The Building Societies (Designation of Qualifying Bodies) (No. 2) Order 1993

Articles 2 and 3

SCHEDULE

PART I DESCRIPTION OF DESIGNATED BODY CORPORATE

Column 1	Column 2	Column 3	Column 4	Column 5
Specified description	Specified definition	Specified relevant power	Specified purposes	Specified conditions
Mortgage indemnity insurance body	A specified type of body corporate (not being one excluded by the particular restrictions for mortgage indemnity insurance bodies) which is a single tier organisation formed for the purposes of, or the objects of which include, carrying on in any member State or in any country or territory listed in paragraph 2(c) of Part II of the Schedule hereto, any or all of the following activities— (i) mortgage indemnity insurance business; (ii) investment of premiums which have been obtained by the body in the course of carrying on mortgage indemnity insurance business; (iii) entering into and effecting insurance contracts against risks incurred by the body in carrying on the activity referred to in (i) above; (iv) any activity which is ancillary or necessary for the purpose of carrying on any of the activities referred to in (i), (ii) and (iii) above.	Investment and support	Enabling the body to carry on any activity listed in column 2 for which purpose the body may be formed.	The standard asset provision. The ownership condition.

PART II INTERPRETATION

Meaning of standard asset provision

1.  In this Schedule “the standard asset provision” means a condition to the effect that—

(a) the relevant power is not available to a society which does not for the time being have a qualifying asset holding, but

(b) the cessation of its availability does not require the disposal of any property or rights.

Meaning of specified type of body corporate

2.  In this Schedule “specified type of body corporate” means a body corporate which is—

(a) a company or industrial and provident society,

(b) a body corporate formed in a member State other than the United Kingdom,

(c) a body corporate formed in any of the following countries or territories:

Austria, Finland, Iceland, Liechtenstein, Norway, Sweden, Switzerland, Isle of Man, Jersey, Guernsey and Alderney.

Meaning of single tier organisation

3.  In this Schedule “a single tier organisation” is a body which does not have the capacity to hold 5% or more of shares or corresponding membership rights in another body corporate, and any shares or corresponding membership rights which the body holds in another body corporate are held for the purpose of investing premiums which have been obtained for the purposes of carrying on mortgage indemnity insurance business.

Meaning of carrying on mortgage indemnity insurance business

4.—(1) For the purposes of this paragraph—

“advance” means any advance which is secured on land situated in the United Kingdom or in any country or territory designated under section 14 (power to make advances secured on land overseas) of the Act;

“mortgagor” means any person to whom the society has made an advance;

“society” means any society which owns shares or corresponding membership rights in the body.

(2) In this Schedule, “carrying on mortgage indemnity insurance business” means that the body enters into an agreement (“the agreement”) with a society whereby the body, subject to the conditions specified below, agrees to indemnify the society against loss incurred by the society.

(3) For the purposes of sub-paragraph (2) above the conditions are that:

(i) the loss arises following failure by a mortgagor to make due payment in respect of an advance, and

(ii) the body pays the society the amount specified in the agreement following sale of the land in respect of which that advance has been made.

Meaning of the ownership condition

5.  In this Schedule “the ownership condition” means that all shares or corresponding membership rights in the body are owned by one or more societies.

Specification of particular restrictions for mortgage indemnity insurance bodies

6.—(1) In this Schedule the “particular restrictions for mortgage indemnity insurance bodies” means that a body corporate is not a mortgage indemnity insurance body for a society where—

(a) for the purpose of carrying on mortgage indemnity insurance business the body is neither authorised nor otherwise entitled to carry on such business in any member State nor in any country or territory listed in paragraph 2(c) above, nor (where applicable) a candidate for authorisation in any such State, country or territory, and

(b) its business includes any prohibited activity.

(2) For the purposes of sub-paragraph (1)(b) above, a prohibited activity means the following—

(i) any activity which is not listed in column 2 of Part I of the Schedule to this Order as an activity for which purpose the body may be formed, or

(ii) any activity which is not one for which purpose a society may invest in and support the body by virtue of section 18(4) of the Act.

Meaning of candidate for authorisation

7.  For the purposes of this Schedule a body corporate is “a candidate for authorisation” in respect of the carrying on of mortgage indemnity insurance business if it has been formed with a view to being authorised in that respect and is applying, or is taking steps to apply, for authorisation in that respect.