PART IIU.K. TRANSFERS OF GENERAL BUSINESS
Approval of Secretary of State requiredU.K.
6(1)Where it is proposed to execute an instrument by which an insurance company to which this Part of this Act applies (“the transferor”) is to transfer to another body (“the transferee”) all its rights and obligations under such general policies, or general policies of such descriptions as may be specified in the instrument, and—
(a)where the transferor is a UK company, the performance by it of the obligations proposed to be transferred constitutes the carrying on of insurance business in one or more member States; or
(b)where the transferor is not a UK company, the performance by it of the obligations proposed to be transferred constitutes the carrying on of insurance business in the United Kingdom,
the transferor may apply to the [Treasury] for [their] approval of the transfer.
(2)Any notice or other document authorised or required to be given or served under this Partof this Schedule may, without prejudice to any other method of service, be served by post; and a letter containing the notice or other document shall be deemed to be properly addressed if it is addressed to that person at his last known residence or last known place of business in the United Kingdom.
(3)In this Part of this Schedule—
“direct insurance” means insurance other than reinsurance;
“general policy” means a policy evidencing a contract the effecting of which constitutes the carrying on of general business.
Textual Amendments
Modifications etc. (not altering text)
Procedure with respect to applicationsU.K.
7(1)The [Treasury] shall not determine an application made under paragraph 6 above unless [they are] satisfied that—
(a)a notice approved by [the Treasury] for the purpose has been [published in the London, Edinburgh and Belfast Gazettes and, if [they think] fit—
(i)in two national newspapers in the United Kingdom which have been so approved;]
(ii)where the transferor is a UK or non-EC company and, as regards any policy included in the proposed transfer which evidences a contract of direct insurance, the risk is situated in a member State which is not the United Kingdom, in two national newspapers in that member State; and
(iii)where, as regards any EFTA policy included in the proposed transfer, an EEA State other than the United Kingdom is the EEA State in which the risk is situated, in two national newspapers in that EEA State;
(b)except in so far as he has otherwise directed, a copy of the notice has been sent to every affected policy holder and every other person who claims an interest in a policy included in the proposed transfer and has given written notice of his claim to the transferor; and
(c)copies of a statement setting out particulars of the transfer and approved by [the Treasury] for the purpose have been available for inspection—
(i)at one or more places in the United Kingdom;
(ii)where the transferor is a UK or non-EC company and, as regards any policy included in the proposed transfer which evidences a contract of direct insurance, the risk is situated in a member State which is not the United Kingdom, at one or more places in that member State; and
(iii)where, as regards any EFTA policy included in the proposed transfer, an EEA State other than the United Kingdom is the EEA State in which the risk is situated, at one or more places in that EEA State,
for a period of not less than thirty days beginning with the date of the first publication of the notice in accordance with paragraph (a) above.
(2)The notice referred to in sub-paragraph (1) above shall include a statement that written representations concerning the transfer may be sent to the [Treasury] before a specified day, which shall not be earlier than sixty days after the day of the first publication of the notice in accordance with sub-paragraph (1)(a) above; and the [Treasury] shall not determine the application until after considering any representations made to [them] before the specified day.
(3)For the purposes of this paragraph a policy holder is an “affected policy holder” in relation to a proposed transfer if—
(a)his policy is included in the transfer, or
(b)his policy is with the transferor and the [Treasury][have]certified, after consulting the transferor, that in the opinion of the [Treasury] the policy holder’s rights and obligations under the policy will or may be materially affected by the transfer.
(4)A policy which evidences a contract of direct insurance is an “EFTA policy” for the purposes of this Part of this Schedule if—
(a)it covers a risk situated in an EFTA State and the transferee is a UK or EC company or a non-EC company whose head office is in an EFTA State; or
(b)it covers a risk situated in a member State and the transferor company or the transferee is a non-EC company whose head office is in an EFTA State.
(5)Where the transferor is a UK or non-EC company and the transferee is an incorporated friendly society or registered friendly society authorised under Part IV of the Friendly Societies Act 1992, sub-paragraph (1)(b) shall have effect as if the reference to every affected policy holder included a reference to the Friendly Societies Commission.
Textual Amendments
Modifications etc. (not altering text)
Determination of applicationsU.K.
8(1)Where the transferor is a UK or non-EC company and any policy included in the proposed transfer evidences a contract of direct insurance, the [Treasury] shall not approve the transfer unless—
(a)[they are] satisfied that the transferee is, or will be immediately after the approval—
(i)authorised under section 3 or 4 above to carry on, or
(ii)authorised in accordance with Article 6 of the first general insurance Directive to carry on in an EEA State other than the United Kingdom,
general business of the class or classes to be transferred by the instrument;
(b)[they are] also satisfied that every policy included in the transfer evidences a contract which was entered into before the date of the application;
(c)the relevant authority certifies that the transferee possesses the necessary margin of solvency after taking the proposed transfer into account; . . .
(d)where the transferor is a UK company and the establishment from which the policies are to be transferred is situated in a member State other than the United Kingdom, the [Treasury][are] satisfied
(i)that the supervisory authority in that member State has been consulted about the proposed transfer; and
(ii)either that the authority has responded or that the period of three months beginning with the consultation has elapsed.
[(e)in the opinion of the [Treasury] the circumstances of the case justify the giving of [their] approval]
(2)Where sub-paragraph (1) above applies and, as regards any policy (other than an EFTA policy) which is included in the proposed transfer and evidences a contract of direct insurance, the risk is situated in a member State other than the United Kingdom, the [Treasury] shall not approve the transfer unless [they are] satisfied—
(a)that the supervisory authority in that member State has been notified of the proposed transfer;
(b)either that the authority has consented to the transfer or that the authority has not refused its consent to the transfer within the period of three months beginning with the notification.
(3)Where sub-paragraph (1) above applies, the establishment of the transferee to which the policies are to be transferred is situated in the United Kingdom and, as regards any EFTA policy included in the proposed transfer, an EEA State other than the United Kingdom is the State in which the risk is situated, the [Treasury] shall not approve the transfer unless [they are] satisfied that—
(a)the transferee either fulfils the conditions in Articles 13 to 16 of the second general insurance Directive in that EEA State or will be participating, by virtue of the transfer of that policy, in a Community co-insurance operation otherwise than as the leading insurer; and
(b)the supervisory authority in that EEA State agrees to the transfer.
(4)Where sub-paragraph (1) above applies, the establishment of the transferee to which the policies are to be transferred is situated in an EEA State other than the United Kingdom and, as regards any EFTA policy included in the proposed transfer, an EEA State . . . is the State in which the risk is situated, the [Treasury] shall not approve the transfer unless—
(a)where the EEA State in which the establishment is situated is also the State in which the risk is situated, [they are] satisfied that the supervisory authority in that EEA State agrees to the transfer;
[(b)where the United Kingdom is the State in which the risk is situated, [they are] satisfied that—
(i)the transferee is not precluded by Schedule 2F to this Act from covering the risk; and
(ii)the supervisory authority in the EEA State in which the establishment is situated agrees to the transfer;]
(c)where an EEA State other than the United Kingdom or the EEA State in which the establishment is situated is the State in which the risk is situated, [they are] satisfied that—
(i)the transferee either fulfils the conditions in Articles 13 to 16 of the second general insurance Directive in the EEA State in which the risk is situated or will be participating, by virtue of the transfer of that policy, in a Community co-insurance operation otherwise than as the leading insurer;
(ii)the law of that State provides for the possibility of such a transfer; and
(iii)the supervisory authority in that State agrees to the transfer.
(5)Where the transferor company is not a UK or non-EC company or any policy included in the proposed transfer evidences a contract of reinsurance, the [Treasury] shall not approve the transfer on an application under paragraph 6 above unless [they are] satisfied that —
[(a)the transferee is, or will be immediately after the approval—
(i)authorised under section 3 or 4 above to carry on; or
(ii)an EC company which is not precluded by Part I of Schedule 2F to this Act from carrying on,
general business of the class or classes to be transferred by the instrument; and
(b)every policy included in the transfer evidences a contract which was entered into before the date of the application,
and in [their] opinion the transferee’s financial resources and the other circumstances of the case justify the giving of [their] approval.]
(6)Where the [Treasury] determines an application under paragraph 6 above, [they]shall—
(a)publish a notice of [their] decision in the London, Edinburgh and Belfast Gazettes and in such other manner as [they] may think fit, and
(b)send a copy of that notice to the transferor, the transferee and every person who made representations in accordance with the notice referred to in paragraph 7(1) above;
and if [they][refuse] the application he shall inform the transferor and the transferee in writing of the reasons for [their] refusal.
(7)In this paragraph “the relevant authority” means—
(a)if the transferee is a UK company, the [Treasury];
(b)if the transferee is an EC company, the supervisory authority in its home State;
(c)if the transferee is a non-EC company whose head office is in an EFTA State, the supervisory authority in that EFTA State;
(d)if the transferee is a Swiss general insurance company, the supervisory authority in Switzerland;
(e)if the transferee does not fall within paragraphs (a) to (d) above, the [Treasury] or other authority which, in accordance with Article 25 or 26 of the first general insurance Directive, is responsible for supervising the transferee’s margin of solvency.
(8)Where the transferor is a UK or non-EC company and the transferee is an incorporated friendly society or registered friendly society authorised under Part IV of the Friendly Societies Act 1992—
(a)sub-paragraphs (1)(a) and (5)(a) above shall have effect as if the reference to section 3 or 4 above were a reference to that Part of that Act; and
(b)sub-paragraph (1)(c) above shall have effect as if the relevant authority for the purposes of this paragraph were the Friendly Societies Commission.
Textual Amendments
Modifications etc. (not altering text)
Rights of policy holdersU.K.
9(1)This paragraph applies where the [Treasury][approve] an application made under paragraph 6 above and either—
(a)the transferor is a UK or non-EC company and, as regards any policy included in the transfer which evidences a contract of direct insurance, a member State other than the United Kingdom is the member State in which the risk is situated; or
(b)as regards any EFTA policy included in the transfer, an EEA State other than the United Kingdom is the EEA State in which the risk is situated.
(2)The [Treasury] shall direct that—
(a)notice of [their]decision, and of the execution of any instrument giving effect to the transfer, shall be published in the member State or, as the case may be, the EEA State in which the risk is situated; and
(b)the notice shall specify the period during which the policy holder may exercise any right to cancel the policy;
and the instrument shall not bind the policy holder if either such a notice is not so published or the policy holder exercises any such right during the period so specified.
(3)The law of the member State or, as the case may be, the EEA State in which the risk is situated shall determine—
(a)whether the policy holder has a right to cancel the policy; and
(b)the conditions applicable to any such right.
Textual Amendments
Modifications etc. (not altering text)
Effect of approval of Secretary of StateU.K.
[10(1)Subject to paragraph 9(2) above, an instrument giving effect to a transfer approved by the [Treasury] under this Part of this Schedule shall be effectual in law—
(a)to transfer to the transferee all the transferor’s rights and obligations under the policies included in the instrument, and
(b)if the instrument so provides, to secure the continuation by or against the transferee of any legal proceedings by or against the transferor which relate to those rights or obligations, notwithstanding the absence of any agreements or consents which would otherwise be necessary for it to be effectual in law for those purposes.
(2)Where the transferor is a UK or non-EC company, it is immaterial for the purposes of sub-paragraph (1) above that the law applicable to any of the contracts of direct insurance included in the transfer is the law of an EEA State other than the United Kingdom.
(3)Except in so far as the [Treasury] may otherwise direct, a policy holder whose policy is included in such an instrument shall not be bound by it unless he has been given written notice of its execution by the transferor or the transferee.]
Textual Amendments
Modifications etc. (not altering text)