PART 3Friendly societies carrying on long-term business

Exempt BLAGAB or eligible PHI business

154Meaning of “BLAGAB or eligible PHI business”

1

In this Part “BLAGAB or eligible PHI business” means—

a

basic life assurance and general annuity business, and

b

any PHI business so far as consisting of the effecting or carrying out of qualifying contracts,

but see subsections (3) and (4) for some qualifications.

2

A contract is a “qualifying” contract if—

a

it is made before 1 September 1996, or

b

it is made on or after that date and it also falls within paragraph I, II or III of Part 2 of Schedule 1 to the FISMA (Regulated Activities) Order 2001.

3

A contract made before 1 September 1996 which effects a policy affording provision for injury, sickness or other infirmity is to be regarded for the purposes of this Part as forming part of “BLAGAB or eligible PHI business” only if—

a

the policy also affords assurance for a gross sum independent of injury, sickness or other infirmity,

b

at least 60% of the total premiums are attributable to the provision afforded during injury, sickness or other infirmity, and

c

there is no bonus or addition which may be declared or accrue upon the assurance of the gross sum.

4

Business is not to be regarded as “BLAGAB or eligible PHI business” of a friendly society for the purposes of this Part so far as it consists of the assurance of any annuity the consideration for which consists of sums obtainable—

a

on the maturity, or

b

on the surrender,

of any other policy of assurance issued by the society which forms part of its exempt BLAGAB or eligible PHI business.