Friendly Societies Act 1992

Interpretation U.K.

116 Friendly societies etc. U.K.

In this Act—

• “friendly society” means an incorporated friendly society or a registered friendly society;

• “incorporated friendly society” means a society incorporated under this Act;

• “registered branch” means a branch of a registered friendly society which is separately registered within the meaning of the 1974 Act;

• “registered friendly society” means a society registered within the meaning of the 1974 Act by virtue of section 7(1)(a) of that Act or any enactment which it replaced.

Commencement Information

I1 Ss. 116-119 wholly in force at 8.6.1992 see s. 126(2) and S.I. 1992/1325, art. 2(c).

117 Insurance business etc. U.K.

(1) For the purposes of this Act—

• “annual contribution income” means, in relation to a friendly society’s long term business, the income of the society in a financial year without any deduction for reinsurance cessions;

• [F1 “commitment" means, in relation to a friendly society to which section 37(2) applies, a commitment represented by insurance business of any class of Head A of Schedule 2 to this Act;]

• “insurance business” means long term business and general business but [F2 , except for the purposes of sections 87 and 88 above,] does not include the operations of a society whose benefits vary according to the resources available and which require each of its members to contribute on a flat-rate basis;

• [F3 “direct insurance business" means insurance business other than reinsurance business and “direct insurance" shall be construed accordingly;]

• “long term business” means insurance business of any of the classes specified in head A of Schedule 2 to this Act; and

• “general business” means insurance business of any of the classes specified in head B of that Schedule.

(2) For the purposes of any provision of Parts IV, V, VI and VIII of this Act, unless the context otherwise requires—

(a) references to insurance business include references to reinsurance business; and

(b) reinsurance business consisting of the effecting and carrying out of a contract of reinsurance of risks of any class shall be taken to constitute the carrying on of insurance business of that class;

and “reinsurance business” means the effecting and carrying out of contracts of reinsurance.

(3) For the purposes of this Act the effecting and carrying out of a contract whose principal object is within one class of insurance business, but which contains related and subsidiary provisions within another class or classes, shall be taken to constitute the carrying on of insurance business of the first-mentioned class, and no other, if subsection (4) or (5) below applies to the contract.

(4) This subsection applies to a contract whose principal object is within any class of long term business, but which contains subsidiary provisions within general business class 1 or 2, if the society concerned is authorised under section 32 above to carry on long term business class I.

(5) This subsection applies to a contract whose principal object is within one of the classes of general business but which contains subsidiary provisions within another of those classes.

[F4 (6) In relation to a contract of insurance entered into by a person on any date with a friendly society to which section 37(3) above applies the effecting of which constitutes general business, or a contract of insurance entered into by a person on any date with a friendly society to which section 37(2) above applies the effecting of which constitutes long term business, references in this Act to the [F5 member or EEA State] where the risk or commitment is situated shall be construed as follows—

(a) where that person is an individual, as references to the [F5 member or EEA State] where he has his habitual place of residence on that date; and

(b) in any other case, as references to the [F5 member or EEA State] where the establishment of that person to which the contract relates is situated on that date.

(7) In relation to any other contract of insurance with a friendly society, references in this Act to the member State where the risk is situated shall be construed as references to the member State where the person who has entered into the contract has his habitual place of residence.]

F6 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F7 (9) In this Act “establishment", in relation to a friendly society to which section 37(2) or (3) above applies, means the registered office or an overseas branch of the society.

Any permanent presence of such a society in an EEA State other than the United Kingdom shall be regarded for those purposes as a single overseas branch, whether that presence consists of a single office which, or two or more offices each of which–

(a) is managed by the society’s own staff;

(b) is an agency of the society; or

(c) is managed by a person who is independent but has permanent authority to act for the society in the same way as an agency.]

Textual Amendments

F1 Definition in s. 117(1) inserted (1.1.1994) by S.I. 1993/2519, reg. 7(1)

F2 Words in definition in s. 117(1) inserted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 114 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F3 Definition in s. 117(1) added (1.9.1994) by S.I. 1994/1984, reg. 29(1)

F4 S. 117(6)(7) substituted for s. 117(6) (1.1.1994) by S.I. 1993/2519, reg. 7(2)

F5 Words in s. 117(6) substituted (1.9.1994) by S.I. 1994/1984, reg. 29(2)

F6 S. 117(8) repealed (1.12.2001) by S.I. 2001/3649, arts. 1, 205(1)

F7 S. 117(9) inserted (1.9.1994) by S.I. 1994/1984, reg. 29(3)

Commencement Information

I2 Ss. 116-119 wholly in force at 8.6.1992 see s. 126(2) and S.I. 1992/1325, art. 2(c).

118 Financial year of friendly societies. U.K.

(1) Subject to subsection (2) below, in this Act “financial year” means the period of 12 months ending with 31st December.

(2) The initial financial year of a friendly society shall be such period as expires with the end of the calendar year in which it is registered under the 1974 Act or incorporated under this Act and the final financial year of the society shall be such shorter period than 12 months as expires with the date as at which the society makes up its final accounts.

Commencement Information

I3 Ss. 116-119 wholly in force at 8.6.1992 see s. 126(2) and S.I. 1992/1325, art. 2(c).

119 General interpretation. U.K.

(1) In this Act, unless the context otherwise requires—

• “the 1974 Act” means the M1 Friendly Societies Act 1974;

• “actuary” means an actuary possessing [F8 such qualifications, if any, as may be specified in rules made by the Authority under section 340 of the Financial Services and Markets Act 2000 (and subsections (3) to (6) of that section apply in relation to an actuary appointed by virtue of any provision of this Act as they apply in relation to an actuary appointed in compliance with such rules)];

• “annuities on human life” does not include superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of persons engaged or who have been engaged in any particular profession, trade or employment, or of the dependants of such persons;

• [F9 “the Authority” means the Financial Services Authority;]

• “appointed actuary” means the actuary appointed [F10 in accordance with rules made under section 340 of the Financial Services and Markets Act 2000];

• “the appropriate actuary” means—

  (a)

  if the society is under [F11 a duty imposed by rules made by the Authority under section 340 of the Financial Services and Markets Act 2000], the society’s appointed actuary; and

  (b)

  if it is not under [F12 such a] duty, an actuary appointed to perform the function in question;

• F13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “committee of management” means the committee of management or other directing body of a society or branch;

• [F14 “the life assurance consolidation Directive” means Directive 2002/83/EC of the European Parliament and of the Council of 5th November 2002 concerning life assurance;]

• “contract of insurance” includes any contract the effecting of which constitutes the carrying on of insurance business by virtue of section 117 above;

• [F15 “controller” has the meaning given by section 55A above;]

• “the court” except in relation to the winding-up of an incorporated friendly society, means—

  (a)

  in the case of a body whose registered office is situated in England and Wales or in Northern Ireland, the county court for the district in which the office is situated;

  (b)

  in the case of a body whose registered office is situated in Scotland, the sheriff in whose jurisdiction the office is situated;

  and, in relation to the winding-up of an incorporated friendly society, means the court which has jurisdiction under the applicable winding-up legislation to wind-up the society;

• F13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F16 “EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 F17 as adjusted by the Protocol signed at Brussels on 17th March 1993 F18 ;]

  [F16 “EEA State” means a State which is a Contracting Party to the EEA Agreement but, until the EEA Agreement comes into force in relation to Liechtenstein, does not include Liechtenstein;]

  [F16 “EFTA State” means an EEA State which is not a member State;]

• “financial year” is to be construed in accordance with section 118;

• “the first general insurance Directive” means Council Directive 73/239/EEC of 24th July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance;

• F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F20 “the general insurance Directives” means the first general insurance Directive, the second general insurance Directive and the third general insurance Directive as amended, and such other Directives as make provision with respect to the business of direct insurance other than life assurance;]

• “group business” is to be construed in accordance with section 11 above;

• “jointly controlled body” is to be construed in accordance with section 13 above;

• F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F21 “manager”, in relation to a friendly society to which section 37(2) or (3) above applies, means any person (other than an employee of a society) appointed by the society to manage any part of its insurance business, or any employee of the society (other than a chief executive) who, under the immediate authority of a member of the committee of management or chief executive of the society–

  (a)

  exercises managerial functions, or is responsible for maintaining accounts or other records of the society; and

  (b)

  is not a person whose functions relate exclusively to business conducted from a place of business which is not in a member State;]

• “memorandum” has the meaning given by paragraph 4(3) of Schedule 3 to this Act;

• “modifications”, in relation to enactments, includes additions, omissions and amendments [F22 and cognate expressions are to be construed accordingly];

• “non-insurance business” means business falling within head C of Schedule 2 to this Act;

• “notice” means written notice and “notice to” a person means notice given to that person, and “notify” shall be construed accordingly;

• F13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “officer” means—

  (a)

  in relation to a registered friendly society or a registered branch—

  (i)

  a trustee;

  (ii)

  the treasurer, secretary and chief executive (however described);

  (iii)

  a member of the committee of management; and

  (iv)

  a person appointed by the society or branch to sue or be sued on its behalf; or

  (b)

  in relation to an incorporated friendly society, a member of the committee of management, the chief executive (however described) and the secretary;

• “the public file”, in relation to a friendly society, means the file relating to the society which the [F23 Authority] is required to maintain under section 104 above;

• “registered address”, in relation to a member of an incorporated friendly society, has the meaning given by paragraph 14(6) of Schedule 3 to this Act;

• “the second general insurance Directive” means Council Directive 88/357/EEC of 22nd June 1988 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC;

• F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “special resolution” has the meaning given by paragraph 7 of Schedule 12 to this Act;

• “subscription” includes any premium or other sum (however described) payable, in respect of the provision of benefits, by (or on behalf of) a member of a friendly society under the rules of the society;

• “subsidiary” is to be construed in accordance with section 13 above; and

• [F24 “supervisory authority”, in relation to an EEA State other than the United Kingdom, means the authority responsible in that State for supervising [F25 persons whose business consists of effecting or carrying out contracts of insurance];]

  [F24 “the third general insurance Directive” means Council Directive 92/49/EEC of 18th June 1992 F26 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EECF27 and 88/357/EEC F28 ;]

  F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F30 (1AA) Any reference in this Act to the seal of the Authority is a reference to the seal provided for in regulations made under section 109(1)(b) of the Friendly Societies Act 1974 (and not to the Authority’s common seal).]

[F31 (1A) References in this Act to the first or third general insurance DirectiveF32 ... are references to that Directive as amended by the [F33 European Parliament and Council Directive of 29th June 1995 amending Directives 77/780/EEC and 89/646/EEC in the field of credit institutions, [F34 Directives 72/239/EEC and 92/49/EEC in the field of non-life insurance], Directive 93/22/EEC in the field of investment firms and Directive 85/611/EEC in the field of undertakings for collective investment in transferable securities (UCITS) with a view to reinforcing prudential supervision (No. 95/26/EC)].]

F35 (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F36 (1C) In the definition of “supervisory authority” in subsection (1), the reference to contracts of insurance and to effecting or carrying out such contracts must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.]

(2) References in this Act to the “ECU” are to the unit of account of that name defined in Council Regulation (EEC) No.3180/78 as amended; and the exchange rates as between the ECU and pounds sterling to be applied for each year beginning on 31st December shall be the rates applicable on the last day of the preceding October for which exchange rates for the currencies of all the member States were published in the Official Journal of the Communities.

Textual Amendments

F8 Words in the definition of “actuary” in s. 119(1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 115(a)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F9 Definition of “the authority” in s. 119(1) inserted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 115(a)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F10 Words in the definition of “appointed actuary” in s. 119(1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 115(a)(iii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F11 S. 119(1): Words in para. (a) of the definition of “appropriate actuary” substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 115(a)(iv)(A) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F12 S. 119(1): Words in para. (b) of the definition of “appropriate actuary” substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 115(a)(iv)(B) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F13 Definitions of “the central office”, “the Chief Registrar”, “collecting society”, “the Commission”, “the criteria of prudent management” and “notifiable voting rights” in s. 119(1) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F14 Words in s. 119(1) inserted (11.1.2005) by The Life Assurance Consolidation Directive (Consequential Amendments) Regulations 2004 (S.I. 2004/3379), regs. 1, 3(3)(a)

F15 S. 119(1): definition inserted (1.9.1994) by S.I. 1994/1984 reg. 30(a)

F16 S. 119(1): definition inserted (1.9.1994) by S.I. 1994/1984, reg. 30(b)

F17 O.J. L1, 3.1.94, page 3.

F18 O.J. L1, 3.1.94, page 572.

F19 Words in s. 119(1) omitted (11.1.2005) by virtue of The Life Assurance Consolidation Directive (Consequential Amendments) Regulations 2004 (S.I. 2004/3379), regs. 1, 3(3)(b)

F20 S. 119(1): definition substituted (1.9.1994) by S.I. 1994/1984 reg. 30(c)

F21 S. 119(1): definitions of “the life Directives” and “manager” substituted for definition of “the life Directives” (1.9.1994) by S.I. 1994/1984, reg. 30(d)

F22 Words in s. 119 inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Friendly Societies Act 1992 (International Accounting Standards and Other Accounting Amendments) Order 2005 (S.I. 2005/2211), art. 1(2), Sch. para. 4

F23 Words in the definition of “the public file” in s. 119(1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by The Financial Services and Markets Act 2000 (Mutual Societies) Order 2001 (S.I. 2001/2617), arts. 2, 8(1), 13(1), Sch. 3 para. 115(a)(vi) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F24 Words in s. 119(1) inserted (1.9.1994) by S.I. 1994/1984, reg. 30(f)

F25 Words in the definition of “supervisory authority” in s. 119(1) substituted (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 (S.I. 2001/3649), arts. 1, 205(3)

F26 O.J. L228, 11.8.92, page 1.

F27 O.J. L228, 16.8.73, page 3.

F28 O.J. L172, 4.7.88, page 1.

F29 Words in s. 119(1) omitted (17.8.2001 for specified purposes and 1.12.2001 for all other purposes) by virtue of The Financial Services and Markets Act 2000 (Mutual Societies) Order 2001 (S.I. 2001/2617), arts. 2, Sch. 3 para. 115(a)(vii), Sch. 4 (with art. 13(3), Sch. 5)

F30 S. 119(1AA) inserted (17.8.2001 for specified purposes and otherwise 1.12.2001) by The Financial Services and Markets Act 2000 (Mutual Societies) Order 2001 (S.I. 2001/2617), arts. 2, 8(1), 13(1), Sch. 3 para. 115(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F31 S. 119(1A) inserted (18.7.1996) by S.I. 1996/1669, reg. 23, Sch. 5 para. 6

F32 Words in s. 119(1A) omitted (11.1.2005) by virtue of The Life Assurance Consolidation Directive (Consequential Amendments) Regulations 2004 (S.I. 2004/3379), regs. 1, 3(4)(a)

F33 Words in s. 119(1A) substituted (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 (S.I. 2001/3649), arts. 1, 205(4)

F34 Words in s. 119(1A) substituted (11.1.2005) by The Life Assurance Consolidation Directive (Consequential Amendments) Regulations 2004 (S.I. 2004/3379), regs. 1, 3(4)(b)

F35 S. 119(1B) repealed (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 (S.I. 2001/3649), arts. 1, 205(5)

F36 S. 119(1C) inserted (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 (S.I. 2001/3649), arts. 1, 205(6)

Commencement Information

I4 Ss. 116-119 wholly in force at 8.6.1992 see s. 126(2) and S.I. 1992/1325, art. 2(c).

Marginal Citations

M1 1974 c. 46.

[F37 119A Meaning of “associate". U.K.

(1) In this Act “associate", in relation to any person entitled to exercise or control the exercise of voting power in relation to a friendly society to which section 37(2) or (3) above applies, means–

(a) the wife or husband [F38 or civil partner] or minor son or daughter of that person;

(b) any company of which that person is a director;

(c) any person who is an employee or partner of that person;

(d) if that person is a company–

(i) any director of that company;

(ii) any subsidiary undertaking of that company;

(iii) any director or employee of any such subsidiary under– taking; and

(e) if that person has made an agreement or arrangement with any other person under which they undertake to act together in exercising their voting power in relation to the society, that other person.

(2) In this section–

“minor", in relation to Scotland, means not having attained the age of sixteen;

“son" includes stepson and “daughter" includes stepdaughter;

“subsidiary undertaking" has the same meaning as in the Insurance Companies Act 1982 M2 .]

Textual Amendments

F37 S. 119(A) inserted (1.9.1994) by S.I. 1994/1984 reg. 31

F38 Words in s. 119A(1)(a) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), s. 263(10)(b), Sch. 27 para. 142; S.I. 2005/3175, art. 2(2)

Marginal Citations

M2 1982 c.50.

F39 119B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F39 S. 119B repealed (1.12.2001) by S.I. 2001/2617, arts. 2, 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)