General scope of the Board’s functions
1 Insurance companies to which the 1975 Act applies.
1
For section 3 of the 1975 Act there shall be substituted—
3 Insurance companies to which this Act applies.
1
The functions of the Board under this Act shall be exercisable in relation to policyholders and others who have been or may be prejudiced in consequence of the inability of insurance companies to meet their liabilities under policies issued or securities given by them only in cases where the insurance companies in question are insurance companies to which this Act applies.
2
An insurance company is one to which this Act applies if it is—
a
authorised under section 3 or 4 of the M1Insurance Companies Act 1982 to carry on insurance business of any class in the United Kingdom,
b
an EC company which is lawfully carrying on insurance business of any class in the United Kingdom, or
c
an EC company not falling within paragraph (b) above which provides general insurance or long term insurance in the United Kingdom.
2
Schedule 1 to this Act (consequential amendments) shall have effect.
2 Eligibility of policyholders for protection.
1
For section 4 of the 1975 Act there shall be substituted—
4 Protection confined to insurance under qualifying policies of protected risks or commitments.
1
A policyholder is eligible for the assistance or protection of the Board in accordance with any provision of sections 6 to 16 below only in respect of the insurance under a qualifying policy of a protected risk or commitment.
2
The following are qualifying policies for the purposes of this Act—
a
a policy of insurance issued by an insurance company authorised under section 3 or 4 of the M2Insurance Companies Act 1982 through an establishment in—
i
the United Kingdom,
ii
another EEA State, or
iii
the Channel Islands or the Isle of Man, and
b
a policy of insurance issued by an EC company through an establishment in an EEA State.
3
A risk or commitment is a protected risk or commitment for the purposes of this Act—
a
in the case of a policy falling within subsection (2)(a)(i) above, if it is situated in an EEA State, the Channel Islands or the Isle of Man;
b
in the case of a policy falling within subsection (2)(a)(ii) or (2)(b) above, if it is situated in the United Kingdom;
c
in the case of a policy falling within subsection (2)(a)(iii) above, if it is situated in the United Kingdom, the Channel Islands or the Isle of Man.
2
Schedule 2 to this Act (consequential amendments) shall have effect.
3
This section shall not have effect in relation to a policy, or security, where the contract which the policy evidences, or which governs the security, was entered into before the day on which this section comes into force.
4
For the purposes of subsection (3) above, where a contract for a term of more than one year—
a
was entered into before the day on which this section comes into force, and
b
continues in force beyond an anniversary of its inception which falls on or after the day on which this section comes into force,
the contract shall be treated as having been entered into on that anniversary, unless the effecting of the contract constituted the carrying on of long term business (within the meaning of the M3Insurance Companies Act 1982).