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1

This paragraph applies to any transfer of engagements (other than contracts of reinsurance) where–

a

the effecting of the engagements constituted the carrying on of general business;

b

the transferor is a friendly society to which section 37(3) above applies; and

c

the transferee is–

i

a friendly society to which section 37(2) or (3) above applies;

ii

a UK company;

iii

an EC company;

iv

a non–EC company whose head office is in an EFTA State;

v

a Swiss general insurance company; or

vi

an insurance company whose margin of solvency is required to be supervised in accordance with Article 25 or 26 of the first general insurance Directive.

2

The Commission shall not confirm the transfer unless–

a

it is satisfied that the transferee is, or will be immediately after the approval–

i

authorised under section 32 above to carry on, or

ii

authorised under section 3 or 4 of the Insurance Companies Act 198218 to carry on, or

iii

authorised in accordance with Article 6 of the first general insurance Directive to carry on in an EEA State other than the United Kingdom,

general business of the class or classes to be transferred;

b

it is also satisfied that every policy included in the transfer evidences a contract which was entered into before the date of the application;

c

the relevant authority certifies that the transferee possesses the necessary margin of solvency after taking the proposed transfer into account; and

d

where the establishment from which the policies are to be transferred is situated in a member State other than the United Kingdom, the Commission is satisfied–

i

that the supervisory authority in that member State has been consulted about the proposed transfer; and

ii

either that the authority has responded or that the period of three months beginning with the consultation has elapsed.

3

Where, as regards any policy (other than an EFTA policy) which is included in the proposed transfer, the risk is situated in a member State other than the United Kingdom, the Commission shall not confirm the transfer unless it is satisfied–

a

that the supervisory authority in that member State has been notified of the proposed transfer;

b

either that the authority has consented to the transfer or that the authority has not refused its consent to the transfer within the period of three months beginning with the notification.

4

Where the establishment of the transferee to which the policies are to be transferred is situated in the United Kingdom and, as regards any EFTA policy included in the proposed transfer, an EEA State other than the United Kingdom is the State in which the risk is situated, the Commission shall not confirm the transfer unless it is satisfied that–

a

the transferee either fulfils the conditions in Articles 13 to 16 of the second general insurance Directive in that EEA State; and

b

the supervisory authority in that EEA State agrees to the transfer.

5

Where the establishment of the transferee to which the policies are to be transferred is situated in an EEA State other than the United Kingdom and, as regards any EFTA policy included in the proposed transfer, an EEA State other than the United Kingdom is the State in which the risk is situated, the Commission shall not confirm the transfer unless–

a

where the EEA State in which the establishment is situated is also the State in which the risk is situated, it is satisfied that the supervisory authority in that EEA State agrees to the transfer;

b

where the United Kingdom is the State in which the risk is situated, it is satisfied that the transferee is not precluded by Schedule 2F to the Insurance Companies Act 1982 from covering the risk; and

c

where an EEA State other than the United Kingdom or the EEA State in which the establishment is situated is the State in which the risk is situated, it is satisfied that–

i

the transferee either fulfils the conditions in Articles 13 to 16 of the second general insurance Directive in the EEA State in which the risk is situated;

ii

the law of that State provides for the possibility of such a transfer; and

iii

the supervisory authority in that State agrees to the transfer.

6

In this paragraph “the relevant authority” means–

a

if the transferee is a friendly society to which section 37(2) or (3) above applies, the Commission;

b

if the transferee is a United Kingdom company, the Secretary of State;

c

if the transferee is an EC company, the supervisory authority in its home State;

d

if the transferee is a non–EC company whose head office is in an EFTA State, the supervisory authority in that EFTA State;

e

if the transferee is a Swiss general insurance company, the supervisory authority in Switzerland;

f

if the transferee is an insurance company whose margin of solvency is required to be supervised in accordance with Article 25 or 26 of the first general insurance Directive, the Secretary of State or other supervisory authority responsible for the supervision.