Policyholders Protection Act 1997

Interpretation of the 1975 Act

16 Extension of definition of “policy holder”

(1) In section 32 of the 1975 Act (interpretation), in subsection (2) (which provides that expressions used in that Act have the same meaning as in the [1982 c. 50.] Insurance Companies Act 1982), after “above,” there shall be inserted “but subject to subsection (2ZA) below”.

(2) After that subsection there shall be inserted—

“(2ZA) In its application by virtue of subsection (2) above, the definition of the expression “policy holder” (in section 96(1) of the [1982 c. 50.] Insurance Companies Act 1982) shall have effect as if the reference in paragraph (b) of the definition to a person to whom a sum is due included a person to whom a sum is contingently due.”

17 Situation of risks and commitments

(1) In section 32 of the 1975 Act (interpretation), after subsection (2ZA) there shall be inserted—

“(2A) Subject to subsection (2C) below, the situation of a risk for the purposes of this Act shall be determined as follows—

(a) in the case of insurance relating to buildings or to buildings and their contents (in so far as the contents are covered by the same policy), the risk shall be treated as situated where the property is situated;

(b) in the case of insurance relating to vehicles of any type, the risk shall be treated as situated where the vehicle is registered;

(c) in the case of policies of a duration of four months or less covering travel or holiday risks (whatever the class concerned), the risk shall be treated as situated where the policyholder took out the policy;

(d) in a case not covered by paragraphs (a) to (c) above—

(i) where the policyholder is an individual, the risk shall be treated as situated where he has his habitual residence at the date when the contract is entered into;

(ii) where the policyholder is not an individual, the risk shall be treated as situated where the establishment of the policyholder to which the risk relates is situated at that date.

(2B) Subject to subsection (2C) below, the situation of a commitment for the purposes of this Act shall be determined as follows—

(a) in the case of a policy where the policyholder is an individual, the commitment shall be treated as situated where the individual has his habitual residence at the date when the commitment is entered into;

(b) in the case of a policy where the policyholder is not an individual, the commitment shall be treated as situated where the establishment to which the commitment relates is situated at that date.

(2C) The Secretary of State may by regulations made by statutory instrument make such provision as he thinks fit about how the situation of a risk or commitment is to be determined for the purposes of this Act; but no regulations shall be made under this subsection unless a draft of the regulations has been laid before and approved by a resolution of each House of Parliament.”

(2) In section 31 of that Act (regulations), in subsection (1) (which provides for negative resolution procedure), after “any provision of this Act” there shall be inserted “, except section 32(2C) below,”.

18 Miscellaneous

(1) In section 32 of the 1975 Act, in subsection (1), at the appropriate places in alphabetical order, there shall be inserted—

““authorised friendly society” means a society authorised under section 32 of the [1992 c. 40.] Friendly Societies Act 1992 to carry on in the United Kingdom insurance business such as is mentioned in section 31 of that Act;”

““EC company” and “EEA State” have the same meanings as in the [1982 c. 50.] Insurance Companies Act 1982;”

““establishment” has the same meaning as in the Insurance Companies Act 1982;”.

(2) In that section, after subsection (2C) there shall be inserted—

“(2D) For the purposes of this Act—

(a) a company shall be taken to provide general insurance in the United Kingdom if it covers (otherwise than by reinsurance) a risk situated there through an establishment in another EEA State, and

(b) a company shall be taken to provide long term insurance in the United Kingdom if it covers (otherwise than by reinsurance) a commitment situated there through an establishment in another EEA State.”