Levies on the insurance industry to finance the performance by the Board of their functions
19 Levies on intermediaries.
1
Where—
a
the Board have incurred or propose to incur any long term business expenditure in relation to a company in liquidation or a company which is a company in financial difficulties within the meaning of section 16 above; and
b
it appears to the Board that the company in question has accountable intermediaries;
it shall be the duty of the Board to impose a levy on those intermediaries in accordance with the following provisions of this section and Schedule 2 to this Act.
2
Subject to section 20 and subsections (3) and (5) below, a person is an accountable intermediary of a company for the purposes of this section and Schedule 2 to this Act if—
a
he has acted as an intermediary for the company in relation to any relevant long term contract of the company; and
b
his income from the company in respect of his services (whether as an intermediary or otherwise) in relation to any such contracts (hereafter in this section and in section 20 below referred to as “relevant services”) for either or each of the two years comprised in the period of two years ending immediately before the time mentioned below in this subsection exceeded his exempt income level for the year in question.
The time referred to above is the beginning of the liquidation in the case of a company in liquidation and the relevant time as defined by section 16(6) above in the case of a company in financial difficulties within the meaning of that section.
3
An individual shall not be an accountable intermediary of a company for the purposes of this section and Schedule 2 to this Act if the services in question under subsection (2)(b) above were performed in pursuance of a contract of exclusive agency with the company.
For the purposes of this subsection a contract is a contract of exclusive agency with a company in relation to the performance of any services thereunder if it provides that the person performing the services must not perform services of a like description for any other insurance company.
4
Subject to section 20 and subsection (5) below, the income of an accountable intermediary of a company which is liable to levy under this section shall be—
a
one-half of any amount by which his income from the company in respect of relevant services for the later of the two years mentioned in subsection (2) above exceeded his exempt income level for that year; and
b
one-quarter of any amount by which his income from the company in respect of relevant services for the earlier of those two years exceeded his exempt income level for that year;
and in relation to any intermediary, his income liable to levy for either of those years or, where he had income liable to levy for each of those years, the aggregate of his income liable to levy for both of those years, is hereafter in this Act referred to as income of the intermediary which is income liable to levy.
5
For the purposes of this section and section 20 below a person’s income from a company in respect of relevant services for any year is the total amount of the sums paid or allowed to that person by the company in respect of relevant services which were recorded as debits in the company’s accounts during that year; but no account shall be taken for those purposes of any sums recorded in a company’s accounts at any time before 1st January 1976.
6
If the proceeds of any levy imposed under this section in respect of any company exceed the long term business expenditure incurred by the Board in relation to that company the Board shall distribute the excess among the accountable intermediaries of that company who have made any payments to the Board under the levy in proportion to the sums those intermediaries have respectively paid thereunder.
7
References in this section, in section 20 below and in Schedule 2 to this Act to an intermediary of a company are references to a person who has acted as an intermediary for the company in relation to any relevant long term contract of the company.
8
For the purposes of this section a person acts as an intermediary for a company in relation to a long term contract if, otherwise than as an employee of the company—
a
he invites any other person to take any step with a view to entering into a long term contract with the company;
b
he introduces any other person to the company with a view to his entering into such a contract with the company; or
c
he takes any other action with a view to securing that any other person will enter into such a contract with the company.
9
In this section “long term contract” means a contract the effecting of which by a company constitutes the carrying on by the company of long term business. . . F2 in the United Kingdom, not being a contract of reinsurance; and a long term contract is a relevant long term contract of a company for the purposes of this section if it was effected by the company within the period of two years mentioned in subsection (2) above.
10
Schedule 2 to this Act shall have effect with respect to the imposition and enforcement of levies under this section.