SCHEDULES

Section 1.

SCHEDULE 1 U.K. Additional Provisions with respect to the Policyholders Protection Board

Modifications etc. (not altering text)

C1 Sch. 1 (except paras. 5, 6): functions made exercisable by, or by employees of, such person as may be authorised in that behalf by the Treasury (18.11.1998) by S.I. 1998/2842, art. 2, Sch. Pt. II para. 63(d)

Constitution of the Board U.K.

1 (1) The Board shall consist of five persons appointed by the Secretary of State to be members of the Board, together with any persons appointed by the Secretary of State under sub-paragraph (3) below to be alternate members.

(2) Of the persons appointed to be members of the Board—

(a) at least three shall be persons who are directors, chief executives or managers of authorised insurance companies; and

(b) at least one shall be a person appearing to the Secretary of State to be qualified to represent the interests of policyholders of authorised insurance companies.

(3) The Secretary of State may appoint, in respect of each member of the Board, a person to perform his duties as a member in his absence, and a person so appointed shall be an alternate member of the Board and may take part in the proceedings of the Board in the absence of the member in respect of whom he was appointed or as provided by paragraph 4(4) below (but not otherwise).

(4) A person appointed as an alternate member of the Board in respect of a person who is a director, chief executive or manager of an authorised insurance company shall himself be such a director, chief executive or manager; and a person so appointed in respect of any such person as is mentioned in sub-paragraph (2)(b) above shall himself be a person appearing to the Secretary of State to be qualified as there mentioned.

(5) The Secretary of State shall consult persons appearing to him to be representative of the interests of authorised insurance companies before appointing a person who is a director, chief executive or manager of an authorised insurance company to be a member or alternate member of the Board.

Appointment and tenure of members, etc. U.K.

2 (1) Any appointment made by the Secretary of State under paragraph 1 above shall be for a term not exceeding two years and the term of appointment of an alternate member shall not exceed the term, or the remainder of the term (as the case may be) of the member in respect of whom he is appointed.

(2) Nothing in sub-paragraph (1) above shall be taken as prejudicing the power of the Secretary of State to re-appoint a person as a member or alternate member of the Board on his ceasing to hold office in either capacity, or at any time thereafter.

3 (1) The Secretary of State shall appoint one of the members of the Board to be the chairman of the Board.

(2) If the chairman ceases to be a member of the Board he shall cease to be the chairman.

4 (1) Subject to the following provisions of this paragraph, the members and alternate members of the Board (including the chairman) shall hold and vacate office in accordance with the terms of their respective appointments.

(2) A person may at any time resign his office as a member, as an alternate member or as chairman by giving to the Secretary of State a notice in writing signed by that person and stating that he resigns that office.

(3) If the Secretary of State is satisfied that a member or an alternate member—

(a) is incapacitated by physical or mental illness; or

(b) is otherwise unable or unfit to discharge his functions as such;

the Secretary of State may by notice in writing given to the person in question remove him from office as member or (as the case may be) as alternate member; and his office shall thereupon become vacant.

(4) Where before the end of the term for which he was appointed a member dies or vacates office by virtue of sub-paragraph (2) or (3) above—

(a) the alternate member in respect of that member may act as member in his place until a person is appointed to fill his office as member; and

(b) the Secretary of State may vary the terms of appointment of the alternate member on appointing a person to fill the office vacated by the member in question.

Remuneration, etc. of members U.K.

5 (1) Subject to sub-paragraph (2) below, Board shall pay to each member or alternate member such remuneration and such travelling, subsistence or other allowances as the Board may determine.

(2) Any determination of the Board with respect to the remuneration to be paid to any member or alternate member shall be subject to the approval of the Secretary of State, and the Secretary of State shall not give his approval without the consent of the Minister for the Civil Service.

6 If a person ceases to be a member or an alternate member of the Board and it appears to the Secretary of State that there are special circumstances which make it right that that person should receive compensation, the Secretary of State may require the Board to pay to that person a sum of such amount as the Secretary of State may with the consent of the Minister for the Civil Service determine.

Powers and procedure, etc. U.K.

7 (1) The Board may invest any funds held by them which appear to them to be surplus to their requirements for the time being—

(a) in any investment for the time being falling within Part I, Part II or Part III of Schedule 1 to the M1 Trustee Investments Act 1961; or

(b) in any investment approved for the purpose by the Secretary of State.

(2) Subject to sub-paragraph (1) above, the Board shall have power to do anything incidental or conducive to the proper performance of their functions under this Act.

(3) Without prejudice to the generality of sub-paragraph (2) above, the measures open to the Board under any provision of this Act which authorises or requires the Board to take any measures appearing to them to be appropriate for any purpose include in particular—

(a) the making of payments to any person, on such terms (including terms requiring repayment, in whole or in part) and on such conditions as the Board think fit;

(b) the giving of guarantees or indemnities to or in favour of any person; and

(c) the making of any other agreement or arrangement with or for the benefit of any person.

Marginal Citations

M1 1961 c. 62.

8 Subject to the provisions of this Schedule, the Board shall have power to regulate their own procedure.

9 (1) Subject to sub-paragraph (2) below, a member or an alternate member of the Board who is in any way directly or indirectly interested (whether as being a member or policyholder of an insurance company or in any other manner whatsoever) in any matter falling to be considered by the Board shall disclose the nature of his interest at a meeting of the Board and the disclosure shall be recorded in the minutes of the meeting; and the member or the alternate member in question shall not take part in any deliberation or decision of the Board with respect to that matter.

(2) Sub-paragraph (1) above shall not apply in relation to any interest of a member or alternate member arising from any connection with an insurance company where the only connection of the company in question with the matter under consideration arises from the fact that it has agreed or may agree to take a transfer of all or any part of the insurance business of a company in liquidation or of a company which is a company in financial difficulties within the meaning of section 16 above.

(3) A notice given by a member or alternate member at a meeting of the Board to the effect that he is a member or a policyholder of a specified insurance company and is to be regarded as interested in any matter affecting that company which falls to be considered by the Board after the date of the notice shall, for the purposes of sub-paragraph (1) above, be a sufficient disclosure of his interest in any such matter.

(4) A member or alternate member need not attend in person at a meeting of the Board in order to make a disclosure which he is required to make under this paragraph if he takes reasonable steps to secure that the disclosure is made by a notice which is taken into consideration and read at such a meeting.

10 The validity of any proceedings of the Board shall not be affected by any vacancy among the members or by any defect in the appointment of a member or of an alternate member or by any failure to comply with the requirements of paragraph 9 above.

Performance of functions U.K.

11 The Board may authorise any member or alternate member or any other person who is either an employee or an agent of theirs to perform on their behalf such of their functions (including the function conferred on them by this paragraph) as are specified in the authorisation.

Instruments and contracts U.K.

12 The fixing of the common seal of the Board shall be authenticated by the signature of the chairman of the Board or some other person authorised by the Board to act for that purpose.

13 A document purporting to be duly executed under the seal of the Board shall be received in evidence and shall, unless the contrary is proved, be deemed to be so executed.

Accounts, audit and annual report U.K.

14 (1) It shall be the duty of the Board—

(a) to keep proper accounts and proper records in relation to the accounts; and

(b) to prepare in respect of the period beginning with the date on which this Act is passed and ending with 31st March 1976 and in respect of each subsequent financial year a statement of accounts, in such form as the Secretary of State may direct, showing the state of affairs and income and expenditure of the Board.

(2) A statement of accounts prepared in accordance with sub-paragraph (1)(b) above shall be audited by auditors appointed by the Board.

[F1 (3) A person shall not be appointed as auditor by the Board under sub-paragraph (2) above unless he is eligible for appointment as a company auditor under section 25 of the Companies Act 1989.]

(4) It shall be the duty of the Board, as soon as possible after the end of the period mentioned in sub-paragraph (1)(b) above and each subsequent financial year, to prepare, in such manner as the Secretary of State may direct, a report on the performance of their functions during that period or (as the case may be) during that year.

(5) It shall be the duty of the Board to publish the statement of accounts prepared in accordance with sub-paragraph (1)(b) above and the report prepared in accordance with sub-paragraph (4) above in respect of the period mentioned in sub-paragraph (1)(b) above and any subsequent financial year at such time and in such manner as the Secretary of State may direct.

Textual Amendments

F1 Sch. 1 para. 14(3) substituted (1.10.1991) by S.I. 1991/1997, reg. 2, Sch. para.27 (with reg. 4).

Section 19.

SCHEDULE 2 U.K. Additional Provisions with Respect to Levies on Intermediaries

Restriction on the imposition of the levy U.K.

1 No levy shall be imposed under section 19 above in respect of any company—

(a) after the end of the period of two years beginning with the beginning of the liquidation if the company is a company in liquidation; or

(b) after the end of the period of two years beginning with the relevant time as defined by section 16(6) above if the company is a company in financial difficulties within the meaning of that section.

The rate of the levy U.K.

2 (1) Subject to sub-paragraph (2) below, the rate of a levy imposed under section 19 above in respect of any company shall be—

(a) where the long term business expenditure incurred by the Board in relation to that company is less than the total amount of the income liable to levy, a percentage equal to the percentage of that amount which that expenditure represents; and

(b) in any other case, one hundred per cent.

(2) Where a levy is imposed under section 19 above in respect of any company before the exact amount of the long term business expenditure of the Board in relation to that company is ascertained sub-paragraph (1)(a) above shall apply as if the Board’s estimate of that expenditure were the expenditure actually incurred.

(3) In sub-paragraph (1) above “the total amount of the income liable to levy” means, in relation to any company, the total amount of the income of all the persons who appear to the Board to be accountable intermediaries of that company which appears to the Board to be income liable to levy.

Statements for the purposes of section 20 U.K.

3 (1) The Board may by notice in writing require any person who appears to them to be an intermediary of any such company as is mentioned in sub-paragraph (a) or (b) of paragraph 1 above to give to them any information which appears to them to be necessary in order to determine what (if any) persons would be linked with that person within the meaning of section 20 above if that person were an intermediary of that company.

(2) A person to whom a notice is sent under this paragraph shall send to the Board within one month of the date of the notice a statement—

(a) giving any of the information required by the notice which he is able to give; or

(b) informing the Board that he is unable to give any of the information required by the notice.

4 (1) Any person who causes or permits to be included in a statement sent to the Board under paragraph 3 above any information which he knows to be false in a material particular or recklessly causes or permits to be so included any information which is false in a material particular shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

(b) on summary conviction, to a fine not exceeding £400.

(2) Any person who makes default in complying with paragraph 3 above shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £400.

Declaration and enforcement of the levy U.K.

5 (1) On imposing a levy under section 19 above in respect of any company, the Board shall send notice of the levy to every person who appears to the Board to be an accountable intermediary of that company.

(2) A notice under sub-paragraph (1) above shall indicate—

(a) the name of the company in respect of which the levy is being imposed;

(b) the period covered, in the case of that company, by each of the two years mentioned in section 19(2) above; and

(c) what in the view of the Board is the amount of the income of the intermediary in question which is income liable to levy;

and shall specify the rate of the levy.

6 (1) An intermediary to whom notice of a levy is sent under paragraph 5 above shall pay to the Board within one month of the date of the notice the percentage specified in the notice of any income of the intermediary which is income liable to levy.

(2) Any sum due to the Board in respect of a levy imposed under section 19 above shall be recoverable in any court of competent jurisdiction.

Notices under paragraphs 3 and 5 U.K.

7 A notice under paragraph 3 or 5 above may be sent by post, and a letter containing such a notice shall be deemed to be properly addressed if it is addressed to the person to whom it is sent at his last known place of business in the United Kingdom.

Section 21.

SCHEDULE 3 U.K. Additional Provisions with Respect to Levies on Authorised Insurance Companies

Modifications etc. (not altering text)

C2 Power to amend Sch. 3 conferred by Insurance Companies Act 1982 (c. 50, SIF 67), s. 67(4)

Sch. 3: functions made exercisable by, or by employees of, such person as may be authorised in that behalf by the Treasury (18.11.1998) by S.I. 1998/2842, art. 2, Sch. Pt. II para. 63(e)

Restrictions on the imposition of the levies U.K.

1 No levy may be imposed by the Board under section 21 above before the beginning of the financial year ending with 31st March 1977.

2 (1) The amounts required to be paid by any company under general business levies imposed by the Board in any financial year shall not exceed one per cent. of any income of the company for the year ending last before the beginning of that financial year which is income liable to the general business levy.

(2) The amounts required to be paid by any company under long term business levies imposed by the Board in any financial year shall not exceed one per cent. of any income of the company for the year ending last before the beginning of that financial year which is income liable to the long term business levy.

3 The Board may not impose a levy for the purpose of financing expenditure of any description unless—

(a) the expenditure in question has already been incurred by the Board; or

(b) it appears to the Board that the expenditure will be incurred within twelve months of the imposition of the levy.

Statements of premium income U.K.

[F2 4 (1) The Secretary of State may by notice in writing require an authorised insurance company to send him a statement of—

(a) any income of the company for the year preceding that in which the notice is received by the company which is income liable to the general business levy, and

(b) any income of the company for that year which is income liable to the long term business levy.

(2) An authorised insurance company which receives a notice under this paragraph shall send the statement required by the notice to the Secretary of State within three months of receiving the notice.

(3) Where an authorised insurance company is required under this paragraph to send a statement to the Secretary of State in respect of income of both descriptions mentioned in sub-paragraph (1)(a) and (b) above it shall send a separate statement in respect of income of each description.]

Textual Amendments

F2 Sch. 3 para. 4 substituted by Companies Act 1989 (c. 40, SIF 27), s. 210(2)

Prospective

[F3 4A In the application of this Schedule to a friendly society—

(a) paragraph 4 above shall have effect with the substitution for any reference to the [F4 Treasury] of a reference to the Commission; and

(b) paragraph 9 below shall be omitted.]

Textual Amendments

F3 Sch. 3 para. 4A inserted (prosp.) by Friendly Societies Act 1992 (c. 40), ss. 97, 126(2), Sch. 17 para. 19(1) (with ss. 7(5), 93(4))

F4 Word in Sch. 3 para. 4A(a) substituted (5.1.1998) by S.I. 1997/2781, arts. 2(1), 8(1), Sch. Pt. II para. 98, 99 (with art. 7)

[F15 4A In the application of this Schedule to a friendly society—

(a) paragraph 4 above shall have effect with the substitution for any reference to the Secretary of State of a reference to the Commission; and

(b) paragraph 9 below shall be omitted.]

Textual Amendments

F15 Sch. 3 para. 4A inserted (prosp.) by Friendly Societies Act 1992 (c. 40), ss. 97, 126(2), Sch. 17 para. 19(1) (with ss. 7(5), 93(4))

Prospective

[F5 4B (1) Any person who causes or permits to be included in a statement sent to the Commission under paragraph 4 above as applied by this paragraph any information which he knows to be false in a material particular or recklessly causes or permits to be so included any information which is false in a material particular shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

(2) Any friendly society which makes default in complying with paragraph 4 above as so applied shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding level 5 on the standard scale.]

Textual Amendments

F5 Sch. 3 para. 4B inserted (prosp.) by Friendly Societies Act 1992 (c. 40), ss. 97, 126(2), Sch. 17 para. 19(1) (with ss. 7(5), 93(4))

5 (1) Any person who causes or permits to be included in a statement sent to the Secretary of State under paragraph 4 above any information which he knows to be false in a material particular or recklessly causes or permits to be so included any information which is false in a material particular shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

(b) on summary conviction, to a fine not exceeding £400.

(2) Any insurance company which makes default in complying with paragraph 4 above shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding [F6 level 5 on the standard scale].

(3) [F7 Sections 37(2)(b)(i) and 54(1)(b) of the Insurance Companies Act 1982] (failure to satisfy an obligation under that Act to be a ground for the exercise by the Secretary of State of certain powers in relation to an insurance company) shall have effect in relation to [F8 an obligation imposed on an insurance company under paragraph 4] above as they have effect in relation to obligations imposed on an insurance company under that Act.

(4) [F9 Sections 91 to 94 of the Insurance Companies Act 1982] shall apply in relation to an offence committed or alleged to have been committed under this paragraph as they apply in relation to an offence committed or alleged to have been committed under that Act.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F10

Textual Amendments

F6 Words substituted by (E.W.) Criminal Justice Act 1982 (c. 48, SIF 39:1), ss. 38, 46, (S.) Criminal Procedure (Scotland) Act 1975 (c. 21, SIF 39:1), ss. 289F, 289G and (N.I.) S.I. 1984/703 (N.I. 3), arts. 5, 6

F7 Words substituted by Insurance Companies Act 1982 (c. 50, SIF 67), s. 99(2), Sch. 5 para. 16(e)

F8 Words substituted by Companies Act 1989 (c. 40, SIF 27), s. 210(3)

F9 Words substituted by Insurance Companies Act 1982 (c. 50, SIF 67), s.99(2), Sch. 5 para. 16(f)

F10 Sch. 3 para. 5(5) repealed by Insurance Companies Act 1980 (c. 25, SIF 67), s. 4(3), Sch. 5

Declaration and enforcement of levies U.K.

6 (1) Subject to paragraphs 1 to 3 above, levies may be imposed by the Board under section 21 above at such times and at such rates in relation to income of authorised insurance companies liable to the general business levy or to the long term business levy as the Board may determine.

(2) On imposing a levy under section 21 above, the Board shall send notice of the rate of levy to every authorised insurance company which may in the opinion of the Board have had income liable to the levy for the year ending last before the financial year in which the levy is imposed.

(3) A notice under sub-paragraph (2) above shall indicate—

(a) whether the levy is a general business levy or a long term business levy;

(b) what description of income is income liable to the levy in question; and

(c) the purpose for which the levy is being imposed;

and shall specify the rate of the levy as a percentage of the income liable to the levy.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F11

Textual Amendments

F11 Sch. 3 para. 6(4) repealed by Companies Act 1989 (c. 40, SIF 27), ss. 210(4), 213(2)

7 (1) An insurance company to which notice of the rate of a levy is sent under paragraph 6 above shall pay to the Board within one month of the date of the notice the percentage specified in the notice of any income of the company for the year ending last before the financial year in which the levy is imposed which is income liable to the levy in question.

(2) Any sum due to the Board in respect of a levy imposed under section 21 above shall be recoverable in any court of competent jurisdiction.

[F12 Notices under paragraphs 4 and 6] U.K.

Textual Amendments

F12 Sch. 3 para. 8 inserted by Companies Act 1989 (c. 40, SIF 27), s. 210(5)

8 A notice under paragraph 4 or 6 above may be sent by post, and a letter containing such a notice shall be deemed to be properly addressed if it is addressed to the insurance company to which it is sent at its last known place of business in the United Kingdom.

Prospective

[F13 8A (1) The [F14 Treasury] may by regulations made by statutory instrument—

(a) make provision for the purpose of securing, in relation to a company which at any time—

(i) is an insurance company to which this Act applies, and

(ii) does not have any business establishment or other fixed establishment in the United Kingdom,

that another person is the company’s levy representative at that time, and

(b) make provision with respect to the functions of a person who is a company’s levy representative under paragraph (a) above.

(2) Regulations under paragraph (b) of sub-paragraph (1) above may, in particular, impose on a person who is a company’s levy representative under paragraph (a) of that sub-paragraph obligations and liabilities relating to the company’s obligations and liabilities under this Schedule.

(3) Regulations under this paragraph may contain such supplementary, incidental and consequential provisions as the [F14 Treasury] thinks fit.

(4) In sub-paragraph (2) above, references to obligations include obligations enforceable under the criminal law and references to liabilities include criminal penalties.]

Textual Amendments

F13 Sch. 3 para. 8A inserted (prosp.) by 1997 c. 18, ss. 7(12), 23(3) (which insertion was repealed (1.12.2001) by S.I. 2001/3649, arts. 1, 3(1)(a))

F14 Words in Sch. 3 para. 8A(1)(3) substituted (5.1.1998) by S.I. 1997/2781, arts. 2(1), 8(1), Sch. Pt. II paras. 98, 99

[F16 8A (1) The Secretary of State may by regulations made by statutory instrument—

(a) make provision for the purpose of securing, in relation to a company which at any time—

(i) is an insurance company to which this Act applies, and

(ii) does not have any business establishment or other fixed establishment in the United Kingdom,

that another person is the company’s levy representative at that time, and

(b) make provision with respect to the functions of a person who is a company’s levy representative under paragraph (a) above.

(2) Regulations under paragraph (b) of sub-paragraph (1) above may, in particular, impose on a person who is a company’s levy representative under paragraph (a) of that sub-paragraph obligations and liabilities relating to the company’s obligations and liabilities under this Schedule.

(3) Regulations under this paragraph may contain such supplementary, incidental and consequential provisions as the Secretary of State thinks fit.

(4) In sub-paragraph (2) above, references to obligations include obligations enforceable under the criminal law and references to liabilities include criminal penalties.]

Textual Amendments

F16 Sch. 3 para. 8A inserted (prosp.) by 1997 c. 18, ss. 7(12), 23(3)