Insurance Companies Act 1982 (repealed) (c. 50)

SCHEDULES

Yn ddilys o 01/07/1994

[F1 SCHEDULE 2A] U.K. CRITERIA OF SOUND AND PRUDENT MANAGEMENT

Textual Amendments

F1 Sch. 2A inserted (1.7.1994) by S.I. 1994/1696, reg. 5(3), Sch. 1

Modifications etc. (not altering text)

C1 Sch. 2A: Power to contract out functions conferred (18.11.1998) by S.I. 1998/2842, arts. 2, 3, Sch. Pt. I para. 56

Business to be conducted in a sound and prudent manner U.K.

5 The insurance company conducts its business in a sound and prudent manner.

6 (1) The insurance company shall not be regarded as conducting its business in a sound and prudent manner unless it maintains—

(a) adequate accounting and other records of its business; and

(b) adequate systems of control of its business and records.

(2) Accounting and other records and systems of control shall not be regarded as adequate unless they are such as—

(a) to enable the business of the company to be prudently managed; and

(b) to enable the company to comply with the obligations imposed on it by or under this Act and, in the case of a UK company, enactments in other EEA States which apply to its insurance business.

(3) In determining whether any systems of control are adequate the Secretary of State shall have regard to the functions and responsibilities for those systems which are held by the persons who are responsible for the direction and management of the company and to whom paragraph 2 above applies.

7 The insurance company shall not be regarded as conducting its business in a sound and prudent manner if it fails to conduct its business with due regard to the interests of policy holders and potential policy holders.

8 The insurance company shall not be regarded as conducting its business in a sound and prudent manner if—

(a) it fails to satisfy an obligation to which it is subject by virtue of this Act; or

(b) in the case of a UK company, it fails to satisfy an obligation to which it is subject by virtue of any provision of the law of another EEA State which applies to its insurance business in that State.

[9 The insurance company shall not be regarded as conducting its business in a sound and prudent manner if it fails to supervise the activities of a subsidiary undertaking—

(a) with due care and diligence; and

(b) without detriment to the company’s business.]