http://www.legislation.gov.uk/id/uksi/2004/353

http://www.legislation.gov.uk/uksi/2004/353/regulation/33/2023-07-11

The Insurers (Reorganisation and Winding Up) Regulations 2004

text

text/xml

INSOLVENCY

COMPANIES

Statute Law Database

2024-05-16

Expert Participation

2023-07-11

These Regulations revoke and replace in their entirety the Insurers (Reorganisation and Winding Up) Regulations 2003 (SI 2003/1102) which implemented the directive of the Parliament and the Council on the reorganisation and winding up of insurance undertakings (2001/17/EC) for all UK insurers except Lloyd's. They take account of the changes to insolvency law brought about by the commencement of the Enterprise Act 2002 and in particular the new administration procedures in the new Schedule B1 to the Insolvency Act 1986. The Financial Services and Markets Act 2000 (Administration Orders Relating to Insurers) Order 2002 (SI 2002/1242) is amended to disapply paragraphs 14 and 22 of Schedule B1 because the reorganisation and winding up directive does not permit the appointment of an administrator other than by a court. These Regulations continue to provide that no winding up proceedings or voluntary arrangements in respect of EEA insurers can be undertaken in the UK except in the circumstances permitted by the Regulations. EEA reorganisation and winding up proceedings are to be recognised in the UK. Provisions are made for the exercise by EEA liquidators of their functions in the UK. Provision is made for the notification of reorganisation and winding up proceedings to competent authorities in other EEA Member States. Modifications are made to UK insolvency law in respect of notifications of various other matters including important stages in the relevant procedures and forms in which creditors in other EEA States may enter claims, to the FSA, EEA authorities and creditors. There are detailed changes from the provisions in the Regulations replaced with regard to administration and in particular to accommodate the ability for companies, Directors and holders of floating charges to appoint an administrator without a court order. The Regulations provide for the special order of priority for insurance debts created by the directive to apply to UK insurers and for the carrying through of the consequences of this in insolvency law. They make provision for application to insurers whose head office is outside the UK and the EEA. Provision is made for detailed amendment of existing secondary legislation including the insolvency rules in all UK jurisdictions dealing with the reorganisation or winding up of insurers.

The Insurers (Reorganisation and Winding Up) Regulations 2004

Regulations

Financial Services and Markets Act 2023

Sch. 1

Pt. 2

s. 1(4)

s. 86(3)

C1PART IVPRIORITY OF PAYMENT OF INSURANCE CLAIMS IN WINDING UP ETC.

Annotations:

Modifications etc. (not altering text)

Pt. IV applied (with modifications) (10.8.2005) by The Insurers (Reorganisation and Winding Up) (Lloyd's) Regulations 2005 (S.I. 2005/1998), regs. 1, 40(1)-(11) (with reg. 32) (as amended by S.I. 2018/208, regs. 1(3), 10(10) (with reg. 21); S.I. 2019/755, regs. 1, 6(6))

Voluntary arrangements: treatment of insurance debts33

1

The modifications made by paragraph (2) apply where a voluntary arrangement is proposed under section 1 of the 1986 Act or Article 14 of the 1989 Order in relation to a UK insurer, and that arrangement includes—

a

a composition in satisfaction of any insurance debts; and

b

a distribution to creditors of some or all of the assets of that insurer in the course of, or with a view to, terminating the whole or any part of the business of that insurer.

2

Section 4 of the 1986 Act (decisions of meetings) has effect as if—

a

after subsection (4) there were inserted—

F24A
Neither the company nor its creditors may approve any proposal or modification under which any insurance debt of the company is to be paid otherwise than in priority to such of its debts as are not insurance debts or preferential debts.

b

for subsection (7) there were substituted—

7
References in this section to preferential debts mean debts falling into any of categories 4 and 5 of the debts listed in Schedule 6 to this Act; and references to preferential creditors are to be construed accordingly.

c

after subsection (7) as so substituted there were inserted—

8
For the purposes of this section—
a
“insurance debt” has the meaning it has in the Insurers ( Reorganisation and Winding up) Regulations 2004; and
b
“relevant insolvency measure” means—
i
the appointment of a provisional liquidator, or
ii
the appointment of an administrator,
where an effect of the appointment will be, or is intended to be, a realisation of some or all of the assets of the insurer and the distribution of the proceeds to creditors, with a view to terminating the whole or any part of the business of that insurer.

3

Article 17 of the 1989 Order (decisions of meetings) has effect as if—

a

after paragraph (4) there were inserted—

4A
A meeting so summoned and taking place on or after 20th April 2003 shall not approve any proposal or modification under which any insurance debt of the company is to be paid otherwise than in priority to such of its debts as are not insurance debts or preferential debts.
4B
Paragraph (4A) does not apply where—
a
a winding up order made before 20th April 2003 is in force; or
b
a relevant insolvency appointment made before 20th April F12003 has effect, in relation to the company.

b

for paragraph (7) there were substituted—

7
References in this Article to preferential debts mean debts falling into any of categories 4 and 5 of the debts listed in Schedule 4 to this Order, and references to preferential creditors are to be construed accordingly.

c

after paragraph (7) as so substituted there were inserted—

8
For the purposes of this section—
a
“insurance debt” has the meaning it has in the Insurers (Reorganisation and Winding Up) Regulations 2004 and
b
“relevant insolvency measure” means—
i
the appointment of a provisional liquidator, or
ii
the appointment of an administrator,
where an effect of the appointment will be, or is intended to be, a realisation of some or all of the assets of the insurer and the distribution of the proceeds to creditors, with a view to terminating the whole or any part of the business of that insurer.