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These Regulations make amendments to the Insurance Companies Act 1982 (“the 1982 Act”), the Insurance Companies Regulations 1981 (“the 1981 Regulations”) and the Insurance Companies (Accounts and Statements) Regulations 1983 (“the 1983 Regulations”).The purpose of these Regulations is to meet the obligation under Council Directive 91/371/EEC (O.J.No.L205, 27.7.91, p. 48) to amend United Kingdom law to comply with the Agreement signed on 10 October 1989 between the European Economic Community and the Swiss Confederation on direct insurance other than life assurance (O.J.No.L205, 27.7.91, p. 3).
The Agreement has the effect of extending to Switzerland, and to companies having their head office there, the provisions of Council Directive 73/239/EEC (O.J.No.L228, 16.8.73, p. 3), with limited modifications and exceptions, and taking account of the amendments to that Directive contained in Council Directives 84/641/EEC (O.J.No.L339, 27.12.84, p. 21) and 87/343/EEC (O.J.No.L185, 4.7.87, p. 72), and in Article 9 of Council Directive 87/344/EEC (O.J.No.L185, 4.7.87, p. 77) and certain of the amendments in Title II of Council Directive 88/357/EEC (O.J.No.L172, 4.7.88, p. 1).
The Agreement thus provides to companies with their head office in a member State or Switzerland and which carry on direct general insurance business a reciprocal right to establish branches or agencies in the territory of the other party to the Agreement.
Regulation 1 makes provision for the citation and commencement of the Regulations, and defines the 1982 Act, the 1981 Regulations and the 1983 Regulations.
Regulation 2 amends sections 8 and 9 of the 1982 Act, which are concerned with applications for authorisation to carry on insurance business in the United Kingdom, so that the provisions of section 8, which applies to applicants from other member States, apply also to Swiss companies which intend to carry on direct general insurance business in the United Kingdom. In addition, it amends section 11 of the 1982 Act so that the Secretary of State may withdraw authorisation from a Swiss general insurance company,as defined in paragraph (6) of regulation 2, if authorisation has been withdrawn from that company in Switzerland, and where the Secretary of State has issued a direction that authorisation be withdrawn from such a company, he may only vary or revoke that direction if he considers it appropriate to do so after consultation with the Swiss supervisory authorities.
Regulation 3 amends, in the 1982 Act, section 27 which concerns accounts and records which must be held in the United Kingdom by companies whose head office is outside the Community, sections 32, 34 and 35, which are concerned with the margins of solvency and assets of insurance companies, sections 51 and 52A, which are concerned with transfers of insurance business, and section 63, which is concerned with changes of the managers etc of insurance companies, so that the provisions applicable to companies having their head office in another member State are applicable also to Swiss general insurance companies.In addition, it amends section 37 of the 1982 Act to allow the Secretary of State to exercise the powers of intervention in sections 38 and 41 to 45 of that Act against a Swiss general insurance company if the Swiss supervisory authorities have withdrawn authorisation from the company.Section 38 is amended so that the Secretary of State is prohibited from exercising powers in that section in respect of assets in excess of the liabilities of the business of such a company carried on in the United Kingdom.
Regulation 4 amends the definition of “supervisory authority” in section 96 of the 1982 Act to extend to bodies responsible for supervising insurance companies in Switzerland.
Regulation 5 amends the definition of external company in regulation 2 of the 1981 Regulations, and inserts a definition of a Swiss general insurance company.It also amends regulation 29 of and Part II of Schedule 5 to the 1981 Regulations so that, for the most part,a Swiss insurance company seeking authorisation to carry on direct general business in the United Kingdom must supply the same information as that required from a company which has its head office in another member State and which intends to carry on direct general business in the United Kingdom.
Regulation 6 amends the definitions of Community company and external company in regulation 3(1) of the 1983 Regulations with the effect that a Swiss general insurance company carrying on insurance business in the United Kingdom is subject to the same requirements under those Regulations as a company which has its head office in another member State.It also introduces a new transitional provision to regulation 31 to provide that Swiss general insurance companies are required to prepare accounts for financial years ending on or before 31 December 1992 on the basis that they are external companies.
Regulation 7 revokes a provision of earlier regulations that is superseded by the present Regulations.
The Regulations will not impose any new burdens on business, and therefore a Compliance Costs Assessment has not been prepared.
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