsidiary company.
(6) Where a company stands in the relation of a principal company to one company, and in the relation of a subsidiary company to some other company, or where there are several companies standing in the relation of subsidiary companies to one principal company, the court may deal with any number of such companies together or in separate groups, as it thinks most expedient, upon the principles laid down in this section.
58 Reduction of contracts as alternative to winding up.
In the case of an insurance company which has been proved to be unable to pay its debts, the court may, if it thinks fit, reduce the amount of the contracts of the company on such terms and subject to such conditions as the court thinks just, in place of making a winding up order.
(1) Rules may be made under section411 of the Insolvency Act 1986 or Article 359 of the Insolvency (Northern Ireland) Order 1989 (general rules about winding up) for determining the amount of the liabilities of an insurance company to policy holders of any class or description for the purpose of proof in a winding up and generally for carrying into effect the provisions of this Part of this Act with respect to the winding up of insurance companies.
(2) Without prejudice to the generality of subsection (1) above, rules under section411 of the Insolvency Act 1986 or, as the case may be, Article 359 of the said Order of 1989 may make provision for all or any of the following matters—
(a) the identification of the assets and liabilities falling within either paragraph of subsection (3) of section 55 above;
(b) the apportionment between the assets falling within paragraphs (a) and (b) of that subsection of the costs, charges and expenses of the winding up and of any debts of the company having priority under sections 175 and 176 of, and Schedule 6 to, the Insolvency Act 1986, or, as the case may be, Articles 149 and 150 of, and Schedule 4 to, the Insolvency (Northern Ireland) Order 1989;
(c) the determination of the amount of liabilities of any description falling within either paragraph of that subsection for the purpose of establishing whether or not there is any such excess in respect of that paragraph as is mentioned in subsection (4) of section 55 above;
(d) the application of assets within paragraph (a) of the said subsection (3) for meeting the liabilities within that paragraph;
(e) the application of assets representing any such excess as is mentioned in the said subsection (4).
60 Approval of proposed managing director or chief executive of insurance company.
(1) No insurance company to which this Part of this Act applies shall appoint a person as managing director or chief executive of the companies unless—
(a) the company has served on the Treasury a written notice stating that it proposes to appoint that person to that position and containing such particulars as may be prescribed; and
(b) either the Treasuryhave, before the expiration of the period of three months beginning with the date of service of that notice, notified the company in writing that there is no objection to that person being appointed to that position or that period has elapsed without the Treasury having served on the company a written notice of objection.
(2) A notice served by a company under subsection (1)(a) above shall contain a statement signed by the person proposed to be appointed that it is served with his knowledge and consent.
(3) The Treasury may serve a notice of objection under subsection (1) above on the ground—
(a) that it appears to the Treasurythat the person proposed to be appointed is not a fit and proper person to be appointed to the position in question; or
(b) where the insurance company is a UK or non-EC company, that it appears to the Treasury that, if that person were appointed, the criteria of sound and prudent management would not or might not continue to be fulfilled in respect of the company.
(3A) Before serving such a notice the Treasuryshall serve on the company and on the person proposed to be appointed a preliminary notice stating—
(a) that the Treasuryareconsidering the service on the company of a notice of objection on that ground; and
(b) that the company or that person may, within the period of one month from the date of service of the preliminary notice, make written representations to the Treasury and, if the company or that person so requests, oral representations to an officer of the the Treasury appointed for the purpose by the Treasury.
(4) The Treasury shall not be obliged to disclose to the company or to the person proposed to be appointed any particulars of the ground on which they areconsidering the service on the company of a notice of objection.
(5) Where representations are made in accordance with this section the Treasury shall take them into consideration before serving the notice of objection.
61 Approval of person proposing to become controller of insurance company where section 60 does not apply.
(1) No person shall become a controller of an insurance company to which this Part of this Act applies otherwise than by virtue of an appointment in relation to which section 60 above has effect unless—
(a) he has served on the Treasury a written notice stating that he intends to become a controller of that company and containing such particulars as may be prescribed; and
(b) either the Treasury have, before the expiration of the period of three months beginning with the date of service of that notice, notified him in writing that there is no objection to his becoming a controller of the company or that period has elapsed without the Treasury having served on him a written notice of objection.
(1A) The Treasury may serve a notice of objection under subsection (1) above on the ground—
(a) that it appears to the Treasurythat the person concerned is not a fit and proper person to become a controller of the company; or
(b) where the company is a UK or non-EC company, that it appears to the Treasury that, if that person were to become such a controller, the criteria of sound and prudent management would not or might not continue to be fulfilled in respect of the company.
(2) Before serving such a notice the Treasury shall serve on the person proposing to become a controller a preliminary notice stating—
(a) that the Treasuryare considering the service on that person of a notice of objection on that ground; and
(b) that that person may, within the period of one month from the date of service of the preliminary notice, make written representations to the Treasuryand, if that person so requests, oral representations to an officer of the Treasury appointed for the purpose by the Treasury.
(2A) The Treasurymay serve a notice of objection under subsection (1) above for the purpose of implementing any decision of the Council or Commission of the Communities under—
(a) Article 29b(4) of the first general insurance Directive; or
(b) Article 32b(4) of the first long term insurance Directive.
(3) The Treasury shall not be obliged to disclose to any person any particulars of the ground on which they are considering the service on him of a notice of objection.
(4) Where representations are made in accordance with this section the Treasury shall take them into consideration before serving the notice of objection.
61A Approval of acquisition of notifiable holding in UK company.
(1) No person who is a controller of a UK company shall acquire a notifiable holding in that company, or in another company of which it is a subsidiary undertaking, unless—
(a) he has served on the Treasury a written notice stating—
(i) that he intends to acquire such a holding; and
(ii) the number of the shares or details of the voting rights which he proposes to acquire; and
(b) either the Treasuryhave, before the expiration of the period of three months beginning with the date of service of that notice, notified him in writing that there is no objection to his proposed acquisition of the holding, or that period has elapsed without the Treasury having served on him a written notice of objection.
(2) The Treasury may serve a notice of objection under subsection (1) above on the ground—
(a) that it appears to them that the person concerned is not a fit and proper person to acquire such a holding; or
(b) that it appears to them that, if that person were to acquire such a holding, the criteria of sound and prudent management would not or might not continue to be fulfilled in respect of the company.
(3) Subsections (2) to (4) of section 61 above shall (with the necessary modifications) apply for the purposes of this section as they apply for the purposes of that section.
61B Further provisions with respect to controllers of UK companies.
Schedule 2D to this Act (which makes further provision with respect to persons becoming or continuing to be companies, controllers of UK and persons who are such controllers acquiring or dealing with holdings in such companies) shall have effect.
62 Duty to notify change of director, controller or manager.
(1) If, in the case of a company to which this Part of this Act applies, a person becomes or ceases to be—
(a) a controller of the company; or
(b) where the company is a UK company, a 10 per cent.shareholder controller, a 20 per cent.shareholder controller, a 33 per cent.shareholder controller, a 50 per cent.shareholder controller or a majority shareholder controller of the company,
he shall, before the expiration of the period of seven days beginning with the day next following that on which he does so, notify the company in writing of that fact and of such other matters as may be prescribed.
(1A) If, after ceasing to be a shareholder controller of any description mentioned in paragraph (b) of subsection (1) above, a person will still be a shareholder controller of the company, his notice under that subsection shall state the percentage of the shares or voting power which he will (alone or with any associate or associates) hold or be entitled to exercise or control.
(1B) A person who becomes a director or manager of an insurance company to which this Part of this Act applies shall, before the expiration of the period of seven days beginning with the day next following that on which he does so, notify the company in writing of such matters as may be prescribed.
(2) An insurance company to which this part of this Act applies shall give written notice to the Treasuryof the fact that any person has become or ceased to be a director, controller or manager of the company and of any matter of which any such person is required to notify the company under subsection (1), (1A) or (1B) above; and that notice shall be given before the expiration of the period of fourteen days beginning with the day next following that on which that fact or matter comes to the company’s knowledge.
(3) In this section 'share’ has the same meaning as in Part VII of the Companies Act or Part VIII of the Companies (Northern Ireland) Order 1986.