Part IV Authorisation of Friendly Societies’ Business
Powers of Commission in relation to authorised societies
40 Withdrawal of authorisation in respect of new business.
(1)
Subject to the following provisions of this section, the Commission may by notice direct—
(a)
that a friendly society authorised to carry on insurance business shall, from a date specified in the direction, cease to be authorised to effect contracts of insurance, or contracts of a class (or part of a class) so specified; or
(b)
that a friendly society authorised to carry on non-insurance business shall, from a date specified in the direction, cease to be authorised to effect contracts for non-insurance benefits, or contracts of a description so specified.
(2)
The Commission shall give such a direction in relation to a friendly society if—
(a)
in the case of an incorporated society, a special resolution has been passed for its voluntary winding up;
(b)
an order to wind up the society has been made;
(c)
an event declared by the rules of the society to be the termination of the society has happened;
(d)
an instrument of dissolution has been executed as mentioned in section 93(1)(b) of the 1974 Act or a special resolution approving an instrument of dissolution under section 20 above has been passed; or
(e)
in the case of a registered society, the Commission has made an award under section 95(3) or 95A(1) of the 1974 Act for the dissolution of the society.
(3)
The Commission may give such a direction in relation to a friendly society at the request of the society or if—
(a)
it appears to the Commission that the society has failed to satisfy an obligation to which it is subject by virtue of the M1Industrial Assurance Act 1923, the 1974 Act, the M2Industrial Assurance (Northern Ireland) Order 1979 or this Act;
(b)
there exists a ground on which the Commission would be prohibited from granting authorisation to the society;
(c)
it appears to the Commission to be expedient to make the proposed direction in order to protect the interests of members of the society;
(d)
the authorisation was subject to conditions and it appears to the Commission that the society has not complied with a condition;
(e)
it appears to the Commission that information furnished to it on behalf of the society or, in connection with an application for authorisation, by or on behalf of an officer of the society is false in a material particular, misleading or inaccurate;
(f)
it appears to the Commission that a friendly society has failed to satisfy an obligation to which it is subject by virtue of any provision of the law of a country or territory outside the United Kingdom; F1. . .
(g)
the society, having been directed to apply for fresh authorisation under section 39 above, has either failed to make such an application within the period allowed or been refused fresh authorisation covering the effecting of new contracts of any description covered by the society’s previous authorisation F2F1or
F2(h)
the society is a society to which section 37(2) or (3) above applies and has not effected any contracts of insurance, or any contracts of insurance of a class (or part of a class), for a period of six months or more.
(4)
A direction under this section shall not prevent a friendly society from effecting an insurance contract, or a contract for non-insurance benefits, in pursuance of a term of a subsisting contract of that description.
(5)
A direction under this section or section 41 below—
(a)
shall be given in accordance with Part II of Schedule 13 to this Act, and
(b)
may not be revoked or varied,
but has effect without prejudice to the subsequent grant to the society of authorisation to carry on any business to which the direction relates.