SCHEDULES
F1 [SCHEDULE 13B TO 1992 ACT] RECOGNITION IN OTHER EEA STATES OF FRIENDLY SOCIETIES TO WHICH SECTION 37(2) OR (3) APPLIES
PART I FRIENDLY SOCIETIES CARRYING ON BUSINESS ETC, IN OTHER MEMBER STATES
Requirements for carrying on insurance business
1
1
A friendly society to which section 37(2) or (3) above applies shall not carry on direct insurance business of a class or part of a class through an overseas branch in F2an EEA State other than the United Kingdom unless–
a
the society is authorised under section 32 above to carry on insurance business of that class or part of a class; and
b
the requirements of this paragraph have been complied with in relation to that branch.
2
The requirements of this paragraph are–
a
that the society has given to the Commission a notice containing both the requisite EC details and the requisite UK details;
b
that the Commission has given to the supervisory authority in the F2EEA State in which the overseas branch is to be established (“the F2EEA State of the branch")–
i
a notice which contains the requisite EC details; and
ii
a certificate in accordance with sub–paragraph (3) below; and
c
that either–
i
that authority has informed the Commission of the conditions which, in the interest of the general good, must be complied with by the society in carrying on insurance business through the branch; or
ii
the period of two months beginning with the day on which the Commission gave that authority the certificate mentioned in paragraph (b) above has elapsed.
3
A certificate is in accordance with this sub–paragraph if it–
a
attests that the society has the minimum margin of solvency calculated in accordance with such of the following as are appropriate–
i
Articles 16 and 17 of the first general insurance Directive, and
ii
Articles 19 and 20 of the first life Directive; and
b
indicates the classes of insurance business which the society is authorised to carry on in the United Kingdom.
4
The Commission shall, within the period of three months beginning with the date on which the society’s notice was received–
a
give the notice and certificate referred to in sub–paragraph (2)(b) above; or
b
refuse to give either or both of those documents.
5
The Commission shall, within the period of three months referred to in sub–paragraph (4) above, notify the society–
a
that it has given the notice and certificate referred to in sub–paragraph (2)(b) above, stating the date on which it did so; or
b
that it has refused to give either or both those documents, stating the reasons for the refusal.
6
The Commission shall not refuse to give the notice referred to in sub–paragraph (2)(b) above unless, having regard to the business to be carried on through the overseas branch, it appears to it that the criteria of prudent management would not or might not continue to be fulfilled in respect of the society.
7
Where the supervisory authority in the member State of the branch has informed the Commission as mentioned in paragraph (2)(c)(i) above, the Commission shall forward the information to the society.
2
1
A friendly society to which section 37(2) or (3) above applies shall not change the requisite EC details of an overseas branch–
a
b
through which it carries on direct insurance business,
unless the requirements of this paragraph have been complied with in relation to its making of the change.
2
Subject to sub–paragraph (3) below, the requirements of this paragraph are–
a
that the society has given a notice to the Commission, and to the supervisory authority in the F3EEA State of the branch, stating the details of the proposed change not less than one month before the change is to take place;
b
that the Commission has sent to that authority a notice in accordance with sub–paragraph (4)(a) below; and
c
that either–
i
that authority has informed the society of any consequential changes in the conditions which, in the interest of the general good, must be complied with by the society in carrying on insurance business through the branch; or
ii
the period of two months beginning with the day on which the society gave that authority the notice of the proposed change in accordance with paragraph (a) above has elapsed.
3
In the case of a change occasioned by circumstances beyond the society’s control, the requirements of this paragraph are that the society shall as soon as practicable (whether before or after the change) give a notice to the Commission, and to the supervisory authority in the F3EEA State of the branch, stating the details of the change.
4
The Commission shall, as soon as practicable after receiving a notice under sub–paragraph (2)(a) above–
a
give notice to the the supervisory authority in the F3EEA State of the branch informing it of the proposed change; or
b
refuse to give such notice.
5
The Commission shall, as soon as practicable after making a decision under sub–paragraph (4) above, notify the society–
a
that it has given the notice referred to in that sub–paragraph, stating the date on which it did so; or
b
that it refused to give the notice, stating the reasons for that refusal.
6
The Commission shall not refuse to give the notice referred to in sub–paragraph (4)(a) above unless, having regard to the proposed change, it appears to it that the criteria of prudent management would not or might not continue to be fulfilled in respect of the society.
3
1
A friendly society to which section 37(2) or (3) above applies shall not change the requisite UK details of an overseas branch–
a
which has been established by it in F4an EEA State other than the United Kingdom; and
b
through which it carries on direct insurance business,
unless the requirements of this paragraph have been complied with in relation to its making of the change.
2
Subject to sub–paragraph (3) below, the requirements of this paragraph are that the society has given a notice to the Commission stating the details of the proposed change not less than one month before the change is to take place.
3
In the case of a change occasioned by circumstances beyond the society’s control, the requirements of this paragraph are that the society shall as soon as practicable (whether before or after the change) give a notice to the Commission stating the details of the change.
Requisite details for purposes of paragraphs 1 to 3
4
1
The requisite EC details for the purposes of paragraphs 1 and 2 above are–
a
b
the address of the branch and confirmation that that address is an address for service on the society’s authorised agent;
c
the name of the society’s authorised agent;
d
the classes and parts of classes of insurance business to be carried on, and the nature of the risks or commitments to be covered, in the F5EEA State of the branch;
e
details of the structural organisation of the branch;
f
the guiding principles as to reinsurance of business to be carried on in the F5EEA State of the branch, including the society’s maximum retention per risk or event after all reinsurance ceded;
g
estimates of the following, namely–
i
the costs of installing administrative services and the organisation for securing business in the F5EEA State of the branch; and
ii
the resources available to cover those costs;
h
for each of the first three financial years following the establishment of the branch–
i
estimates of the society’s margin of solvency and the margin of solvency required, and a statement showing how both have been calculated;
ii
in the case of a society which intends to carry on long term business, the details mentioned in sub–paragraph (2) below as respects the business to be carried on in the F5EEA State of the branch; and
iii
in the case of a society which intends to carry on general business, the details mentioned in sub–paragraph (3) below as respect the business to be so carried on; and
i
in the case of a society which intends to cover health insurance risks, the technical bases which will be used for calculating premiums in respect of such risks.
2
The details referred to in sub–paragraph (1)(h)(ii) above are–
a
a statement showing, on both optimistic and pessimistic bases, for each type of contract or treaty–
i
the number of contracts or treaties expected to be issued;
ii
the total premium income, both gross and net of reinsurance ceded;
iii
the total sums assured or the total amounts payable each year by way of annuity;
b
a statement setting out, on both optimistic and pessimistic bases, detailed estimates of income and expenditure in respect of direct business, reinsurance acceptances and reinsurance cessions; and
c
estimates relating to the financial resources intended to cover underwriting liabilities.
3
The details referred to in sub–paragraph (1)(h)(iii) above are–
a
estimates relating to expenses of management (other than costs of installation), and in particular those relating to current general expenses and commissions;
b
estimates relating to premiums or contributions (both gross and net of all reinsurance ceded) and to claims (after all reinsurance recoveries); and
c
estimates relating to the financial resources intended to cover underwriting liabilities.
4
The requisite UK details for the purposes of paragraphs 1 and 3 above are–
a
the names of the society’s managers and main agents in the F5EEA State of the branch;
b
particulars of any association which exists or is proposed to exist between–
i
the committee of management and the controllers (if any) of the society; and
ii
any person who will act as an insurance broker, agent, loss adjuster or reinsurer for the society in the F5EEA State of the branch;
c
the names of the principal reinsurers of business to be carried on in the F5EEA State of the branch;
d
the sources of business in the F5EEA State of the branch (for example, insurance brokers, agents, own employees or direct selling) with the approximate percentage expected from each of those sources;
e
copies or drafts of the following, namely–
i
any separate reinsurance treaties covering business to be written in the F5EEA State of the branch;
ii
any standard agreements which the society will enter into with persons who will be sources of business in the F5EEA State of the branch;
iii
any agreements which the society will enter into with persons (other than employees of the society) who will manage the business to be carried on in the F5EEA State of the branch;
f
in the case of a society which intends to carry on long term business–
i
the technical bases which the appointed actuary proposes to use for each class of business to be carried on in the F5EEA State of the branch, including the bases needed for calculating premium rates and mathematical reserves;
ii
a statement by that actuary as to whether he considers that the premium rates that will be used in the F5EEA State of the branch are suitable;
iii
a statement by that actuary as to whether he agrees with the information provided under sub–paragraphs (1)(f) and (2)(b) and (c) above; and
iv
the technical bases used to calculate the statements and estimates referred to in sub– paragraph (2) above; and
g
in the case of a society which intends to carry on general business, copies or drafts of any agreements which the society will have with main agents in the F5EEA State of the branch.
5
In this paragraph “authorised agent" means an agent or employee of the society who has authority–
a
to bind the society in its relations with third parties; and
b
to represent the society in its relations with supervisory authorities and courts in the member State of the branch.
Requirements for providing insurance
5
1
A friendly society to which section 37(2) or (3) above applies shall not provide insurance of any class or part of a class in F6an EEA State other than the United Kingdom unless–
a
the society is authorised under section 32 above to carry on insurance of that class or part of a class; and
b
the requirements of this paragraph have been complied with in relation to the provision of the insurance in that F6 EEA State.
2
The requirements of this paragraph are–
a
that the society has given to the Commission a notice containing the requisite details; and
b
that the Commission has given to the supervisory authority in the F6 EEA State in which the insurance is to be provided–
i
a notice which contains the requisite details; and
ii
a certificate in accordance with sub–paragraph (3) below.
3
A certificate is in accordance with this sub–paragraph if it–
a
attests that the society has the minimum margin of solvency calculated in accordance with such of the following as are appropriate–
i
Articles 16 and 17 of the first general insurance Directive, and
ii
Articles 19 and 20 of the first life Directive; and
b
indicates the classes of insurance business which the society is authorised to carry on in the United Kingdom.
4
5
The Commission shall, within the period of one month beginning with the date on which the society’s notice was received–
a
give the notice and certificate referred to in sub–paragraph (2)(b) above to the supervisory authority in the F6an EEA State in which the society intends to provide insurance; or
b
refuse to give either or both of those documents.
6
The Commission shall, within the period of one month referred to in sub–paragraph (5) above, notify the society–
a
that it has given the notice and certificate referred to in sub–paragraph (2)(b) above to the supervisory authority in the F6an EEA State in which the society intends to provide insurance, stating the date on which it did so; or
b
that it has refused to give either or both of those documents, stating the reasons for the refusal.
7
The Commission shall not refuse to give the notice referred to in sub–paragraph (2)(b) above unless, having regard to the insurance to be provided in the F6an EEA State, it appears to it that the criteria of prudent management would not or might not continue to be fulfilled in respect of the society.
6
1
A friendly society to which section 37(2) or (3) above applies shall not change the requisite details of the provision of insurance in F7an EEA State other than the United Kingdom unless the requirements of this paragraph have been complied with in relation to its making of the change.
2
The requirements of this paragraph are–
a
that the society has given a notice to the Commission stating the details of the proposed change;
b
that the Commission has sent to the supervisory authority in the F7aEEA State in which the insurance is provided a notice in accordance with sub–paragraph (4)(a) below.
3
In the case of a change occasioned by circumstances beyond the society’s control, the requirements of this paragraph are that the society shall as soon as practicable give a notice to the Commission stating the details of the change.
4
The Commission shall, as soon as practicable after receiving a notice under sub–paragraph (2)(a) above either–
a
give notice to the supervisory authority in the F7 EEA State in which the insurance is provided informing it of the proposed change; or
b
refuse to give such notice.
5
The Commission shall, as soon as practicable after making a decision under sub–paragraph (4) above, notify the society–
a
that it has given the notice referred to in that sub–paragraph, stating the date on which it did so; or
b
that it has refused to give the notice, stating the reasons for the refusal.
6
The Commission shall not refuse to give the notice referred to in sub–paragraph (4)(a) above unless, having regard to the proposed change, it appears to it that the criteria of prudent management would not or might not continue to be fulfilled in respect of the society.
Requisite details for purposes of paragraphs 5 and 6
7
The requisite details for the purposes of paragraphs 5 and 6 above are–
a
the F8EEA State in which the insurance is to be provided;
b
the nature of the risks or commitments which the society proposes to cover in that State; and
c
in the case of a society which intends to cover health insurance risks, the technical bases which will be used for calculating premiums in respect of such risks.
Requirement to notify cessation of business etc.
8
A friendly society to which section 37(2) or (3) above applies which has ceased–
a
to carry on insurance business through an overseas branch in F9an EEA State other than the United Kingdom; or
b
to provide insurance in such F9an EEA State,
shall as soon as practicable notify the Commission in writing that it has done so.
Sch. 13B inserted (1.9.1994) by S.I. 1994/1984 reg. 15(2), Sch. 2