Friendly Societies Act 1992

Confirmation of transfers of engagements U.K.

12 The Commission shall not confirm a transfer unless it is satisfied—

(a) that all the engagements included in the transfer may be transferred under section 86 above to the transferee;

(b) that the transfer is in the interests of the members of each friendly society participating in the transfer; and

(c) where the transfer is not of all the engagements of the transferor, that the purposes of each friendly society participating in the transfer will, after the transfer, continue to include the carrying on of one or more activities falling within Schedule 2 to this Act.

13 (1) The Commission shall not confirm a transfer in any case where the transferee is required by section 87 above to furnish the Commission with a report unless it is satisfied that the transferee will (after taking the proposed transfer into account)—

(a) where the report is furnished under section 87(2), possess the margin of solvency required by section 48 above;

(b) where the report is furnished under section 87(3), possess an excess of assets over liabilities.

(2) The Commission shall not confirm a transfer of any engagements the fulfilment of which will constitute the carrying on of insurance business in the United Kingdom in any case where the transferee is a person to whom Part II of the M1 Insurance Companies Act 1982 applies unless the Secretary of State certifies that the transferee will, after taking the proposed transfer into account, possess any margin of solvency required by that Part of that Act.

[F1 (3) This paragraph and paragraph 14 below do not apply to any transfer of engagements to which paragraph 15 or 15A below applies.]

Textual Amendments

F1 Sch. 15 para. 13(3) inserted (1.9.1994) by S.I. 1994/1984 reg. 25, Sch. 4 para. 2

Marginal Citations

M1 1982 c.50.

14 The Commission shall not confirm a transfer of any engagements the fulfilment of which will constitute the carrying on in the United Kingdom of insurance business unless it is satisfied—

(a) that the proposed transferee will be able to fulfil the engagements without authorisation under Part I of the Insurance Companies Act 1982 or section 32 of this Act; or

(b) that there is no substantial risk that the proposed transferee will not have such authorisation as will permit it to fulfil them.

[F2 15 (1) This paragraph applies to any transfer of engagements (other than contracts of reinsurance) where–

(a) the effecting of the engagements constituted the carrying on of general business;

(b) the transferor is a friendly society to which section 37(3) above applies; and

(c) the transferee is–

(i) a friendly society to which section 37(2) or (3) above applies;

(ii) a UK company;

(iii) an EC company;

(iv) a non–EC company whose head office is in an EFTA State;

(v) a Swiss general insurance company; or

(vi) an insurance company whose margin of solvency is required to be supervised in accordance with Article 25 or 26 of the first general insurance Directive.

(2) The Commission shall not confirm the transfer unless–

(a) it is satisfied that the transferee is, or will be immediately after the approval–

(i) authorised under section 32 above to carry on, or

(ii) authorised under section 3 or 4 of the Insurance Companies Act 1982 M2 to carry on, or

(iii) authorised in accordance with Article 6 of the first general insurance Directive to carry on in an EEA State other than the United Kingdom,

general business of the class or classes to be transferred;

(b) it is also satisfied that every policy included in the transfer evidences a contract which was entered into before the date of the application;

(c) the relevant authority certifies that the transferee possesses the necessary margin of solvency after taking the proposed transfer into account; and

(d) where the establishment from which the policies are to be transferred is situated in a member State other than the United Kingdom, the Commission is satisfied–

(i) that the supervisory authority in that member State has been consulted about the proposed transfer; and

(ii) either that the authority has responded or that the period of three months beginning with the consultation has elapsed.

(3) Where, as regards any policy (other than an EFTA policy) which is included in the proposed transfer, the risk is situated in a member State other than the United Kingdom, the Commission shall not confirm the transfer unless it is satisfied–

(a) that the supervisory authority in that member State has been notified of the proposed transfer;

(b) either that the authority has consented to the transfer or that the authority has not refused its consent to the transfer within the period of three months beginning with the notification.

(4) Where the establishment of the transferee to which the policies are to be transferred is situated in the United Kingdom and, as regards any EFTA policy included in the proposed transfer, an EEA State other than the United Kingdom is the State in which the risk is situated, the Commission shall not confirm the transfer unless it is satisfied that–

(a) the transferee either fulfils the conditions in Articles 13 to 16 of the second general insurance Directive in that EEA State; and

(b) the supervisory authority in that EEA State agrees to the transfer.

(5) Where the establishment of the transferee to which the policies are to be transferred is situated in an EEA State other than the United Kingdom and, as regards any EFTA policy included in the proposed transfer, an EEA State other than the United Kingdom is the State in which the risk is situated, the Commission shall not confirm the transfer unless–

(a) where the EEA State in which the establishment is situated is also the State in which the risk is situated, it is satisfied that the supervisory authority in that EEA State agrees to the transfer;

(b) where the United Kingdom is the State in which the risk is situated, it is satisfied that the transferee is not precluded by Schedule 2F to the Insurance Companies Act 1982 from covering the risk; and

(c) where an EEA State other than the United Kingdom or the EEA State in which the establishment is situated is the State in which the risk is situated, it is satisfied that–

(i) the transferee either fulfils the conditions in Articles 13 to 16 of the second general insurance Directive in the EEA State in which the risk is situated;

(ii) the law of that State provides for the possibility of such a transfer; and

(iii) the supervisory authority in that State agrees to the transfer.

(6) In this paragraph “the relevant authority" means–

(a) if the transferee is a friendly society to which section 37(2) or (3) above applies, the Commission;

(b) if the transferee is a United Kingdom company, the Secretary of State;

(c) if the transferee is an EC company, the supervisory authority in its home State;

(d) if the transferee is a non–EC company whose head office is in an EFTA State, the supervisory authority in that EFTA State;

(e) if the transferee is a Swiss general insurance company, the supervisory authority in Switzerland;

(f) if the transferee is an insurance company whose margin of solvency is required to be supervised in accordance with Article 25 or 26 of the first general insurance Directive, the Secretary of State or other supervisory authority responsible for the supervision.]

Textual Amendments

F2 Sch. 15 para. 15 substituted (1.9.1994) by S.I. 1994/1984, reg. 25, Sch. 4 para. 3

Marginal Citations

M2 1982 c. 50.

[F3 15A (1) This paragraph applies to any transfer of engagements (other than contracts of reinsurance) where–

(a) the effecting of the engagements constituted the carrying on of long term business;

(b) the transferor is a friendly society to which section 37(3) above applies; and

(c) the transferee is–

(i) a friendly society to which section 37(2) or (3) above applies;

(ii) a UK company;

(iii) an EC company;

(iv) a non–EC company whose head office is an EFTA State; or

(v) an insurance company whose margin of solvency is required to be supervised in accordance with Article 29 or 30 of the first life Directive.

(2) The Commission shall not confirm the transfer unless–

(a) it is satisfied that the transferee is, or will be immediately after the making of the confirmation–

(i) authorised under section 32 above to carry on, or

(ii) authorised under section 3 or 4 of the Insurance Companies Act 1982 to carry on, or

(iii) authorised in accordance with Article 6 of the first life Directive to carry on in an EEA State other than the United Kingdom,

long term business of the class or classes to be transferred;

(b) the relevant authority certifies that the transferee possesses the necessary margin of solvency after taking the proposed transfer into account; and

(c) where the establishment from which the policies are to be transferred is situated in a member State other than the United Kingdom, the Commission is satisfied–

(i) that the supervisory authority in that member State has been consulted about the proposed scheme; and

(ii) either that the authority has responded or that the period of three months beginning with the consultation has elapsed.

(3) Where, as regards any policy (other than an EFTA policy) which is included in the proposed transfer, a member State other than the United Kingdom, is the State in which the commitment is situated, the Commission shall not confirm the transfer unless it is satisfied–

(a) that the supervisory authority in that member State has been notified of the proposed scheme; and

(b) either that the authority has consented to the scheme or that the authority has not refused its consent to the scheme within the period of three months beginning with the notification.

(4) Where the establishment of the transferee to which the policies are to be transferred is situated in the United Kingdom and, as regards any EFTA policy included in the proposed transfer, an EEA State other than the United Kingdom is the State in which the commitment is situated, the Commission shall not confirm the transfer unless it is satisfied that–

(a) the transferee either fulfils the conditions in Articles 11, 12, 14 and 16 of the second life Directive in that EEA State; and

(b) the supervisory authority in that EEA State agrees to the transfer.

(5) Where the establishment of the transferee to which the policies are to be transferred is situated in an EEA State other than the United Kingdom and, as regards any ETFA policy included in the proposed transfer, an EEA State is the State in which the commitment is situated, the Commission shall not confirm the transfer unless–

(a) where the EEA State in which the establishment is situated is also the State in which the commitment is situated, it is satisfied that the supervisory authority in that EEA State agrees to the transfer;

(b) where the United Kingdom is the State in which the commitment is situated, it is satisfied that the transferee is not precluded by Schedule 2F to the Insurance Companies Act 1982 from covering the commitment; and

(c) where an EEA State other than the United Kingdom or the EEA State in which the establishment is situated is the State in which the risk is situated, it is satisfied that–

(i) the transferee fulfils the conditions in Articles 11, 12, 14 and 16 of the second life Directive in the EEA State which is the State in which the commitment is situated;

(ii) the law of that State provides for the possibility of such a transfer; and

(iii) the supervisory authority in that State agrees to the transfer.

(6) In this paragraph “the relevant authority" means–

(a) if the transferee is a friendly society to which section 37(2) or (3) above applies, the Commission;

(b) if the transferee is a UK company, the Secretary of State;

(c) if the transferee is an EC company, the supervisory authority in its home State;

(d) if the transferee is a non–EC company whose head office is in an EFTA State, the supervisory authority in that EFTA State;

(e) if the transferee is an insurance company whose margin of solvency is required to be supervised in accordance with Article 29 or 30 of the first life Directive, the Secretary of State or other supervisory authority responsible for the supervision.]

Textual Amendments

F3 Sch. 15 para 15A substituted (1.9.1994) by S.I. 1994/1984, reg. 25, Sch. 4 para. 4

16 The Commission shall not confirm a transfer to a friendly society of engagements the fulfilment of which will constitute the carrying on in the United Kingdom of non-insurance business of any description unless it is satisfied that there is no substantial risk that the society will not be authorised under section 32 above to carry on non-insurance business of that description.