If, in the case of an insurance company to which this Part of this Act applies, being a company which may be wound up by the court under the provisions of the F17Insolvency Act 1986 or, as the case may be, the F18Insolvency (Northern Ireland) Order 1989, it appears to the F5Treasury that it is expedient in the public interest that the company should be wound up, F19the Treasury may, unless the company is already being wound up by the court, present a petition for it to be so wound up if the court thinks it just and equitable for it to be so wound up.

The Secretary of State may exercise the powers conferred on the Treasury by subsections (1) to (4) above, and for this purpose those subsections shall be construed as if references to the Treasury were references to the Secretary of State.

Where a petition for the winding up of an insurance company to which this Part of this Act applies is presented by a person other than the F5Treasury, a copy of the petition shall be served on F21theTreasury and they shall be entitled to be heard on the petition.

No insurance company to which this Part of this Act applies which is an unincorporated body and carries on long term business shall be made the subject of bankruptcy proceedings or, in Scotland, sequestration proceedings.

No insurance company to which this Part of this Act applies which carries on long term business shall be wound up voluntarily.

Where the value of the assets mentioned in either paragraph of subsection (3) above exceeds the amount of the liabilities mentioned in that paragraph the restriction imposed by that subsection shall not apply to so much of those assets as represents the excess.

In relation to the assets falling within either paragraph of subsection (3) above the creditors mentioned in F22section 168(2) of the Insolvency Act 1986 or, as the case may be, F23Article 143(2) of the Insolvency (Northern Ireland) Order 1989 shall be only those who are creditors in respect of liabilities falling within that paragraph; and any general meetings of creditors summoned for the purposes of that section shall accordingly be separate general meetings of the creditors in respect of the liabilities falling within each paragraph.

Where under section F24212 of the Insolvency Act 1986 or F25Article 176 of the Insolvency (Northern Ireland) Order 1989 (defalcations of directors etc. disclosed in course of winding up) a court orders any money or property to be repaid or restored to a company or any sum to be contributed to its assets then, if and so far as the wrongful act which is the reason for the making of the order related to assets representing a fund or funds maintained by the company in respect of its long term business, the court shall include in the order a direction that the money, property or contribution shall be treated for the purposes of this Act as assets of that fund or those funds and this Act shall have effect accordingly.

This section has effect in relation to the winding up of an insurance company to which this Part of this Act applies, being a company carrying on long term business.

The liquidator shall, unless the court otherwise orders, carry on the long term business of the company with a view to its being transferred as a going concern to another insurance company, whether an existing company or a company formed for that purpose; and, in carrying on that business as aforesaid, the liquidator may agree to the variation of any contracts of insurance in existence when the winding up order is made but shall not effect any new contracts of insurance.

If the liquidator is satisfied that the interests of the creditors in respect of liabilities of the company attributable to its long term business require the appointment of a special manager of the company’s long term business, he may apply to the court, and the court may on such application appoint a special manager of that business to act during such time as the court may direct, with such powers, including any of the powers of a receiver or manager, as may be entrusted to him by the court.

F26Section 177(5) of the Insolvency Act 1986 or, in the case of a special manager appointed in proceedings in Northern Ireland, F27Article 151(5) of the Insolvency (Northern Ireland) Order 1989 (special manager to give security and receive remuneration) shall apply to a special manager appointed under subsection (3) above as they apply to a special manager appointed under F26section 177 of the said Act of 1986 or, as the case may be, F28Article 151 of the said Order of 1989

The court may, if it thinks fit and subject to such conditions (if any) as it may determine, reduce the amount of the contracts made by the company in the course of carrying on its long term business.

The court may, on the application of the liquidator, a special manager appointed under subsection (3) above F29, the Treasuryor the Secretary of State, appoint an independent actuary to investigate the long term business of the company and to report to the liquidator, the special manager F30, the Treasuryor the Secretary of State, as the case may be, on the desirability or otherwise of that business being continued and on any reduction in the contracts made in the course of carrying on that business that may be necessary for its successful continuation.

Notwithstanding F31section 167 of, and Schedule 4 to, the Insolvency Act 1986 or, as the case may be, F32Article 142 of, and Schedule 2 to, the Insolvency (Northern Ireland) Order 1989 (which requires a liquidator to obtain the sanction of the court or F33a specified committee for the bringing of legal proceedings in the name of and on behalf of the company) the liquidator may without any such sanction make an application in the name of and on behalf of the company under section 49 above.

In this section “the court” means the court having jurisdiction to wind up the company.

Where the insurance business or any part of the insurance business of an insurance company has been transferred to an insurance company to which this Part of this Act applies under an arrangement in pursuance of which the first-mentioned company (in this section called the subsidiary company) or the creditors thereof has or have claims against the company to which the transfer was made (in this section called the principal company), then, if the principal company is being wound up by F34or under the supervision of the court, the court shall, subject to the provisions of this section, order the subsidiary company to be wound up in conjuction with the principal company, and may by the same or any subsequent order appoint the same person to be liquidator for the two companies, and make provision for such other matters as may seem to the court necessary, with a view to the companies being wound up as if they were one company.

The commencement of the winding up of the principal company shall, save as otherwise ordered by the court, be the commencement of the winding up of the subsidiary company

In adjusting the rights and liabilities of the members of the several companies between themselves, the court shall have regard to the constitution of the companies, and to the arrangements entered into between the companies, in the same manner as the court has regard to the rights and liabilities of different classes of contributories in the case of the winding up of a single company, or as near thereto as circumstances admit.

Where any company alleged to be subsidiary is not in process of being wound up at the same time as the principal company to which it is subsidiary, the court shall not direct the subsidiary company to be wound up unless, after hearing all objections (if any) that may be urged by or on behalf of the company against its being wound up, the court is of the opinion that the company is subsidiary to the principal company, and that the winding up of the company in conjunction with the principal company is just and equitable.

An application may be made in relation to the winding up of any subsidiary company in conjunction with a principal company by any creditor of, or person interested in, the principal or subsidiary company.

Where a company stands in the relation of a principal company to one company, and in the relation of a subsidiary company to some other company, or where there are several companies standing in the relation of subsidiary companies to one principal company, the court may deal with any number of such companies together or in separate groups, as it thinks most expedient, upon the principles laid down in this section.

Rules may be made under F35sectionF36411 of the Insolvency Act 1986 or F37Article 359 of the Insolvency (Northern Ireland) Order 1989 (general rules about winding up) for determining the amount of the liabilities of an insurance company to policy holders of any class or description for the purpose of proof in a winding up and generally for carrying into effect the provisions of this Part of this Act with respect to the winding up of insurance companies.