The Financial Services and Markets Act 2000 (Consequential Amendments and Savings) (Industrial Assurance) Order 2001

4.  The following provision is substituted for section 5(1) of the 1923 Act (prohibition of issue of illegal policies) and has effect after commencement in relation to existing policies—

“(1) Where an industrial assurance policy was, at the time of its issue, illegal or not within the legal powers of the relevant insurer which issued it, the collecting society or industrial assurance company which receives, or is entitled to receive, premiums in respect of that policy (whether or not it issued the policy) shall, without prejudice to any other penalty, be entitled to pay to the owner of the policy a sum equal to the surrender value of the policy (to be ascertained in manner hereafter provided), or, if the policy was issued after commencement of this Act, a sum equal to the amount of the premiums paid, unless it is proved that owing to any false representations on the part of the proposer, the relevant insurer did not know that the policy was illegal or beyond its legal powers.”.