SCHEDULEMODIFICATIONS OF PART II OF THE INSOLVENCY ACT 1986 IN RELATION TO INSURERS

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1

The powers of the administrator referred to in Schedule 1 to the 1986 Act (powers of administrator or administrative receiver) include the power to make—

a

any payments due to a creditor; or

b

any payments on account of any sum which may become due to a creditor.

2

Any payments to a creditor made pursuant to sub-paragraph (1) must not exceed, in aggregate, the amount which the administrator reasonably considers that the creditor would be entitled to receive on a distribution of the insurer’s assets in a winding up.

3

The powers conferred by sub-paragraph (1) may be exercised until a section 23 meeting but may only be exercised thereafter—

a

if the following conditions are met—

i

the administrator has laid before the section 23 meeting or any subsequent creditors' meeting (“the relevant meeting”) a statement containing the information mentioned in sub-paragraph (4); and

ii

the powers are exercised with the consent of a majority in number representing three-fourths in value of the creditors present and voting either in person or by proxy at the relevant meeting; or

b

with the consent of the court.

4

The information referred to in sub-paragraph (3)(a) is an estimate of the aggregate amount of—

a

the insurer’s assets and liabilities (whether actual, contingent or prospective); and

b

all payments which the administrator proposes to make to creditors pursuant to sub-paragraph (1);

including any assumptions which the administrator has made in calculating that estimate.