Policyholders Protection Act 1997 (repealed)

For section 3 of the 1975 Act there shall be substituted—

Schedule 1 to this Act (consequential amendments) shall have effect.

For section 4 of the 1975 Act there shall be substituted—

Schedule 2 to this Act (consequential amendments) shall have effect.

This section shall not have effect in relation to a policy, or security, where the contract which the policy evidences, or which governs the security, was entered into before the day on which this section comes into force.

For the purposes of subsection (3) above, where a contract for a term of more than one year— the contract shall be treated as having been entered into on that anniversary, unless the effecting of the contract constituted the carrying on of long term business (within the meaning of the Insurance Companies Act 1982).

Section 16 of the 1975 Act (which enables the Board to take measures to protect policyholders of companies in financial difficulties) shall be amended as follows.

In subsection (2) (under which the Board’s powers are exercisable for the purpose of safeguarding policyholders of a company in financial difficulties who are eligible for protection under the section)—

In subsection (3) (power to secure or facilitate transfer of business of company in financial difficulties on terms including reducing liabilities or benefits under any policies), for the words from “the liabilities” to “policies)” there shall be substituted “ any of the things to which any of those who are qualifying persons in relation to the company in financial difficulties are entitled in their capacity as such) ”.

In subsection (5) (power to assist company in financial difficulties conditionally on reduction of liabilities or benefits under any of its policies), for the words from “any liabilities” to “the company” there shall be substituted “ of the things to which any of those who are qualifying persons in relation to the company are entitled in their capacity as such ”.

In subsection (8) (restriction on exercise of powers)—

After subsection (8B) there shall be inserted—

After subsection (9) there shall be inserted—

Section 16 of the 1975 Act shall be amended as follows.

In subsection (1) (definition of company in financial difficulties), in paragraph (c) (application made for sanctioning compromise or arrangement providing for reducing liabilities or benefits under company’s policies), after “reducing” there shall be inserted “ , or deferring payment of, ”.

In subsection (3) (power to secure or facilitate transfer of business of company in financial difficulties on terms including reducing entitlements of qualifying persons), after “reducing” there shall be inserted “ , or deferring payment of, ”.

In subsection (5) (power to assist company in financial difficulties conditionally on reduction of entitlements of qualifying persons), after “reduction of” there shall be inserted “ , or the deferment of the payment of, ”.

In the 1975 Act, after section 17 there shall be inserted—

Schedule 3 to this Act (consequential amendments of the 1975 Act) shall have effect.

Section 21 of the 1975 Act (power to impose levies) shall be amended as set out in subsections (2) to (9) below.

In subsection (1) (general business levy), for the words from “authorised” to “United Kingdom” there shall be substitutedinsurance companies to which this Act applies which are— .

In subsection (2) (long term business levy), for the words from “authorised” to “United Kingdom” there shall be substitutedinsurance companies to which this Act applies which are— .

In subsection (3) (income by reference to which general business levy calculated)—

After that subsection there shall be inserted—

In subsection (4) (income by reference to which long term business levy calculated)—

After that subsection there shall be inserted—

After subsection (7) there shall be inserted—

After subsection (9) there shall be inserted—

In section 25(1) of the 1975 Act (application of surplus funds by the Board), for “authorised insurance companies carrying on business in the United Kingdom” there shall be substituted “ insurance companies to which this Act applies ”.

In Schedule 3 to that Act (additional provisions with respect to levies), in paragraph 4, for “authorised insurance company”, in each place, there shall be substituted “ insurance company to which this Act applies ”.

In that Schedule, at the end there shall be inserted—

Section 21 of the 1975 Act shall be amended as follows.

In subsection (3A), for paragraph (a) there shall be substituted—.

In subsection (3B)—

In subsection (4A), for paragraph (a) there shall be substituted—.

In subsection (4B)—

Section 21(7) of the 1975 Act (which provides for the deduction of reinsurance premiums in determining net premium income for the purposes of calculating amount payable under the general business levies) shall cease to have effect.

In paragraph 2(1) of Schedule 3 to that Act (which provides for general business levies in any financial year not to exceed specified percentage of company’s income), for “one per cent.” there shall be substituted “ 0.8 per cent. ”.

Schedule 3 to the 1975 Act (which makes provision as to the imposition and enforcement of general and long term business levies) shall be amended as follows.

After paragraph 6(2) there shall be inserted—

In paragraph 7, at the end of sub-paragraph (1) there shall be inserted “ , except where that income does not exceed such amount as the Secretary of State may specify for the purposes of this provision by regulations made by statutory instrument. ”

In Schedule 3 to the 1975 Act, in paragraph 7 (liability following notification of levy), in sub-paragraph (1), for “pay to the Board within one month of the date of the notice” there shall be substituted “ be liable to pay to the Board in accordance with sub-paragraph (1A) below ”, and after that sub-paragraph there shall be inserted—

In that Schedule, in paragraph 8 (service of notices), for “or 6” there shall be substituted “ , 6 or 7 ”.

In Schedule 2 to the 1975 Act (levies on intermediaries), in paragraph 6 (liability following notification of levy), in sub-paragraph (1), for “pay to the Board within one month of the date of the notice” there shall be substituted “ be liable to pay to the Board in accordance with sub-paragraph (1A) below ”, and after that sub-paragraph there shall be inserted—

In that Schedule, in paragraph 7 (service of notices), for “or 5” there shall be substituted “ , 5 or 6 ”.

Section 1 of the 1975 Act (which makes provision for the financing of the Board’s expenditure in performing their functions) shall be amended as follows.

In subsection (4) (limit on amount outstanding in respect of principal of money borrowed by the Board), for “£10 million” there shall be substituted “ £40 million ”.

After that subsection there shall be inserted—

In section 11(5)(a) of the 1975 Act (powers of the Board in relation to the transfer of the long term business of a company in liquidation), after “another insurance company to which this Act applies” there shall be inserted “ or an authorised friendly society ”.

In section 16(3) of that Act (corresponding provision in relation to companies in financial difficulties), after “another insurance company to which this Act applies” there shall be inserted “ or an authorised friendly society ”.

In section 32 of the 1975 Act (interpretation), in subsection (2) (which provides that expressions used in that Act have the same meaning as in the Insurance Companies Act 1982), after “above,” there shall be inserted “ but subject to subsection (2ZA) below ”.

After that subsection there shall be inserted—

In section 32 of the 1975 Act (interpretation), after subsection (2ZA) there shall be inserted—

In section 31 of that Act (regulations), in subsection (1) (which provides for negative resolution procedure), after “any provision of this Act” there shall be inserted “ , except section 32(2C) below, ”.

“authorised friendly society” means a society authorised under section 32 of the Friendly Societies Act 1992 to carry on in the United Kingdom insurance business such as is mentioned in section 31 of that Act; “EC company” and “EEA State” have the same meanings as in the Insurance Companies Act 1982; “establishment” has the same meaning as in the Insurance Companies Act 1982;

In that section, after subsection (2C) there shall be inserted—

Schedule 17 to the Friendly Societies Act 1992 (which prospectively amends the 1975 Act for the purpose of extending it to contracts of insurance with friendly societies) shall have effect subject to the amendments in Part I of Schedule 4 to this Act (which are consequential on the other provisions of this Act).

The 1975 Act, in its application to contracts of insurance with friendly societies entered into before the day on which section 2 above comes into force, shall have effect subject to the amendments in Part II of Schedule 4 to this Act (which have the effect that eligibility for protection in relation to such contracts is determined without regard to the amendments made by section 2 above).

In this section, “friendly society” has the same meaning as in the Friendly Societies Act 1992.

This Act may be cited as the Policyholders Protection Act 1997.

Section 20(1) and (3) above, section 22 above, so far as relating to the Friendly Societies Act 1992, and this section shall come into force on the day on which this Act is passed.

The remaining provisions of this Act shall come into force on such day as the Treasury may by order made by statutory instrument appoint; and different days may be so appointed for different purposes.

An order under subsection (3) above may contain such transitional provisions and savings as the Treasurythink fit.

This Act extends to Northern Ireland.