The Credit Institutions and Insurance Undertakings Reorganisation and Winding Up (Amendment) (EU Exit) Regulations 2019

CHAPTER 2 U.K. EEA insurers subject on [F1 IP completion day] to reorganisation or winding up in another EEA State

Textual Amendments

F1 Words in Pt. 3 Ch. 2 heading substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 13(g)

Interpretation U.K.

11.—(1) In this Chapter each of the following definitions has the meaning given in regulation 2(1) of the Insurers (Reorganisation and Winding Up) Regulations 2004 M1 (“the 2004 Regulations”)—

(a) “branch”;

(b) “directive reorganisation measure”;

(c) “directive winding-up proceedings”;

(d) “EEA insurer”;

(e) “EEA State”; and

(f) “section 899 compromise or arrangement”.

(2) The definitions of “branch”, “EEA insurer” and “EEA State” have effect for the purposes of this Chapter despite being omitted by regulation 2(2)(a).

(3) The definitions of “directive reorganisation measure” and “directive winding-up proceedings”—

(a) have effect for the purposes of this Chapter despite being omitted by regulation 2(2)(a); and

(b) despite regulation 2(2)(b) are to be construed in accordance with regulation 2(2) of the 2004 Regulations.

(4) In this Chapter—

“creditor”, in relation to a relevant EEA insurer, means any person who has a claim of any kind against the insurer (whether or not it is an insurance claim);

“EEA creditor” means a creditor who—

(a)

is located or payable in an EEA State; or

(b)

is treated by the law of the EEA State in which law a directive reorganisation measure was adopted or imposed or directive winding up proceedings were opened as if they were located or payable in an EEA State;

“relevant EEA insurer” means—

(a)

an EEA insurer which has a branch in the United Kingdom; or

(b)

a person who—

(i)

by virtue of regulation 8 or 11 of the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 M2 is treated as having permission under the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance; and

(ii)

has a branch in the United Kingdom;

“UK creditor” means a creditor who—

(a)

is located or payable in the United Kingdom; or

(b)

is treated by the law of the EEA State under which a directive reorganisation measure was adopted or imposed or directive winding up proceedings were opened as if they were located or payable in the United Kingdom.

Commencement Information

I1 Reg. 11 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M1 S.I. 2004/353, which is amended by regulation 2 of these Regulations subject to the transitional and saving provisions in this Part.

M2 S.I. 2018/1149.

Saving for reorganisation or winding up started in another EEA State before exit day U.K.

12.—(1) This regulation applies where a relevant EEA insurer is, on [F2 IP completion day], subject to—

(a) a directive reorganisation measure adopted or imposed before [F2 IP completion day] under the law of an EEA State other than the United Kingdom (“relevant measure”); or

(b) directive winding-up proceedings opened before [F2 IP completion day] under the law of an EEA State other than the United Kingdom (“relevant proceedings”).

(2) Despite regulation 2(3) Part 2 of the 2004 Regulations continues to have effect in relation to the relevant EEA insurer.

(3) For the purposes of paragraph (2) regulation 2 of the 2004 Regulations has effect without the following amendments made by regulation 2(2)—

(a) the omission of the definitions of “branch”, “directive reorganisation measure”, “directive winding up proceedings” and “EEA State”;

(b) the omission of regulation 2(2).

(4) Part 5 of the 2004 Regulations has effect without the amendments made by regulation 2(10) to (16) in relation to rights specified in that Part which are exercisable in the EEA State under whose law the relevant measure was adopted or imposed or the relevant proceedings were opened.

(5) This regulation has effect subject to regulations 13 to 15.

Textual Amendments

F2 Words in reg. 12(1) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 13(h)

Commencement Information

I2 Reg. 12 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Conditions under which saving may be disapplied U.K.

13.—(1) The court may make an order declaring that there is no prohibition against the commencement of any proceedings under the law of insolvency of the United Kingdom in relation to the relevant EEA insurer or any branch of that insurer.

(2) An application for an order under paragraph (1) may be made—

(a) by the Bank of England (“the Bank”) on the ground that the condition specified in regulation 14(1)(a) is met; or

(b) on the ground that one or more of the conditions specified in regulation 14(1)(b) and (c) are met—

(i) by the scheme manager (within the meaning given by section 212(1) of the Financial Services and Markets Act 2000 M3 );

(ii) by a UK creditor of the relevant EEA insurer.

(3) In paragraph (1)—

(a) the reference to the law of insolvency of the United Kingdom is to be construed in accordance with regulation 2(3) of the 2004 Regulations; and

(b) the reference to any proceedings under that law includes a reference to an application for a court order sanctioning a section 899 compromise or arrangement.

(4) In this regulation “the court” means a court having jurisdiction to wind up a company registered under the Companies Act 2006 in England and Wales or Scotland or Northern Ireland.

Commencement Information

I3 Reg. 13 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Marginal Citations

M3 2000 c. 8.

Grounds for making an order under regulation 13 U.K.

14.—(1) The court may make an order under regulation 13 only if the court is satisfied that one or more of the following conditions are met—

(a) that if an order is not made (on application by the Bank), the relevant measure or relevant proceedings will have an adverse effect on financial stability in the United Kingdom;

(b) that an order should be made (on application by the scheme manager or a UK creditor) because under the relevant measure or in the relevant proceedings UK creditors of the relevant EEA insurer would be materially prejudiced by the operation of the law of the EEA State under which the measure was adopted or imposed or the proceedings were opened—

(i) in relation to its treatment of the United Kingdom as a State which is outside the EEA; or

(ii) by reason of its different treatment of UK creditors by comparison with its treatment of EEA creditors who have similar rights;

(c) that having regard to the operation of the law of the EEA State under which the measure was adopted or imposed or the proceedings were opened, a refusal to make the order (on application by the scheme manager or a UK creditor) would be unlawful under section 6 of the Human Rights Act 1998 (public authority not to act incompatibly with European Convention on Human Rights).

(2) Where the court makes an order under regulation 13—

(a) the court must state in the order which one or more of the conditions specified in paragraph (1) are met; and

(b) an officer of the court must serve a copy of the order on—

(i) the applicant for the order;

(ii) if the Bank is not the applicant, the Bank;

(iii) if the scheme manager is not the applicant, the scheme manager;

(iv) the Prudential Regulation Authority;

(v) the Financial Conduct Authority;

(vi) the relevant EEA insurer.

Commencement Information

I4 Reg. 14 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)

Effect of an order made under regulation 13 U.K.

15.—(1) An order made in relation to the relevant EEA insurer under regulation 13 comes into force on the day on which it is made or on such later date as the court may specify.

(2) On the day on which the order comes into force, regulation 12 ceases to have effect in relation to the relevant EEA insurer.

(3) On or at any time after the day on which the order comes into force—

(a) Where, according to the court's statement in the order, the condition met (or one of them) is the condition specified in regulation 14(1)(a), the Bank or the Prudential Regulation Authority may, in relation to the relevant EEA insurer or any branch of that insurer, commence such proceedings under the law of insolvency of the United Kingdom as it sees fit, having regard to the grounds on which the court is satisfied that the condition is met; and

(b) where, according to the court's statement in the order, the condition met (or one of them) is one of the conditions specified in regulation 14(1)(b) and (c)—

(i) the scheme manager may, in relation to the relevant EEA insurer or any branch of that insurer, commence such proceedings under the law of insolvency of the United Kingdom as it sees fit, having regard to the grounds on which the court is satisfied that the condition is met; and

(ii) a UK creditor of the relevant EEA insurer may commence such proceedings under the law of insolvency of the United Kingdom as that person is entitled to commence as a creditor of the insurer.

Commencement Information

I5 Reg. 15 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1(3)