The Insurers (Reorganisation and Winding Up) (Lloyd's) Regulations 2005

Moratorium

8.—(1) Except with the permission of the court, for the period during which a Lloyd’s market reorganisation order is in force, no proceedings or other legal process may be commenced or continued against:

(a) an affected market participant;

(b) the Society; or

(c) a subsidiary of the Society to which the order applies.

(2) In paragraph (1),

(a) “court” means in England and Wales the High Court, in Northern Ireland the High Court and in Scotland the Court of Session; and

(b) “proceedings” means proceedings of every description and includes:

(i) a petition under section 124 or 124A of the 1986 Act or Article 104 or 104A of the 1989 Order for the appointment of a liquidator or provisional liquidator;

(ii) an application under section 252 of the 1986 Act or Article 226 of the 1989 Order for an interim order;

(iii) a petition for a bankruptcy order under Part 9 of the 1986 Act or Part 9 of the 1989 Order; and

(iv) a petition for sequestration under section 5 or 6 of the Bankruptcy (Scotland) Act, but

does not include prosecution for a criminal offence.

(3) Except with the permission of the court, for the period during which a Lloyd’s market reorganisation order is in force, no execution may be commenced or continued, no security may be enforced, and no distress may be levied, against (or against the assets of or in the possession of):

(a) any person specified in paragraph (1);

(b) a relevant trust fund (or the trustees of a relevant trust fund); and

(c) an overseas business regulatory deposit.

(4) Paragraph (3) does not prevent the enforcement of—

(a) approved security granted to secure payment of approved debts of a member incurred in connection with an overseas regulatory deposit arrangement; or

(b) security granted by a Lloyd’s broker over assets not being assets constituting or representing assets received or held by the Lloyd’s broker as intermediary in respect of any contract of insurance or reinsurance written at Lloyd’s or any contract of reinsurance reinsuring a member of Lloyd’s in respect of a contract or contracts of insurance or reinsurance written by that member at Lloyd's.

(5) In the application of paragraph (3) to Scotland, references to execution being commenced or continued include references to diligence being carried out or continued, and references to distress being levied shall be omitted.

(6) For the period during which a Lloyd’s market reorganisation order is in force, no action or step may be taken in respect of any of the persons specified in paragraph (1) by any person who is or may be entitled—

(a) under any provision in Schedule B1 to appoint an administrator;

(b) to appoint an administrative receiver or receiver;

(c) under section 425 of the 1985 Act or Article 418 of the Companies Order to propose a compromise or arrangement,

unless he has complied with paragraph (7)

(7) A person intending to take any such action or step shall give notice to the reorganisation controller before doing so.

(8) Where a person fails to comply with paragraph (7),

(a) an appointment to which sub-paragraph (6)(a) or (b) applies shall be void, and

(b) no application under section 425 or Article 418 may be entertained by the court,

except where the court, having heard the reorganisation controller, orders otherwise.

(9) Every application pursuant to paragraph (1) or paragraph (3) must be served on the reorganisation controller.

(10) For the period during which a Lloyd’s market reorganisation order is in force, an affected market participant in Scotland may not grant a trust deed for his creditors without the consent of the reorganisation controller.

(11) Where a person who is subject to a Lloyd’s market reorganisation order is, at the date of the order, in administration or liquidation or has been adjudged bankrupt or is a person whose estate is being sequestrated or who has granted a trust deed for his creditors—

(a) any application to the court for permission to take any action that would be subject to a moratorium arising in those earlier proceedings shall be served on the reorganisation controller and the reorganisation controller shall be entitled to be heard on the application; and

(b) the court shall take into account the achievement of the objectives for which the Lloyd’s market reorganisation order was made.

(12) In this regulation—

(a) “approved debt” means a debt approved by the Society at the time it is incurred;

(b) “approved security” means security approved by the Society at the time it is granted over or in respect of assets comprised in the member’s premiums trust funds or liable in the future to become comprised therein;

(c) “overseas regulatory deposit arrangement” means an arrangement approved by the Society and notified to the Authority whose purpose is to facilitate funding of any overseas business regulatory deposit.