81.—(1) The validity of an act done by a protected cell company cannot be called into question on the ground of lack of capacity by reason of anything in the enactments and documents specified in paragraph (7) (the “governing documents”).
(2) A party to a transaction with a protected cell company is not bound to enquire—
(a)as to whether the transaction is permitted by the governing documents; or
(b)as to any limitation on the powers of the directors deriving from the governing documents.
(3) But sub-paragraph (b) of paragraph (2) does not apply if the party is not dealing in good faith.
(4) In favour of a person dealing in good faith, the following powers are deemed to have been exercised free of any limitation in the governing documents—
(a)the powers of the directors to bind the protected cell company or authorise others to do so; and
(b)the power of the protected cell company in a general meeting to bind the protected cell company or authorise others to do so.
(5) For the purposes of this regulation—
(a)a person deals with a protected cell company if the person is a party to a transaction or other act to which the protected cell company is a party;
(b)a person acts in good faith unless—
(i)the person has actual knowledge that the protected cell company did not have the power to do the relevant act; or
(ii)the person deliberately fails to make enquiries in circumstances where a reasonable and honest person would have done so; and
(c)a person is presumed to have acted in good faith unless the contrary is proved.
(6) This regulation does not affect—
(a)the right of a person holding a share issued on behalf of the core of the protected cell company to bring proceedings to restrain the protected cell company from doing an act which would be beyond the protected cell company's capacity (see regulation 98(1));
(b)the duty on the directors to observe any limitation on their powers; or
(c)any liability incurred by the directors or any other person by reason of the directors exceeding their powers.
(7) In this regulation, the “governing documents” are—
(a)these Regulations;
(b)Commission Delegated Regulation (EU) 2015/35 of 10th October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) M1;
(c)the Implementing Technical Standard;
(d)rules made under FSMA;
(e)the protected cell company's instrument of incorporation;
(f)written resolutions of the persons holding voting shares issued on behalf of the core of the protected cell company; and
(g)resolutions passed in general meeting.
Marginal Citations
M1OJ no L335, 17.12.2014, p.1.