The Friendly Societies (Valuation) (Amendment) Regulations 1988

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Friendly Societies (Valuation) Regulations 1985.

Section 41 of the Friendly Societies Act 1974 requires registered friendly societies and branches to send a valuation report relating to their assets and liabilities to the Chief Registrar once at least in every five years. Section 42 of the 1974 Act enables the Chief Registrar to make regulations providing that any society or branch of a class specified in the regulations must send the valuation report once at least in every three years. By virtue of the Friendly Societies (Valuation) Regulations 1985 valuation reports are required to be sent at least once in every three years by the following societies:

(1) those registered after 25 July 1968 engaging in long term business, in respect of all their business;

(2) those registered before 26 July 1968, whose life or endowment funds exceed £1 million or whose contribution income exceeds £150,000 in any year of account, in respect of their life or endowment business; and

(3) those registered before 26 July 1968, which contract with any individual under life or endowment business for a gross sum, or gross sums in aggregate, exceeding £5,000, in respect of their life or endowment business.

The Friendly Societies (Long Term Insurance Business) Regulations 1987, made to give effect to Council Directive 79/267/EEC on life assurance, contain a separate requirement for friendly societies with an annual contribution income from life assurance business of at least 500,000 ECUs for three consecutive years to obtain authorisation under those Regulations and then, under regulation 11, to have an actuarial investigation and make a valuation report annually; that report will be examined by the Chief Registrar in order to establish that the level of solvency of each such society meets the requirements of the 1987 Regulations.

By virtue of these Regulations once a society, which is at present required to make valuation reports at least every three years under the 1985 Regulations and is also required to make an annual valuation report under the 1987 Regulations, has carried out valuations and made reports in respect of its position on 31st December in the same year–

(1) on the basis required by section 41 of the 1974 Act, and

(2) on the basis required by regulation 11 of the 1987 Regulations (or on a similar basis in its application for authorisation),

it can thereafter revert to the five year cycle in respect of valuation reports under section 41 and the 1985 Regulations will no longer apply to it.