Finance (No. 3) Act 2010

15 Insurance business transfer schemes: non-profit fund transferred assets U.K.

(1) Chapter 1 of Part 12 of ICTA (insurance companies etc) is amended as follows.

(2) Section 444AB (transfer schemes: charge on transferor in respect of relevant non-transferred assets and retained assets) is amended as follows.

(3) In subsection (1)(b), for “or condition” substitute “ , AA or ”.

(4) In subsection (2), for the words after “business transfer” substitute “scheme—

(a) if the transferee is an insurance company or an insurance special purpose vehicle, are not, immediately after their transfer, assets of the transferee's long-term insurance fund, or

(b) if the transferee is not an insurance company, an insurance special purpose vehicle or a friendly society, would not, immediately after their transfer, be assets of the transferee's long-term insurance fund if the transferee were an insurance company with permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance,

(“non long-term fund transferred assets”).”

(5) After that subsection insert—

“(2A) Condition AA is met if—

(a) the transferee is not an insurance company, an insurance special purpose vehicle or a friendly society, and

(b) any of the assets of the transferor's long-term insurance fund which are transferred from the transferor to the transferee by the insurance business transfer scheme would, immediately after their transfer, be assets of a non-profit fund of the transferee if the transferee were an insurance company with permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance (“non-profit fund transferred assets”).”

(6) In subsection (4), for “relevant non-transferred assets or retained assets (or both)” substitute “ non long-term fund transferred assets, non-profit fund transferred assets or retained assets ”.

(7) In subsection (5), for “relevant non-transferred assets;” substitute “ non long-term fund transferred assets, section 444ABAA makes provision for its calculation in relation to non-profit fund transferred assets ”.

(8) In subsection (8), for “paragraph (2)(a)” substitute “ subsection (2)(a) and (b) ”.

(9) In subsection (1) of section 444ABA (relevant amount in relation to relevant non-transferred assets), for “relevant non-transferred assets” substitute “ non long-term fund transferred assets ”; and for the heading of that section substitute “ Non long-term fund transferred assets ”.

(10) After that section insert—

“444ABAA Non-profit fund transferred assets

(1) For the purposes of section 444AB the relevant amount in relation to assets that are non-profit fund transferred assets is—

where—

FVA is the fair value of the assets on the transfer date,

ABTO is any amount brought into account in respect of the assets as a business transfer-out and shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor for the period of account of the transferor including the transfer date, and

TL is the amount of any non-profit fund transferred liabilities which are shown (or treated as shown) in any of lines 17, 21 to 23 and 31 to 38, but not in line 61, in Form 14 in the periodical return for the period of account of the transferor ending (or treated as ending by section 444AA) immediately before the transfer date or, if there is no period of account of the transferor so ending (or treated as so ending), the amount of any liabilities which would be so shown if one did.

(2) In subsection (1) “non-profit fund transferred liabilities” means such of the liabilities of the transferor's long-term insurance fund as are transferred from the transferor to the transferee by the insurance business transfer scheme and were, immediately before their transfer, liabilities of a non-profit fund of the transferor.

(3) See section 444AA for the meaning of “the transfer date” in this section.”

(11) The amendments made by this section have effect in relation to transfers of business taking place on or after 22 June 2010.