Friendly Societies Act 1992
The Financial Conduct Authority (“the FCA”) has the following functions under this Act and the 1974 Act in relation to friendly societies—
to secure that the purposes of each friendly society are inconformity with this Act and any other enactment regulating the purposes of friendly societies;
to administer the system of regulation of the activities of friendly societies provided for by or under this Act and the 1974 Act; and
to advise and make recommendations to the Treasury and other government departments on any matter relating to friendly societies.
The FCA and the PRA also have, in relation to such societies, the other functions conferred on them respectively by or under this Act or any other enactment.
The function in subsection (1)(c) is also a function of the Prudential Regulation Authority (“the PRA”).
Any appointment under subsection (2) above may be on either a full-time or a part-time basis.
The general functions of the Commission shall be— and the Commission shall have the other functions conferred on it by or under this Act or any other Act.
to promote the protection by each friendly society of its funds;
to promote the financial stability of friendly societies generally;
to secure that the purposes of each friendly society are in conformity with this Act and any other enactment regulating the purposes of friendly societies;
to administer the system of regulation of the activities of friendly societies; and
to advise and make recommendations to the Treasury and other government departments on any matter relating to friendly societies,
The Commission shall have power to do anything which is calculated to facilitate the discharge of its functions, or is incidental or conducive to their discharge.
The functions of the Commission, and of its officers and employees, shall be performed on behalf of the Crown.
The Treasury may by order transfer some or all of the functions of the Commission to such other person or body as the order may specify.
Without prejudice to the generality of section 121(3) below, an order under this section may in consequence of the transfer—
amend any enactment or instrument;
direct that the Commission shall cease to exist on a day specified in the order.
Schedule 1 to this Act shall have effect with respect to the Commission.
There shall be charged on friendly societies such a general charge towards the expenses of the Commission and such fees in respect of the exercise of its functions as are authorised under this section.
The Treasury may, by regulations, make provision for—
a general charge to be levied on friendly societies with respect to each accounting year of the Commission and to be paid at such rate computed by reference to such criteria, at such time and in such manner as may be prescribed by the regulations; and
fees of such amounts as may be so prescribed to be paid by friendly societies in respect of the exercise of the Commission’s functions in relation to them.
The provision to be made from time to time under subsection (2) above, by way of the general charge and fees, shall be such as to produce an annual revenue of the Commission sufficient to meet its expenses properly chargeable to revenue account, taking one year with another.
Regulations under subsection (2) above may include provision for any fees payable by societies to be reduced or for payment of any fees to be waived by the Commission in circumstances determined by or under the regulations.
The amounts received by the Commission under this section shall be applied as an appropriation in aid of money provided by Parliament for the expenses of the Commission, and in so far as not so applied, shall be paid into the Consolidated Fund.
In this Part of this Act “accounting year”, in relation to the Commission, means the period of 12 months ending with 31st March in any year, except that the Commission’s first accounting year shall end on 31st March 1993.
The Commission shall keep proper accounts and proper accounting records and shall prepare in respect of each accounting year a statement of accounts in such form as the Treasury may direct.
The statement of the accounts required by subsection (1) above may be combined with the statement of the accounts of the Chief Registrar which he is required to prepare as regards his functions.
The Commission shall send to the Treasury and to the Comptroller and Auditor General, before the end of the period of seven months after the end of each accounting year, a copy of the statement of accounts for that year.
The Comptroller and Auditor General shall examine, certify and report on every statement of accounts received by him from the Commission and shall lay a copy of the statement and of his report thereon before each House of Parliament.
It shall be the duty of the Commission to lay before the Treasury and before Parliament as soon as possible after the end of each accounting year a report on the discharge of its functions during that year.
The Commission may lay before Parliament from time to time such other reports relating to the discharge of its functions, whether in relation to friendly societies generally or a particular friendly society, as it thinks fit.
This Part of this Act has effect—
to enable societies to be established in accordance with this Act and to be registered and incorporated under it; and
to enable friendly societies registered under the 1974 Act to be registered and incorporated under this Act.
A society may be established under this Act if under its proposed memorandum—
its purposes are to include the carrying on of one or more activities falling within Head A, B, C or D of Schedule 2 to this Act;
any such activity—
is to be carried on by the society with a view to the provision, for its members and such persons connected with its members as may be prescribed in its rules, of insurance or other benefits; and
is to be funded by voluntary subscriptions from members of the society, with or without donations; and
any other purposes which it is to have are within the permitted capacity of incorporated friendly societies under this Act.
A society established under this Act is incorporated as from the date of its registration under this Act by the FCA.
The Treasury may by order vary Schedule 2 to this Act by adding to or deleting, or by varying the description of, any activity for the time being specified in it.
No such order shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
Schedule 3 to this Act shall have effect in relation to— and certain incidents of membership of incorporated friendly societies.
the procedure for registration of societies as societies incorporated under this Act (in this Act referred to as “incorporated friendly societies”);
the memorandum of the purposes and extent of the powers of, and the rules for the regulation of, such societies,
the name and registered office of such societies,
In this Part of this Act references to the permitted capacity of incorporated friendly societies under this Act are to the capacity to carry on all the activities mentioned in section 7(2) below.
A registered friendly society may be registered and incorporated under this Act if— and such a society is so incorporated as from the date of its registration by the FCA.
the conditions mentioned in section 5(2) above are satisfied by reference to the society’s proposed memorandum; and
the society complies with the requirements in Schedule 3 to this Act which are applicable to its registration under this Act;
On the incorporation of a registered friendly society all property held immediately before incorporation by any person in trust for the society shall become by virtue of this subsection the property of the society after incorporation.
After its incorporation the society shall continue to be entitled to all rights and subject to all liabilities to which it was entitled or subject immediately before incorporation.
On the incorporation of a registered society with registered or unregistered branches— shall, subject to subsection (5) below, become by virtue of this subsection property, rights and liabilities of the society.
all property held immediately before incorporation by any person in trust for any branch of the society, and
all rights and liabilities to which any such branch was then entitled or subject,
A registered friendly society may (in accordance with paragraph 2 of Schedule 4 to this Act) make a scheme identifying any property, rights or liabilities of any branch of the society which are not to be transferred to the society on its incorporation; and any such property, rights or liabilities shall be excluded from transfer under subsection (4) above.
On the incorporation of a registered friendly society, its registration under the 1974 Act and that of any registered branch of the society shall be cancelled by the FCA.
Schedule 4 to this Act shall have effect for supplementing this section.
The purposes of an incorporated friendly society shall be those provided for by the society’s memorandum.
The purposes for which an incorporated friendly society may exist are— and the memorandum of an incorporated friendly society may also confer on the society power to do anything falling within Schedule 5 to this Act.
the carrying on, subject to section 5(2)(b) above, of—
any business of any description falling within a class specified in Head A or B or within Head C of Schedule 2 to this Act, or
any activity falling within Head D of that Schedule; and
the carrying on, in addition to any business or activity falling within paragraph (a) above, of any of the following, namely—
social or benevolent activities in accordance with section 10 below;
group insurance business in accordance with section 11 below;
reinsurance, in accordance with section 12 below, of risks insured by other friendly societies;
control or joint control of bodies corporate in accordance with section 13 below;
The memorandum of an incorporated friendly society may confer on it any other power specified in this Part of this Act, but no such power may be exercised except for carrying out the society’s purposes.
An incorporated friendly society shall, subject to the provisions of this Act, its memorandum and its rules, have any other power which is incidental or conducive to the carrying out of its purposes or for doing anything falling within Schedule 5 to this Act.
Nothing in this Act shall be taken as preventing an incorporated friendly society from providing in its rules— but no such group may do anything on its own account which does not fall within section 10 below or within Head D of Schedule 2 or within Schedule 5 to this Act.
for such system of representation of the members in the making of decisions by the society as the society may think fit;
for the division of the society’s members into groups under the control of the society and bound to contribute to the funds of the society but, subject to that, having funds and property of their own vested in trustees and administered by themselves or through their own trustees, officers or committees (and in accordance with their own rules);
for the delegation of authority to any such group (or to its committee or any of its officers) to act, within such limits as the society may set, on the society’s behalf;
Schedule 6 to this Act shall have effect in relation to the making of contracts and execution of documents by incorporated friendly societies.
The provisions of the memorandum of an incorporated friendly society are binding upon— and all such members, officers and persons (but no others) shall be taken to have notice of the provisions of the memorandum.
each of the members and officers of the society,
all persons claiming on account of a member or under its rules,
A person not of a description mentioned in subsection (1)(a) or (b) above who is a party to a transaction with an incorporated friendly society which is within the permitted capacity of such societies under this Act is not bound to enquire as to whether the transaction is within the capacity of the society in question.
Subsection (4) below applies to any act of an incorporated society which is within the permitted capacity of such societies under this Act but is beyond the capacity of the society in question.
In favour of a person who— any act to which this subsection applies is deemed to be one which is within the capacity of the society to enter into, notwithstanding the provisions of the memorandum.
is not a person mentioned in subsection (1) above;
gives valuable consideration for the act; and
does not know that the act is beyond the capacity of the society,
Where an incorporated friendly society purports to transfer or grant an interest in property, the fact that the act was beyond the capacity of the society does not affect the title of a person who in good faith subsequently acquires the property or an interest in it for valuable consideration and without actual notice of the circumstances affecting the validity of the society’s act.
Subsection (4) above does not affect—
the right of a member of an incorporated friendly society to bring proceedings to restrain the doing of an act (other than an act done in fulfilment of a legal obligation arising from a previous act of the society) which is beyond the capacity of the society;
the duty of the committee of management to observe any limitation on their powers flowing from the society’s memorandum; or
any liability incurred by any person by reason of the society acting beyond its capacity.
Relief from any liability mentioned in subsection (6)(c) above must be agreed to by special resolution.
In any proceedings arising out of subsection (4) above, the burden of proving that a person knew that an act was beyond the capacity of the society in question lies on the person making the allegation.
In this section “transaction” includes any act.
The provisions of the rules of an incorporated friendly society are binding upon— and all such members, officers and persons (but no others) shall be taken to have notice of the provisions of the rules.
each of the members and officers of the society,
all persons claiming on account of a member or under its rules,
A party to a transaction with an incorporated friendly society who is not of a description mentioned in subsection (1)(a) or (b) above is not bound to enquire as to any limitation on the powers of the committee of management to bind the society.
Subsection (4) below applies in relation to any act of an incorporated friendly society which is, or is deemed by section 8(4) above to be, within the capacity of the society and is decided upon by the committee of management acting beyond their powers under the constitution of the society.
In favour of a person who— the power of the committee of management to bind the society shall be deemed free of any limitation in the society’s constitution.
is not a person mentioned in subsection (1) above;
gives valuable consideration for an act to which this subsection applies; and
does not know that the act is beyond the powers of the committee of management;
Where an incorporated friendly society purports to transfer or grant an interest in property, the fact that the committee of management acted beyond their powers under the society’s constitution does not affect the title of a person who in good faith subsequently acquires the property or an interest in it for valuable consideration and without actual notice of the circumstances (if any) affecting the validity of the society’s act.
Subsection (4) above does not affect—
the right of a member of an incorporated friendly society to bring proceedings to restrain the doing of an act (other than an act done in fulfilment of a legal obligation arising from a previous act of the society) which is beyond the powers of the committee of management;
the duty of the committee of management to act within their powers under the constitution of the society;
any liability incurred by any person by reason of the committee of management exceeding their powers.
Action by the committee of management of an incorporated friendly society which is beyond their powers under the society’s constitution but is within its capacity may be ratified by the society in general meeting in such manner as its rules may provide; but relief from any liability mentioned in subsection (6)(c) above must be agreed to by special resolution separate from any resolution ratifying the committee’s action.
In this section—
references to limitations on the committee’s powers under the constitution of the society include limitations deriving from a resolution of the society in general meeting or any agreement between the members of the society; and
“transaction” includes any act.
In any proceedings arising out of subsection (4) above, the burden of proving that a person knew that an act was beyond the powers of the committee of management lies on the person making the allegation.
This section shall not affect the application, in relation to an incorporated friendly society, of any rule of law relating to the validity of acts which are within the capacity of a body corporate but may have been affected by defects arising from its internal management under its constitution.
An incorporated friendly society may include among its purposes the carrying on of any social or benevolent activity which is not inconsistent with the other purposes of the society.
For the purposes of this section “benevolent activity” means the making of donations, the raising of funds or any other activity carried on for a charitable purpose or for any other benevolent purpose.
An incorporated friendly society may include among its purposes the carrying on of any group insurance business.
In this Act “group insurance business” means business (carried on in accordance with the society’s rules) which—
is of a description falling within Head A, or class 2 of Head B, of Schedule 2 to this Act; and
is carried on as the business of providing benefits, in pursuance of a contract with a qualifying person, for or in respect of the members of a group scheme.
For the purposes of this section—
“the body under investigation” means— the friendly society whose affairs are the subject of the investigation, or the friendly society, and each subsidiary of or body jointly controlled by the society, whose affairs are so subject, as the case may be;
“specified” means specified in a notice under this section; and
The FCA must consult the PRA before cancelling under subsection (1), (2) or (3) the registration of a society which is a PRA-authorised person.
the individual accounts required by section 69A, and
being employees of a particular employer, or
“income and expenditure account”, in relation to a friendly society or registered branch which prepares IAS accounts, includes an income statement or other equivalent financial statement required to be prepared by UK-adopted international accounting standards;
being members of some other group of persons of a description prescribed in regulations under subsection (7) below;
Group insurance business may be carried on by an incorporated friendly society whether or not members of the group scheme are, or are required by the society to be, members of the society.
Where an incorporated friendly society carries on any group insurance business and the rules of the society so provide, any qualifying person with whom the society contracts (or his nominee) may be accorded the rights of a member of the society (including any right to vote) for the purpose of participating in the affairs of the society in the interests of the members of the group scheme with which he is concerned.
A person who is accorded the rights of a member of a society by virtue of subsection (4) above shall, for the purposes of any power conferred on the FCA or the PRA by this Act which is exercisable in the interests of members of the society, be treated as if he were a member of the society.
The rules of an incorporated friendly society may not prevent a person from being a member of the society in his private capacity by reason only of the fact that he has been accorded the rights of a member by virtue of subsection (4) above.
The Treasury may make regulations specifying the manner in which group insurance business may be carried on by incorporated friendly societies; and such regulations may in particular include limitations or requirements relating to—
the contracts in pursuance of which group insurance business may be carried on; or
the persons with whom, or the groups of persons for whose benefit, such contracts may be made.
An incorporated friendly society may include among its purposes the carrying on of any reinsurance business to which subsection (2) below applies to such extent or in such circumstances as may from time to time be approved by the appropriate actuary.
This subsection applies to business consisting of the effecting and carrying out of contracts of reinsurance of risks which—
are insured or to be insured by any other friendly society (whether incorporated or not); and
are of a class or part of a class of insurance business which the society carrying on the reinsurance business itself carries on.
An incorporated friendly society which carries on any insurance business may provide in its rules for the reinsurance to such extent as may from time to time be approved by the appropriate actuary of any risks against which persons are or are to be insured by the society.
Subject to the following provisions of this section, an incorporated friendly society may include among its purposes any of the following activities—
forming subsidiaries;
taking part with others in forming bodies corporate to be jointly controlled by it;
otherwise acquiring, or keeping, control or joint control of bodies corporate.
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companies whose objects are limited to the carrying on of any one or more of the activities specified in Schedule 7 to this Act; and
bodies formed in another member State whose purposes are limited to the carrying on of any one or more of those activities in another member State.
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Any alteration of the memorandum of an incorporated friendly society to include among its purposes and powers the carrying on of any activity such as is mentioned in subsection (1) above must be adopted by a special resolution of the society in general meeting; and any amendment of a provision in its memorandum which permits it to do so must also be so adopted.
A registered friendly society may not include in a memorandum adopted for the purposes of paragraph 2(1)(c) of Schedule 3 to this Act any provision enabling it on incorporation to carry on any activity such as is mentioned in subsection (1) above unless its inclusion has been authorised by a special resolution of the society in general meeting.
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For the purposes of this Act— and a society acquires joint control whenever any of the conditions mentioned in paragraph (c) or (cc) above are satisfied with respect to a body corporate, notwithstanding that it may already be a subsidiary of the society.
an incorporated friendly society has control of a body corporate if the society—
holds a majority of the voting rights in it; or
is a member of it and has the right to appoint or remove a majority of its board of directors; or
is a member of it and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in it;
a body corporate is a subsidiary of an incorporated friendly society if the society has control of it.
an incorporated friendly society also has control of a body corporate if the body corporate is itself a body controlled in one of the ways mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has control;
an incorporated friendly society has joint control of a body corporate if, in pursuance of an agreement or other arrangement between them, the society and another person—
hold a majority of the voting rights in that body; or
are members of it and together have the right to appoint or remove a majority of its board of directors; or
are members of it and alone control, pursuant to an agreement with other shareholders or members, a majority of the voting rights in it;
a body corporate is a body jointly controlled by an incorporated friendly society if the society has joint control of it;
an incorporated friendly society also has joint control of a body corporate if—
a subsidiary of the society has joint control of the body corporate in a way mentioned in paragraph (c)(i), (ii) or (iii);
a body corporate of which the society has joint control has joint control of the body corporate in such a way; or
the body corporate is controlled in a way mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has joint control;
Schedule 8 to this Act shall have effect for supplementing this section.
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An incorporated friendly society may invest its funds—
in the purchase of land, or in the erection of offices or other buildings thereon;
upon any other security expressly directed by the rules of the society, other than personal security (but without prejudice to any provision of this Act relating to loans); or
in any other investment of a kind which trustees are for the time being by law authorised to make.
An incorporated friendly society which falls within subsection (3) . . . below may also invest the funds of the society in any other manner authorised by its constitution.
An incorporated friendly society falls within this subsection if—
it is a society to which rules in respect of margins of solvency, made by the appropriate authority under Part 9A of the Financial Services and Markets Act 2000, apply and
it maintains the margin of solvency which it is required to maintain by virtue of such rules.
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it carries on insurance business in the United Kingdom;
section 48 below does not apply to it; and
it maintains a margin of solvency of such amount as may be prescribed by or determined in accordance with regulations made for the purposes of this section.
Once a society falls within subsection (3) . . . above, it shall be treated as continuing to do so for the purposes of subsection (2) above unless the appropriate authority serves a notice under subsection (6) below on it.
Where it appears to the appropriate authority that an incorporated friendly society has ceased to fall within subsection (3) . . . above, it shall serve on the society a notice stating that fact.
The powers of investment of a society on which a notice is served under subsection (6) above shall accordingly, until the notice is revoked under subsection (10) below, be limited to investment falling within subsection (1) above.
A notice under subsection (6) above may direct a society to dispose of an investment which it could not have acquired except under subsection (2) above.
Subject to subsection (8) above, a society may retain any investment which it could only have acquired under subsection (2) above.
The appropriate authority may, by a subsequent notice to the society, revoke a notice under this section at any time when it appears to it that the society again falls within subsection (3) . . . above.
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The PRA must send to the FCA a copy of any notice it serves under subsection (6) or (10).
The FCA shall keep a copy of any notice served on a society under subsection (6) or (10) above in the public file of the society.
An incorporated friendly society may acquire and hold land— and may dispose of, or otherwise deal with, any land so held by it.
for the purpose of carrying on any of its activities; or
for the purpose of enabling a subsidiary of the society, or a body jointly controlled by it, to conduct its business;
An incorporated friendly society may provide its subsidiaries or bodies which it jointly controls with any of the following services—
loans of money, with or without security and whether or not at interest;
the use of services or property, whether or not for payment;
grants of money, whether or not repayable; and
guarantees of the discharge of their liabilities.
An incorporated friendly society may make payments towards the discharge of the liabilities of any of its subsidiaries.
An incorporated friendly society may advance to a member of at least one full year’s standing any sum not exceeding one half of the amount of an assurance of his life, on the written security of himself and two satisfactory sureties or, in Scotland, cautioners for repayment.
The amount so advanced, with all interest on it, may be deducted from the sum assured, without prejudice in the meantime to the operation of the security.
A person’s membership of a registered friendly society before the society’s incorporation is to be taken into account in calculating his standing for the purposes of this section.
The terms on which an incorporated friendly society provides any benefit shall be—
specified in its rules; or
determined in a manner specified in its rules.
If the terms on which a benefit is provided are not specified in the society’s rules, the society—
shall make copies of them available free of charge to members of the society at every office of the society; and
shall send, free of charge, copies of them to any member of the society who demands them.
If, on demand made of it under subsection (2) above, a society fails, in accordance with that subsection, to make available or, as the case may be, within 7 days of the demand, to send to a person a copy of the terms on which a benefit is provided, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
Schedule 9 to this Act shall have effect in relation to nominations by members of incorporated friendly societies and related matters.
An incorporated friendly society— in accordance with this Part of this Act; and an incorporated friendly society may not, except where it is dissolved by virtue of section 85(4), 86(5) or 90(9) below, be dissolved or wound up in any other manner.
may be dissolved by consent of the members; or
may be wound up voluntarily or by the court,
An incorporated friendly society which is in the course of dissolution by consent, or is being wound up voluntarily, may be wound up by the court.
An incorporated friendly society may be dissolved by an instrument of dissolution.
An instrument of dissolution shall only have effect if it is approved by special resolution.
An instrument of dissolution shall set out—
the liabilities and assets of the society in detail;
the number of members, and the nature of their interests in the society;
the claims of creditors, and the provision to be made for their payment;
the intended appropriation or division of the funds and property of the society;
the names of one or more persons to be appointed as trustees for the purposes of the dissolution, and their remuneration.
An instrument of dissolution may be altered, but the alteration shall only have effect if it is approved by special resolution.
The provisions of this Act shall continue to apply in relation to an incorporated friendly society as if the trustees appointed under the instrument of dissolution were the committee of management of the society.
The trustees shall— and if the trustees fail to comply with this subsection, they shall each be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
within 15 days of the passing of a special resolution approving an instrument of dissolution, give notice to the FCA and, if the society is a PRA-authorised person, the PRA of the fact and the date of commencement of the dissolution, enclosing a copy of the instrument; and
within 15 days of the passing of a special resolution approving an alteration of such an instrument, give notice to the FCA and, if the society is a PRA-authorised person, the PRA of the fact, enclosing a copy of the altered instrument;
An instrument of dissolution or an alteration to such an instrument shall be binding on all members of the society as from the date on which the copy of the instrument or altered instrument, as the case may be, is placed on the public file of the society under subsection (12) below.
The trustees shall, within 28 days from the termination of the dissolution, give notice to the FCA and, if the society is a PRA-authorised person, the PRA of the fact and the date of the termination, enclosing an account and balance sheet signed and certified by them as correct, and showing—
the assets and liabilities of the society at the commencement of the dissolution; and
the way in which those assets and liabilities have been applied and discharged.
If the trustees fail to comply with subsection (8) above they shall each be guilty of an offence and liable on summary conviction—
to a fine not exceeding level 2 on the standard scale; and
in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.
Except with the consent of the appropriate authority, no instrument of dissolution or alteration to such an instrument shall be of any effect if the purpose of the proposed dissolution or alteration is to effect or facilitate the transfer of the society’s engagements to any other friendly society or to a company.
Any provision in a resolution or document that members of an incorporated friendly society proposed to be dissolved shall accept membership of some other body in or towards satisfaction of their rights in the dissolution shall be conclusive evidence of such purpose as is mentioned in subsection (10) above.
The FCA shall keep in the public file of the society any notice or other document received by it under subsection (6) or (8) above and shall record in that file the date on which the notice or document is placed in it.
An incorporated friendly society may be wound up voluntarily under the applicable winding up legislation if it resolves by special resolution that it be wound up voluntarily.
A copy of any special resolution passed for the voluntary winding up of an incorporated friendly society shall be sent by the society to the FCA and, if the society is a PRA-authorised person, the PRA within 15 days after it is passed; and the FCA shall keep the copy in the public file of the society.
A copy of any such resolution shall be annexed to every copy of the memorandum or of the rules issued after the passing of the resolution.
If an incorporated friendly society fails to comply with subsection (2) or (3) above, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
For the purposes of this section, a liquidator of the society shall be treated as an officer of it.
An incorporated friendly society may be wound up under the applicable winding up legislation by the court on any of the following grounds, that is to say, if—
the society has by special resolution resolved that it be wound up by the court;
the number of members is reduced below 7;
the number of members of the committee of management is reduced below 2;
the society has not commenced business within a year from its incorporation or has suspended its business for a whole year;
the society exists for an illegal purpose;
the society is unable to pay its debts; or
the court is of the opinion that it is just and equitable that the society should be wound up.
Except as provided by subsection (2A), (2B) or (3) or the applicable winding up legislation, a petition for the winding up of an incorporated friendly society may be presented by— or by all or any of those parties, together or separately.
the FCA;
the society or its committee of management;
the PRA;
any creditor or creditors (including any contingent or any prospective creditor); or
any contributory or contributories,
A contributory may not present a petition unless the number of members is reduced below 7 or he has been a contributory for at least six months before the winding up.
The FCA may only present a petition under subsection (2) in respect of a society which is a PRA-authorised person after consulting the PRA.
In this section “contributory” has the meaning assigned to it by paragraph 9 of Schedule 10 to this Act.
The PRA may only present a petition under subsection (2)—
in respect of a society which is a PRA-authorised person; and
after consulting the FCA.
In this section “the companies winding up legislation” means the enactments applicable in relation to England and Wales, Scotland and Northern Ireland which are specified in paragraph 1 of Schedule 10 to this Act (including any enactment which creates an offence by any person arising out of acts or omissions occurring before the commencement of the winding up).
In its application to the winding up of an incorporated friendly society, by virtue of section 21(1) or 22(1) above, the companies winding up legislation shall have effect with the modifications effected by Parts I to III of Schedule 10 to this Act; and the supplementary provisions of Part IV of that Schedule also have effect in relation to such a winding up and in relation to a dissolution by consent.
In section 21 and 22 above “the applicable winding up legislation” means the companies winding up legislation as so modified.
This section has effect in relation to the winding up of an incorporated friendly society which carries on long term business (including any reinsurance business).
The liquidator shall, unless the court otherwise orders, carry on the long term business of the society with a view to its being transferred as a going concern under this Act; and, in carrying on that business, the liquidator may agree to the variation of any contracts of insurance in existence when the winding up order is made but shall not effect any new contracts of insurance.
If the liquidator is satisfied that the interests of the creditors in respect of liabilities of the society attributable to its long term business require the appointment of a special manager of the society’s long term business, he may apply to the court, and the court may on such application appoint a special manager of that business to act during such time as the court may direct, with such powers (including any of the powers of a receiver or manager) as may be entrusted to him by the court.
Section 177(5) of the Insolvency Act 1986 or, as the case may be, Article 151 of the Insolvency (Northern Ireland) Order 1989 shall apply to a special manager appointed under subsection (3) above as it applies to a special manager appointed under that section or that Article.
The court may, if it thinks fit and subject to such conditions (if any) as it may determine, reduce the amount of the contracts made by the society in the course of carrying on its long term business.
The court may, on the application of the liquidator, a special manager appointed under subsection (3) above or the FCA or the PRA appoint an independent actuary to investigate the long term business of the society and to report to the liquidator, the special manager or the FCA or the PRA, as the case may be, on the desirability or otherwise of that business being continued and on any reduction in the contracts made in the course of carrying on that business that may be necessary for its successful continuation.
Where an incorporated friendly society has been dissolved under section 20 above or following a winding up, the court may, at any time within 12 years after the date on which the society was dissolved, make an order under this section declaring the dissolution to have been void.
An order under this section may be made, on such terms as the court thinks fit, on an application by the trustees under section 20 above or the liquidator, as the case may be, or by any other person appearing to the court to be interested.
When an order under this section is made, such proceedings may be taken as might have been taken if the society had not been dissolved.
The person on whose application the order is made shall, within 7 days of its being so made, or such further time as the court may allow, furnish the FCA and, if the society is a PRA-authorised person, the PRA with a copy of the order; and the FCA shall keep the copy in the public file of the society.
If a person fails to comply with subsection (4) above, he shall be guilty of an offence and liable on summary conviction—
to a fine not exceeding level 3 on the standard scale; and
in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.
In this section “the court” means—
in relation to a society whose registered office is in England and Wales, the High Court;
in relation to a society whose registered office is in Scotland, the Court of Session; and
in relation to a society whose registered office is in Northern Ireland, the High Court in Northern Ireland.
Where the FCA is satisfied that an incorporated friendly society has been dissolved under section 20 above or following a winding up, the it shall cancel the society’s registration under this Act.
Where the FCA is satisfied, with respect to an incorporated friendly society—
that a certificate of incorporation has been obtained for the society by fraud or mistake; or
that the society has ceased to exist,
Without prejudice to subsection (2) above, the FCA may, if it thinks fit, cancel the registration of an incorporated friendly society at the request of the society, evidenced in such manner as the FCA may direct.
Before cancelling the registration of an incorporated friendly society under subsection (2) above, the FCA shall give to the society not less than two months’ previous notice, specifying briefly the grounds of the proposed cancellation.
Where the registration of an incorporated friendly society is cancelled under subsection (2) above, the society may appeal— and on any such appeal the court may, if it thinks it just to do so, set aside the cancellation.
where the registered office of the society is situated in England and Wales, to the High Court;
where that office is situated in Scotland, to the Court of Session; or
where that office is situated in Northern Ireland, to the High Court in Northern Ireland;
Where the registration of a society is cancelled under subsection (2) or (3) above, then, subject to the right of appeal under subsection (5) above, the society, so far as it continues to exist, shall cease to be a society incorporated under this Act.
Subsection (6) above shall not affect any liability actually incurred by an incorporated friendly society; and any such liability may be enforced against the society as if the cancellation had not taken place.
Any cancellation of the registration of an incorporated friendly society under this section shall be effected by written notice given by the FCA to the society.
As soon as practicable after the cancellation of the registration of an incorporated friendly society under this section the FCA shall cause notice thereof to be published in the London Gazette, the Edinburgh Gazette or the Belfast Gazette according to the situation of the society’s registered office, and if it thinks fit, in one or more newspapers.
Every friendly society shall have a committee of management with at least 2 members.
The committee of management shall appoint one of its members to be chairman of the committee.
Members of the committee of management shall (unless co-opted on to the committee) be elected to office in accordance with the rules of the society.
The committee of management may co-opt as a member of the committee (whether as an additional member or to fill any vacancy) any person— and such a person may be co-opted notwithstanding that he is not a member of the society.
who appears to the committee to be fit and proper to be a member, and
who has not failed, having been nominated at an election held within the preceding 12 months, to be elected as a member of the committee;
Part I of Schedule 11 to this Act shall have effect in relation to committees of management and Part II shall have effect with regard to dealings with members of committees of management of friendly societies and registered branches.
Every friendly society shall have a chief executive and a secretary.
The chief executive of a friendly society shall be a person appointed by the committee of management who (whether alone or jointly with one or more other persons) is responsible under the immediate authority of the committee for the conduct of the business of the society.
The secretary of a friendly society shall be appointed by the committee of management or, if the rules of the society so provide, elected to office in accordance with the rules.
The committee of management of a friendly society shall take all reasonable steps to secure that the person appointed as chief executive has the requisite knowledge and experience to discharge the functions of his office.
The offices of chief executive and secretary may be held by the same person.
Anything required or authorised to be done by or to the secretary or chief executive of a friendly society may, if the office is vacant or there is for any other reason no secretary or chief executive capable of acting, be done by or to—
any assistant or deputy secretary or assistant or deputy chief executive, as the case may be; or
if there is no assistant or deputy capable of acting, any member of the society’s staff who is authorised generally or specially for that purpose by the committee of management.
Where a person becomes or ceases to be a member of the committee of management of a friendly society, the society shall within one month give notice of that fact, including the information specified in subsection (2) below, to the FCA.
The notice shall state the person’s full name and address and the date on which he became, or ceased to be, a member of the committee and, in the case of a person becoming a member, the date of his birth.
Where a person becomes or ceases to be the chief executive or the secretary of a friendly society, the society shall within one month give notice of that fact to the FCA, stating the person’s full name and address and the date on which he became, or ceased to be, chief executive or secretary.
If a friendly society fails to comply with subsection (1) or (3) above, it shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.
On receipt of a notice under this section, the FCA shall record the name of the person to whom the notice relates and the date on which he began to hold, or, as the case may be, ceased to hold office, in the public file of the society.
Schedule 12 to this Act shall have effect with respect to meetings and resolutions of friendly societies and registered branches.
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Subject to subsections (2) and (3) below, a friendly society shall not carry on in the United Kingdom any insurance business or non-insurance business unless it is authorised by the Commission to do so.
A friendly society which— may carry on without authorisation business of that description consisting of the carrying out of contracts effected by the society before that commencement.
carried on, before the commencement of this section—
insurance business of any description that did not require to be authorised under the 1987 Regulations; or
non-insurance business of any description; and
is not authorised by the Commission to carry on business of that description after that commencement,
A friendly society may without authorisation effect an insurance contract, or a contract for non-insurance benefits, in pursuance of a term in a subsisting contract which the society may, by virtue of subsection (2) above, carry out without authorisation.
A friendly society which carries on any business in contravention of subsection (1) above shall be guilty of an offence and liable—
on conviction on indictment, to a fine;
on summary conviction, to a fine not exceeding the statutory maximum.
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The Commission may, subject to this Part of this Act, authorise friendly societies to carry on in the United Kingdom any class, or any part of a class, of insurance business and any description of non-insurance business.
Where, on an application duly made under this section or section 33 below, the Commission determines to grant authorisation to a friendly society, it shall do so in writing in terms specifying— the carrying on of which is covered by the authorisation.
each class of insurance business,
in relation to any class of such business the whole of which is not covered, each part of the class, and
each description of non-insurance business,
Authorisation may be restricted to industrial assurance business; and a friendly society is not authorised to carry on industrial assurance business unless the terms of its authorisation expressly specify such business.
Authorisation entitles a friendly society to carry on business anywhere in the United Kingdom unless, at the request of the society, the terms of its authorisation are expressly restricted to a part of the United Kingdom.
Authorisation may be granted to a friendly society unconditionally or subject to written conditions to be complied with by the society as provided by section 34 below.
Schedule 13 to this Act shall have effect in relation to the making and determination of applications for authorisation, the imposition of conditions and the withdrawal of authorisation.
An authorisation granted to a friendly society by the Chief Registrar under regulation 5 or 6 of the 1987 Regulations which is in force immediately before the commencement of section 31 above shall have effect as if it were an authorisation granted by the Commission under this section which authorised the society to carry on insurance business of such classes (or such parts of classes) as correspond to the business specified in the authorisation.
Where an application for authorisation under the 1987 Regulations has not been decided before the commencement of subsection (1) above, the Chief Registrar shall send to the Commission the information submitted by the society or otherwise received by him in relation to the application; and the application shall be treated as being an application under this section.
In this Part of this Act “authorisation” (except where the context otherwise requires) means an authorisation which is granted by the Commission under this section or deemed by this section to have been so granted; and “authorise” and “authorised” shall be construed accordingly.
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A friendly society which— may apply under this section for authorisation to continue to carry on any business it was carrying on before that commencement.
is not authorised and has not made any previous application for authorisation;
was, before the commencement of section 32 above, carrying on in the United Kingdom any insurance or non-insurance business; and
was, immediately before that commencement, neither required to be authorised under the 1987 Regulations nor subject to an order under section 88(1) of the 1974 Act (power of Chief Registrar to suspend business of friendly societies);
If the Commission is satisfied, on an application duly made under this section— it shall, subject to section 37 below, authorise the society to carry on any class (or part of a class) of insurance business, and any description of non-insurance business, which corresponds to any business carried on by the society immediately before the commencement of section 32 above.
that it has received adequate information about the society; and
that there is no reason to believe that the interests of the members of the society require refusal of the application;
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On an application duly made by a friendly society (“the society”), the Commission shall, subject to section 37 below, grant unconditional or conditional authorisation, or refuse to grant authorisation, in accordance with the following provisions of this section.
The Commission shall grant unconditional authorisation if it is satisfied that—
the chairman of the committee of management, the secretary and the chief executive of the society are each fit and proper persons to hold their respective offices;
the members of the committee of management, with the secretary and chief executive, have the capacity and intention to direct the affairs of the society in accordance with the criteria of prudent management;
the society is likely to comply with any requirements of this Act which relate to the business to be covered by the authorisation; and
the interests of the members of the society will be adequately protected without the imposition of conditions.
Subject to subsection (4) below, if the Commission is not satisfied as mentioned in subsection (2) above, it shall refuse to grant authorisation.
Where the Commission is not satisfied as mentioned in subsection (2)(b), (c) and (d) above but is satisfied that the imposition of conditions will secure— it shall grant authorisation subject to such conditions as it thinks fit for securing those objects.
the direction of the affairs of the society in accordance with the criteria of prudent management;
the likelihood of compliance by the society with any requirements of this Act which relate to the business to be covered by the authorisation; and
the adequate protection of the interests of the members of the society,
The conditions that may be so imposed may—
relate to any class (or part of a class) or description of business in respect of which authorisation is sought;
require the society to take steps or to refrain from adopting a particular course of action or to restrict the scope of its business in a particular way;
require the society to take steps with regard to the activities of any subsidiary or body jointly controlled by the society.
Without prejudice to the generality of subsection (5) above, conditions imposed under subsection (4) above may—
impose limitations on the effecting of contracts of insurance or contracts for non-insurance benefits or the accepting of new members;
require the removal of an officer of the society or of any registered branch;
where the society has branches, require the society to take steps with regard to the activities of any registered branch.
Conditions imposed under subsection (4) above— and, on adding to, varying or revoking any such conditions, the Commission shall (unless it considers it unnecessary to do so by reason of the nature of the changes) send to the secretary of the society a statement of the terms of all the subsisting conditions to which its authorisation is subject.
may be added to or varied from time to time by agreement between the Commission and the society; and
may be revoked at any time by the Commission if it is satisfied that they are no longer needed for the purpose for which they were imposed;
Subsections (2) to (7) above apply in relation to applications for authorisation made under section 33 above with the omission—
of subsection (2)(a) and (b);
of the reference to subsection (2)(b) in subsection (4); and
of subsection (4)(a).
Subsections (2) to (7) above apply in relation to a society applying for authorisation to carry on both long term and general business by virtue of section 37(8) below—
with the substitution, in subsection (2), for the words “unconditional authorisation”, of the words “authorisation subject only to the conditions required by section 37 below”;
with the insertion in subsections (2)(d) and (4), after the words “imposition of”, of the word “further”.
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This section applies where an authorised friendly society applies under section 32 above for authorisation to carry on insurance business of a class (or part of a class), or non-insurance business of a description, which is not covered by the society’s current authorisation.
On such an application, the conditions which the Commission may impose under section 34 above include—
conditions relating to any business covered by the society’s current authorisation; and
where the current authorisation is subject to conditions, conditions which vary the current conditions (whether by adding to, amending or replacing any of them).
Where the Commission determines to grant authorisation on such an application, it shall be granted in terms including all current terms of the society’s authorisation (including any that were otherwise unaffected by the determination); and those terms shall have effect in place of the previously subsisting terms.
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If the Commission considers it expedient to do so, it may (in accordance with Part II of Schedule 13 to this Act)— and the conditions that may be so imposed include any condition that might be imposed on the grant of authorisation.
impose conditions on a friendly society’s authorisation, or
where an authorisation is subject to conditions, impose conditions which vary the current conditions (whether by adding to, amending or replacing any of them);
Without prejudice to the generality of subsection (1) above, conditions so imposed may require—
the submission to the Commission of a plan for the restoration of a sound financial position or a short-term financial scheme;
modification of the plan or scheme (or the plan or scheme as previously modified) if the Commission considers it inadequate; and
the implementation of the plan or scheme if the Commission consider it adequate.
Subsection (7) of section 34 above applies to conditions imposed under this section as it applies to conditions imposed under that section.
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long term business;
general business; and
non-insurance business;
This subsection applies to a friendly society which carries on long term business— and, for the purposes of paragraph (b) above, years ending before 1st January 1985 shall be disregarded.
if its rules do not contain provision for calling up additional contributions, for reducing benefits or for claiming assistance from other persons who have undertaken to provide it; or
if its annual contribution income from long term business exceeded 500,000 ECU for 3 consecutive years and it is not the subject of a direction under subsection (5) below;
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This subsection applies to a friendly society which carries on general business— and, for the purposes of paragraph (b) above, years ending before 1st January 1993 shall be disregarded.
if its rules do not contain provision for calling up additional contributions or for reducing benefits; or
if its annual contribution income from general business in any previous year exceeded 1,000,000 ECU and it is not the subject of a direction under subsection (5) below;
In subsections (2) and (3) above a reference to a year, in relation to annual contribution income, is a reference to any financial year of a society for which, at the relevant time, accounts have been or ought to have been prepared.
The appropriate authority may, if it is satisfied that it is consistent with the international obligations of the United Kingdom to do so, direct that a friendly society— shall, unless the direction is revoked, be treated as not being a society to which subsection (2) or, as the case may be, subsection (3) above applies.
which is, by virtue only of paragraph (b) of subsection (2) above, a society to which that subsection applies; or
which is, by virtue only of paragraph (b) of subsection (3) above, a society to which that subsection applies;
If— the appropriate authority shall revoke the direction.
the appropriate authority has given a direction under subsection (5) above in relation to a society such as is mentioned in subsection (5)(a) above; and
the society’s annual contribution income from long term business exceeds 500,000 ECU for 3 consecutive years ending after a date specified in the direction,
If— the appropriate authority shall revoke the direction.
the appropriate authority has given a direction in relation to a society such as is mentioned in subsection (5)(b) above; and
the society’s annual contribution income from general business in a year ending after a date specified in the direction exceeded 1,000,000 ECU,
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the society may (if authorised to do so) carry on any class (or part of a class) of long term or general business which corresponds to business carried on by it on that date; but
the Commission shall (whether or not other conditions are imposed) impose such conditions on the society’s authorisation as the Commission thinks fit for securing that the society’s long term business and general business are kept separate;
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that assets representing funds in respect of long term business may be transferred so as to be available for general business if—
they represent the excess of the long term business funds over the society’s liabilities in respect of that business; or
the transfer is by way of reimbursement of expenditure borne by other assets in respect of long term business; and
that assets representing funds in respect of general business may be transferred so as to be available for long term business if they represent the excess of the general business funds over the society’s liabilities in respect of that business.
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An authorised friendly society to which section 37(2) or (3) applies shall not carry on any commercial business otherwise than in connection with or for the purposes of its insurance business.
Subsection (1) above shall not prevent a friendly society which was on 15th March 1979 carrying on long term business and a savings business in the United Kingdom from continuing to carry on the savings business.
Subsection (1) above has effect without prejudice to any stricter obligations imposed on friendly societies under this Part; and nothing in this section shall be taken to imply that a friendly society may carry out any activity other than for purposes permitted by this Act (or, in the case of registered societies, the 1974 Act) and the constitution of the society.
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If, with respect to an authorised friendly society, the Commission has reason to believe— it may by notice direct the society to make within such period as is specified in the notice an application under section 32 above for fresh authorisation.
that the society’s business is being, or will in the future be, conducted—
in a way that may not adequately protect the interests of members of the society; or
so as not to comply with the requirements of this Act which relate to the business for which the society’s authorisation was granted; or
that by reason of any increase in the volume of its long term or its general business it is appropriate for the society’s affairs to be re-examined;
The period so specified shall not be shorter than 3 nor longer than 6 months beginning with the date of the notice; but the Commission may, on representations being made to it, extend or further extend the period within which the application is to be made.
A notice under subsection (1) above shall state the grounds on which the Commission decided to give the direction.
The business covered by, and the conditions imposed on, a society’s fresh authorisation need not be the same as that covered by, or those imposed on, the previous one.
If the Commission refuses to grant fresh authorisation, it may specify in the notice of its refusal a date for the expiry of the current authorisation; and the authorisation shall expire on that date.
The making of an application for fresh authorisation shall not preclude the Commission, at any time while the application is pending, from exercising any power under this Part of this Act in relation to the society; but if it gives a direction under section 41 below, the proceedings on the application shall abate.
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Subject to the following provisions of this section, the Commission may by notice direct—
that a friendly society authorised to carry on insurance business shall, from a date specified in the direction, cease to be authorised to effect contracts of insurance, or contracts of a class (or part of a class) so specified; or
that a friendly society authorised to carry on non-insurance business shall, from a date specified in the direction, cease to be authorised to effect contracts for non-insurance benefits, or contracts of a description so specified.
The Commission shall give such a direction in relation to a friendly society if—
in the case of an incorporated society, a special resolution has been passed for its voluntary winding up;
an order to wind up the society has been made;
an event declared by the rules of the society to be the termination of the society has happened;
an instrument of dissolution has been executed as mentioned in section 93(1)(b) of the 1974 Act or a special resolution approving an instrument of dissolution under section 20 above has been passed; or
in the case of a registered society, the Commission has made an award under section 95(3) or 95A(1) of the 1974 Act for the dissolution of the society.
The Commission may give such a direction in relation to a friendly society at the request of the society or if—
it appears to the Commission that the society has failed to satisfy an obligation to which it is subject by virtue of the Industrial Assurance Act 1923, the 1974 Act, the Industrial Assurance (Northern Ireland) Order 1979 or this Act;
there exists a ground on which the Commission would be prohibited from granting authorisation to the society;
it appears to the Commission to be expedient to make the proposed direction in order to protect the interests of members of the society;
the authorisation was subject to conditions and it appears to the Commission that the society has not complied with a condition;
it appears to the Commission that information furnished to it on behalf of the society or, in connection with an application for authorisation, by or on behalf of an officer of the society is false in a material particular, misleading or inaccurate;
it appears to the Commission that a friendly society has failed to satisfy an obligation to which it is subject by virtue of any provision of the law of a country or territory outside the United Kingdom; or
the society, having been directed to apply for fresh authorisation under section 39 above, has either failed to make such an application within the period allowed or been refused fresh authorisation covering the effecting of new contracts of any description covered by the society’s previous authorisation.
A direction under this section shall not prevent a friendly society from effecting an insurance contract, or a contract for non-insurance benefits, in pursuance of a term of a subsisting contract of that description.
A direction under this section or section 41 below— but has effect without prejudice to the subsequent grant to the society of authorisation to carry on any business to which the direction relates.
shall be given in accordance with Part II of Schedule 13 to this Act, and
may not be revoked or varied,
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Where the Commission is satisfied that a friendly society which is authorised to carry on insurance business— the Commission may by notice direct that the society shall cease to be authorised to carry on insurance business or, as the case may be, insurance business of that class (or part of a class).
has ceased to carry on in the United Kingdom any insurance business, or insurance business of any class (or of any part of a class) specified in the society’s authorisation; or
has not, since the grant of authorisation to carry on insurance business of any class (or part of a class), carried on in the United Kingdom any insurance business or insurance business of that class (or part of a class) and at least twelve months has elapsed since that grant;
Where the Commission is satisfied that a friendly society which is authorised to carry on non-insurance business— the Commission may direct that it shall cease to be authorised to carry on non-insurance business or, as the case may be, non-insurance business of that description.
has ceased to carry on in the United Kingdom any non-insurance business or non-insurance business of a description specified in the authorisation; or
has not, since the grant of authorisation to carry on non-insurance business of any description, carried on in the United Kingdom any non-insurance business or non-insurance business of that description, and at least twelve months has elapsed since that grant;
For the purposes of this section a friendly society shall be taken to have ceased to carry on business, or business of a particular class or description, if at no time during a financial year of the society which began and ended during the currency of the authorisation did it carry on business or, as the case may be, business of that class or description.
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Where a contract of insurance or for non-insurance benefits is entered into between a friendly society and a member in contravention of section 31(1) above the member may, subject to subsection (2) below, elect— and the compensation so recoverable shall be such as the parties may agree or as any court of competent jurisdiction may, on the application of either party, determine.
to enforce the contract; or
to recover any money paid by him under the contract, together with compensation for any loss sustained by him as a result of having parted with it;
Any such court may allow money paid by a member under a contract to which subsection (1) applies to be retained by the friendly society if it is satisfied—
that the society reasonably believed that its entering into the contract did not constitute a contravention of section 31(1) above; and
that it is just and equitable for the money to be retained.
A member who recovers the money paid under a contract to which subsection (1) above applies— and, where any property so received has passed to a third party, the reference in this subsection to that property shall be construed as a reference to its value at the time at which it was received by the member.
shall not be entitled to any benefits under the contract; and
shall repay any money and return any other property received by him under the contract;
A contravention of subsection (1) of section 31 above shall not make a contract of insurance or contract for non-insurance benefits illegal or invalid to any greater extent than is provided in this section; and a contravention of that subsection in respect of a contract of insurance shall not affect the validity of any reinsurance contract entered into in respect of that contract.
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“modification” includes any additions and, as regards modifications of the statutory provisions relating to companies, any modification whether effected by any future Act or by an instrument made after the passing of this Act under an Act whenever passed; and
The Commission shall be a body corporate.
Subject to the provisions of this paragraph, a person shall hold and vacate office as a member or the chairman or deputy chairman of the Commission in accordance with the terms of the instrument appointing him to that office. A person may at any time resign office as a member or the chairman or deputy chairman of the Commission by giving the Treasury a signed notice stating that he resigns that office. When a member becomes or ceases to be the chairman or deputy chairman, the Treasury may vary the terms of his appointment so as to alter the date on which he is to vacate office as a member. If the chairman or deputy chairman ceases to be a member, he shall cease to be the chairman or deputy chairman, as the case may be. If the Treasury are satisfied— the Treasury may declare his office as a member vacant, and shall notify the declaration in such manner as they think fit; and thereupon the office shall become vacant.
No person who has attained the age of 70 years is eligible to be or to remain a part-time member of the Commission.
The Commission shall pay to its part-time members such fees for services and such allowances in respect of expenses as may be determined by the Treasury.
If the Treasury so determine in the case of any person who is or has been a part-time member of the Commission, the Commission shall pay or make arrangements for the payment of such pensions to or in respect of that person as the Treasury may determine. Where a person who is a part-time member of the Commission ceases to be a member otherwise than on the expiry of his term of office and it appears to the Treasury that there are special circumstances which make it right for that person to receive compensation, the Treasury may direct the Commission to make to that person a payment of such amount as the Treasury may determine.
In Part II of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified under that Act) there shall be inserted at the appropriate place the entry: “ The Friendly Societies Commission ”. A corresponding amendment shall be made in Part II of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975.
The Commission may appoint such staff as the chairman of the Commission thinks fit, subject to the approval of the Treasury as to numbers and as to terms and conditions of service.
The quorum of the Commission and the arrangements relating to its meeting shall be such as the Commission may determine.
The validity of any proceedings of the Commission shall not be affected by any vacancy among the members or by any defect in the appointment of a member.
With the exception specified in sub-paragraph (2) below, the Commission may authorise any member or members of the Commission to perform on behalf of the Commission such of the Commission’s functions (including the power conferred by this paragraph) as are specified in the authorisation. The Commission shall not delegate any power exercisable by statutory instrument.
The Statutory Instruments Act 1946 shall apply to all powers of the Commission of making statutory instruments under this Act as if the Commission were a Minister of the Crown.
In Schedule 2 to the Parliamentary Commissioner Act 1967 (which lists the departments etc. subject to investigation under that Act) there shall be inserted in the appropriate place in alphabetical order the words “ Friendly Societies Commission ”.
The fixing of the common seal of the Commission shall be authenticated by the signature of the chairman or deputy chairman or by some other person authorised by the Commission to act for that purpose.
A document purporting to be duly executed under the seal of the Commission shall be received in evidence and shall, unless the contrary is proved, be deemed to be so executed. A document purporting to be signed on behalf of the Commission shall be received in evidence and shall, unless the contrary is proved, be deemed to be so signed.
This paragraph shall have effect as regards the execution of documents in Scotland. For any purpose other than those mentioned in sub-paragraph (3) below, a document is validly executed by the Commission if it is signed on its behalf by the chairman or deputy chairman or by a person authorised to sign the document on its behalf. For the purposes of any enactment or rule of law relating to the authentication of documents, a document is validly executed by the Commission if it is subscribed on its behalf by being executed in accordance with the provisions of sub-paragraph (2) above. A document which bears to have been executed by the Commission in accordance with sub-paragraph (3) above shall, in relation to such execution, be a probative document if—
Sections 5 and 7. A. Long term business of one or more of the following classes: Number Description Nature of business I Life and annuity Effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life, but excluding (in each case) contracts within Class III below. II Marriage , civil partnership and birth Effecting and carrying out contracts of insurance to provide a sum on marriage or on the formation of a civil partnership or on the birth of a child, being contracts expressed to be in effect for a period of more than one year. III Linked long term Effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life where the benefits are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contracts) or by reference to fluctuation in, or in an index of, the value of property of any description (whether or not so specified). IV Permanent health Effecting and carrying out contracts of insurance providing specified benefits against risks of persons becoming incapacitated in consequence of sustaining injury as a result of an accident or of an accident of a specified class or of sickness or infirmity, being contracts that: (a) are expressed to be in effect for a period of not less than five years, or until the normal retirement age for the persons concerned, or without limit of time, and (b) either are not expressed to be terminable by the insurer, or are expressed to be so terminable only in special circumstances mentioned in the contract. V Tontines Effecting and carrying out tontines. VI Capital redemption Effecting and carrying out capital redemption contracts. VII Pension fund management Effecting and carrying out— (a) contracts to manage the investments of pension funds; or (b) contracts of the kind mentioned in paragraph (a) above that are combined with contracts of insurance covering either conservation of capital or payment of a minimum interest. B. General business of one or more of the following classes: Number Description Nature of business 1 Accident Effecting and carrying out contracts of insurance providing fixed pecuniary benefits or benefits in the nature of indemnity (or a combination of both) against risks of the person insured: (a) sustaining injury as the result of an accident or of an accident of a specified class, or (b) dying as the result of an accident or of an accident of a specified class, or (c) becoming incapacitated in consequence of disease or of disease of a specified class, inclusive of contracts relating to industrial injury and occupational disease but exclusive of contracts falling within Class 2 below or within Class IV in head A of this Schedule (permanent health). 2 Sickness Effecting and carrying out contracts of insurance providing fixed pecuniary benefits or benefits in the nature of indemnity (or a combination of the two) against risks of loss to the persons insured attributable to sickness or infirmity, but exclusive of contracts falling within Class IV in head A of this Schedule. 3 Miscellaneous financial loss Effecting and carrying out contracts of insurance against any of the following risks, namely: (a) risks of loss to the persons insured attributable to their being unemployed, or (b) risks of loss to the persons insured attributable to their being in distressed circumstances, or (c) risks of loss to the persons insured attributable to sickness or infirmity, but exclusive of contracts falling within Class 2 above or Class IV in head A of this Schedule. C. Business, not falling within the descriptions of insurance business in head A or B above, consisting of the effecting and carrying out of contracts in accordance with which benefits are provided— (a) for the relief or maintenance of any persons during sickness or when in distressed circumstances; or (b) to meet the funeral expenses of any persons. D. Activities carried out in accordance with the society’s rules (or with arrangements made under the rules) whereby discretionary benefits are provided— (a) for the education of any persons; (b) for the relief or maintenance of any persons during sickness, when out of employment or when in distressed circumstances; or (c) for the funeral expenses of any persons.
Long term business of one or more of the following classes: Number Description Nature of business I Life and annuity Effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life, but excluding (in each case) contracts within Class III below. II Marriage and birth Effecting and carrying out contracts of insurance to provide a sum on marriage or on the birth of a child, being contracts expressed to be in effect for a period of more than one year. III Linked long term Effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life where the benefits are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contracts) or by reference to fluctuation in, or in an index of, the value of property of any description (whether or not so specified). IV Permanent health Effecting and carrying out contracts of insurance providing specified benefits against risks of persons becoming incapacitated in consequence of sustaining injury as a result of an accident or of an accident of a specified class or of sickness or infirmity, being contracts that: are expressed to be in effect for a period of not less than five years, or until the normal retirement age for the persons concerned, or without limit of time, and either are not expressed to be terminable by the insurer, or are expressed to be so terminable only in special circumstances mentioned in the contract. V Tontines Effecting and carrying out tontines. VI Capital redemption Effecting and carrying out capital redemption contracts. VII Pension fund management Effecting and carrying out— contracts to manage the investments of pension funds; or contracts of the kind mentioned in paragraph (a) above that are combined with contracts of insurance covering either conservation of capital or payment of a minimum interest.
General business of one or more of the following classes: Number Description Nature of business 1 Accident Effecting and carrying out contracts of insurance providing fixed pecuniary benefits or benefits in the nature of indemnity (or a combination of both) against risks of the person insured: sustaining injury as the result of an accident or of an accident of a specified class, or dying as the result of an accident or of an accident of a specified class, or becoming incapacitated in consequence of disease or of disease of a specified class,inclusive of contracts relating to industrial injury and occupational disease but exclusive of contracts falling within Class 2 below or within Class IV in head A of this Schedule (permanent health). 2 Sickness Effecting and carrying out contracts of insurance providing fixed pecuniary benefits or benefits in the nature of indemnity (or a combination of the two) against risks of loss to the persons insured attributable to sickness or infirmity, but exclusive of contracts falling within Class IV in head A of this Schedule. 3 Miscellaneous financial loss Effecting and carrying out contracts of insurance against any of the following risks, namely: risks of loss to the persons insured attributable to their being unemployed, or risks of loss to the persons insured attributable to their being in distressed circumstances, or risks of loss to the persons insured attributable to sickness or infirmity, but exclusive of contracts falling within Class 2 above or Class IV in head A of this Schedule.
Business, not falling within the descriptions of insurance business in head A or B above, consisting of the effecting and carrying out of contracts in accordance with which benefits are provided—
for the relief or maintenance of any persons during sickness or when in distressed circumstances; or
to meet the funeral expenses of any persons.
Activities carried out in accordance with the society’s rules (or with arrangements made under the rules) whereby discretionary benefits are provided—
for the education of any persons;
for the relief or maintenance of any persons during sickness, when out of employment or when in distressed circumstances; or
for the funeral expenses of any persons.
Section 5.
Any 7 or more persons may establish a society under this Act by taking the following steps— Where two or more friendly societies propose to amalgamate under section 85 above, they shall establish their successor society by— Where copies of the memorandum and the rules are sent to the FCA in accordance with sub-paragraph (1)(c) or (2)(d) above, the FCA, if satisfied that— shall register the society and issue it with a certificate of incorporation. The FCA shall not register a society as the successor society to any friendly societies proposing to amalgamate unless the appropriate authority . . . has confirmed the proposed amalgamation under section 85 above. The FCA shall not register a society which, if it were registered . . ., would be a society to which section 37(2) or (3) above applies if the FCA is satisfied that the principal place of business of the society is to be situated outside the United Kingdom; . . ..
A registered friendly society may be incorporated under this Act only if the following steps are taken—
On registering a society under paragraph 1 or 2 above, the FCA shall—
retain and register one copy of the memorandum and of the rules;
return another copy to the secretary of the society, together with a certificate of registration; and
keep another copy, a copy of the certificate of incorporation and a copy of the certificate of registration of the memorandum and the rules, in the public file of the society.
The memorandum of an incorporated friendly society shall— The choice stated in a society’s memorandum in pursuance of sub-paragraph (1)(b) above may not be altered by the society. In this Act, in relation to an incorporated friendly society, “memorandum” means the memorandum registered under paragraph 3 above, including the record of any alteration under paragraph 6 below.
The rules of an incorporated friendly society shall provide for the matters specified in the Table in sub-paragraph (3) below. Nothing in this paragraph shall be taken to authorise any provision in the rules of a society which is inconsistent with, or rendered void by, this Act (or any instrument made under it). The Table referred to in sub-paragraph (1) above is as follows:— TABLE OF MATTERS TO BE COVERED BY THE RULES
An incorporated friendly society may in the manner prescribed by its rules alter the memorandum or rules of the society by the addition, rescission or variation of any provision. Sub-paragraph (1) above does not apply to any alteration to which section 13(6) above applies or which is prohibited by paragraph 4(2) above. An alteration to the name or registered office of an incorporated friendly society shall (instead of being effected under this paragraph) be effected under paragraph 9 or 12 below; and it is not necessary to alter the memorandum or rules of such a society by reason only that its name or registered office is changed. Where a society makes an alteration of its memorandum or rules under this paragraph, it shall send to the FCA— On making an alteration of its memorandum or rules under this paragraph the society shall determine the date on which it intends the alteration to take effect; and the record of the alteration shall specify that date (in this paragraph referred to as “the specified date”). Where copies of a record of an alteration of a society’s memorandum or rules are sent to the FCA under sub-paragraph (4) above and the FCA is satisfied that the alteration is in conformity with this Act, the FCA shall— An alteration of the memorandum or rules of a society under this paragraph shall not take effect until the specified date or, if the alteration is registered under sub-paragraph (6) above on a later date, the date on which the certificate of registration is issued. If an incorporated friendly society arranges for the publication in consolidated form of its memorandum or rules as altered for the time being— but the FCA shall not register the copy. If an incorporated friendly society fails, within the period of 3 months beginning with the date on which an alteration to its memorandum or rules is made, to comply with sub-paragraph (4) above, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.
A person under 18—
may, if the rules do not otherwise provide, be admitted as a member of an incorporated friendly society and, if he is over 16 by himself, and if he is under 16 by his parent or guardian, execute all instruments and give all receipts necessary to be executed or given under the rules;
may not vote or hold any office in the society; and
may not nominate, or join in nominating, a person for election as a member of the committee of management, or (if the secretary is elected) as secretary, of the society.
The liability of a member of an incorporated friendly society is limited to the amount of any subscription to the society which is outstanding. No subscription of a member of an incorporated friendly society shall be recoverable at law except on the winding up of the society.
The name of an incorporated friendly society must have “Limited" as its last word, except that, if the society is to be registered with a memorandum stating that its registered office is to be situated in Wales, the name may have “cyfyngedig" (the Welsh equivalent of “Limited") as its last word. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If the society has a common seal, it shall bear the registered name of the society. An incorporated friendly society may change its name by a resolution of the society in general meeting after the giving of such notice as is required for a special resolution. Where a society changes its name under this paragraph, notice of the change shall be sent to the FCA and, unless it is of the opinion that the changed name is undesirable, the FCA shall— A change of name shall not take effect until the date on which the certificate of registration under sub-paragraph (5) above is issued or such later date as may be specified in the certificate. A change of name shall not affect the rights and obligations of the society, of any of its members or of any other person concerned.
Every incorporated friendly society shall have its name mentioned in legible characters— Where the name of an incorporated friendly society does not include the words “friendly society", the fact that it is an incorporated friendly society shall be shown in legible characters in all documents such as are mentioned in sub-paragraph (1) above. The reference in this paragraph to a society’s websites includes a reference to a section of another person’s website—
If an incorporated friendly society— the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale. If an officer of an incorporated friendly society or a person on its behalf— he shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale; and, in the case of the conduct mentioned in paragraph (b) above, he is further personally liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount of it (unless it is duly paid by the society). If an officer of an incorporated friendly society whose name does not include the words “friendly society" or a person on its behalf— he shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale; and, in the case of the conduct mentioned in paragraph (b) above, he is further personally liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount of it (unless it is duly paid by the society).
An incorporated friendly society may change its registered office in such manner as its rules prescribe or, if the rules do not provide for that matter, by a resolution of the society in general meeting after the giving of such notice as is required for a special resolution. Notice of any such change shall be sent to the FCA and the FCA shall— A change of registered office shall not take effect until the date on which the certificate of registration under sub-paragraph (2) above is issued or such later date as may be specified in the certificate. If an incorporated friendly society fails, within the period of 3 months beginning with the date on which a resolution changing its registered office is passed, to send to the FCA the notice required by sub-paragraph (2) above, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.
An incorporated friendly society shall, on demand, give a copy of its statutory documents— The reference in sub-paragraph (1) above to a copy of an incorporated friendly society’s statutory documents is a reference to— If an incorporated friendly society fails to comply with the requirements of sub-paragraph (1) above, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale. In sub-paragraph (1) above the “prescribed amount” means £1 or such other amount as the Treasury prescribe by order.
Every incorporated friendly society shall maintain a register of the names and addresses of the members of the society. Where a member has notified to the society an electronic address for the purpose of receiving notices or documents under this Act, the requirement under sub-paragraph (1) includes a requirement to secure that the register shows— The register shall be kept at the registered office or at such other place or places as the committee of management thinks fit. A society which was previously a registered friendly society need not enter in the register the address of a member who became a member before its incorporation while it has no address for him and his whereabouts are unknown. Where it appears to an incorporated friendly society that the registered address shown in the register for a member is no longer current, the society— Where it appears to an incorporated friendly society that an electronic address shown on the register pursuant to sub-paragraph (1) is no longer current, the society may remove that address from the register. If an incorporated friendly society contravenes sub-paragraph (1) above, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale. For the purposes of this Act “registered address”, in relation to a member of an incorporated friendly society, means—
Subject to sub-paragraph (2) below, a member or person having an interest in the funds of an incorporated friendly society may inspect the records at all reasonable hours at the registered office of the society or at any other place where they are kept. Unless he is an officer of the society or is specially authorised by resolution of the society to do so, a member or such a person shall not have the right to inspect the loan account of any other member without the written consent of that member.
Section 6.
This Schedule has effect in relation to an incorporated friendly society (“the incorporated society”) which was formerly a registered friendly society (“the registered society”); and in this Schedule “incorporation” means the incorporation of that society. In this Schedule “branch”, in relation to the registered society, means any registered or unregistered branch of the society and, in relation to the incorporated society, means a group of members provided for by the rules of the society— In this Schedule references to an agreement include references to any agreement (whether in writing or not) and any deed, bond or other instrument. Nothing in section 6 above or this Schedule shall be taken as affecting any power or liability of a branch of a registered friendly society to secede or to be expelled from that society.
This paragraph applies to a registered society with branches which proposes— The registered society may, by the procedure required to amend the rules of the society, approve a scheme under subsection (5) of section 6 above (a “scheme”) identifying property, rights and liabilities of a branch which are to continue to be property, rights and liabilities of the branch (as a branch of the incorporated society) and so are to be excluded from transfer under subsection (4) of that section. A scheme— A scheme may not identify for exclusion from transfer under section 6(4) above any property, rights or liabilities of a branch of the registered society which are referable only to an activity of the branch which a branch of the incorporated society would (by virtue of section 7(5) above) be unable to carry on on its own behalf. On making a scheme the registered society shall send to the FCA— On receiving copies of a scheme, the FCA shall, if satisfied that the society has duly approved the scheme— and the FCA shall not register the incorporated society under this Act until after it has registered the scheme.
Subject to the provisions of this Act, the incorporated society shall be treated after incorporation as the same person as the registered society. Without prejudice to the generality of sub-paragraph (1) above, any agreement made, transaction effected or other thing done by, to or in relation to the registered society which is in force or effective immediately before incorporation shall have effect as if made, effected or done by, to or in relation to the incorporated society; and, accordingly, references to the society— shall be taken as referring to the incorporated society.
On incorporation of the registered society— but paragraph (c) above is without prejudice to anything done by the society after incorporation as respects the election or appointment of members of its committee of management and its other officers.
a person who was immediately before incorporation a member of the registered society shall be a member of the incorporated society;
any appointment as trustee or treasurer of the society shall determine; and
all other persons who were officers of the registered society shall become officers, holding corresponding offices, of the incorporated society;
Any agreement made by the registered society which is in force immediately before incorporation shall have effect as if—
for references to members of the registered society there were substituted references to members of the incorporated society;
for references to officers of the registered society (other than its trustees or treasurer) there were substituted references to the corresponding officers of the incorporated society;
for references to the trustees of the registered society there were substituted references to the incorporated society; and
for references to the treasurer of the registered society there were substituted references to such person as the incorporated society may appoint or in default of appointment to the officer of that society who corresponds as nearly as may be to the treasurer.
It is hereby declared for the avoidance of doubt that—
any contract of employment with the registered society in force immediately before incorporation is merely modified by the substitution of the name of the incorporated society as the employer (and is not terminated or varied in any other way);
any period of employment with the registered society shall count for all purposes as a period of employment with the incorporated society; and
the rights and liabilities referred to in section 6 above include any rights and liabilities subsisting immediately before incorporation—
under any agreement or arrangement for the payment of pensions, allowances or gratuities; or
under the law of any country or territory outside the United Kingdom.
The final financial year of the registered friendly society shall be such period not exceeding 12 months as expires immediately before its incorporation. Anything which, if it had not been incorporated, would be required to be done by the registered society at a time after its incorporation shall be done by the incorporated society. If the incorporated friendly society fails to do anything which it is required to do by virtue of sub-paragraph (2) above, the society and its officers shall be subject to the sanctions to which the registered friendly society and its officers would have been subject if the society had failed to do it.
This paragraph applies where the property, rights and liabilities of a branch of the registered society (“the branch”) are all transferred to the incorporated society by section 6(4) above. The provisions of paragraphs 3 to 7 above shall apply in relation to the branch as they apply in relation to the registered society— and the branch shall be deemed to be dissolved immediately after the transfer of its property, rights and liabilities to the incorporated society.
This paragraph applies where the property, rights and liabilities of a branch of the registered society are all excluded by virtue of a scheme from transfer to the incorporated society. On incorporation of the registered society, the property, rights and liabilities of the branch shall continue as property, rights and liabilities of the branch (as a branch of the incorporated society). The branch of the incorporated society shall be treated as a continuation of the branch of the registered society; and so on incorporation— but paragraphs (a) and (b) above are without prejudice to anything done after incorporation as respects the membership and officers of the branch.
This paragraph applies where some of the property, rights and liabilities of a branch of the registered society are transferred to the incorporated society by section 6(4) above and some are excluded from transfer by virtue of a scheme. As respects the property, rights and liabilities transferred from the branch to the incorporated society, the provisions of paragraphs 3, 5, 6 and 7 above shall apply in relation to the branch as they apply in relation to the registered society— On incorporation of the registered society, the property, rights and liabilities of the branch which are excluded from transfer shall continue as property, rights and liabilities of the branch (as a branch of the incorporated society). As respects the property, rights and liabilities so excluded, the branch shall, after incorporation of the registered society, be treated as a continuation of the branch of the registered society; and so on incorporation— but paragraphs (a) and (b) above are without prejudice to anything done after incorporation as respects membership and officers of the branch.
No transfer effected by section 6 above shall give rise to any liability to stamp duty.
The action mentioned in the following provisions of this paragraph shall be taken not later than the end of the period of 90 days beginning with the day on which the registered society is incorporated. The persons who were the trustees and treasurer of the registered society immediately before its incorporation shall deliver to the incorporated society— The persons who were the trustees and treasurer of any branch of the registered society immediately before its incorporation shall deliver to the incorporated society— The Public Trustee shall, if he held property on trust for the registered society immediately before its incorporation, deliver to the incorporated society any property so held by him and any documents relating to it. A person required by this paragraph to deliver a document does not satisfy the requirement by sending the document in an electronic form except in so far as the document is held by that person in that electronic form. Nothing in this Act shall have effect to relieve the former trustees or treasurer of a registered friendly society or branch or the Public Trustee from any liability arising from acts or omissions before the incorporation of the society.
Section 7.
An incorporated friendly society may do anything mentioned in the following provisions of this Schedule in the manner directed by the society’s rules.
An incorporated friendly society may, out of any separate loan fund to be formed by contributions or deposits from its members, make loans to members on their personal security, with or without sureties or, in Scotland, cautioners, subject to the restrictions in sub-paragraphs (2) to (4) below. A loan shall not at any time be made out of money contributed otherwise than for the purpose of the loan fund. A member shall not be capable of holding any interest in the loan fund exceeding £800. The society shall not— The Treasury may by order amend sub-paragraph (3) or (4) above to substitute, for the sum for the time being specified in that sub-paragraph, such greater sum as is specified in the order.
An incorporated friendly society may set up and administer a fund for the purchase, on behalf of members contributing thereto, of Defence Bonds, National Savings Certificates, Ulster Savings Certificates or such other securities of Her Majesty’s Government as the Treasury may prescribe. A society may allow persons to become members of the society for the purpose only of contributing to a fund set up by virtue of this paragraph. Any securities prescribed, before the commencement of this paragraph, for the purposes of section 47 of the 1974 Act shall be treated as having been prescribed under sub-paragraph (1) above.
An incorporated friendly society may invest funds of the society in subscribing for any of the share or loan capital of a housing association (within the meaning of the Housing Associations Act 1985) other than shares or debentures not fully paid up at the time of issue. This paragraph has effect without prejudice to any power the society may have by virtue of section 14 above.
An incorporated friendly society may accumulate at interest, for the use of any member, any surplus of his contributions to the funds of the society which may remain after providing for any assurance in respect of which they are paid and for the withdrawal of the accumulations.
An incorporated friendly society may subscribe out of its funds to any hospital, infirmary, charitable or provident institution, any annual or other sum which may be necessary to secure to members of the society and their families the benefits of that institution.
An incorporated friendly society may contribute to the funds and take part in the government of any other friendly society.
Section 7.
Under the law of England and Wales and Northern Ireland a contract may be made— and any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of an incorporated friendly society.
by an incorporated friendly society, by writing under its common seal; or
on behalf of an incorporated friendly society, by any person acting under its authority, express or implied;
The following provisions have effect with respect to the execution of documents by an incorporated friendly society under the law of England and Wales and of Northern Ireland. A document is executed by an incorporated friendly society by the affixing of its common seal. An incorporated friendly society need not have a common seal, however, and the following sub-paragraphs apply whether it does or not. A document signed by a member of the committee of management and the secretary of an incorporated friendly society, or by 2 members of the committee of management, and expressed (in whatever form of words) to be executed by the society has the same effect as if executed under the common seal of the society. A document executed by an incorporated friendly society which makes it clear on its face that it is intended by the person or persons making it to be a deed has effect, upon delivery, as a deed; and it shall be presumed, unless a contrary intention is proved, to be delivered upon its being so executed. In favour of a purchaser a document shall be deemed to have been duly executed by an incorporated friendly society if it purports to be signed by a member of the committee of management and the secretary of the society, or by 2 members of the committee of management, and, where it makes it clear on its face that it is intended by the person or persons making it to be a deed, to have been delivered upon its being executed. In sub-paragraph (6) above a “purchaser” means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.
The following provisions have effect with respect to the execution of documents by an incorporated friendly society under the law of Scotland. For any purpose other than those mentioned in sub-paragraph (3) below, a document is validly executed by an incorporated friendly society if it is signed on behalf of the society by a member of the committee of management or by the secretary of the society or by a person authorised to sign the document on its behalf. For the purposes of any enactment or rule of law relating to the authentication of documents under the law of Scotland, a document is validly executed by an incorporated friendly society if it is subscribed on behalf of the society by— notwithstanding that such subscription is not attested by witnesses and the document is not sealed with the society’s common seal. A document which bears to be executed by an incorporated friendly society in accordance with sub-paragraph (3) above is, in relation to such execution, a probative document. Notwithstanding any other provision of this paragraph, an incorporated friendly society need not have a common seal. For the purposes of any enactment providing for a document to be executed by an incorporated friendly society by affixing its common seal or referring (in whatever terms) to a document so executed, a document signed or subscribed on behalf of the society by— shall have effect as if executed under the common seal of the society. In this paragraph “enactment” includes an enactment contained in a statutory instrument. Sub-paragraphs (2) and (3) above are—
The establishment and management of personal equity plans within the meaning of the Finance Act 1986.
The establishment and management of unit trust schemes within the meaning of the Financial Services Act 1986.
The establishment and management, or arranging for the establishment and management, of individual savings accounts; and in this paragraph “individual savings accounts" means plans of a kind referred to in section 333(1A) of the Income and Corporation Taxes Act 1988 .
The carrying on of long-term or general business.
Arranging for the provision of, or giving advice as to, insurance of any description.
Arranging for the provision of credit, whether as agents for the borrower or the person providing credit and the provision of services in connection with current loan agreements to the person providing credit.
The provision of fund management services for trustees of pension funds or for friendly societies or for other bodies whose business consists of any activity falling within paragraphs 1 to 5 above or paragraphs 7 to 14 below.
The administration of estates and the execution of trusts of wills.
The provision of executry services (within the meaning of Part II of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990) where the subsidiary or body is an executry practitioner (within the meaning of that Part of that Act) and the administration of testamentary trusts.
The establishment and management of— and the provision of medical, administrative or other services for persons owning or managing any of them.
sheltered housing,
residential homes for the elderly,
hospitals, or
nursing homes or mental nursing homes (within the meaning of the Registered Homes Act 1984) or, in Northern Ireland, nursing homes (within the meaning of the Nursing Homes and Nursing Agencies Act (Northern Ireland) 1971),
The provision of administrative services for friendly societies or other bodies whose business consists of any activity falling within paragraphs 1 to 9 above or paragraph 11 to 15 below.
The carrying on of a business which is a deposit-taking business within the meaning of the Banking Act 1987 but only to the extent that money which is received as a deposit, or money which is lent, is received from, or lent to, an individual.
The carrying on of insurance business which is general business within the meaning of the Insurance Companies Act 1982 but only to the extent that a contract of insurance which is effected or carried out is a contract which is effected with an individual.
The establishment and management of investment companies with variable capital falling within regulation 3(1) of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996 or within regulation 3(2) of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations (Northern Ireland) 1997 (an open-ended investment company).
The establishment and management of companies which are approved as investment trusts for the purposes of section 842 of the Income and Corporation Taxes Act 1988 .
Arranging for the provision of banking services by a UK institution or a European institution, and providing services in pursuance of such arrangements; and in this paragraph “UK institution" and “European institution" have the same meaning as in the Banking Co-ordination (Second Council Directive) Regulations 1992 , and “banking services" means such services as are ordinarily provided in the course of or in connection with a business which is a deposit-taking business for the purposes of the Banking Act 1987 .
Section 13.
The provisions of this Schedule explain expressions used in section 13 above and otherwise supplement that section.
In section 13(9)(a) and (c) the references to the voting rights in a body corporate are to the rights conferred on shareholders in respect of their shares or, in the case of a body corporate not having a share capital, on members, to vote at general meetings of the body corporate on all, or substantially all, matters.
For the purposes of section 13(9)(a) and (c) the reference to the right to appoint or remove a majority of the board of directors is to the right to appoint or remove directors holding a majority of the voting rights at meetings of the board on all, or substantially all, matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rights which are exercisable only in certain circumstances shall be taken into account only— and rights which are normally exercisable but are temporarily incapable of exercise shall continue to be taken into account.
when the circumstances have arisen, and for so long as they continue to obtain, or
when the circumstances are within the control of the person having the rights;
A body is to be treated for the purposes of section 13(9) as having the right to appoint to a directorship if— A body (“B”) and some other person (“P”) together are to be treated, for the purposes of section 13(9), as having the right to appoint to a directorship if— For the purposes of section 13(9), a right to appoint (or remove) which is exercisable only with the consent or agreement of another person must be left out of account unless no other person has a right to appoint (or remove) in relation to that directorship. Nothing in this paragraph is to be read as restricting the effect of section 13(9).
Rights held by a person in a fiduciary capacity shall be treated as not held by him.
Rights held by a person as nominee for another shall be treated as held by the other; and rights shall be regarded as held as nominee for another if they are exercisable only on his instructions or with his consent or concurrence.
Rights attached to shares held by way of security shall be treated as held by the person providing the security—
where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in accordance with his instructions;
where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in his interests.
Rights shall be treated as held by an incorporated friendly society if they are held by any of its subsidiaries; and nothing in paragraph 6 or 7 above shall be construed as requiring rights held by an incorporated friendly society to be treated as held by any of its subsidiaries.
For the purposes of paragraph 7 above rights shall be treated as being exercisable in accordance with the instructions or in the interests of an incorporated friendly society if they are exercisable in accordance with the instructions of or, as the case may be, in the interests of any subsidiary of that society or in the interests of any body over which the society has joint control.
The voting rights in a body corporate shall be reduced by any rights held by the body itself.
References in any provision of paragraphs 5 to 10 above to rights held by a person include rights falling to be treated as held by him by virtue of any other provision of those paragraphs but not rights which by virtue of any such provision are to be treated as not held by him.
Section 18.
Subject to the following provisions of this paragraph, a member of an incorporated friendly society who is not under the age of 16 years may by writing under his hand delivered at or sent to the registered office of the society, or made in a book kept at that office, nominate a person or persons to whom any sum of money payable by the society on the death of that member or any specified amount of money so payable, shall be paid at his decease. The total amount which may be nominated under this paragraph shall not exceed the relevant maximum, that is to say, £5,000 or such higher amount as, by virtue of an order under section 6 of the Administration of Estates (Small Payments) Act 1965, may for the time being apply for the purposes of the enactments specified in subsection (1) of that section. The sum payable on the death of a member by an incorporated friendly society shall include sums of money contributed to or deposited in the separate loan fund, together with interest on them, and any sum of money accumulated for the use of the member under the provisions of this Act, together with interest on it. A person nominated under this paragraph must not at the date of the nomination be an officer or employee of the society unless he is the husband, wife, father, mother, child, brother, sister, nephew or niece of the nominator. Nominations so made may be revoked or varied by any similar document under the hand of the nominator delivered, sent, or made as mentioned in sub-paragraph (1) above. The marriage of a member of the society shall operate as a revocation of any nomination previously made by that member under this paragraph. Where a society has paid money to a nominee in ignorance of a marriage subsequent to the nomination, the receipt of the nominee shall be a valid discharge to the society.
Subject to sub-paragraph (2) below, on receiving satisfactory proof of the death of a nominator, an incorporated society shall pay to his nominee or nominees the amount due to the deceased or, as the case may be, the amount specified in the nomination. The total amount paid by an incorporated friendly society by virtue of a nomination (whether in favour of one nominee or more) shall not exceed the relevant maximum referred to in paragraph 1(2) above. The receipt of a nominee over 16 years of age for any amount paid in accordance with this paragraph shall be valid.
If any member of an incorporated friendly society entitled from its funds to a sum not exceeding the relevant maximum referred to in paragraph 1(2) above dies without having made any nomination of that sum then subsisting, the society may, without letters of administration or probate of any will or, in Scotland, without any grant of confirmation, distribute the sum among such persons as appear to the society, upon such evidence as the society may deem satisfactory, to be entitled by law to receive that sum. A payment made by an incorporated friendly society under this Schedule shall be valid and effectual against any demand made upon the society by any other person, but the next of kin or personal representatives of the deceased member shall have a remedy for recovery of the money paid under paragraph 2(1) above against the person who has received that money.
Section 23.
The enactments which comprise the companies winding up legislation (referred to in this Schedule as “the enactments”) are the provisions of— and, in so far as they relate to offences under any such enactment, sections 430 and 432 of, and Schedule 10 to, that Act or Article 373 of, and Schedule 7 to, that Order.
Parts IV, VI, VII, XII and XIII of the Insolvency Act 1986, or
Parts V, VI, XI and XII of the Insolvency (Northern Ireland) Order 1989,
Subject to the following provisions of this Schedule, the enactments apply to the winding up of incorporated friendly societies as they apply to the winding up of companies registered under the Companies Act 2006.
Subject to the following provisions of this Schedule, the enactments shall, in their application to incorporated friendly societies, have effect with the substitution— Subject to the following provisions of this Schedule in the application of the enactments to incorporated friendly societies—
Where any of the enactments as applied to incorporated friendly societies requires a notice or other document to be sent to the FCA, it shall have effect as if it required the FCA to keep the notice or document in the public file of the society and to record in that file the date on which the notice or document is placed in it. Where any of the enactments, as so applied, refers to the registration, or to the date of registration, of such a notice or document, that enactment shall have effect as if it referred to the placing of the notice or document in the public file or (as the case may be) to the date on which it was placed there.
Any enactment which specifies a sum altered by order under section 416 of the Insolvency Act 1986 or Article 362 of the Insolvency (Northern Ireland) Order 1989 (powers to alter monetary limits) applies with the effect of the alteration.
In this Part of this Schedule, Part IV of the Insolvency Act 1986 is referred to as “Part IV"; and that Act is referred to as “the Act".
Parts 4, 6, 7 and 12 of, and Schedule 10 to, the Act, in their application to incorporated friendly societies, have effect without the amendments of those Parts and that Schedule made by—
section 122 of the Small Business, Enterprise and Employment Act 2015 (abolition of requirements to hold meetings: company insolvency);
section 124 of that Act (ability for creditors to opt not to receive certain notices: company insolvency); and
Section 74 (liability of members) of the Act is modified as follows. In subsection (1), the reference to any past member shall be omitted. Paragraphs (a) to (d) of subsection (2) shall be omitted; and so shall subsection (3). The extent of the liability of a member of an incorporated friendly society in a winding up shall not exceed the extent of his liability under paragraph 8 of Schedule 3 to this Act.
Sections 75 to 78 and 83 in Chapter I of Part IV (miscellaneous provisions not relevant to incorporated friendly societies) do not apply.
Section 79 (meaning of “contributory”) of the Act does not apply. In the enactments as applied to an incorporated friendly society, “contributory”— but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or section 214 (wrongful trading) of the Act.
Section 84 of the Act does not apply. In the enactments as applied to an incorporated friendly society, the expression “resolution for voluntary winding up” means a resolution passed under section 21(1) above.
Section 88 shall have effect with the omission of the words from the beginning to “and".
Subsection (1) of section 89 shall have effect as if for the words from the beginning to “meeting" there were substituted the words—. The reference to the directors in subsection (2) shall be construed as a reference to members of the committee of management.
Section 90 shall have effect as if for the words “directors’ statutory declaration under section 89" there were substituted the words “ statutory declaration made under section 89 by members of the committee of management ”.
Sections 95(1) and 96 shall have effect as if the word “directors"' were omitted from each of them.
In subsection (1) of section 101 (appointment of liquidation committee) of the Act, the reference to functions conferred on a liquidation committee by or under that Act shall have effect as a reference to its functions by or under that Act as applied to incorporated friendly societies.
Section 107 (distribution of property) of the Act does not apply; and the following applies in its place. Subject to the provisions of Part IV relating to preferential payments, an incorporated friendly society’s property in a voluntary winding up shall be applied in satisfaction of the society’s liabilities to creditors pari passu and, subject to that application, in accordance with the rules of the society.
Sections 110 and 111 (liquidator accepting shares, etc. as consideration for sale of company property) of the Act do not apply.
In sections 117 (High Court and county court jurisdiction) and 120 (Court of Session and sheriff court jurisdiction) of the Act, each reference to a company’s share capital paid up or credited as paid up shall have effect as a reference to the amount of the contribution or subscription income of an incorporated friendly society as shown by the latest balance sheet.
Section 122 (circumstances in which company may be wound up by the court) of the Act does not apply.
Section 124 (application for winding up) of the Act does not apply.
In section 125 (powers of court on hearing of petition) of the Act, subsection (1) applies with the omission of the words from “but the court" to the end of the subsection. The conditions which the court may impose under section 125 of the Act include conditions for securing— and may also include conditions for securing that any default which occasioned the petition be made good and that the costs, or in Scotland the expenses, of the proceedings on that petition be defrayed by the person or persons responsible for the default.
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If, before the presentation of a petition for the winding up by the court of an incorporated friendly society, an instrument of dissolution under section 20 above is placed in the society’s public file, section 129(1) (commencement of winding up by the court) of the Act shall also apply in relation to the date on which the notice is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.
Section 130 of the Act (consequences of winding-up order) shall have effect with the following modifications. Subsections (1) and (3) shall be omitted. An incorporated friendly society shall, within 15 days of a winding-up order being made in respect of it, give notice of the order to the FCA and, if the society is a PRA-authorised person, the PRA; and the FCA shall keep the notice in the public file of the society. If an incorporated friendly society fails to comply with sub-paragraph (3) above, it shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
Section 140 (appointment of liquidator by court in certain circumstances) of the Act does not apply.
In the application of sections 141(1) and 142(1) (liquidation committees), of the Act to incorporated friendly societies, the references to functions conferred on a liquidation committee by or under that Act shall have effect as references to its functions by or under that Act as so applied.
The conditions which the court may impose under section 147 (power to stay or sist winding up) of the Act shall include those specified in paragraph 21(2) above.
Section 154 (adjustment of rights of contributories) of the Act shall have effect with the modification that any surplus is to be distributed in accordance with the rules of the society.
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Section 187 (power to make over assets to employees) of the Act does not apply.
In section 201 (dissolution: voluntary winding up) of the Act, subsection (2) applies without the words from “and on the expiration" to the end of the subsection and, in subsection (3), the word “However" shall be omitted. Sections 202 to 204 (early dissolution) of the Act do not apply.
In section 205 (dissolution: winding up by the court) of the Act, subsection (2) applies with the omission of the words from “and, subject" to the end of the subsection; and in subsections (3) and (4) references to the Secretary of State shall have effect as references to the FCA.
Sections 216 and 217 of the Act (restriction on re-use of name) do not apply.
Sections 218 and 219 (prosecution of delinquent officers) of the Act do not apply in relation to offences committed by members of an incorporated friendly society acting in that capacity. Sections 218(5) of the Act and subsections (1) and (2) of section 219 of the Act do not apply. The references in subsections (3) and (4) of section 219 of the Act to the Secretary of State shall have effect as references to the FCA; and the reference in subsection (3) to section 218 of the Act shall have effect as a reference to that section as supplemented by paragraph 35 below.
Where a report is made to the prosecuting authority (within the meaning of section 218) under section 218(4) of the Act, in relation to an officer of an incorporated friendly society, he may, if he thinks fit, refer the matter to the FCA for further enquiry. On such a reference to it the FCA shall exercise its power under section 65(1) above to appoint one or more investigators to investigate and report on the matter. An answer given by a person to a question put to him, in exercise of the powers conferred by section 65 above on a person so appointed, may be used in evidence against the person giving it.
Section 387 (meaning in Schedule 6 of “the relevant date") of the Act applies with the omission of subsections (2) and (4) to (6).
Section 233B of the Act (protection of supplies of goods and services) does not apply.
Section 390 of the Act (persons not qualified to act as insolvency practitioners) has effect as if for subsection (2) there were substituted—.
In the following provisions of the Act, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in paragraph 3(1)(a) above— In sections 391Q(2)(b) (direct sanctions order: conditions) and 391S(3)(e) (power for Secretary of State to obtain information) of the Act the reference to a company has effect without the modification in paragraph 3(1)(a) above.
In this Part of this Schedule, Part V of the Insolvency (Northern Ireland) Order 1989 is referred to as “Part V”; and that Order is referred to as “the Order”.
Article 61 (liability of members) of the Order is modified as follows. In paragraph (1), the reference to any past member shall be omitted. Sub-paragraphs (a) to (d) of paragraph (2) shall be omitted; and so shall paragraph (3). The extent of the liability of a member of an incorporated friendly society in a winding up shall not exceed the extent of his liability under paragraph 8 of Schedule 3 to this Act.
Articles 62 to 65 and 69 of the Order (miscellaneous provisions not relevant to incorporated friendly societies) do not apply.
Article 13 (meaning of “contributory") of the Order does not apply. In the enactments as applied to an incorporated friendly society “contributory”— but does not include persons liable to contribute by virtue of a declaration by the court under Article 177 (imputed responsibility for fraudulent trading) or Article 178 (wrongful trading) of the Order.
Article 70 of the Order does not apply. In the enactments as applied to an incorporated friendly society, the expression “resolution for voluntary winding up” means a resolution passed under section 21(1) above.
Article 74 shall have effect with the omission of the words from the beginning to “and".
Paragraph (1) of Article 75 shall have effect as if for the words from the beginning to “meeting" there were substituted the words—. The reference to the directors in paragraph (2) shall be construed as a reference to members of the committee of management.
Article 76 shall have effect as if for the words “directors’ statutory declaration in accordance with Article 75" there were substituted the words “ statutory declaration made in accordance with Article 75 by members of the committee of management ”.
Article 81(1) and 82 shall have effect as if the word “directors"' were omitted from each of them.
In paragraph (1) of Article 87 (appointment of liquidation committee) of the Order, the reference to functions conferred on a liquidation committee by or under that Order shall have effect as a reference to its functions by or under that Order as applied to incorporated friendly societies.
Article 93 (distribution of property) of the Order does not apply; and the following applies in its place. Subject to the provisions of Part V relating to preferential payments, an incorporated friendly society’s property in a voluntary winding up shall be applied in satisfaction of the society’s liabilities to creditors pari passu and, subject to that application, in accordance with the rules of the society.
Articles 96 and 97 (liquidator accepting shares, etc. as consideration for sale of company property) of the Order do not apply.
Article 102 (circumstances in which company may be wound up by the High Court) of the Order does not apply.
Article 104 (application for winding up) of the Order does not apply.
In Article 105 (powers of High Court on hearing of petition) of the Order, paragraph (1) applies with the omission of the words from “but the Court" to the end of the paragraph. The conditions which the Court may impose under Article 105 of the Order include conditions for securing— and may also include conditions for securing that any default which occasioned the petition be made good and that the costs of the proceedings on that petition be defrayed by the person or persons responsible for the default.
Article 106 (power of court, between petition and winding-up order, to stay or restrain proceedings against company) of the Order has effect with the omission of paragraph (2).
If, before the presentation of a petition for the winding up by the High Court of an incorporated friendly society, an instrument of dissolution under section 20 is placed in the society’s public file, Article 109(1) (commencement of winding up by the High Court) of the Order shall also apply in relation to the date on which the notice is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.
Article 110 of the Order (consequences of winding-up order) shall have effect with the following modifications. Paragraphs (1) and (3) shall be omitted. An incorporated friendly society shall, within 15 days of a winding-up order being made in respect of it, give notice of the order to the FCA and, if the society is a PRA-authorised person, the PRA; and the FCA shall keep the notice in the public file of the society. If an incorporated friendly society fails to comply with sub-paragraph (3) above, it shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
Article 119 (appointment of liquidator by High Court in certain circumstances) of the Order does not apply.
In the application of Article 120(1) (liquidation committees), of the Order to incorporated friendly societies, the references to functions conferred on a liquidation committee by or under that Order shall have effect as references to its functions by or under that Order as so applied.
The conditions which the High Court may impose under Article 125 (power to stay winding up) of the Order shall include those specified in paragraph 51(2) above.
Article 132 (adjustment of rights of contributories) of the Order shall have effect with the modification that any surplus is to be distributed in accordance with the rules of the society.
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Article 158 (power to make over assets to employees) of the Order does not apply.
In Article 166 (dissolution: voluntary winding up) of the Order, paragraph (2) applies without the words from “and on the expiration" to the end of the paragraph and, in paragraph (3), the word “However" shall be omitted. Articles 167 and 168 (early dissolution) of the Order do not apply.
In Article 169 (dissolution: winding up by the High Court) of the Order, paragraph (1) applies with the omission of the words from “and, subject" to the end of the paragraph; and in paragraphs (2) and (3) references to the Department shall have effect as references to the FCA and the PRA.
Articles 180 and 181 of the Order (restriction on re-use of name) do not apply.
Articles 182 and 183 (prosecution of delinquent officers) of the Order do not apply in relation to offences committed by members of an incorporated friendly society acting in that capacity. Articles 182(4) and 183(1) and (2) of the Order do not apply. The references in paragraph (3) and (5) of Article 183 of the Order to the Department shall have effect as references to the FCA; and the reference in paragraph (3) to Article 182 of the Order shall have effect as a reference to that Article as supplemented by paragraph 65 below.
Where a report is made to the prosecuting authority (within the meaning of Article 182) under Article 182(5) of the Order, in relation to an officer of an incorporated friendly society, he may, if he thinks fit, refer the matter to the FCA for further enquiry. On such a reference to it the FCA shall exercise its power under section 65(1) above to appoint one or more investigators to investigate and report on the matter. An answer given by a person to a question put to him in exercise of the powers conferred by section 65 above on a person so appointed may be used in evidence against the person giving it.
Article 347 (meaning in Schedule 4 of “the relevant date") of the Order applies with the omission of paragraphs (2) and (4) to (6).
Article 349 of the Order (persons not qualified to act as insolvency practitioners) has effect as if for paragraph (2) there were substituted—.
In the following provisions of the Order, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in paragraph 3(1)(a) above— In Articles 350Q(2)(b) (direct sanctions order: conditions) and 350S(3)(e) (power for Department to obtain information) of the Order the reference to a company has effect without the modification in paragraph 3(1)(a) above.
Where an incorporated friendly society has been wound up voluntarily, it is dissolved as from 3 months from the date of the placing in the public file of the society of the return of the final meetings of the society and its creditors made by the liquidator under— Where an incorporated friendly society has been wound up by the court, it is dissolved as from 3 months from the date of the placing in the public file of the society of the liquidator’s notice under—
Sections 1012 to 1023 and 1034 of the Companies Act 2006 (property of dissolved company) apply in relation to the property of a dissolved incorporated friendly society (whether dissolved under section 20 or following its winding up) as they apply in relation to the property of a dissolved company. Paragraph 3(1) above shall apply to those sections for the purpose of their application to incorporated friendly societies. Any reference in those sections to restoration to the register shall be read as a reference to the effect of an order under section 25 of this Act.
Rules may be made under— for the purpose of giving effect, in relation to incorporated friendly societies, to the provisions of the applicable winding up legislation. An order made by the competent authority under section 414 of the Insolvency Act 1986 may make provision for fees to be payable under that section in respect of proceedings under the applicable winding-up legislation and the performance by the official receiver or the Secretary of State of functions under it. An order made by the competent authority under Article 361 of the Insolvency (Northern Ireland) Order 1989 may make provisions for fees to be payable under that section in respect of proceedings under the applicable winding-up legislation and the performance by the official receiver in Northern Ireland or the Department of Economic Development in Northern Ireland of functions under it.
Section 27.
This Part of this Schedule applies in relation to members of the committee of management of a friendly society (“the society”); and in this Schedule— For the purposes of this Act the date of a person’s election to office as a member of the committee, where the rules of the society provide for election by ... ballot, is the date of the meeting at which the declaration of the result of the ballot is made.
Subject to paragraph 3 below, paragraph 7 of Schedule 3 to this Act and to the rules of the society, any person is eligible to be elected as a member of the committee.
The rules of the society may require the members of the committee to retire at a prescribed age without eligibility for re-election or reappointment; and, if the age so prescribed is no greater than the age which is the normal retirement age for members of the committee, sub-paragraph (3) below shall have no application to the society. If the rules of the society make the provision authorised by sub-paragraph (1) above, a person who has attained the age so prescribed shall not be eligible to be elected as a member of the committee. Except in the case mentioned in sub-paragraph (1) above, if a person has attained the normal retirement age for the society, he shall not be eligible to be elected as a member of the committee unless— A friendly society is to be regarded as notifying a person for the purposes of sub-paragraph (3)(b) if it makes the information available to the person on a website; and the end date for the purposes of section 119AB(4)(b) is the day after the election. If a friendly society, in a case where its committee has approved as eligible for election a person who has attained the normal retirement age, fails to notify every person entitled to vote at the election, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale; but no such failure shall invalidate the election.
No person may be co-opted as a member of the committee who has attained the normal retirement age or the compulsory retirement age (where that age is less than the normal retirement age).
A person who holds office as, or is to his knowledge nominated for election or proposed for co-option to the committee as, a member of the committee shall, not later than 28 days before he attains the normal retirement age or, as the case may be, the compulsory retirement age for members of the committee, give the society notice of the date on which he will attain that age. A person who fails to give to a friendly society a notice required, in relation to that society, by sub-paragraph (1) above shall be guilty of an offence and liable on summary conviction—
A member of the committee shall retire from office— A member of the committee attaining the normal retirement age or, as the case may be, the compulsory retirement age shall, subject to any provision of the rules for earlier retirement, retire from office at the next annual general meeting of the society. The rules of the society, if they provide for the retirement by rotation of members of its committee, may provide that a person elected to fill a vacant seat on the committee must retire at the annual general meeting at which, in accordance with the rules for retirement by rotation, the seat is to fall vacant. Sub-paragraph (3) above applies to any vacancy arising when an elected member ceases to hold office for any reason before the annual general meeting at which (disregarding his age) the seat is due to fall vacant.
A person who is co-opted as a member of the committee shall cease to hold office at the end of the permitted period unless he is elected to office as a member of the committee within that period. For the purposes of sub-paragraph (1) above “the permitted period”, with reference to the tenure of office of a co-opted member of the committee, is the period beginning with the date of his appointment and ending with the declaration of the next election of members of the committee conducted after his appointment or the expiration of the period of 16 months beginning with the date of his appointment, whichever first occurs.
A friendly society or registered branch must not make any payment to a member of the committee of management of the society or branch— unless particulars of the proposed payment (including its amount) have been disclosed to members of the society or branch and the proposal has been approved by the society or branch. Sub-paragraph (1) does not apply to a bona fide payment by way of damages for breach of contract or by way of pension in respect of past services.“Pension” here includes any superannuation allowance, superannuation gratuity or similar payment.
The following provisions of the Building Societies Act 1986— shall have effect as if any reference to a director of a building society included a reference to a member of the committee of management of a friendly society or registered branch. The provisions mentioned in sub-paragraph (1) above shall have effect in their application to such members with the substitution— Section 65 shall in addition have effect in its application to them— Section 69 shall in addition have effect with the substitution— The requisite particulars of the business of a business associate of a friendly society or registered branch are accordingly those set out in paragraphs 10 to 12 or 13 to 15 below.
Where the business associate of the society or branch provides legal services the requisite particulars of its business in any financial year are the following—
the aggregate amount of the fees paid to it by the society or branch concerned for the provision of legal services; and
the aggregate amount of any fees paid to it by the society or branch in consideration of the provision of management services to the society or branch.
Where the business associate of the society or branch provides accountancy services the requisite particulars of its business in any financial year are the following—
the aggregate amount of the fees paid to it by the society or branch for the provision of accountancy services; and
the aggregate amount of any fees paid to it by the society or branch in consideration of the provision of management services to the society or branch.
Where the business associate of the society or branch arranges for the provision of insurance broking services, the requisite particulars of its business in any financial year are the following—
the aggregate of the amounts paid to it by the society or branch by way of commission; and
the aggregate amount of any fees paid to it by the society or branch in consideration of the provision of management services to the society or branch.
Where the business associate of the society or branch provides legal services, the requisite particulars of its business in any financial year are the following—
the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society or branch for the provision of legal services; and
the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society or branch in consideration of the provision of management services to the society or branch.
Where the business associate of the society or branch provides accountancy services the requisite particulars of its business in any financial year are the following—
the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society or branch for the provision of accountancy services; and
the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society or branch in consideration of the provision of management services to the society or branch.
Where the business associate of the society or branch provides insurance broking services the requisite particulars of its business in any financial year are the following—
the prescribed band within which falls the estimated aggregate of the amounts paid to it by or by way of commission; and
the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society or branch in consideration of the provision of management services to the society or branch.
The Treasury, with the consent of the Treasury, may by order prescribe, for the purposes of the provisions of this Part of this Schedule, series of monetary amounts by reference to limits specified in the order; and, in any such provision, “prescribed band” means, in relation to monetary amounts, any series of monetary amounts so prescribed for the purposes of that provision. The power conferred by this paragraph includes power to prescribe different series of monetary amounts for the purposes of different provisions.
Section 30.
Every friendly society and registered branch shall in each year hold a general meeting as its annual general meeting (in addition to any other meetings in that year). Not more than 15 months shall elapse between the date of one annual general meeting and that of the next. If an incorporated friendly society holds its first annual general meeting within 18 months of its incorporation, it need not hold it in the year of its incorporation or in the following year. If a registered friendly society or registered branch holds its first annual general meeting within 18 months of its registration under the 1974 Act, it need not hold it in the year of its registration or in the following year.
A meeting to be held as the annual general meeting of a friendly society or registered branch shall be specified as such in any notice calling it. Notwithstanding anything in the rules of a friendly society or registered branch, the business which may be dealt with at the annual general meeting includes any resolution (whether a special resolution or not).
If a friendly society or registered branch fails to hold a meeting as its annual general meeting in accordance with paragraph 1 above, the society or branch shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale. If such default is made, the FCA may— If default is made in complying with any directions of the FCA given under this paragraph, the society or branch concerned shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
A meeting of a friendly society or registered branch must be called by not less than 14 days’ notice to members, or such longer period as the rules may require, expiring— and the notice to members of a meeting shall be given in such manner as is prescribed by the rules of the society or branch. Sending the notice by electronic means to an electronic address which the member has notified for that purpose, or making the notice available to a member on a website, is to be regarded as giving the member notice for the purposes of sub-paragraph (1), unless the rules of the society or branch make express provision to the contrary. The end date for the purposes of section 119AB(4)(b) is the date of the meeting. If a notice calling a meeting includes an electronic address for the society or registered branch, the address is to be regarded as one to which documents or information relating to the meeting may be sent; but that is subject to such conditions or restrictions as the notice specifies. Where notice of a meeting is given to a member by sending it to an electronic address, the notice is to be treated as given to that member on the day it is sent. Where a notice of a meeting is given to a member by making the notice available on a website, the notice is to be treated as given on the day the member is notified in accordance with section 119AB(3). If the notice is absent from the website for part of the period referred to in section 119AB(4), and the absence is disregarded for the purposes of section 119AB(5), that absence does not invalidate the proceedings of the meeting or resolutions passed. Where the rules of a friendly society do not provide for the giving of individual notices to those entitled (when the notice is given) to vote at meetings of any description, the rules may provide for the giving of notice of such meetings by advertisement. If the rules provide for the giving of notice of any meetings by advertisement, the rules must include provision requiring the necessary advertisements to be inserted— as the rules may provide. The rules of a friendly society or registered branch may provide— and sub-paragraphs (1) to (3) above shall not apply to meetings held by virtue of such provision. This paragraph is without prejudice to any requirement under the rules of a friendly society or registered branch as to the giving of notice of special resolutions to be moved, or any other business to be transacted, at a meeting of the society or branch.
Subject to sub-paragraph (2) below, any provision in the rules of a friendly society or registered branch is void to the extent that it would have the effect of making the voting rights conferred on members by the rules conditional upon the amount of their subscriptions. Sub-paragraph (1) above shall not apply to any provision in the rules excluding or limiting the voting rights of members by reference to the amount of their subscriptions in such cases or circumstances as the Treasury may by regulations prescribe. In this section “subscription” includes a contribution payment falling to be made by a member.
Any provision contained in the rules of a friendly society or registered branch shall be void in so far as it would have the effect either— The reference in sub-paragraph (1)(b) above to members includes a reference, where the rules allow the appointment of proxies, to persons who are duly appointed on behalf of members entitled to attend and vote at the meeting.
No resolution of a friendly society shall be passed as a special resolution unless— and, in this Act, “special resolution” means a resolution so passed. Subject to sub-paragraph (3) below, a resolution of a friendly society shall not be effective as a special resolution unless it is passed by not less than three-quarters of the number of the members of the society entitled to vote on it and voting either (in person or by proxy) on a poll at a meeting of the society or in a ... ballot. Where the rules of a friendly society provide for delegate voting, a resolution shall not be effective as a special resolution unless it is passed by not less than three quarters of the number of delegates entitled to vote on the resolution and voting on a poll at a meeting or in a ... ballot. Where the rules of a friendly society do not provide for the giving of individual notices to those entitled (when the notice is given) to vote on special resolutions of any description, the rules may provide for the giving of notice by advertisement. If the rules provide for the giving of notice of any special resolutions by advertisement, the rules must include provision requiring the necessary advertisements to be inserted— as the rules may provide. Proxy voting shall be permitted (notwithstanding anything to the contrary in a society’s rules) on any resolution which is to be moved as a special resolution at any meeting of a friendly society other than a meeting of delegates; and the procedure adopted by the society for such proxy voting shall comply with any requirements prescribed in regulations by the Treasury.
The rules of a friendly society or registered branch may provide for the voting— to be conducted in all, or in any particular, circumstances by postal ballot; and ... “postal ballot” in relation to an election or a resolution of the society or branch, means a postal ballot taking place by virtue of those rules. The rules of a friendly society or registered branch may also make provision in relation to the use of electronic communications in the conduct of a postal ballot. Where a postal ballot is to take place, the following provisions of this paragraph have effect. Notice of a postal ballot shall be given not less than 14 nor more than 56 days before the date which the society or branch specifies as the final date for the receipt of completed ballot papers (referred to in this paragraph as “the voting date”). Subject to the provisions of this Act, notice of a postal ballot shall be given to every member of the society or branch who would be entitled to vote in the election or on the resolution if the voting date for the election or the resolution fell on the date of the notice. A friendly society or registered branch is to be regarded as giving notice of a postal ballot for the purposes of this paragraph if it makes the notice available to a member on a website; and the end date for the purposes of section 119AB(4)(b) is the voting date. A notice given in accordance with sub-paragraph (4A) is to be treated as given to the member on the day the member is notified in accordance with section 119AB(3). If the notice of postal ballot is absent from the website for part of the period referred to in section 119AB(4), and the absence is disregarded for the purposes of section 119AB(5), that absence does not invalidate the postal ballot. If a notice of postal ballot includes an electronic address for the society or registered branch, the address is to be regarded as one to which a completed voting paper, or other documents or information relating to the ballot may be sent; but that is subject to such conditions or restrictions as the notice specifies, and any express provision to the contrary made in the rules of the society or branch. Notice of a postal ballot— as would be required to be given or sent to a member in connection with the election or resolution had it been intended to hold the election or vote on the resolution at a meeting instead of by postal ballot with the exception, however, of any notice relating to voting by proxy at a meeting.
Where by any provision of this Act special notice is required of a resolution, the resolution is not effective unless notice of the intention to move it has been given to the friendly society concerned at least 28 days before the meeting at which it is moved. The friendly society concerned shall give its members notice of any such resolution at the same time and in the same manner as is required by its rules for notice of the meeting or, if that is not practicable, shall give them notice (either by advertisement in a newspaper having an appropriate circulation or in any other mode allowed by the society’s rules) at least 14 days before the meeting. Sending the notice by electronic means to an electronic address which the member has notified for that purpose, or making the notice available to a member on a website, is to be regarded as giving the member notice for the purposes of sub-paragraph (2), unless the rules of the society make express provision to the contrary. The end date for the purposes of section 119AB(4)(b) is the date of the meeting. If a notice calling a meeting includes an electronic address for the society, the address is to be regarded as one to which documents or information relating to the meeting may be sent; but that is subject to such conditions or restrictions as the notice specifies. Where notice of a meeting is given to a member by sending it to an electronic address, the notice is to be treated as given to that member on the day it is sent. Where a notice of a meeting is given to a member by making the notice available on a website, the notice is to be treated as given on the day the member is notified in accordance with section 119AB(3). If the notice is absent from the website for part of the period referred to in section 119AB(4), and the absence is disregarded for the purposes of section 119AB(5), that absence does not invalidate the proceedings of the meeting or resolutions passed. If, after notice of the intention to move such a resolution has been given to the society, a meeting is called for a date 28 days or less after the notice has been given, the notice is deemed properly given, though not given within the time required.
The rules of a friendly society or registered branch may provide for the voting in an election of the committee of management or, where applicable, the secretary, or on any resolution (whether special or not) to be conducted in all, or any particular, circumstances by electronic ballot. An “electronic ballot”, in relation to such an election or resolution, means an electronic ballot taking place by virtue of those rules. A person is to be regarded as voting in an electronic ballot only if the following conditions are satisfied. The first condition is that the person— The second condition is that the society or branch has notified the person of— The third condition is that the facility is present on the website for the whole of the period— The fourth condition is that the person registers a vote in the ballot by using the facility. The notification given under sub-paragraph (5) must— Notice of an electronic ballot must be given not less than 14 nor more than 56 days before the date which the society or branch specifies as the final day for the registration of votes in the ballot. Unless express provision to the contrary is made in the rules of a society or branch, sub-paragraphs (4) and (5) of paragraph 8 apply to a notice of an electronic ballot as they apply to a notice of a postal ballot. The rules of the society or branch may make provision as to the consequences of any irregularities occurring in the course of a ballot, including provision as to the validity of multiple votes cast by a member in the same election or on the same resolution. Unless express provision to the contrary is made in the rules of a society or branch, if the facility for registering a vote is absent from the website for part of the period referred to in sub-paragraph (6), the absence is to be disregarded if it is wholly attributable to circumstances that it would not be reasonable to have expected the society or branch to prevent or avoid.
The rules of a friendly society or registered branch may provide for the voting in an election of the committee of management or, where applicable, the secretary, or on any resolution (whether special or not) to be conducted in all, or any particular, circumstances by combined ballot. A “combined ballot”, in relation to such an election or resolution, means a postal ballot and electronic ballot taking place in accordance with those rules. The rules must, in particular, stipulate that no person entitled to vote in a combined ballot is permitted to do so in both the postal and the electronic ballot. Paragraph 8(2) to (5) applies to a combined ballot in so far as it involves a postal ballot. Paragraph 8A(3) to (12) applies to a combined ballot in so far as it involves an electronic ballot.
In this Part of this Schedule “application” means an application by a friendly society for authorisation and, in relation to any application, “the society” means the friendly society making the application. For the purposes of this Part of this Schedule “officer”, in relation to a registered friendly society, does not include a trustee of the society.
An application shall be made in such manner as the Commission may specify, either generally or in any particular case. Subject to sub-paragraph (3) below, the society must submit to the Commission such proposals as to the manner in which it proposes to carry on business, such financial forecasts and such other information as may be required by or in accordance with regulations made by the Commission with the consent of the Treasury. Where the application is made under section 33 above the society shall, instead of submitting the information mentioned in sub-paragraph (2) above, furnish the Commission with the documents referred to in sub-paragraph (4) below and such other information as the Commission may request. The documents referred to in sub-paragraph (3) above are— The Commission shall decide an application within 6 months of receiving the information referred to in sub-paragraph (2) above or, in the case of an application under section 33 above, the documents and other information mentioned in sub-paragraph (3) above.
If on an application the Commission proposes to impose conditions, the provisions of paragraphs 7 and 8 below shall apply. If the Commission proposes to refuse to grant authorisation, it shall serve a notice on the society stating— If the grounds for the proposed refusal include the ground that a person is not a fit and proper person to hold office in the society, the Commission shall also serve the notice specified in sub-paragraph (2) above on the person concerned giving him the like right to make representations and to be heard with respect to his fitness and propriety for office. If, on an application made by virtue of section 33 above, the grounds for the proposed refusal include the ground that the Commission is not satisfied that a statement referred to in paragraph 2(4)(b) or (c) above is accurate, it shall also serve the notice specified in sub-paragraph (2) above on the person or, as the case may be, each person who made the statement giving him the like right to make representations and to be heard with respect to the accuracy of his statement. The Commission shall, before reaching a decision on the application, consider any representations made to it in accordance with sub-paragraph (2), (3) or (4) above. If, on an application for authorisation, the Commission refuses to grant authorisation it shall serve— a notice stating the Commission’s decision and the grounds for it. The non-receipt by an officer or other person of a notice of a matter under this paragraph does not affect the validity of any action on the part of the Commission.
A friendly society which furnishes any information or makes any statement which is false or misleading in a material particular in connection with an application shall be guilty of an offence and liable— Any person who knowingly or recklessly furnishes any information or makes any statement which is false or misleading in a material particular in connection with an application shall be guilty of an offence and liable—
On granting authorisation to a friendly society the Commission shall send a copy of the terms of the authorisation— and the central office shall keep a copy of those terms in the public file of the society. Where the terms of a society’s authorisation are superseded by the grant of authorisation— the central office shall, on placing the copy of the terms of the authorisation on the public file of the society under sub-paragraph (1) above, indicate on the copy of the previous terms kept on that file that they have been superseded.
In this Part of this Schedule “the society” means— For the purposes of this Part of this Schedule “officer”, in relation to a registered friendly society, does not include a trustee of the society.
If the Commission proposes to impose conditions, it shall serve on the society and on each of its officers a notice stating— If any condition proposed to be imposed on the society includes a requirement for a person’s removal from office (whether an office in the society or in any registered branch of the society), the Commission shall also serve the notice specified in sub-paragraph (1) above on the person whose removal is proposed giving him the like right to make representations and to be heard with respect to his proposed removal from office. The Commission shall, before reaching a decision on whether to impose conditions and, if so, what conditions, consider any representations made in accordance with sub-paragraph (1) or (2) above. The Commission may not impose conditions on grounds other than those stated, or grounds included in those stated, in the notice served by it under sub-paragraph (1) above. Except where paragraph 8 below applies, the Commission shall serve— a notice stating its decision and, where it has decided to impose conditions, specifying the conditions and stating the grounds for imposing them. Where conditions are imposed on an authorisation which is already subject to conditions, the notice served on the society under sub-paragraph (5) above shall be accompanied by a statement of all subsisting conditions to which the authorisation is subject (including any that were otherwise unaffected by the decision); and the Commission shall send a copy of that statement to the central office.
This paragraph applies where the Commission has decided to impose conditions but proposes to impose conditions different from and more onerous than those stated in the notice served by the Commission under paragraph 7(1) above. The Commission shall serve on the society and on each of its officers a notice stating— If any new or different condition proposed to be imposed on the society includes a requirement for a person’s removal from office (whether an office in the society or in any registered branch of the society), the Commission shall also serve the notice specified in sub-paragraph (2) above on the person whose removal is proposed giving him the like right to make representations and to be heard with respect to his proposed removal from office. The Commission shall, before reaching a decision on whether to impose conditions different from those stated in the notice served under paragraph 7(1) above and, if so, what conditions, consider any representations made in accordance with sub-paragraph (2) or (3) above. The Commission may not impose conditions on grounds other than those stated, or grounds included in those stated, in the notice served by it under sub-paragraph (2) above. The Commission shall serve- a notice stating its decision and, where it has decided to impose conditions, specifying the conditions and stating the grounds for imposing them. Where conditions are imposed on an authorisation which is already subject to conditions, the notice served on the society under sub-paragraph (6) above shall be accompanied by a statement of all subsisting conditions to which the authorisation is subject (including any that were otherwise unaffected by the decision); and the Commission shall send a copy of that statement to the central office. The procedure in this paragraph may be repeated; and on any such repeat references in this paragraph to the notice under paragraph 7(1) above shall be construed as reference to the latest notice under sub-paragraph (2) of this paragraph.
The modifications of the provisions of paragraphs 7 and 8 above in their application to the imposition of conditions by the Commission in pursuance of a direction of an appeal tribunal under section 59 above are as follows. The notice under paragraph 7(1) above shall be served on the society and the other persons there specified within the period of 14 days beginning with the date on which the Commission received notice of the tribunal’s decision under subsection (10) of that section; and a copy shall also be sent within that period to the tribunal. The notice under paragraph 7(1) above may specify, as the period within which representations may be made, a period of not less than 7 days. If the Commission serves a notice under paragraph 8(2) above on the society and other persons there specified it shall send a copy of the notice to the tribunal.
Subject to sub-paragraph (6) below, if the Commission proposes to give a direction under section 40 or section 41 above it shall serve on the society and on each of its officers a notice stating— If the grounds for the proposed direction include the ground that a person is not a fit and proper person to hold office in the society, the Commission shall also serve the notice specified in sub-paragraph (1) above on the person concerned giving him the like right to make representations and to be heard with respect to his fitness and propriety for office. Before reaching a decision on whether to give a direction, the Commission shall consider any representations made to it in accordance with sub-paragraph (1) or (2) above. Except where the Commission proposes to impose conditions instead of giving a direction (in which case paragraphs 7 and 8 above apply), the Commission shall serve on the society and each of its officers a notice stating its decision and, where it has decided to give a direction, the grounds for the decision. The Commission may not give a direction on grounds other than those stated, or grounds included in those stated, in the notice served under sub-paragraph (1) above. Sub-paragraphs (1) to (5) above shall not apply in relation to a direction to a friendly society which is given at the request of the society or under section 40(2) or (3)(g) above; but the notice of any such direction sent to the secretary of the society shall state the grounds on which it is given.
On giving a direction in relation to a friendly society under section 40 or 41 above the Commission shall— The central office—
The non-receipt by an officer of a friendly society or registered branch of a notice of a matter does not affect the validity of any action on the part of the Commission.
Section 72.
The first auditor of a friendly society or registered branch may be appointed by the committee of management of the society or branch at any time before the first general meeting of the society or branch following the end of its initial financial year; and an auditor so appointed shall hold office until the conclusion of that meeting. If the committee of management fails to exercise its powers under sub-paragraph (1) above, those powers may be exercised by the society or branch in general meeting.
The committee of management, or the society or branch in general meeting, may fill any casual vacancy in the office of auditor; but while any such vacancy continues, the surviving or continuing auditor or auditors (if any) may act.
If at any annual general meeting of a friendly society or registered branch no auditor is appointed or re-appointed, the appropriate authority may appoint a person to fill the vacancy; and the society or branch shall, within one week of the power of the appropriate authority becoming exercisable, give it notice of that fact. If a society or branch fails to give the notice required by sub-paragraph (1) above, the society or branch shall be guilty of an offence and liable on summary conviction—
Subject to paragraph 7 below, a person is eligible for appointment as the auditor of a friendly society or registered branch only if he— An individual or a firm may be appointed as auditor of a friendly society or registered branch. In this Schedule—
A person is ineligible for appointment as an auditor of a friendly society or a registered branch of the society under this Schedule if he is— or, in the case of an incorporated friendly society, if he is prohibited by section 1214(2) of the Companies Act 2006 (independence requirement) from acting as statutory auditor of a subsidiary of the society or of a body jointly controlled by the society and some other person. For this purpose an auditor of a friendly society or branch shall not be regarded as an officer or employee of the society or branch. A person is also ineligible for appointment as auditor of a friendly society or branch if there exists between him or any associate of his and the society or branch or, if it is an incorporated friendly society, any of its subsidiaries, a connection of any such description as may be specified by regulations made by the Treasury. In this paragraph “associate” has the meaning given by section 1260 of the Companies Act 2006.
Appointment as auditor of a friendly society subject to special requirements is an appointment as a statutory auditor to which the provisions of Part 42 of the Companies Act 2006 apply. The following provisions of this Schedule do not apply in that case—
The following provisions apply to the appointment as auditor under this Schedule of a partnership constituted under the law of England and Wales or Northern Ireland, or under the law of any other country or territory in which a partnership is not a legal person. The appointment is (unless a contrary intention appears) an appointment of the partnership as such and not of the partners. Where the partnership ceases, the appointment shall be treated as extending to— For this purpose a partnership shall be regarded as succeeding to the practice of another partnership only if the members of the successor partnership are substantially the same as those of the former partnership; and a partnership or other person shall be regarded as succeeding to the practice of a partnership only if it or he succeeds to the whole or substantially the whole of the business of the former partnership. Where the partnership ceases and no person succeeds to the appointment under sub-paragraph (3) above, the appointment may with the consent of the recognised supervisory body be treated as extending to a partnership or other person eligible for the appointment who succeeds to the business of the former partnership or to such part of it as is agreed by the body shall be treated as comprising the appointment.
A person who is not a member of a recognised supervisory body may be an auditor of a registered friendly society or of a registered branch if— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A person who is not a member of a recognised supervisory body may also be an auditor of a registered branch if— Regulations made by the Treasury may— A registered friendly society or registered branch which, by virtue of this paragraph, may appoint a person who is not a member of a recognised supervisory body as an auditor in respect of any financial year is in this Schedule referred to as an exempt society or, as the case may be, an exempt branch, in respect of that financial year. Subject to any direction given by the appropriate authority under sub-paragraph (7) below, a society or branch which in respect of any financial year is an exempt society or, as the case may be, an exempt branch shall in respect of that year appoint— to audit its annual accounts for that year. The appropriate authority may give a direction in the case of any particular society or branch which is an exempt society or branch in respect of any financial year that sub-paragraph (4) above shall apply to it in respect of that year as if it were not an exempt society or branch.
No person shall act as an auditor under this Act if he is ineligible for appointment to the office. If during his term of office an auditor appointed under this Schedule become ineligible for appointment to the office, he shall thereupon vacate office and shall forthwith give notice in writing to the society concerned that he has vacated it by reason of ineligibility. A person who acts as auditor under this Act in contravention of sub-paragraph (1) above, or fails to give notice of vacating his office as required by sub-paragraph (2) above, is guilty of an offence and liable— In proceedings against a person for an offence under this paragraph it is a defence for him to show that he did not know and had no reason to believe that he was, or had become, ineligible for appointment.
Where a person appointed auditor under this Schedule was, for any part of the period during which the audit was conducted, ineligible for appointment to that office, the appropriate authority may direct the friendly society or registered branch concerned to retain a person eligible for appointment as auditor under this Schedule— and the society or branch shall comply with such a direction within 21 days of its being given. If a second audit is recommended, the society or branch shall forthwith take such steps as are necessary to comply with the recommendation. Where a direction is given to a society or branch under this paragraph the PRA must send a copy of the direction to the FCA and the FCA must place a copy of the direction in the public file of the society. Where a society or branch receives a report under sub-paragraph (1)(b) above, it shall within 21 days send a copy of it to the FCA and, if the society is a PRA-authorised person, the PRA, and the FCA must place a copy of the report in the public file. Any statutory or other provisions applying in relation to the first audit shall apply, so far as practicable, in relation to a second audit under this paragraph. If a society or branch fails to comply with the requirements of this paragraph, it is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale; and in the case of a continuing offence to an additional fine not exceeding one-tenth of that level one-tenth of the greater of £5,000 or level 4 on the standard scale for every day during which the offence continues. A direction under this paragraph is, on the application of the appropriate authority, enforceable by injunction or, in Scotland, by an order under section 45 of the Court of Session Act 1988. If a person accepts an appointment, or continues to act, as an auditor under this Act at a time when he knows he is ineligible, the society concerned may recover from him any costs incurred by it in complying with the requirements of this paragraph.
A friendly society or registered branch may by ordinary resolution in general meeting remove an auditor before the expiration of his term of office, notwithstanding anything in any agreement between it and him. Where such a resolution is passed, the society or branch shall within 14 days give notice of that fact to the FCA and, if the society is a PRA-authorised person, the PRA. If a friendly society or branch fails to give the notice required by sub-paragraph (2) above, it shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale and in the case of a continuing offence to an additional fine not exceeding one-tenth of that level for every day during which the offence continues. Nothing in this paragraph is to be taken as depriving a person removed under it of compensation or damages that may be payable to him in respect of the termination of his appointment as auditor or of any appointment terminating with that as auditor. An auditor of a friendly society or registered branch who has been removed has, not withstanding his removal, the rights conferred by section 75 above in relation to any general meeting of the society or branch at which— An auditor may not be removed from office before the expiration of that auditor’s term of office except—
Special notice is required for a resolution at a general meeting of a friendly society or registered branch— On receipt of notice of such an intended resolution the friendly society or branch shall forthwith send a copy of it to the person proposed to be removed or, as the case may be, to the person proposed to be appointed and to the retiring auditor. The auditor proposed to be removed or (as the case may be) the retiring auditor may make with respect to the intended resolution representations in writing to the society or branch (not exceeding a reasonable length) and request their notification to members of the society. The society or branch shall (unless the representations are received by it too late for it to do so)— If notice of any such representations is not given as required by sub-paragraph (4) above because received too late or because of the default of the society or branch, the auditor may (without prejudice to his right to be heard orally) require that the representations be read out at the meeting. The steps required by sub-paragraphs (4) or (5) above need not be taken if, on the application of the society or branch or of any other person claiming to be aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; and the court may order the costs of the society or branch on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.
An auditor of a friendly society or registered branch may resign his office by depositing a notice in writing to that effect at the society’s registered office. The notice is not effective unless it is accompanied by the statement required by paragraph 14 below. An effective notice of resignation operates to bring the auditor’s term of office to an end as of the date on which the notice is deposited or on such later date as may be specified in it. The society or branch shall within 14 days of the deposit of a notice of resignation send a copy of the notice to the FCA and, if the society is a PRA-authorised person, the PRA. If default is made in complying with sub-paragraph (4) above, the society or branch is guilty of an offence and liable—
Where an auditor of a friendly society subject to special requirements is removed from office , other than by order of the High Court made under paragraph 6 of Schedule 14A, an application may be made to the High Court under this paragraph. The persons who may make such an application are— If the court is satisfied that the removal was— it may make such order as it thinks fit for giving relief in respect of the removal. The court may, in particular— In the application of this paragraph to a friendly society whose registered office is in Scotland or Northern Ireland, references to the High Court shall be read as references to the Court of Session or, as the case may be, the High Court in Northern Ireland.
This paragraph applies where an auditor’s notice of resignation is accompanied by a statement of circumstances which he considers should be brought to the attention of members or creditors of the society or branch. He may deposit with the notice a signed requisition calling on the committee of management of the society or branch forthwith duly to convene an extraordinary general meeting of the society or branch for the purpose of receiving and considering such explanation of the circumstances connected with his resignation as he may wish to place before the meeting. The society or branch shall, at the request of the auditor (unless the statement is received too late to comply)— If the committee of management does not within 21 days from the date of the deposit of a requisition under this paragraph proceed duly to convene a meeting for a day not more than 28 days after the date on which the notice convening the meeting is given, every member of the committee who failed to take all reasonable steps to secure that a meeting was convened as mentioned above is guilty of an offence and liable— If notice of the statement mentioned above is not given as required because received too late or because of the default of the society or branch, the auditor may (without prejudice to his right to be heard orally) require that the statement be read out at the meeting in question. The steps required by sub-paragraphs (3) and (5) above need not be taken if, on the application of the society or branch or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; and the court may order the costs of the society or branch on such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application. An auditor who has resigned has, notwithstanding his resignation, the rights conferred by section 75 above in relation to any such general meeting of the society or branch as is mentioned in sub-paragraph (3) above; and in such a case, the references in that section to matters concerning the auditors as auditors shall be construed as references to matters concerning him as a former auditor.
Where an auditor of a friendly society or registered branch ceases for any reason to hold office, he shall deposit at the registered office of the society or branch concerned— In a case falling within sub-paragraph (1)(a) above it shall also be the duty of the auditor, unless he receives notice of an application under sub-paragraph (4) below before the end of the period of 21 days beginning with the day on which he deposited the statement, to send the FCA and the PRA a copy within a further 7 days. In the case of resignation, the statement shall be deposited along with the notice of resignation; in the case of failure to seek re-appointment, the statement shall be deposited not less than 14 days before the end of the time allowed for next appointing auditors; in any other case, the statement shall be deposited not later than the end of the period of 14 days beginning with the date on which he ceases to hold office. If the statement is of circumstances which the auditor considers should be brought to the attention of the members or creditors of the society or branch, the society shall within 14 days of the deposit of the statement either— The society or branch shall if it applies to the court notify the auditor of the application. If the court is satisfied that the auditor is using the statement to secure needless publicity for defamatory matter— and the society or branch shall within 14 days of the court’s decision send to the persons mentioned in sub-paragraph (4)(a) above a statement setting out the effect of the order. If the court is not so satisfied, the society or branch shall within 14 days of the court’s decision— and the auditor shall within 7 days of receiving such notice send a copy of the statement to the FCA and the PRA. A society is to be regarded as sending a person a copy of the statement for the purposes of sub-paragraph (4)(a) or (7)(a) if it makes the information available to the person on a website; and the end date for the purposes of section 119AB(4)(b) is the day falling 28 days after the later of the two dates referred to in section 119AB(4)(a).
If a person ceasing to hold office as auditor fails to comply with paragraph 14 above, he is guilty of an offence and liable— If a society or branch makes default in complying with paragraph 14 above, it is guilty of an offence and liable—
The remuneration of auditor appointed by a friendly society or registered branch in general meeting shall be fixed by the society or branch in general meeting or in such manner as the society or branch in general meeting may determine. The remuneration of auditor appointed by the committee of management or the appropriate authority shall be fixed by the committee of management or the appropriate authority as the case may be. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . For the purposes of this paragraph “remuneration” includes sums paid in respect of expenses. This paragraph applies in relation to benefits in kind as to payments in cash .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Where an auditor of a friendly society or registered branch ceases for any reason to hold office, he must notify the appropriate audit authority. The notice must— If the statement so deposited is to the effect that he considers that there are no circumstances in connection with his ceasing to hold office that need to be brought to the attention of the members or creditors of the society or branch, the notice must also be accompanied by a statement of the reasons for his ceasing to hold office. The auditor must comply with this paragraph at the same time as he deposits a statement at the registered office of the society or branch in accordance with paragraph 14. If a person ceasing to hold office as auditor fails to comply with this paragraph, he is guilty of an offence and liable—
Where an auditor of a friendly society or registered branch ceases to hold office before the end of his term of office, the society or branch must notify the appropriate audit authority. The notice must— The society or branch must give notice under this paragraph— If a friendly society or registered branch fails to comply with this paragraph, it is guilty of an offence and liable—
In paragraphs 15A and 15B above “appropriate audit authority” means—
the Secretary of State, or
if the Secretary of State has delegated functions under section 1252 of the Companies Act 2006 to a body whose functions include receiving the equivalent notice under section 522 or 523 of that Act, that body.
Section 85.
A friendly society which desires— shall, subject to sub-paragraph (2) below, send a statement concerning the matters specified in paragraph 2 below to every member entitled (when the statements are sent) to vote on any resolution required by section 85, 86 or 90. Sub-paragraph (1) above does not apply, in the case of a friendly society desirous of undertaking to fulfil another society’s engagements, where the appropriate authority has consented under section 86(3)(b) or 90(2)(b) above to its proceeding by resolution of the committee of management. The statement referred to in sub-paragraph (1) above shall be sent so as to arrive no later than 14 days (or such longer period as the rules may require for notice of any resolution required by section 85, 86 or 90 above) before— If it appears to the appropriate authority that it is impractical to include the summary mentioned in paragraph 2(1)(d) below in the statement referred to in sub-paragraph (1) above, the appropriate authority may direct that the summary shall be sent separately from that statement within such period as the appropriate authority may specify in the direction.
The matters of which a statement required by paragraph 1 above is to give particulars are the following, namely— No statement shall be sent unless its contents, so far as they concern the matters specified in this paragraph, have been approved by the appropriate authority. The PRA must consult the FCA before approving a statement under sub-paragraph (2).
A friendly society which desires to convert into a company under section 91 above shall send a statement concerning— to every member entitled (when the statements are sent) to vote on any resolution required by subsection (2) of that section. Regulations under sub-paragraph (1) above may include among the prescribed matters any alternatives to a proposed conversion which may be available.
The statement referred to in paragraph 3 above shall be sent so as to arrive no later than 14 days (or such longer period as the rules may require for notice of any resolution required by section 91 above) before— but no such statement may be sent unless its contents, so far as they concern the matters mentioned in that paragraph, have been approved by the appropriate authority.
the meeting at which any such resolution is to be moved; or
where proxy voting is permitted, such earlier date as may be specified by the society, under its rules, as the final date for the receipt of appointments of proxies to vote at the meeting;
The PRA must consult the FCA before approving a statement under paragraph 4.
A society is to be regarded as sending a member— if it makes the statement available to the member on a website; and the end date for the purposes of section 119AB(4)(b) is the day falling 28 days after the later of the two dates referred to in section 119AB(4)(a). If the statement is absent from a website for part of the period referred to in section 119AB(4), and the absence is disregarded for the purposes of section 119AB(5), that absence does not invalidate—
An application by a friendly society for confirmation by the appropriate authority— shall be made in such manner as the appropriate authority may direct. An application for confirmation of an amalgamation shall be made jointly by the friendly societies concerned. The appropriate authority may, on the application or with the consent of a friendly society, direct in relation to any provision of regulations made for the purposes of sub-paragraph (1) above that the provisions shall not apply to the society, or shall apply to it with such modifications as may be specified in the direction. A direction under sub-paragraph (3) above may be subject to conditions. A direction under sub-paragraph (3) above may be revoked by the appropriate authority at any time; and the appropriate authority may at any time vary any such direction on the application or with the consent of the society to which it applies. The PRA must send the FCA a copy of any direction, variation or revocation it makes under this paragraph. Where the appropriate authority— the FCA must cause the direction, variation or revocation to be entered on a register kept by it for the purposes of this subsection. The register kept for the purposes of subsection (6) above shall be available for inspection on reasonable notice by members of the public. The FCA shall keep a copy of— . . . in the public file of the society to which it relates.
Where a friendly society applies for confirmation of an amalgamation, transfer or conversion, it shall publish a notice of the application— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The notice shall— Where a friendly society participating in a transfer is required under section 88 above to furnish an actuary’s report, the society shall publish a notice in the manner required by sub-paragraph (1) above— at which copies of the report shall be available for inspection for a period of not less than 21 days beginning with the date of the first publication of the notice; and containing such particulars of any other matter relating to the report which the appropriate authority requires in the case of the transfer in question; and such a society may include the notice required by this sub-paragraph in the notice required by sub-paragraph (1) above.
After the date specified in the notice in pursuance of paragraph 6(2)(b) above, the appropriate authority shall— and the appropriate authority shall allow that society an opportunity to comment on the written representations (whether at a hearing or in writing) before the expiration of such period as the appropriate authority specifies in a notice to the society.
determine the time and place at which oral representations may be made;
give notice of that determination to the friendly society applying for confirmation and to any persons who have give notice of their intention to make oral representations; and
send copies of any written representations received by the appropriate authority to that society;
Where an application is duly made for confirmation by the appropriate authority of an amalgamation, transfer of engagements or conversion, the appropriate authority shall confirm the amalgamation, transfer or conversion unless it is precluded from doing so by any of the following provisions of this Schedule. If it appears to the appropriate authority, in relation to any amalgamation or transfer of engagements, that there is a substantial risk that the successor society or the person taking the transfer will not be able lawfully to carry out the engagements to be transferred to it under section 85(4) or 86(5) above, the appropriate authority— but it may not withdraw its confirmation on or after the transfer date for the amalgamation or transfer. For the purposes of sub-paragraph (2) above, the appropriate authority may have regard to any requirements of the law of a country or territory outside the United Kingdom which appear to the appropriate authority to be relevant.
Subject to sub-paragraph (3) below, the appropriate authority shall not confirm an amalgamation or transfer if it considers that— Subject to sub-paragraph (3) below, the appropriate authority shall not confirm the conversion of a society if it considers that— The appropriate authority shall not be precluded from confirming an amalgamation, transfer or conversion by virtue only of the non-fulfilment of some relevant requirement of this Act or the rules of a friendly society if it appears to the appropriate authority that it could not have been material to the members’ decision about the amalgamation, transfer or conversion and the appropriate authority gives a direction that the failure is to be disregarded for the purposes of this paragraph.
The appropriate authority shall not confirm an amalgamation, transfer of engagements or conversion unless it is satisfied that there is no substantial risk that the successor society, the proposed transferee, or the company into which the society is converted, will not have— as will enable it to carry on the business which it will have as a result of the amalgamation, transfer or conversion without contravening section 19 of that Act (the general prohibition).
such permission (if any) under Part 4A of the Financial Services and Markets Act 2000, ...
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The PRA must consult the FCA before confirming an amalgamation, transfer of engagements or a conversion. The PRA must notify the FCA if it makes any such confirmation.
The appropriate authority shall not confirm a transfer unless it is satisfied—
that all the engagements included in the transfer may be transferred under section 86 above to the transferee;
that the transfer is in the interests of the members of each friendly society participating in the transfer; and
where the transfer is not of all the engagements of the transferor, that the purposes of each friendly society participating in the transfer will, after the transfer, continue to include the carrying on of one or more activities falling within Schedule 2 to this Act.
The appropriate authority shall not confirm a transfer in any case where the transferee is required by section 87 above to furnish the appropriate authority with a report unless it is satisfied (after taking the proposed transfer into account) either that the transferee will possess the margin of solvency required by rules made by the appropriate authority under Part 9A of the Financial Services and Markets Act 2000 or, where no margin of solvency is required by such rules, that the value of the transferee’s assets will exceed its liabilities. The appropriate authority shall not confirm a transfer of any engagements the fulfilment of which will constitute effecting or carrying out contracts of insurance in the United Kingdom unless it is satisfied (after taking the proposed transfer into account) either that the transferee will possess the margin of solvency required by rules made by the appropriate authority under Part 9A of the Financial Services and Markets Act 2000 or, where no margin of solvency is required by such rules, that the value of the transferee’s assets will exceed its liabilities. This paragraph does not apply to any transfer of engagements to which paragraph 15 or 15A below applies. The reference in sub-paragraph (2) to effecting or carrying out contracts of insurance must be read with—
The Commission shall not confirm a transfer of any engagements the fulfilment of which will constitute the carrying on in the United Kingdom of insurance business unless it is satisfied—
that the proposed transferee will be able to fulfil the engagements without authorisation under Part I of the Insurance Companies Act 1982 or section 32 of this Act; or
that there is no substantial risk that the proposed transferee will not have such authorisation as will permit it to fulfil them.
This paragraph applies to any transfer of engagements (other than contracts of reinsurance) where– For the purposes of sub-paragraph (1)(c)(vi), references to rules made by the Prudential Regulation Authority are to those rules as they have effect on IP completion day. The appropriate authority shall not confirm the transfer unless– . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . In this paragraph “the relevant authority" means—
The Commission shall not confirm a transfer to a friendly society of engagements the fulfilment of which will constitute the carrying on in the United Kingdom of non-insurance business of any description unless it is satisfied that there is no substantial risk that the society will not be authorised under section 32 above to carry on non-insurance business of that description.
This paragraph applies to any transfer of engagements (other than contracts of reinsurance) where– For the purposes of sub-paragraph (1)(c)(v), references to rules made by the Prudential Regulation Authority are to those rules as they have effect on IP completion day. The appropriate authority shall not confirm the transfer unless– . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . In this paragraph “the relevant authority" means—
A failure to comply with a relevant requirement of this Act or any rules of a friendly society shall not invalidate any amalgamation, transfer of engagements or conversion; but a society which— shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.
participates in an amalgamation or transfer or converts into a company; and
fails without reasonable excuse to comply with such a requirement;
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In this Part of this Schedule– “policy" means a contract (other than a contract of reinsurance) the effecting of which by a friendly society to which section 37(2) or (3) above applies constituted the carrying on of insurance business of any class; “policy holder" means a member whose contract with such a society is a contract the effecting of which by the society constituted the carrying on of insurance business (other than reinsurance business) of any class; “relevant requirement", with reference to this Act or the rules of a friendly society, means a requirement of this Part of this Act or of any rules prescribing the procedure to be followed by the society in approving or effecting an amalgamation or transfer of engagements or its conversion into a company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
expressions which are defined in section 81A or 96A of the Insurance Companies Act 1982 (interpretation of expressions derived from European Directives relating to insurance) have the same meaning as they have for the purposes of that Act;
“relevant requirement”, with reference to this Act or the rules of a friendly society means a requirement of this Part of this Act or of any rules prescribing the procedure to be followed by the society in approving or effecting an amalgamation or transfer of engagements or its conversion into a company.
Section 95.
The 1974 Act shall be amended as follows.
In subsection (1) of section 4— After subsection (2) of that section there shall be inserted the following subsection— In subsection (3) of that section, after the word “Act", in each place where it occurs, there shall be inserted the words “ or the 1992 Act ”.
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In section 7, in subsection (1)—
for the words “may be" there shall be substituted the words “ may remain ”;
in paragraph (a), for the words from “any" to the end of the paragraph there shall be substituted the words “ any purpose falling within Schedule 2 to the 1992 Act ”; and
but no society may become registered under this Act after the commencement of section 93 of the 1992 Act.
In section 13(1), for the words from “except" to the end of the subsection there shall be substituted the words “ after the commencement of section 93 of the 1992 Act ”.
For section 15 there shall be substituted the following section— Section 17 shall cease to have effect. Sub-paragraphs (1) and (2) above shall not affect the operation of section 15(2) and section 17 in relation to an acknowledgement of registration issued to a registered society under section 15(1).
In section 21, for the words “sum not exceeding 10p" there shall be substituted the words “ reasonable fee ”.
After section 23 there shall be inserted the following section—
For section 24 there shall be substituted the following section—
For section 26 there shall be substituted the following section—
Sections 27 and 28 shall cease to have effect.
Sections 29 to 45 shall cease to have effect in relation to registered friendly societies and registered branches of such societies.
In section 35, after subsection (5) there shall be inserted the following subsection—
In section 40, after subsection (2) there shall be added the following subsection—
In section 46, in subsection (1), paragraphs (a) and (b) shall be omitted. Sub-paragraph (1) above has effect without prejudice to the generality of paragraph (e) of that subsection. After subsection (2) of that section there shall be inserted the following subsection—
In section 49—
in paragraph (b), for “ £200” there shall be substituted “ £800 ”; and
in paragraph (c), for “£50” there shall be substituted “ £200 ”.
In section 50, after subsection (2) there shall be inserted the following subsection—
In section 51—
at the end of subsection (2) there shall be added the words “; but those restrictions shall not apply to investments made by the trustees of a registered friendly society or of a branch of such a society”; and
at the end of subsection (4) there shall be inserted the words “or Part II of the Housing (Northern Ireland) Order 1981.”.
In section 53, for subsection (1) there shall be substituted the following subsection— Subsection (3) of that section shall be omitted.
In section 55, at the end of subsection (4) there shall be added the words “ or Northern Ireland ”.
After section 57 there shall be inserted the following section—
After section 63 there shall be inserted the following section—
After section 65 there shall be inserted the following sections—
Sections 70 to 75 shall cease to have effect.
Section 76 shall be amended as follows. In subsection (1)— For subsection (3) there shall be substituted the following subsections— In subsection (4), at the end of paragraph (b) there shall be added the words; and
Section 77 shall cease to have effect.
In section 78(1), after the words “Act 1950" there shall be inserted the words “ or the corresponding provisions of the Arbitration Act (Northern Ireland) 1937 ”.
In section 80—
in subsection (1), at the beginning there shall be inserted the words “ Subject to subsection (1A) below, ”;
after subsection (1) there shall be inserted the following subsection—
Section 82 (amalgamation and transfer of engagements) shall be amended as follows. In subsection (2), after the word “transfer" there shall be inserted the words “ to any extent ”. In subsection (3)— After subsection (3) there shall be inserted the following subsections—. After subsection (7) there shall be added the following subsections—
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Section 84 shall cease to apply to registered friendly societies.
After section 84 there shall be inserted the following section—
In section 86—
in subsection (1), at the beginning there shall be inserted the words “ Subject to subsection (2A) below ” and, after the words “registered society", there shall be inserted the words “ or branch ”;
after subsection (2) there shall be inserted the following subsection—
For section 87 there shall be substituted the following section—
Sections 88 and 89 shall cease to have effect.
Section 90 shall cease to have effect in relation to registered friendly societies.
In section 91(4), after the words “section 85(4) above" there shall be inserted the words “ or under any provision of the 1992 Act ”.
In section 93—
in subsection (1)(b), for the words from the beginning to “dissolution" there shall be substituted the words “ by an instrument of dissolution approved by a special resolution of the society or branch; ”;
in subsection (1)(c), after the words “section 95(3)" there shall be inserted the words “ or 95A(1) ”; and
within
Section 95 shall cease to have effect in relation to registered friendly societies and, after that section, there shall be inserted the following section—
In section 96, after the words “section 95(3)" there shall be inserted the words “ or 95A(1) ”.
In section 97, in subsection (1)(b) after the words “section 95 (6)(a)" there shall be inserted the words “ or 95A(4)(a) ”.
In section 98—
in subsection (1)(g), for the words from “a certificate" to “false" there shall be substituted the words “ to the society or branch from which the money is claimed a false death ”;
in subsection (2), at the end there shall be inserted the words “ or the Industrial Assurance (Northern Ireland) Order 1979 ”;
in subsection (8), after “1923" there shall be inserted the words “ and Article 46(2) of the Industrial Assurance (Northern Ireland) Order 1979 ”.
In section 100(a), at the end there shall be added the words “ other than a registered friendly society or branch of such a society ”.
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after “1980” there shall be inserted the words “or the Magistrates' Courts (Northern Ireland) Order 1981”;
after the word “Wales” there shall be inserted the words “or Northern Ireland”; and
and, in the application of this section to Northern Ireland, the reference in paragraph (a) to a petty sessions area shall be construed as a reference to a county court division and paragraph (b) shall be omitted.
Section 106 shall cease to have effect.
In section 107, after subsection (2) there shall be inserted the following subsection—
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In section 111(1)—
in the definition of “collecting society" at the end there shall be added the words “ or the Industrial Assurance (Northern Ireland) Order 1979 ”;
after that definition there shall be inserted the following definition—;
in the definition of “the Companies Acts" after “1985" there shall be inserted the words “ or, in Northern Ireland, the Companies (Northern Ireland) Order 1986 ”;
in the definition of “Gazette", after paragraph (b) there shall be inserted the following paragraph—;
“the 1992 Act” means the Friendly Societies Act 1992
Section 115 shall cease to have effect.
In section 117(3), after the words “extends to" there shall be inserted the words “ Northern Ireland, ”.
In paragraph 3 of Schedule 2— Paragraphs 7, 12 and 15 of that Schedule shall cease to have effect in relation to registered friendly societies.
After Schedule 6 there shall be inserted the following Schedule—
In section 1 (the Policyholders Protection Board), in subsection (2), after paragraph (a) there shall be inserted the following paragraph— In paragraph (b) of that subsection, after the word “companies” there shall be inserted “friendly societies”.
After section 3 there shall be inserted the following section—
In section 4 (protection confined to United Kingdom policies) after subsection (2) there shall be inserted the following subsection—
In the heading preceding section 5 (duties of the Board in case of companies in liquidation) after the word “companies” there shall be inserted “and friendly societies”.
After section 5 there shall be inserted the following section—
In section 8 (general policies other than compulsory policies), in subsection (1) after the word “policy”, in the first place where it occurs, there shall be inserted “issued by an authorised insurance company”. In subsection (4) of that section, for the words “this Act” there shall be substituted “the application of this Act to authorised insurance companies”.
After section 8 there shall be inserted the following section—
In section 10 (long term policies), in subsection (1) for the words “this Act” there shall be substituted “the application of this Act to insurance companies”. At the end of that section there shall be added the following subsection—
In section 11 (special provision for future benefits under long term policies) after subsection (3) there shall be inserted the following subsection—
After section 11 there shall be inserted the following section—
At the end of section 16 (companies in financial difficulties) there shall be added the following subsection—
In section 17 (special provision with respect to long term business of a company in financial difficulties) at the end of subsection (8) there shall be added the words “and this section applies to friendly societies in financial difficulties as it applies to companies in financial difficulties”.
In section 18(1)(a) (definition of “general business expenditure”), for the words “or 8” there shall be substituted “8 or 8A”.
At the end of section 19 there shall be inserted the following subsection—
At the end of section 21 ( levies on authorised insurance companies) there shall be added the following subsection—
In section 25 (application of surplus funds by the Board), in subsection (1), after the words “United Kingdom”, there shall be inserted “and to qualifying friendly societies carrying on such business”.
At the end of section 27 (disclosure of documents and information to the Board) there shall be added the words “in relation to companies”.
Section 32 (interpretation) shall be amended as follows. In subsection (1), at the appropriate places in alphabetical order, there shall be inserted the following definitions— In subsection (2), after the word “above”, there shall be inserted “but subject to subsections (2A) and (2B) below”. After subsection (2) there shall be inserted the following subsections— After subsection (4) there shall be inserted the following subsection—
In Schedule 3 (additional provisions with respect to levies on authorised insurance companies) after paragraph 4 there shall be inserted the following paragraphs—
The following section shall be substituted for section 23—
In section 113 (periodical fees), for subsection (3) there shall be substituted the following subsection—
In section 141 (indemnity schemes), in subsection (2), for the words from “the Chief Registrar" onwards there shall be substituted “ the Friendly Societies Commission ”.
In section 179 (restrictions on disclosure of information), in subsection (3), for paragraph (e) there shall be substituted—.
In section 180 (exceptions from restrictions on disclosure), in subsection (1), for paragraph (h) there shall be substituted—.
In section 204(1) (service of notices), for the words from “the Chief Registrar" onwards there shall be substituted “ or the Friendly Societies Commission ”.
“friendly society”, “incorporated friendly society” and “registered friendly society” have the meaning given by section 116 of the Friendly Societies Act 1992
In section 210(3) (expenses and receipts), for the words from “the Chief Registrar" onwards there shall be substituted “ the Friendly Societies Commission ”.
In the following provisions of Schedule 14 (restriction of Rehabilitation of Offenders Act 1974)— for the words “Chief Registrar of friendly societies, the Registrar of Friendly Societies for Northern Ireland" there shall be substituted “ Friendly Societies Commission ”. In paragraph 6 of Part I of that Schedule, for the word “Registrar" there shall be substituted “ Friendly Societies Commission ”.
Subject to paragraph 11 below, for each of the following phrases— wherever occurring, there shall be substituted the words “ the Commission ”. Subject to sub-paragraph (3) below, for the word “he" or “him", in each place where it occurs, there shall be substituted “ the Commission ”. Sub-paragraph (2) above does not apply where the word “he" or “him" refers to the Secretary of State or to the Chairman of any body.
In paragraph 1, in the definition of “a recognised self-regulating organisation for friendly societies", for the words “an order of the Registrar" there shall be substituted “ a recognition order ”. In that paragraph, in the definition beginning “a member society"— “the Commission” means the “Friendly Societies Commission" and; “recognition order” means—
In paragraph 3(1)—
for the word “his" there shall be substituted “ the Commission’s ”; and
for the words from “an order" onwards there shall be substituted “ a recognition order in respect of the organisation declaring the applicant to be a recognised self-regulating organisation for friendly societies ”.
In paragraph 4(2), for the words “the Friendly Societies Act 1974, or as the case may be, the Friendly Societies Act (Northern Ireland) 1970" there shall be substituted the words “ Parts V and VIII of the Friendly Societies Act 1992 ”.
In paragraph 7(1), for the words “himself alter, its rules" there shall be substituted “ itself alter, the rules of the organisation ”.
In paragraph 13A(6), for the word “his" there shall be substituted “ its ”.
In paragraph 26, for sub-paragraph (2) there shall be substituted the following sub-paragraph—.
In paragraph 28(6), for the word “his" there shall be substituted “ its ”.
In paragraph 29, in sub-paragraph (1)—
in paragraph (a) for the word “it" there shall be substituted “ the body ”; and
in paragraph (b) for the word “they" there shall be substituted “ the Commission and the Secretary of State ”.
After paragraph 31 there shall be inserted the following paragraph—
In paragraph 37, in sub-paragraph (1), for the words from “powers" onwards there shall be substituted the words “ relevant powers ”. After that sub-paragraph there shall be inserted the following sub-paragraph—
After paragraph 40 there shall be inserted the following paragraph—
For paragraph 45 there shall be substituted the following paragraph—
The Industrial Assurance Act 1923 shall be amended as follows.
In section 1, for subsection (1A) there shall be substituted the following subsection— In subsection (2) of that section, in paragraph (d), for the words “the Commissioner hereinafter mentioned certifies" there shall be substituted “ the relevant authority certifies ”.
In section 10, for subsection (1) there shall be substituted the following subsection—
In section 11, in subsection (2), for the word “Commissioner" there shall be substituted “ relevant authority ”.
In the following provisions— for the word “Commissioner", wherever occurring, there shall be substituted “ Commission ”. In the following provisions— for the words “he" and “him", wherever occurring, there shall be substituted “ it ”.
In section 17, for subsections (1) and (2) there shall be substituted the following subsections—
For section 23 there shall be substituted the following section—
In section 26, for subsection (1) there shall be substituted the following subsection—.
For section 32 there shall be substituted the following section—
For section 33 there shall be substituted the following section—
In section 39, in subsection (5), for the word “Commissioner" there shall be substituted “ relevant authority ”.
The expression “the Commission” means the Friendly Societies Commission; The expressions “friendly society” and “incorporated friendly society” have the same meanings as in the Friendly Societies Act 1992 The expression “the relevant authority” means—
In section 8(2) of the Industrial Assurance and Friendly Societies Act 1948, for the word “Commissioner" there shall be substituted “ Commission. ”.
In section 13(1) of that Act—
for the word “Commissioner" there shall be substituted “ Commission ”; and
for the word “him" there shall be substituted “ it ”.
In section 17A(1) of that Act, for the words “Industrial Assurance Commissioner" there shall be substituted “ Commission ”.
In section 23(1) of that Act—
at the end of paragraph (c) the word “and" shall be omitted; and
and
The Industrial Assurance (Northern Ireland) Order 1979 shall be amended as follows.
“collecting society” means an incorporated friendly society or registered friendly society which carries on industrial assurance business in Northern Ireland; “the Friendly Societies Act” means the Friendly Societies Act 1974; “industrial assurance company” means a body corporate which carries on industrial assurance business in Northern Ireland other than an incorporated friendly society In that paragraph— After that paragraph there shall be inserted the following paragraph— In Article 2(4), for the words “Friendly Societies Act" there shall be substituted “ Friendly Societies Act (Northern Ireland) 1970. ”
In Article 4(2), for the word “Registrar" there shall be substituted “ Chief Registrar of Friendly Societies ”.
In the following provisions— for the word “Commissioner", wherever occurring, there shall be substituted “ Commission ”.
Article 4(2),
Article 12(3),
Article 13,
Article 18(3),
Article 23(1),
Article 24,
Article 35(3),
Article 42(1)(b),
Article 43(1)(b),
paragraph 1(a) and (b) of Schedule 4,
paragraphs 5(1) and (2), 6 and 7 of Schedule 5, and
Schedule 7,
In Article 12, for paragraph (1) there shall be substituted the following paragraph—
In Article 13(1), for the word “registered" there shall be substituted “ whose registered office is ”.
In Article 14, after paragraph (2) there shall be inserted the following paragraph—
Article 18 shall be amended as follows. For paragraphs (1) and (2) there shall be substituted the following paragraphs— In paragraph (3), for the words “he" and “him" there shall be substituted “ it ”.
For Article 29 there shall be substituted the following Article—
In Article 32, for paragraph (1) there shall be substituted the following paragraph—
For Article 36 there shall be substituted the following Article—
For Article 37 there shall be substituted the following Article—
In Article 46, in paragraph (2) for the word “Commissioner" there shall be substituted “ relevant authority ”. After that paragraph there shall be inserted the following paragraph—
In Schedule 3, in paragraph 10, in paragraph (d) of the definition of “relevant insurance" for the words “paragraph 2(d)" there shall be substituted “ paragraph (2)(d) ”.
In Schedule 4—
in paragraph 1(a) for the words “sections 62 and 63(2) and (3)" there shall be substituted “ sections 72 and 73(2) and (3) ”; and
in paragraph 1(b)—
for the words from “section 61(1)" to “Schedule 7" there shall be substituted “ section 71(1) to (4) of, and paragraph 5 of Schedule 6 ”; and
for the words “section 62" there shall be substituted “ section 72 ”.
In Schedule 5, in paragraph 5(1), for the word “he" there shall be substituted “ the Commission ”. In paragraphs 6 and 7 of that Schedule, for the words “him" and “he" there shall be substituted “ it ” and for the word “himself" there shall be substituted “ itself ”.
Where the person (“the person insured”) who has entered into the contract of insurance with a friendly society has his habitual residence or central administrationwithin the territory of the member State where the risk is situated, the law applicable to the contract is the law of that member State. However, where the law of that member State so allows, the parties may choose the law of another country. Where the person insured does not have his habitual residence or central administrationwithin the territory of the member State where the risk is situated, the parties to the contract may choose to apply either— Where the person insured carries on a business and the contract covers two or more risks relating to his business which are situated in different member States, the freedom of choice of the law applicable to the contract extends to the laws of those member States and of the country in which he has his habitual residence or central administration. In this sub-paragraph “business” includes a trade or profession. Where the member States referred to in sub-paragraph (2) or (3) grant greater freedom of choice of the law applicable to the contract, the parties may take advantage of that freedom. Notwithstanding sub-paragraphs (1) to (3) above, when the risks covered by the contract are limited to events occurring in a member State other than the member State where the risk is situated, the parties may always choose the law of the former State.
The choice referred to in paragraph 1 above must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case. If that is not so, or if no choice has been made, the contract shall be governed by the law of the country (from amongst those considered in the relevant sub-paragraphs) with which it is most closely connected. Nevertheless, a severable part of the contract which has a closer connection with another country (from amongst those considered in the relevant sub-paragraphs) may by way of exception be governed by the law of that other country. A contract is rebuttably presumed to be most closely connected with the member State where the risk is situated.
The law applicable to the contract of insurance is the law of the member State in which the commitment is situated. However, where the law of that member State so allows, the parties may choose the law of another country.
Where the person who has entered into the contract of insurance is an individual and has his habitual residence in a member State other than that of which he is a national, the parties may choose the law of the member State of which he is a national.
Nothing in this Part of this Schedule restricts the application of the rules of a part of the United Kingdom in a situation where they are mandatory, irrespective of the law otherwise applicable to the contract.
Where a member State includes several territorial units, each of which has its own rules of law concerning contractual obligations, each unit shall be considered as a country for the purposes of identifying the applicable law. The provisions of this Part of this Schedule apply to conflicts between the laws of the different parts of the United Kingdom.
Subject to the preceding provisions of this Part of this Schedule, a court in a part of the United Kingdom shall act in accordance with the provisions of the Contracts (Applicable Law) Act 1990. In particular, reference shall be made to those provisions to ascertain for the purposes of paragraph 6 above what freedom of choice the parties have under the law of a part of the United Kingdom.
The fact that in the cases referred to in paragraph 1 above the parties have chosen a law does not, where all the other elements relevant to the situation at the time of the choice are connected with one member State only, prejudice the application of the mandatory rules of the law of that member State, which means the rules from which the law of that member State allows no derogation by means of a contract. Nothing in this Part of this Schedule restricts the application of the rules of a part of the United Kingdom in a situation where they are mandatory, irrespective of the law otherwise applicable to the contract.
Where a member State includes several territorial units, each of which has its own rules concerning contractual obligations, each unit shall be considered as a country for the purposes of identifying the applicable law. The provisions of this Part of this Schedule apply to conflicts between the laws of the different parts of the United Kingdom.
Subject to the preceding provisions of this Part of this Schedule, a court in a part of the United Kingdom shall act in accordance with the provisions of the Contracts (Applicable Law) Act 1990. In particular, reference shall be made to those provisions—
Section 120.
The duty of the Chief Registrar to lay before Parliament the documents mentioned in section 27 of the Loan Societies Act 1840 (accounts etc of loan societies) is abolished.
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In section 49 of the Insurance Companies Act 1982, (sanction of court for transfer of long term business) at the beginning of subsection (1) there shall be inserted “ Subject to section 49A below ”. After that section there shall be inserted the following section—
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After section 22A of the Company Directors Disqualification Act 1986 (application of Act to building societies) there shall be inserted the following section—
The Friendly Societies Commission. Functions under the enactments relating to friendly societies or under the Financial Services Act 1986.
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in subsections (6) to (8) for the words “the registrar”, “he” and “him” wherever occurring there shall be substituted “the Commission”; and
after subsection (8) there shall be inserted the following subsection—
The Friendly Societies Commission. Functions under the enactments relating to friendly societies or under the Financial Services Act 1986.
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In section 171(2) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, after “157" there shall be inserted the words “ and regulations made by the Chief Registrar of friendly societies under paragraph 10(2) of Schedule 1 to this Act. ”
In Schedule 1 to that Act, in paragraph 10(2)— The power conferred by sub-paragraph (2) above on the Chief Registrar of Friendly Societies to make regulations shall be exercisable by statutory instrument, and—
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In section 101(1) of the Industrial and Provident Societies Act (Northern Ireland) Act 1969, in the definition of “registrar", for the words “friendly societies" there shall be substituted “ credit unions ”.
In Article 67(1) of the commref NUM="M845">Social Security Pensions (Northern Ireland) Order 1975 for the words “Registrar of Friendly Societies for Northern Ireland" there shall be substituted “ Chief Registrar of Friendly Societies ”.
In Article 67(4) of that Order for the words “Friendly Societies Act (Northern Ireland) 1970" there shall be substituted “ Friendly Societies Act 1974 ”.
In Article 7(5) of the Statutory Rules (Northern Ireland) Order 1979 for the words “Friendly Societies" there shall be substituted “ Credit Unions ”.
In Part I of Schedule 1 to that Order, for the words “The Registrar of Friendly Societies for Northern Ireland" there shall be substituted “ The Registrar of Credit Unions for Northern Ireland ”.
In Article 114 of the Housing (Northern Ireland) Order 1981, in the definition of “registrar", for the words “of Friendly Societies for Northern Ireland" there shall be substituted “ for the purposes of the Act of 1969 ”.
In Article 3(10) of the Property (Discharge of Mortgage by Receipt)(Northern Ireland) Order 1983 for the words “section 48 of the Friendly Societies Act (Northern Ireland) 1970" there shall be substituted “ section 57A of the Friendly Societies Act 1974 ”.
“registrar” has the meaning assigned to it by Article 2A;
After Article 2 there shall be inserted the following Article—
In Article 442 of the Companies (Northern Ireland) Order 1986, in paragraph (1), after sub-paragraph (dd) there shall be inserted the following sub-paragraphs— In paragraph (3) of that Article, after sub-paragraph (j) there shall be inserted the following sub-paragraph—.
After Article 2 of the Companies (Northern Ireland) Order 1989 there shall be inserted the following Article—
Section 120.
Chapter Short title Extent of repeal 3 & 4 Vict., c.110 Loan Societies Act 1840. In section 27, the words “and shall be laid by him before both Houses of Parliament". 59 & 60 Vict., c.25 Friendly Societies Act 1896. Section 62, so far as unrepealed. Sections 64 to 67, so far as unrepealed. 13 & 14 Geo. 5 c.8. Industrial Assurance Act 1923. Section 2. Section 3. Section 4. Sections 6 to 8. Section 15. Section 16. In section 18, in subsection (1), the words “In the case of a collecting society or industrial assurance company,", paragraph (c), in paragraph (d), the words “society or" (twice), in paragraph (f), the words “society or" (three times) and in paragraph (g) the words “collecting society or" and the words from “the", in the second place where it occurs in that paragraph, to “or", in the second place where it so occurs, and in subsection (3) the words “in the case of a collecting society or industrial assurance company", the words “society or" and the words from “award" to “a company,". In section 19, in subsection (1), the words “collecting society and", in subsection (2), the words “society or" (twice), subsection (3)(b) and the word “or" immediately preceding it and in subsection (4), the words “or company" (twice). Section 20(1)(b). Section 31. Sections 35 and 36. Section 38. Section 44. Section 45(2). Schedule 1. 19 & 20 Geo. 5 c. 28. Industrial Assurance and Friendly Societies Act 1929. The whole Act, so far as unrepealed. 12 Geo. 6 c.39. Industrial Assurance and Friendly Societies Act 1948. Sections 1 and 2. Section 4. Sections 6 and 7. Sections 10 and 11. Section 13(3). Section 17A(2) In section 23(1), at the end of paragraph (c) the word “and". Schedules 1 and 2. In Schedule 3, in paragraph (b), the entry relating to subsections (2), (4) and (5) of section 2, and para-graphs (c) and (d). 4 & 5 Eliz. 2 c.19. Friendly Societies Act 1955. Section 3(2). Section 6. 6 & 7 Eliz.2 c.27. Industrial Assurance Act 1948 (Amendment) Act 1958. The whole Act. 1967 c.81. Companies Act 1967 In Schedule 6, Part II. 1969 c.12. Industrial and Provident Societies Act 1969 In section 60(3), the words “or (2)". 1974 c.39. Consumer Credit Act 1974. In section 189(1), in the definition of “friendly society", the words “or a society within the meaning of the Friendly Societies Act (Northern Ireland) 1970". 1974 c.46. Friendly Societies Act 1974. Section 6(2). Section 8. Section 9(2) and (3). Section 11(1). Section 13(2). In section 16, the words “society or" in each place they appear. Section 17. Sections 27 and 28. In section 30(5), paragraph (a) and the words “paragraph (a) or". In section 46, subsection (1)(a) and (b) and subsection (3). Section 53(3). Sections 70 to 75. In section 76, in subsection (1)(c), (d) and (e) the words “or branch" in each place where they occur, and, in subsection (5) the words from “and in subsection (3)" onwards. Section 77. In section 78, in subsection (1) the words “or the Chief or assistant registrar" and subsections (2) and (3). In section 79(1), the words “or a magistrates’ court". In section 80(1), paragraph (c) and the word “and" immediately preceding it. In section 82, subsection (4) and, in subsection (5), the words “to a company under the Companies Acts". Sections 88 and 89. In section 98, subsection (1)(e) and, in subsection (4), the words “in the amalgamation or transfer of engagements or". Section 106. In section 107(1), the words “national insurance and". Section 111(6). Section 115. In section 117(3), the words “but does not extend to Northern Ireland." Schedule 1. In Schedule 2, in paragraph 3(1) the words “the fines" and “fines" and in paragraph 14 the words from “by consent" onwards. Schedules 3, 5 and 6. In Schedule 9, paragraphs 2, 5, 6, 8 and 10(1). 1984 c.43. Finance Act 1984. In section 73(4), the words “section 1 of the Friendly Societies Act (Northern Ireland) 1970 and". In section 73(5), the words from “according" to “1970; or". 1984 c.62. Friendly Societies Act 1984. Section 3. 1985 c.40. Companies Act 1985. In section 449(3), in paragraph (j) the words “and the Registrar of Friendly Societies for Northern Ireland" and in paragraph (k) the words “and the Industrial Assurance Commission for Northern Ireland". 1986 c.53. Building Societies Act 1986. In section 7(4)(c)(ii), the words “or the Friendly Societies Act (Northern Ireland) 1970." 1986 c.60. Financial Services Act 1986. In section 139, subsections (3) and (4) and in subsection (5) the words “and section 77 of the said Act of 1974" and “and section 65 of the Friendly Societies Act (Northern Ireland) 1970". In section 189(5)(c), the word “registered". In section 207(1), the definition of “registered friendly society". In Schedule 11, in paragraph 1, in the definition beginning “a member society" the words from “and for the purposes" onwards, in paragraph 26, in sub-paragraph (1), the figure “(1)", and sub-paragraph (3), paragraph 27, in paragraph 38(1)(a) the word “registered" and paragraph 43. In Schedule 15, in paragraph 14(1) the word “registered" and in paragraph 14(3), the words “registered", “or as the case may be, the Friendly Societies Act (Northern Ireland) 1970", “or as the case may be, section 70 of the said Act of 1970" and “or, as the case may be, section 75 of the said Act of 1970". 1987 c. 22. Banking Act 1987. In section 84(1), in the Table, in the entry beginning “The Chief Registrar of Friendly Societies", the words “the Registrar of friendly societies for Northern Ireland" and the words “or under the Financial Services Act 1986". In section 96(7), the words from “and in relation to" onwards. In Schedule 2, in paragraph 6(1), the words from “or section 1(1)(a)" onwards. 1988 c.1. Income and Corporation Taxes Act 1988. In section 461(9), the words “or section 81 of the Friendly Societies Act (Northern Ireland) 1970". In section 466(2), the definition of “registrar". In Schedule 15, in paragraph 4(3)(b) the words from “or paragraph" to “1970". In Schedule 29, paragraph 11. 1989 c. 40. Companies Act 1989. In section 87(4), in the Table, in the entry beginning “The Chief Registrar of friendly societies", the words “the Registrar of Friendly Societies for Northern Ireland" and the words “the Financial Services Act 1986 or". . . . . . . . . .
Chapter or Number Short title Extent of repeal 1967 c.5 (N.I.). Administration of Estates (Small Payments) Act (Northern Ireland) 1967. In section 6(1), in paragraph (b), the words “and section 58 of the Friendly Societies Act (Northern Ireland) 1970", and paragraph (c). 1970 c.31 (N.I.). Friendly Societies Act (Northern Ireland) 1970. The whole Act. S.I. 1976/1041 (N.I.14). Births and Deaths Registration (Northern Ireland) Order 1976. In Schedule 1, the entry relating to the Friendly Societies Act (Northern Ireland) 1970. S.I. 1979/1574 (N.I. 13). Industrial Assurance (Northern Ireland) Order 1979. In Article 2(2), the definition of “the Commissioner", and in the definition of “registered friendly society" the words from “Articles" to “7 and". Articles 4(1) and (3). Articles 5 to 11. Article 23(2). In Article 24, the words “collecting society or". In Article 25, in paragraph (1), the words “collecting society and", in paragraph (2), the words “society or" and “collecting society or", and in paragraph (4), the words “collecting society or" and “society or". Articles 39 and 41. Article 49(1)(c). Articles 50 and 51. Article 52(1)(b) and (ii). Schedules 1 and 2. In Schedule 4, in paragraph 1(a), the entry relating to Article 9(1) to (4), in paragraph 1(b), the words “of the Act of 1896" and “section 62 of the Act of 1896" and paragraph 2. In Schedule 5— in paragraph 3, the words “a collecting society or" and “society or"; in paragraph 5(1), the words “society or" and in head (b), the words “collecting society or"; in paragraph 5(2), the words “collecting society or"; in paragraph 6, the words “collecting society or" and the words from “the society" to “may be,"; in paragraph 7, the words “collecting society or" and sub-paragraph (a). In Schedule 8, the amendments of the Friendly Societies (Northern Ireland) Act 1970. S.I. 1981/156 (N.I. 3). Housing (Northern Ireland) Order 1981. In Schedule 10, in paragraph 6, the word from “Friendly Societies (Northern Ireland) 1970" onwards. In Schedule 11, in Part II, the amendment of the Friendly Societies Act (Northern Ireland) 1970. S.I. 1984/703 (N.I. 3). Fines and Penalties (Northern Ireland) Order 1984. In Schedule 3, the entries relating to the Friendly Societies Act (Northern Ireland) 1970. S.I. 1986/1032 (N.I. 6). Companies (Northern Ireland) Order 1986. In Article 13(3)(j) the words “the Registrar of Friendly Societies". S.I. 1986/1035 (N.I. 9). Companies Consolidation (Consequential Provisions) (Northern Ireland) Order 1986. In Schedule 1, in Part I, the entries relating to the Friendly Societies Act (Northern Ireland) 1970.
“general business” means insurance business of any of the classes specified in head B of that Schedule.
“agent”, in relation to a friendly society or other body whose activities are under investigation, includes its bankers, accountants, solicitors and auditors and the appropriate actuary;
“associated pension scheme”, in relation to a friendly society, means a scheme for the provision of benefits for or in respect of committee members or employees (or former committee members or employees) of the society or any subsidiary of the society where—
“restricted information” means information which is obtained by the primary recipient for the purposes of, or in the discharge of his functions under, this Act or the 1974 Act;
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Subject to subsection (3) below, every friendly society which carries on long term business in the United Kingdom shall not later than the end of the relevant period appoint an actuary as actuary to the society; and whenever an appointment under this section comes to an end, the society shall as soon as practicable make a fresh appointment.
In subsection (1) above “the relevant period” means—
if the society is carrying on long term business on the day when this section comes into force, the period of one month beginning with that day; and
if it is not carrying on long term business on that day, the period of one month beginning with the day on which it begins to carry on such business.
The Commission may direct that a friendly society shall not be subject to the duty imposed by subsection (1) above if it considers it inappropriate that the society should be subject to it.
A society making an appointment under this section shall serve on the Commission a notice stating that fact and the name and qualifications of the person appointed and that he has accepted the appointment.
If an appointment under this section comes to an end, the society shall serve on the Commission a notice stating that fact and the name of the person concerned.
A notice under subsection (4) above shall be served not later than the end of the period of 14 days commencing with the day on which the appointment is accepted.
A notice under subsection (5) above shall be served not later than the end of the period of 14 days commencing with the day on which the appointment comes to an end.
No person is qualified for appointment under this section unless he possesses qualifications prescribed by the Commission in regulations.
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Any determination of the value of any assets or the amount of any liabilities of a friendly society which is required for the purposes of any provision of this Part of this Act shall be made in accordance with regulations made by the Commission with the consent of the Treasury.
Without prejudice to the generality of subsection (1) above, regulations under this section may provide that, for any specified purpose, assets or liabilities of any specified class or description shall be left out of account or taken into account only to a specified extent.
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A friendly society which is authorised under section 32 above to carry on long term business and which— shall, once in every period of 12 months, cause an investigation to be made by the appropriate actuary into the financial condition of the society in respect of its long term business.
is a society to which subsection 37(2) above applies; or
is a society of a description prescribed by regulations,
The first investigation into a society’s financial condition under this section shall be—
in the case of a friendly society to which section 37(2) above applies which— an investigation into its condition at a date not later than 12 months after the date to which the accounts of the society were made up for the purposes of the last investigation under regulation 11 of those regulations;
is a registered friendly society that was authorised under the Friendly Societies (Long Term Insurance Business) Regulations 1987; or
is an incorporated friendly society which was formerly a registered friendly society so authorised,
in the case of any other friendly society to which section 37(2) above applies, an investigation into its condition at a date not later than 12 months after the date on which it became such a society or the commencement of this section, whichever is later; and
in the case of a friendly society which is of a description prescribed in regulations under subsection (1)(b) above, an investigation into its condition at a date not later than 12 months after it became such a society or the coming into operation of the regulations, whichever is later.
When such an investigation has been made, the society shall— and one of those copies shall be signed by such persons as may be prescribed by regulations.
cause an abstract of the actuary’s report of the investigation to be made; and
send three copies of that abstract to the Commission within the period of 6 months beginning with the date to which the accounts of the society were made up for the purposes of the investigation or such further period (not exceeding 3 months) as the Commission may by notice to the society direct;
The Commission shall consider the abstract, and if it appears to the Commission to be inaccurate or incomplete in any respect, it shall communicate with the society with a view to the correction of any such inaccuracies and the supply of deficiencies.
An investigation under this section shall include—
a valuation of the liabilities of the society attributable to its long term business; and
a determination of any excess over those liabilities of the assets representing the fund or funds maintained by the society in respect of that business and, where any rights of any long term policy holders to participate in profits relate to particular parts of such a fund, a determination of any excess of assets over liabilities in respect of each of those parts.
At least once in every period of 5 years a friendly society to which this section applies shall prepare a statement of its long term business at the date to which the accounts of the society are made up for the purposes of an investigation under this section.
The form and contents of any abstract or statement under this section shall be such as the Commission may direct; and a direction under this subsection may be given to societies of a specified description or to a specified society.
Regulations under this section shall be made by the Commission with the consent of the Treasury.
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Subject to the following provisions of this section, a friendly society which— shall, at least once in every period of 3 years, cause an investigation to be made by the appropriate actuary into the financial condition of the society in respect of its insurance business.
is not a society to which section 46 above applies and carries on insurance business; or
is a society to which that section applies and carries on general business;
Where an investigation under this section is carried out, the society shall cause an abstract of the actuary’s report to be made and sent to the Commission within 6 months of the date to which the accounts of the society were made up for the purposes of that investigation or such further period (not exceeding 6 months) as the Commission may by notice to the society direct.
The first investigation into a society’s financial condition under this section shall be—
in the case of a registered friendly society, or an incorporated friendly society which was formerly a registered friendly society, an investigation into its condition at a date not later than 3 years after— whichever is earlier; or
the commencement of this section; or
the date as at which its assets and liabilities were last valued under section 41 of the 1974 Act,
in the case of any other incorporated friendly society, an investigation into its condition at a date not later than 3 years after the date on which it is registered.
Subject to subsection (5) below, a friendly society shall send to the Commission, not later than 6 months after each anniversary of the date to which the accounts of the society were made up for the purposes of the last investigation into its financial condition under this section—
a certificate given by the appropriate actuary that there has been no material change in its financial condition in respect of its insurance business since it sent the last abstract under subsection (2) above; or
a statement by the appropriate actuary that he is unable to give such a certificate.
A society is not under the duty imposed by subsection (4) above if, before a date by which a certificate or statement must be sent, a further investigation under this section has been carried out and the requisite abstract has been sent to the Commission.
If a society sends the Commission a statement under subsection (4)(b) above, it shall be the society’s duty to cause an investigation to be carried out under this section; and in such a case—
the date to which the society’s accounts are made up for the purposes of the investigation shall be the latest anniversary of the date to which its accounts were made up for the purposes of the last investigation under this section; and
the abstract required by subsection (2) above shall be sent to the Commission within 6 months of the date by which that statement was required to be sent under subsection (4) above.
An investigation under this section into the financial condition of a society which falls within subsection (1)(a) above shall include—
a valuation of the liabilities of the society attributable to its insurance business; and
a determination of any excess over the liabilities so attributable of the assets representing the fund or funds maintained by the society in respect of its insurance business and, where any rights of any long term policy holders to participate in profits relate to particular parts of such a fund, a determination of any excess of assets over liabilities in respect of each of those parts.
An investigation under this section into the financial condition of a society falling within subsection (1)(b) above shall include—
a valuation of the liabilities of the society attributable to its general business; and
a determination of any excess over the liabilities so attributable of the assets representing the fund or funds maintained by the society in respect of that business.
The form and contents of any abstract under this section shall be such as the Commission may direct; and such a direction may be given to societies of a specified description or to a specified society.
The Commission may dispense with the requirements of subsections (1) to (6) above in respect of societies to whose purposes, or the nature or scale of whose insurance business, it may deem those provisions inapplicable.
The Commission may dispense with the requirements of subsections (1) to (6) above in respect of any particular insurance business of a society if, in the Commission’s opinion, those provisions are inapplicable to that business because of its nature or scale or the manner in which it is carried on.
In relation to any society on which a partial exemption is conferred under subsection (11) above, subsections (1) to (8) above shall have effect as if—
references to the financial condition of the society excluded its condition in relation to the business to which the partial exemption relates; and
subsections (7) and (8) referred only to the assets and liabilities other than those attributable to that business.
The Commission may direct that this section shall have effect, in relation to societies of a specified description or to a specified society, as if for any reference to 3 years there were substituted a reference to 5 years.
A direction under subsection (12) or (13) above may make such transitional provision as the Commission considers appropriate.
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This section applies to a friendly society which—
carries on long term business in the United Kingdom and falls within subsection (2) of section 37 above;
carries on general business in the United Kingdom and falls within subsection (3) of that section; or
not being a society to which either of those subsections applies, carries on insurance business in the United Kingdom and is of any such description as may be prescribed by regulations.
A society to which this section applies shall maintain a margin of solvency in respect of its insurance business of such amount as may be prescribed by or determined in accordance with regulations made for the purposes of this section.
If such a society fails to comply with a requirement to maintain a margin of solvency, the society—
shall at the request of the Commission submit to it a plan for the restoration of a sound financial position;
shall propose modifications to the plan (or the plan as previously modified) if the Commission considers it inadequate;
shall give effect to any plan accepted by the Commission as adequate.
Where a friendly society carries on both long term and general business, subsection (2) above shall have effect as if the requirement to maintain a margin of solvency were a requirement to maintain separate margins in respect of each of those two kinds of business.
For the purposes of this Act a margin of solvency, in relation to a friendly society, is the excess of the value of the society’s assets over the amount of its liabilities.
Regulations under this section may—
make different provision with respect to societies of different descriptions;
prescribe different margins of solvency with respect to different descriptions of business carried on by societies;
prescribe the descriptions of assets or liabilities that are to be taken into account in determining whether a margin of solvency is being maintained; and
prescribe different criteria for determining whether a margin of solvency is being maintained by reference to the different descriptions of long term or general business which may be carried on by societies.
Regulations under this section shall be made by the Commission with the consent of the Treasury.
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If the margin of solvency maintained by a friendly society in respect of its insurance business falls below such amount as may be prescribed by or determined in accordance with regulations made for the purposes of this section by the Commission with the consent of the Treasury, the society shall at the request of the Commission submit to it a short-term financial scheme.
A friendly society that has submitted a scheme to the Commission under subsection (1) above shall propose modifications to the scheme (or the scheme as previously modified) if the Commission considers it inadequate, and shall give effect to any scheme accepted by it as adequate.
Where a friendly society carries on both long term and general business, subsection (1) above shall have effect as if the reference to the margin of solvency maintained by the society were a reference to the margin of solvency maintained in respect of each of those two kinds of business.
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If it appears to the Commission— it shall be entitled to assume for the purposes of its relevant prudential powers that it is expedient to exercise the powers in order to protect the interests of members of the society.
that there has been or is, on the part of a friendly society or its committee of management, a failure to satisfy any one or more of the following criteria of prudent management; or
that the society’s officers do not have the capacity and intention to conduct its affairs so as to satisfy those criteria,
The prudential powers relevant for the purposes of this section are its powers—
under section 34 above to impose conditions on a society’s authorisation;
under section 40 above to give a direction by virtue of subsection (3)(c);
under section 51 below to make an order forbidding the acceptance of new members;
under section 53 below, to give a direction;
under section 90 below, to order a transfer of the society’s engagements.
For the purposes of this Act, the criteria of prudent management are—
Maintenance of any margin of solvency required by section 48 above.
Maintenance of liquid assets sufficient to meet the liabilities of the society as they become due.
Maintenance of the requisite accounting records and systems of control of business and of inspection and report.
Direction and management—
by a sufficient number of persons who are fit and proper to be members of the committee of management or, as the case may be, other officers, in their respective positions,
conducted by them, with prudence and integrity, in the interests of the members of the society.
In relation to insurance business, direction and management which, in addition to satisfying the other requirements as to direction and management, is such as to fulfil the reasonable expectations of members of the society as to the conduct of such business.
Conduct of the society’s activities with adequate professional skills.
Supervision of the activities— with due care and diligence in the interests of the members of the society and without detriment to the conduct of the society’s activities.
of any subsidiary of the society or of any body of which the society has joint control; and
of any registered branch of the society;
Nothing in this section implies that it is improper for a determination for any purpose of the Commission’s relevant prudential powers to take account of factors other than the criteria in subsection (3) above.
In considering whether a society has satisfied the 7th criterion in subsection (3) above, the Commission shall have regard to the extent to which the operation of the subsidiary, jointly controlled body or registered branch is undertaken in accordance with the other 6 criteria in that subsection so far as they are relevant.
A failure to satisfy any of the first 3 criteria in subsection (3) above shall be treated, for the purposes of this section, as a failure on the part of a society’s committee of management prudently to conduct the affairs of the society.
A failure on the part of an authorised friendly society to comply with any conditions to which its authorisation under section 32 above is subject shall be treated, for the purposes of this section, as a failure on the part of the society’s committee of management prudently to conduct the affairs of the society.
Any carrying on by a friendly society of an activity beyond its powers shall be treated, for the purposes of this section, as a failure on the part of the society’s committee of management prudently to conduct the affairs of the society.
Any carrying on of activities which are beyond its powers— shall be treated for the purposes of this section as a failure on the part of the society’s committee of management to supervise the activities of the subsidiary, jointly controlled body or registered branch with due care and diligence.
by a subsidiary of, or a body jointly controlled by, an incorporated friendly society; or
by a registered branch of a registered friendly society,
The following provisions apply for the interpretation of the list of criteria in subsection (3) above in their application to a friendly society, that is to say—
“action” includes omissions.
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Subject to the provisions of this section, if the Commission considers it expedient to do so in the interests of the members or potential members of a friendly society, it may give the society a direction forbidding it to accept any new members.
If the Commission proposes to give such a direction, it shall serve on the society a notice stating that it proposes to give a direction.
A notice under subsection (2) above shall specify the grounds for the proposed direction.
The Commission shall consider any representations made by the society within such period (not being less than one month) from the date on which the society is served with the notice as the Commission may allow and, if the society so requests, shall afford to it an opportunity of being heard by the Commission within that period.
The Commission may not give a direction unless all the grounds for giving it are those, or among those, which were specified in the notice served on the society under subsection (2) above.
On giving a direction, the Commission shall—
serve notice of it on the society, specifying the grounds for making it;
publish notice of it in one or more of the London, Edinburgh and Belfast Gazettes and in any such other ways as it considers appropriate; and
send a copy of it to the central office.
A society which contravenes a direction given to it under this section shall be guilty of an offence and shall be liable—
on conviction on indictment, to a fine; and
on summary conviction, to a fine not exceeding the statutory maximum.
The central office shall keep a copy of a direction given to a friendly society under this section in the public file of the society.
If the FCA has reason to believe that any of the conditions mentioned in subsection (2) is satisfied, it may, after consulting the PRA if the society is a PRA-authorised person—
present a petition to the High Court for the winding up of the society under the applicable winding up legislation;
make an application to the High Court for an order under subsection (5).
The conditions referred to in subsections (1) and (1A) are— and a court shall not make an order for the winding up of a society by virtue of this section unless it is satisfied that one or more of those conditions is satisfied.
that a friendly society is carrying on activities that are not activities which such a society is permitted by this Act or the 1974 Act to carry on;
that the society is not carrying on any activity falling within Schedule 2 to this Act;
that the society is failing to satisfy any obligation to which it is subject by virtue of any provision of the law of any EEA State ... which–
gives effect to the Solvency 2 Directive; or
is otherwise applicable to the insurance activities of the society in that State;
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If the PRA has reason to believe that any of the conditions mentioned in subsection (2) is satisfied in relation to a society which is a PRA-authorised person, it may, after consulting the FCA—
present a petition to the High Court for the winding up of the society under the applicable winding up legislation;
make an application to the High Court for an order under subsection (5).
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A court may not make an order under subsection (5) unless it is satisfied that one or more of the conditions mentioned in subsection (2) are satisfied.
any of the conditions mentioned in subsection (2) above; or
that an incorporated friendly society has taken part in forming or has acquired control of a body corporate jointly with any person other than another incorporated friendly society without the consent of the Commission;
An order under this subsection is an order directing the society to modify its business as directed in the order or to take such other steps as may be so directed ....
Where a court makes an order under subsection (5) above, the FCA shall keep a copy of the order in the public file of the society.
The power to present a petition or to make an application for an order under subsection (5) above is available to the FCA and the PRA whether or not either of them has previously presented a petition or made an application for such an order, as the case may be.
In the application of this section to a friendly society whose registered office is in Scotland or Northern Ireland, references to the High Court shall be read as references to the Court of Session or, as the case may be, the High Court in Northern Ireland.
In this section “the applicable winding up legislation”, in relation to an incorporated friendly society, has the same meaning as in section 23 above and, in relation to a registered friendly society, means Part V of the Insolvency Act 1986 or (where the society’s registered office is in Northern Ireland) Part VI of the Insolvency (Northern Ireland) Order 1989.
If the Commission considers it expedient to do so in order to protect the interests of members of a friendly society which does not require authorisation under section 32 above, it may direct the society to take such action as appears to the Commission to be appropriate, having regard to any risk—
that the society may be unable to meet its liabilities; or
that it will not be managed in the interests of its members.
The power conferred by this section shall not be exercised in such a way as to restrict the society’s freedom to dispose of its assets except where the ground for intervention arises out of the submission by the society to the Commission of an account or statement specifying, as the amount of any liabilities of the society, an amount appearing to the Commission to have been determined otherwise than in accordance with—
valuation regulations; or
where no such regulations are applicable, generally accepted accounting concepts, bases and policies or other generally accepted methods appropriate for friendly societies.
In this section “friendly society group” means an incorporated friendly society, subsidiaries of that society and bodies jointly controlled by it.
If it appears to the FCA or the PRA that the activities of subsidiaries of an incorporated friendly society or bodies jointly controlled by it are or may become disproportionate to those of the friendly society group as a whole, it may direct the society—
to take or refrain from taking steps specified in the direction with a view to securing that the activities in question cease to be or do not become disproportionate; or
to take steps so specified with a view to securing—
that it ceases to have control or joint control of any subsidiary or jointly controlled body in question; or
that any such subsidiary or jointly controlled body is wound up.
If it appears to the FCA or the PRA that any activity of a subsidiary of an incorporated friendly society or of a body jointly controlled by such a society is unsuitable for a member of a friendly society group, it may direct the society—
to take steps specified in the direction with a view to securing that that activity ceases; or
to take steps so specified with a view to securing—
that it ceases to have control or joint control of the subsidiary or jointly controlled body; or
that the subsidiary or jointly controlled body is wound up.
A direction under this section may specify that the society is to comply with it—.
immediately on receipt of a final notice in relation to the direction;
before the end of such period as may be specified in the direction, beginning with the giving of a final notice in relation to the direction; or
on the happening of an event subsequent to the giving of such a notice.
A society given a direction under this section must—
comply with the direction; or
convert itself into a company in accordance with Part VIII of this Act.
The FCA or the PRA may by written notice to the society—
vary a direction issued by it under this section at the request of the society; or
revoke a direction issued by it under this section.
If a society requests the FCA or the PRA to notify the society as to whether, in the opinion of that authority, it has complied with a direction issued by that authority, the FCA or the PRA (as the case may be) must comply with the request.
The FCA must consult the PRA before issuing a direction under this section to a PRA-authorised person or varying such a direction.
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The PRA must consult the FCA before issuing or varying a direction under this section.
The FCA shall keep a copy— . . . in the public file of the society.
of a direction under this section;
of a notice under subsection (6) above; or
of a notification under subsection (7) above;
of a final notice varying a direction under this section;
The PRA must send a copy to the FCA of any direction, notice, final notice or notification it issues under this section.
“Final notice" means a final notice given under section 390 of the Financial Services and Markets Act 2000, as applied by section 58A(6) below.
This section applies where a friendly society carries on any group insurance business providing benefits for or in respect of a group of persons who are not members of the society.
If it appears to the FCA or the PRA that the business so carried on is or may become disproportionate to the other activities of the society (including any group insurance business carried on for the provision of benefits for or in respect of persons who are members of the society), it may direct the society to take or refrain from taking steps specified in the direction with a view to securing that the group business in question ceases to be or does not become disproportionate.
Subsections (4) to (9) of section 54 above shall apply in relation to a direction under this section as they apply to a direction under that section.
Regulations may be made by the Commission, with the consent of the Treasury, as respects the matters specified in subsection (2) below, in relation to contracts made by friendly societies the effecting of which constitutes the carrying on of insurance business falling within class III in head A in Schedule 2 to this Act.
Regulations under this section may make provision for—
restricting the descriptions of property or the indices of the value of property by reference to which benefits under the contracts may be determined;
restricting the proportion of those benefits which may be determined by reference to property of a specified description or a specified index;
regulating the manner in which and the frequency with which property of any description is to be valued for the purpose of determining those benefits and the times at which reference is to be made for that purpose to any index of the value of property;
requiring friendly societies that enter into such contracts to appoint valuers for carrying out valuations of property of any description for the purpose of determining benefits under the contracts (being valuers who comply with the prescribed requirement as to qualifications and independence from the society) and to furnish the Commission with the prescribed information in relation to such appointments;
requiring societies that enter into such contracts to furnish in such manner and at such times or intervals as may be prescribed such information relating to the value of the benefits under the contracts as may be prescribed, whether by sending notices to their members, depositing statements with the Commission, publication in the press or otherwise;
requiring societies that enter into such contracts to furnish to the Commission in such manner and at such times or intervals as may be prescribed, such information certified in such manner as may be prescribed with respect to so much of their business as is concerned with the contracts or with any class or description of the contracts, and enabling the Commission to publish such information in such ways as it thinks appropriate.
Regulations made for the purposes of subsection (2)(e) above may, in relation to notices required to be sent to members of friendly societies, impose requirements (whether as to type, size, colour or disposition of lettering, quality or colour of paper, or otherwise) for securing that such notices are easily legible.
The Commission may, on the application of any friendly society, alter the requirements of regulations under this section so as to adapt those requirements to the circumstances of that society or to any particular kind of contract entered into or proposed to be entered into by that society.
Regulations under this section may, to such extent as may be specified in them, apply in relation to contracts entered into before the coming into operation of the regulations, including contracts entered into before the passing of this Act.
In this section “prescribed” means prescribed by regulations under this section.
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In this Act– “controller”, in relation to a friendly society to which section 37(2) or (3) of this Act applies, means a person who, either alone or with any associate or associates– . . ..
is entitled to exercise or control the exercise of 10 per cent. or more of the voting power at any general meeting of the society; or
is able to exercise a significant influence over the management of the society by virtue of an entitlement to exercise, or to control the exercise of, the voting power at any general meeting of the society;
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Where a friendly society intends to cover any insurance risks falling within any class of Head B of Schedule 2 to this Act which are situated in a member State other than the United Kingdom— it shall before doing so give notice of its intention to the Commission.
through an establishment in the United Kingdom, or
through an establishment in a member State other than that in which the risks will be situated,
The notice shall indicate—
the member State in which the insurance is to be provided;
the nature of the risks which the society intends to cover;
the member state in which the establishment through which the risks will be covered is situated.
Where the society intends to cover risks situated in more than one member State, the information specified above may be contained in a single notice but must be set out separately for each member State.
Where a society has duly notified the Commission of its intention to cover risks situated in another member State where administrative authorisation is required to do so then, if the original notice related— and the society subsequently intends to extend its activities to risks falling within the other category, it shall before doing so (without prejudice to the generality of the preceding provisions of this section) comply with subsections (1) to (3) above in relation to those risks.
only to risks in respect of which such authorisation is required; or
only to risks in respect of which such authorisation is not required,
A friendly society with the intention mentioned in subsection (1) above may apply to the Commission for a certificate attesting—
that the society possesses the minimum margin of solvency calculated in accordance with Article 16 and 17 of the first general insurance Directive, and
that by virtue of this Act and the society’s authorisation under section 32 above, issued in accordance with Article 7(1) of that Directive, the society is able to operate outside the member State of establishment.
A friendly society with the intention mentioned in subsection (1) above in respect of risks to be covered through an establishment in the United Kingdom may apply to the Commission for a certificate—
indicating the classes of insurance business which the society is authorised to carry on in the United Kingdom; and
stating that the Commission does not object to the society covering the risks through such an establishment.
The Commission shall, if it thinks an application under subsection (5) or (6) above ought to be granted, issue the certificate.
If the Commission refuses such an application it shall give notice to the society of its decision and of the reasons for it.
Expressions used in this section which are defined in section 81A or 96A of the Insurance Companies Act 1982 have the same meanings as they have for the purposes of that Act.
A friendly society which is aggrieved by a decision of the Commission— may appeal against the decision to a tribunal constituted in accordance with section 59 below.
to refuse to grant authorisation under section 32 above,
to impose conditions, or as to the conditions imposed, under section 34 or 36 above,
to withdraw authorisation under section 40 or 41 above,
to give a direction under section 51 above; or
to give a direction to the society, or as to the steps specified in a direction, under section 54 or 55 above,
Any person in relation to whom the Commission, in deciding to refuse to grant authorisation, to impose conditions or to withdraw authorisation— may appeal against the decision so far as it relates to that determination or requirement.
makes a determination that he is not a fit and proper person to hold or, as the case may be, to remain in an office in the society in question, or
imposes a requirement that he be removed from an office in the society,
The withdrawal of a society’s authorisation shall not have effect—
until the end of the period within which an appeal can be brought against the Commission’s decision to withdraw that authorisation; and
if such an appeal is brought, until it is determined or withdrawn.
Where the Commission decides to refuse to grant authorisation to a society on an application made in pursuance of a direction under section 39 above, the society’s authorisation shall not expire under subsection (5) of that section—
until the end of the period within which an appeal can be brought against the decision not to grant authorisation; and
if such an appeal is brought, until it is determined or withdrawn.
A direction under section 51, 54 or 55 above shall not have any effect until—
the end of the period within which an appeal can be brought against the Commission’s decision to give the direction or as to any steps specified in the direction; and
if such an appeal is brought, until it is determined or withdrawn.
Subject to any order of the tribunal made under section 59(6) below, an appeal under subsection (1)(b) or (2) above shall not affect the operation, pending the determination of the appeal, of any condition which is the subject of the appeal.
Subject to subsection (8) below, no determination of an appeal brought by any person under subsection (2) above shall affect any decision of the Commission on the ground of (or on grounds including) the determination made in relation to that person or, as the case may be, the failure of the society to comply with the requirement imposed in relation to that person.
The tribunal may revoke a decision of the Commission to impose a condition which is the subject of an appeal under subsection (2) above in so far as it seeks to prevent the person making the appeal from holding, or continuing to hold, office in the society.
Where an appeal is brought under section 58 above, a tribunal to determine the appeal shall be constituted in accordance with subsection (2) below.
The tribunal shall consist of—
a chairman appointed by the Lord Chancellor or, where the society concerned has its registered office in Scotland, by the Lord Chancellor in consultation with the Lord Advocate; and
two other members appointed by the Treasury.
The chairman shall be a person who— and the other two members shall be persons appearing to the Treasury to have experience of accountancy, the business of insurance or the business of friendly societies.
has a seven year general qualification, within the meaning of the Courts and Legal Services Act 1990;
is an advocate or solicitor in Scotland of at least seven years’ standing; or
is a member of the Bar of Northern Ireland or solicitor of the Supreme Court of Northern Ireland of at least seven years’ standing;
Subject to subsection (5) below, on any appeal against a decision of the Commission the question for the determination of the tribunal shall be whether, for the reasons adduced by the appellant, the decision was unlawful or not justified by the evidence on which it was based.
A person shall not be appointed after the day on which he attains the age of 70 to be the chairman of a tribunal under this section.
In the case of an appeal against a decision to give a direction under section 54 or 55 above—
the tribunal shall, on the evidence adduced before it, reconsider the decision to give the direction and the steps specified in the direction (according to the extent of the appeal);
if the tribunal determines that such a direction should not be given, it shall reverse the decision; and
if the tribunal determines that those steps should not be so specified, it may give the Commission such guidance as it thinks fit as to what the appropriate steps might be.
The tribunal may, on the application of the friendly society concerned, order that the operation of any condition which is the subject of an appeal by the society be suspended pending the determination of the appeal.
The tribunal may confirm or reverse the decision which is the subject of the appeal but shall not have power to vary it except by directing the Commission—
in the case of an appeal against a decision to refuse to grant authorisation, to determine conditions to which the grant of authorisation is to be subject;
in the case of an appeal against the imposition of conditions or as to the conditions imposed by the decision, to determine conditions or different conditions subject to which the authorisation is to be granted or is to continue, as the case may be;
in the case of an appeal against a decision to withdraw authorisation, to determine conditions or different conditions subject to which the authorisation is to continue in force, as the case may be;
in the case of an appeal against a decision as to the steps specified in a direction under section 54 or 55 above, to determine, having taken account of any guidance given under subsection (5) above, the steps which are to be so specified.
Where by virtue of subsection (7)(d) above the tribunal directs the Commission to determine the steps to be specified in the direction, the society may appeal against the steps so specified.
Where by virtue of subsection (7) above the tribunal directs the Commission to determine conditions or different conditions— and the society may appeal to the tribunal against any condition so imposed.
the Commission shall in accordance with section 34 or 36 above impose such conditions as it thinks fit; and
the Commission shall in accordance with section 34 or 36 above impose such conditions as it thinks fit; and
paragraphs 7 and 8 of Schedule 13 to this Act shall apply subject to the modifications made by paragraph 9 of that Schedule;
paragraphs 7 and 8 of Schedule 13 to this Act shall apply subject to the modifications made by paragraph 9 of that Schedule;
On any such appeal the tribunal may confirm or reverse the Commission’s decision with respect to the conditions which are the subject of the appeal or may direct the Commission to determine different conditions; and where by virtue of this subsection the tribunal directs the Commission to determine different conditions, subsection (9) above shall apply as it applies where the tribunal gives such a direction by virtue of subsection (7) above.
Where the tribunal reverses a decision of the Commission to refuse to grant authorisation, it shall direct the Commission to grant it; and where the tribunal reverses a decision of the Commission to make the grant of authorisation subject to conditions, it shall direct the Commission to grant it unconditionally.
Notice of a tribunal’s determination, together with a statement of its reasons, shall be given to the appellant and to the Commission; and unless the tribunal has directed the Commission to determine conditions or, in any other case, the tribunal directs otherwise, the determination shall come into operation when the notice is given to the appellant.
The Treasury may out of money provided by Parliament pay to the persons appointed as members of a tribunal under this section such fees and allowances in respect of expenses as the Treasury may determine and any other expenses incurred for the purposes of this section.
If the FCA or the PRA proposes— it must give the society a warning notice.
to give a direction to a society under section 54 or section 55, or to vary such a direction other than at the request of the society, or
to give a direction in relation to a society under section 90,
The warning notice must set out the terms of the direction which the FCA or the PRA proposes to give and, in the case of a proposal to give a direction under section 54 or 55, any provisions which the FCA or the PRA proposes to include in the direction by virtue of section 54(4) (including that provision as applied by section 55(3)).
If the FCA or the PRA decides— it must give the society a decision notice.
to give a direction to a society under section 54 or section 55, or to vary such a direction other than at the request of the society, or
to give a direction in relation to a society under section 90,
The decision notice must set out the terms of the direction which the FCA or the PRA has decided to give and, in the case of a decision to give a direction under section 54 or 55, any provisions to be included in the direction by virtue of section 54(4) (including that provision as applied by section 55(3)).
A society to whom a decision notice is given under this section may refer the matter to the Upper Tribunal.
Part XXVI of the Financial Services and Markets Act 2000 (notices) is to be treated as applying in respect of warning notices and decision notices given under this section as it applies in respect of warning notices and decision notices given under that Act, subject to subsection (8) below.
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In the application of Part XXVI of that Act in respect of warning notices and decision notices given under this section—
section 388(1)(e)(i) (which requires a decision notice to indicate any right given under that Act to refer a decision to the Tribunal) is to be read as if, for the words “this Act", there were substituted “the Friendly Societies Act 1992";
section 388(2) (which makes provision for the type of action to which a decision notice may relate if it was preceded by a warning notice) is to be read as if, for the word “Part", there were substituted “section";
section 390(4) (which provides for the content of a final notice about an order) is to be read as if—
for the words “an order" there were substituted “a direction", and
for the words “the order", in both places where they appear, there were substituted “the direction"; and
section 392 (application of sections 393 (third party rights) and 394 (access to FCA or PRA material)) is to be read as if—
paragraph (a) of that section contained a reference to a warning notice given under subsection (1) above, and
paragraph (b) of that section contained a reference to a decision notice given under subsection (3) above.
A tribunal may give such directions as it thinks fit for the payment of costs or expenses by any party to an appeal.
On an appeal under section 58(2) above the friendly society in relation to which the determination was made, or upon which the requirement was imposed, shall be entitled to be heard.
The Treasury may make regulations with respect to appeals under section 58 above; and those regulations may in particular make provision—
as to the period within which and the manner in which such appeals are to be brought;
as to the manner in which such appeals are to be conducted, including provision for any hearing to be held in private;
for requiring any person, on tender of the necessary expenses of his attendance, to attend and give evidence or produce documents in his custody or under his control and for authorising the administration of oaths to witnesses;
for granting to any person such discovery or inspection of documents or right to further particulars as might be granted by a county court in England and Wales or Northern Ireland or, in Scotland, for granting to any person such recovery or inspection of documents as might be granted by the sheriff;
for enabling an appellant to withdraw an appeal or the Commission to withdraw its opposition to an appeal and for the consequences of any such withdrawal;
for taxing or otherwise settling any costs or expenses directed to be paid by the tribunal and for the enforcement of any such direction;
for enabling any functions in relation to an appeal to be discharged by the chairman of the tribunal; and
as to any other matter connected with such appeals.
Regulations under this section with respect to appeals where the friendly society concerned has its registered office in Scotland shall be made by the Lord Advocate.
A person who, having been required in accordance with regulations under this section to attend and give evidence, fails without reasonable excuse to attend or give evidence shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.
A person who intentionally alters, suppresses, conceals, destroys or refuses to produce any document which he has been required to produce in accordance with regulations under this section, or which he is liable to be so required to produce, shall be liable—
on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both;
on summary conviction, to a fine not exceeding the statutory maximum.
An appeal shall lie to the High Court at the instance of the friendly society or other person concerned or of the Commission on any question of law arising from any decision of a tribunal under section 59 above; and if the court is of the opinion that the decision was erroneous in law, it shall remit the matter to the tribunal for re-hearing and determination by it.
In the application of this section to a friendly society whose registered office is in Scotland or Northern Ireland, references to the High Court shall be construed as references to the Court of Session or, as the case may be, the High Court in Northern Ireland.
No appeal to the Court of Appeal or to the Court of Appeal in Northern Ireland shall be brought from a decision under subsection (1) above except with the leave of that court or of the court or judge from whose decision the appeal is brought.
An appeal shall lie, with the leave of the Court of Session or the House of Lords, from any decision of the Court of Session under this section, and such leave may be given on such terms as to costs, expenses or otherwise as the Court of Session or the House of Lords may determine.
This section applies to information, documents or other material, or explanations of matters which relate to— and, in relation to the imposition of requirements under this section, “the purposes of its supervisory functions” means the purposes of the discharge by the FCA or the PRA of any of its functions under this Act.
the activities or the plans for future development of a friendly society; or
the activities or the plans for future development of a subsidiary of or body jointly controlled by an incorporated friendly society;
This section does not authorise any requirement in relation to information, documents or other material to be imposed on a subsidiary of or body jointly controlled by an incorporated friendly society unless that subsidiary or body carries on business in the United Kingdom; but a requirement may be imposed under this section on a friendly society in relation to information, documents or other material in the possession or control of a subsidiary of or body jointly controlled by the society which does not carry on business in the United Kingdom.
Subject to subsection (2) above, the FCA or the PRA may by notice to a friendly society or to a subsidiary of, or body jointly controlled by, an incorporated friendly society, require the body to which it is addressed—
to furnish to it, within a specified period or at a specified time or times, such specified information as the FCA or the PRA considers it needs for the purposes of its supervisory functions;
to produce to it, at a specified time and place, such specified documents or other material as the FCA or the PRA considers it needs for the purposes of its supervisory functions;
to provide to it, within a specified period, such explanations of specified matters as the FCA or the PRA considers it needs for the purposes of its supervisory functions;
to furnish to it, within a specified period, a report by an accountant or actuary approved by the Commission on, or on specified aspects of, information or documents or other material furnished or produced to the Commission.
Where by virtue of subsection (3)(a), (b) or (c) above the FCA or the PRA has power, or by virtue of subsection (3A) above an authorised officer has power, to require the furnishing of any information, the production of any document or material or the provision of any explanation by a friendly society, the FCA, the PRA or authorised officer shall have the like power as regards any person who—
is or has been an officer, employee or agent of the society or, in the case of a society to which section 37(2) or (3) above applies, a controller or manager of the society, or
in the case of documents or material, appears to the FCA, the PRA or authorised officer to have the document or material in his possession or under his control.
Subject to subsection (2) above, any person authorised for the purpose by the FCA or the PRA (“an authorised officer") may, on producing evidence of his authority, require a friendly society or a subsidiary of, or body jointly controlled by, an incorporated friendly society—
to furnish to him forthwith such specified information as the FCA or the PRA considers it needs for the purposes of its supervisory functions;
to produce to him forthwith such documents or other material as the FCA or the PRA considers it needs for those purposes;
to provide to him forthwith such explanations of specified matters as the FCA or the PRA considers it needs for those purposes.
Where by virtue of subsection (3)(a), (b) or (c) above the FCA or the PRA has power, or by virtue of subsection (3A) above an authorised officer has power, to require the furnishing of any information, the production of any document or material or the provision of any explanation by a subsidiary of or body jointly controlled by an incorporated friendly society, the FCA, the PRA or authorised officer shall have the like power as regards any person who—
is or has been an officer, employee or agent of the subsidiary or jointly controlled body, or
in the case of documents or material, appears to the FCA, the PRA or authorised officer to have the document or material in his possession or under his control.
Where any person from whom production of a document or material is required under subsection (4) or (5) above claims a lien on the document or material, the production of it shall be without prejudice to the lien.
Nothing in the foregoing provisions of this section shall compel the production—
by a relevant lawyer of a document or material contained in a privileged communication or, in Scotland, a communication which is protected from disclosure on the ground of confidentiality, made by or to the relevant lawyer in that capacity or the furnishing of information contained in such communication so made;
by a person who is not a barrister or solicitor of a document or material contained in a communication made by him or to him which is privileged by virtue of section 63 of the Courts and Legal Services Act 1990 or the furnishing of information contained in such a communication; or
by an independent qualified conveyancer, an executry practitioner or a recognised financial institution of a document or material contained in a communication made by him or to him which is protected from disclosure by virtue of section 22 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 or the furnishing of information contained in such a communication.
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Where, by virtue of subsection (3), (3A), (4) or (5) above, the FCA, the PRA or an authorised officer requires the production by a friendly society or other body or any other person of documents or material, the FCA, the PRA or authorised officer may—
if the documents or material are not produced, require that person to state, to the best of his knowledge and belief, where the documents or material are;
if the documents or material are produced, take copies of or extracts from them and require that person or any other person who is or has been an officer, employee or agent of the friendly society or other body, as the case may be, to provide an explanation of the documents or material.
Any person who, when required to do so under this section, fails without reasonable excuse to furnish any information or report, to produce any documents or material, or to provide any explanation or make any statement, shall be guilty of an offence and liable on summary conviction—
to a fine not exceeding level 5 on the standard scale; and
in the case of a continuing offence, to an additional fine not exceeding one tenth of that level one-tenth of the greater of £5,000 or level 4 on the standard scale for every day during which the offence continues.
Any friendly society which furnishes any information, provides any explanation or makes any statement which is false or misleading in a material particular, shall be guilty of an offence and liable—
on conviction on indictment, to a fine; and
on summary conviction to a fine not exceeding the statutory maximum.
Any person who knowingly or recklessly furnishes any information, provides any explanation or makes any statement which is false or misleading in a material particular shall be guilty of an offence and liable—
on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine or both; and
on summary conviction, to a fine not exceeding the statutory maximum.
In this section—
“loss of office” includes, in relation to an officer of an incorporated friendly society holding office by virtue of his position in the society in a subsidiary of the society or body jointly controlled by the society, the loss of that office; and
“modification” includes any additions and, as regards modifications of the statutory provisions relating to companies, any modification whether effected by any future Act or by an instrument made after the passing of this Act under an Act whenever passed; and
Subject to section 64 below, no restricted information which relates to the business or other affairs of a friendly society, a registered branch of a friendly society or any other person shall be disclosed (otherwise than to an officer or employee of the primary recipient) by— without the consent of the person from whom the primary recipient obtained the information and, if different, the person to whom it relates.
the primary recipient; or
any person obtaining the information directly or indirectly from him,
For the purposes of this section— but information shall not be treated as restricted information if it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purpose for which, disclosure is not precluded by this section.
Any information disclosed to the Commission or the Chief Registrar by an overseas regulatory authority (within the meaning of section 64 below) shall be treated as restricted information for the purposes of this section.
A person who discloses information in contravention of this section shall be guilty of an offence and liable—
on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and
on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum, or both.
A justice of the peace may issue a warrant under section 176 of the Financial Services and Markets Act 2000 if satisfied on information on oath given by or on behalf of the FCA or the PRA, an authorised officer within the meaning of section 62(3A) above, or a person appointed as an investigator under section 65(1) below or as an inspector under section 66(1) below, that there are reasonable grounds for believing that the first or second set of conditions below is satisfied.
The first set of conditions is that—
there are on the premises specified in the warrant information, documents or other material in relation to which a requirement has been imposed on any person under section 62(3), (3A), (4) or (5) above or section 67(3) below, or which it is the duty of any person to produce under section 65(3) or 67(2) below, and
that person has failed (wholly or in part) to comply with that requirement or, having been requested to do so, has failed (wholly or in part) to comply with that duty.
The second set of conditions is that—
there are on the premises specified in the warrant information, documents or other material in relation to which a requirement could be imposed on any person under section 62(3), (3A), (4) or (5) above or section 67(3) below, or which any person could be requested to produce in compliance with the duty imposed on them by section 65(3) or 67(2) below, and
if such a requirement were imposed, or such a request made,—
it would not be complied with, or
any information, documents or other material to which it related would be removed, tampered with or destroyed.
Information which is restricted information for the purposes of section 63 above may be disclosed—
to any person with a view to the institution of, or otherwise for the purposes of, relevant proceedings;
if it is information which is or has been available to the public from other sources;
in the form of a summary or collection of information so framed as not to enable information related to any particular body or person to be ascertained from it;
to the extent that it is information which is provided for the purpose, under any provision of this Act or the 1974 Act, of its being made available to the public in any manner;
in pursuance of any Community obligation;
for the purpose of facilitating the discharge by the Commission, the Chief Registrar or the central office of any of their functions under this Act or the 1974 Act;
to the Treasury, if the disclosure is made for the purpose of facilitating the discharge of any functions of the Treasury under this Act or the 1974 Act or otherwise in the interests of members of friendly societies or in the public interest;
for the purpose of enabling or assisting any person appointed investigator under section 65 below or inspector under section 66 below to discharge his duties under that section; or
for the purpose of facilitating the discharge by the auditors of a friendly society of their duties to the Commission.
For the purposes of subsection (1)(a) above “relevant proceedings” are— and in paragraph (c) above “public servant” means an officer or servant of the Crown (including an officer or servant of the Crown in right of Her Majesty’s Government in Northern Ireland) or of any public or other authority designated for the purpose by order made by the Treasury.
any criminal proceedings;
any civil proceedings by or at the relation of or against the Commission or the Chief Registrar arising out of the discharge of any of their functions under this Act or the 1974 Act;
any disciplinary proceedings relating to—
the exercise by a solicitor, auditor, accountant, actuary or valuer of his professional duties;
the discharge by a public servant of his duties;
Nothing in section 63 above prohibits the disclosure of information to the Secretary of State or the Department of Economic Development in Northern Ireland in circumstances where it is desirable or expedient— nor does that section prohibit further disclosure of the information by the Secretary of State or the Department with the consent of the Commission.
that the information should be disclosed in the interests of members of a friendly society or in the public interest; or
it is desirable or expedient that the information should be disclosed for the purpose of facilitating the discharge—
by the Secretary of State, of any functions of his under the enactments relating to companies, insurance companies, or insolvency or under the Financial Services Act 1986 or any provision of Parts II, III or VII of the Companies Act 1989; or
by the Department, of any of its functions relating to companies or insolvency, or under Part III of the Companies (Northern Ireland) Order 1990 or Part II or V of the Companies (No. 2) (Northern Ireland) Order 1990;
Nothing in section 63 above prohibits the disclosure of information to an authority mentioned in subsection (5) below (a “relevant authority") in circumstances where, in the opinion of the Commission, it is desirable or expedient that the information should be disclosed— nor does that section prohibit further disclosure of the information, with the consent of the Commission.
in the interests of members of a friendly society or in the public interest; or
with a view to facilitating the discharge by the authority, of any functions of the authority (including functions in relation to proceedings) mentioned in that subsection (“relevant functions”);
Nothing in section 63 above prohibits the disclosure of information to the Treasury in circumstances where it is desirable or expedient that the information should be disclosed for the purpose of facilitating the discharge by the Treasury of any functions of theirs under the enactments relating to insurance companies, under the Financial Services Act 1986 or under Part III or Part VII of the Companies Act 1989 nor does that section prohibit further disclosure of the information by the Treasury with the consent of the Commission.
The relevant authorities mentioned in subsection (4) above and the relevant functions in relation to each such authority, are as follows— Authority Functions 1. An inspector appointed under Part XIV of the Companies Act 1985, Part XV of the Companies (Northern Ireland) Order 1986 or section 94 or 177 of the Financial Services Act 1986. Functions under that Part or that section or Article. 2. A person authorised to exercise powers under section 44 of the Insurance Companies Act 1982, section 447 of the Companies Act 1985, section 106 of the Financial Services Act 1986 or section 84 of the Companies Act 1989 or Article 440 of the Companies (Northern Ireland) Order 1986. Functions under that section or Article. 3.The Policyholders Protection Board. Functions under the Policyholders Protection Act 1975. 4.A designated agency within the meaning of the Financial Services Act 1986. Functions under that Act or Part VII of the Companies Act 1989. 5.A transferee body or the competent authority within the meaning of the Financial Services Act 1986. Functions under that Act. 6.A body administering a scheme under section 54 of the Financial Services Act 1986. Functions under the scheme. 7.A recognised self-regulating organisation, recognised professional body, recognised investment exchange, recognised clearing house, or recognised self-regulating organisation for friendly societies (within the meaning of the Financial Services Act 1986). Functions in its capacity as an organisation, body, exchange or clearing house recognised under that Act. 8.The Bank of England. Any of its functions The Financial Services Authority. Functions under the Financial Services Act 1986 (other than as a designated agency within the meaning of that Act), the Banking Act 1987 or section 171 of the Companies Act 1989. 9. A body established by order under section 46 of the Companies Act 1989. Functions under Part II of that Act. 10. A recognised supervisory or qualifying body (within the meaning of Part II of the Companies Act 1989 or Part III of the Companies (Northern Ireland) Order 1990). . Functions as such a body or functions in relation to disciplinary proceedings against auditors. 11.The Industrial Assurance Commissioner for Northern Ireland. Functions under the enactments relating to industrial assurance. . . .. . . .. 13.The Official Receiver or the Official Receiver for Northern Ireland. Functions under the enactments relating to insolvency. 14A recognised professional body (within the meaning of section 391 of the Insolvency Act 1986 or Article 350 of the Insolvency (Northern Ireland) Order 1989). Functions in its capacity as such a body under that Act or that Order or functions in relation to disciplinary proceedings against insolvency practitioners (within the meaning of that Act or that Order). 15.The Building Societies Commission. Functions under the Building Societies Act 1986. The Occupational Pensions Regulatory Authority. Functions under the Pension Schemes Act 1993 or the Pensions Act 1995 or any enactment in force in Northern Ireland corresponding to either of them. 16.The Director-General of Fair Trading. Functions under the Financial Services Act 1986. 17An actuary exercising functions under this Act. Those functions. 18The Institute of Actuaries or the Faculty of Actuaries. Supervisory functions in relation to actuaries exercising functions under this Act.
The Commission, with the consent of the Treasury, may by order—
amend the Table in subsection (5) above so as to—
add any public or other authority to the Table and specify the relevant functions of that authority;
remove any authority from the Table; or
add functions to, or remove functions from, those which are relevant functions in relation to an authority specified in the Table;
restrict the circumstances in which information may, by virtue of subsection (4) above, be disclosed or further disclosed; and
impose conditions subject to which the information may be disclosed or further disclosed.
Nothing in section 63 above prohibits the disclosure to an overseas regulatory authority of information for the purpose of assisting that authority in the discharge of its functions.
In this section—
“restricted information” means information which is obtained by the primary recipient for the purposes of, or in the discharge of his functions under, this Act or the 1974 Act;
In the case of restricted information which relates to the business or other affairs of a friendly society to which section 37(2) or (3) above applies, no disclosure may be made by virtue of subsection (1), (3), (4) or (7) above unless the disclosure appears to be in accordance with–
Article 16 of the third general insurance Directive; or
Article 15 of the third life Directive.
Subject to section 64 below, no restricted information which relates to the business or other affairs of a friendly society, a registered branch of a friendly society or any other person shall be disclosed (otherwise than to an officer or employee of the primary recipient) by— without the consent of the person from whom the primary recipient obtained the information and, if different, the person to whom it relates.
the primary recipient; or
any person obtaining the information directly or indirectly from him,
For the purposes of this section— but information shall not be treated as restricted information if it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purpose for which, disclosure is not precluded by this section.
Any information disclosed to the Commission or the Chief Registrar by an overseas regulatory authority (within the meaning of section 64 below) shall be treated as restricted information for the purposes of this section.
A person who discloses information in contravention of this section shall be guilty of an offence and liable—
on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and
on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum, or both.
For the purposes of sections 348 to 353 of the Financial Services and Markets Act 2000 (restrictions on disclosure of confidential information)—
information to which this section applies is to be treated as confidential information; and
in relation to such information, each of the following is a primary recipient—
the FCA;
the PRA;
any person who is or has been employed by the FCA or the PRA; and
any person appointed by the FCA or the PRA to carry out functions under this Act or the 1974 Act.
This section applies to information which—
relates to the business or other affairs of a friendly society, a registered branch of a friendly society or any other person;
was received by a primary recipient (within the meaning of subsection (1)(b)) for the purposes of, or in the discharge of, any functions of the FCA or the PRA under any provision made by or under this Act or the 1974 Act; and
is not excluded information by virtue of subsection (4).
It is immaterial for the purposes of subsection (2) whether or not the information was received—
by virtue of a requirement to provide it imposed by or under this Act;
for other purposes as well as purposes mentioned in that subsection.
Information is excluded information if—
it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purposes for which, disclosure is not precluded by section 348 of the Financial Services and Markets Act 2000 (restrictions on disclosure of confidential information); or
it is in the form of a summary or collection of information so framed that it is not possible to ascertain from it information relating to any particular person.
Subject to section 64 below, no restricted information which relates to the business or other affairs of a friendly society, a registered branch of a friendly society or any other person shall be disclosed (otherwise than to an officer or employee of the primary recipient) by— without the consent of the person from whom the primary recipient obtained the information and, if different, the person to whom it relates.
the primary recipient; or
any person obtaining the information directly or indirectly from him,
For the purposes of this section— but information shall not be treated as restricted information if it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purpose for which, disclosure is not precluded by this section.
Any information disclosed to the Commission or the Chief Registrar by an overseas regulatory authority (within the meaning of section 64 below) shall be treated as restricted information for the purposes of this section.
A person who discloses information in contravention of this section shall be guilty of an offence and liable—
on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and
on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum, or both.
If it appears to the FCA or the PRA desirable to do so for the purpose of its supervisory functions in relation to a friendly society, the FCA or the PRA may appoint one or more competent persons to investigate and report to it on the state and conduct of the activities of the society, or any particular aspect of those activities.
If a person appointed under subsection (1) . . . above thinks it necessary for the purposes of his investigation, he may also investigate the activities of any body corporate which is or has at any relevant time been a subsidiary of, or jointly controlled by, the society under investigation.
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It shall be the duty of every person who is or has been an officer, employee and agent of a friendly society or other body which is under investigation— and otherwise to give to those persons all assistance in connection with the investigation which he is reasonably able to give.
to produce to the persons appointed under subsection (1) . . . above all records, books and papers relating to the body concerned which are in his custody or power; and
to attend before those persons when required to do so;
to answer any question which is put to him by those persons with respect to any friendly society or other body which is under investigation,
A person who, without reasonable excuse— shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
fails to produce any records, books or papers which it is his duty to produce under subsection (3)(a) above; or
fails to comply with his duty under subsection (3)(b) or (c) above;
A person who is or has been an officer, employee or agent of a friendly society or other body and who knowingly or recklessly furnishes to any person appointed under subsection (1) . . . above any information which is false or misleading in a material particular, shall be guilty of an offence and liable—
on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and
on summary conviction, to a fine not exceeding the statutory maximum.
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In this section—
“regulation”, in relation to any public or other authority, means regulation in the public interest or for the protection of private interests.
a combined ballot (within the meaning of paragraph 8B of that Schedule);
In relation to a friendly society to which section 37(2) or (3) above applies, any reference in subsection (3) or (5) above to a person who is or has been an officer shall be read as including a reference to a person who is or has been a controller or manager.
In the circumstances mentioned in subsection (2) below, the FCA or the PRA may— and, in the circumstances mentioned in subsection (3) below, the investigation or consideration may extend to the affairs of any body corporate which is or at any relevant time has been a subsidiary of or jointly controlled by the society concerned.
appoint one or more competent inspectors to investigate and report on the affairs of a friendly society; or
call a special meeting of a friendly society to consider its affairs; or
appoint (whether on the same or on different occasions) an inspector or inspectors and call a special meeting for those purposes;
The powers conferred by subsection (1) above may be exercised either— but paragraph (a) above shall not apply to a registered society with branches (regardless of the number of members) except with the consent of the central body of that society.
on the application of the requisite number of members of the society concerned; or
where the is of the opinion that an investigation should be held into the affairs of the society, or that the affairs of the society call for consideration by a meeting of its members;
The powers conferred by subsection (1) above may be exercised so as to extend the investigation or consideration to the affairs of a body which is or has been a subsidiary of or jointly controlled by a friendly society either—
where an application referred to in subsection (2)(a) above so requests; or
where the FCA or the PRA is of the opinion that it is necessary for the purposes of the investigation into or consideration of the affairs of the friendly society that the affairs of the subsidiary or other body should also be investigated or considered.
Where the inspectors are of the opinion mentioned in subsection (3)(b) above in relation to a subsidiary of or a body jointly controlled by the society under investigation they may, with the consent of the , extend their investigation to the affairs of the subsidiary or other body and make their report accordingly.
For the purposes of subsections (1) to (3) above the requisite number of members—
in the case of a friendly society having more than 1,000 members, is 100; and
in the case of any other friendly society, is one-tenth of the whole number of members of the society.
Where an application is made as mentioned in subsection (2) above—
the application shall be supported by such evidence as the FCA or the PRA may require for the purpose of showing that the applicants have good reason for making the application and are not actuated by malicious, frivolous, vexatious or scandalous motives;
such notice of the application shall be given to the society concerned and, if the application extends to the affairs of a subsidiary of or body jointly controlled by that society, to that subsidiary or other body, as the FCA or the PRA may direct;
the FCA or the PRA may require the applicants to give security for payment of the costs of the investigation or meeting before the inspector is appointed or the meeting is called subject, in the case of the costs of an investigation, to an amount not exceeding the corresponding Companies Act limit; and
as regards the expenses of or incidental to the investigation or meeting—
in the case of an investigation (in whichever way instituted), the expenses shall be defrayed in the first instance by the FCA or the PRA but without prejudice to its rights to contribution under section 67(10) below;
in the case of a meeting, the expenses shall be defrayed by the applicants, or out of the funds of the society, or by the members or officers or former members or officers of the society, in such proportions as the FCA or the PRA may direct.
Before exercising its powers under subsection (1) above in a case falling within subsection (2)(b) above, the FCA or the PRA shall inform the society of the action which it proposes to take and the grounds for that action, and the society shall, within 14 days of receiving the information, be entitled to give the FCA or the PRA an explanatory statement in writing by way of a reply.
Where the FCA or the PRA proposes to exercise its powers under subsection (1) above in a case falling within subsection (3)(b) above, subsection (7) above shall apply in relation to the subsidiary or jointly controlled body as it applies in relation to the society.
Inspectors appointed under this section shall, in addition to having the powers which are necessary for or incidental to the discharge of their functions under this section, have the power specified in section 67 below.
Where a special meeting is called under this section— and the provisions of this subsection and any direction given under it shall have effect notwithstanding anything in the rules of the society.
the FCA or the PRA may— and may give such other directions as it thinks fit with respect to the call, holding and conduct of the meeting;
direct at what time and place the meeting is to be held and what matters are to be discussed and determined at the meeting; and
direct which members may attend and vote at the meeting,
the FCA or the PRA may appoint a person to be chairman at the meeting or, in default of such an appointment, the meeting may appoint its own chairman;
the meeting shall have all the powers of a meeting called according to the rules of the society;
In this section “the corresponding Companies Act limit”, in relation to security for the payment of the costs of an investigation, is £5,000 or such other sum as is specified for the time being in an order under section 431(4) of the Companies Act 1985 ....
Article 197B of the Order (protection of supplies of goods and services) does not apply.
In this section— and references to officers, employees or agents include past, as well as present, officers, employees or agents; and “agents”, in relation to a friendly society or any subsidiary of or body jointly controlled by an incorporated friendly society, includes its bankers, accountants, solicitors and auditors and the appropriate actuary.
When the inspectors have been appointed, it is the duty of all officers, employees and agents of the body under investigation—
to produce to the inspectors all documents and material of or relating to the body under investigation which are in their custody or power;
to attend before the inspectors when required to do so; and
otherwise to give the inspectors all assistance in connection with the investigation which they are reasonably able to give.
If the inspectors consider that a person other than an officer, employee or agent of the body under investigation is or may be in possession of information concerning its affairs, they may require that person to produce to them any documents or material in his custody or power relating to the body under investigation, to attend before them and otherwise to give them all assistance in connection with the investigation which he is reasonably able to give; and it is that person’s duty to comply with the requirement.
The inspectors may examine on oath the officers, employees and agents of the body under investigation, and any such person as is mentioned in subsection (3) above, in relation to the affairs of the body under investigation, and may administer an oath accordingly.
An answer given by a person to a question put to him under the foregoing provisions of this section may be used in evidence against him.
If an officer, employee or agent of the body under investigation or any such person as is mentioned in subsection (3) above— the inspectors may certify the refusal in writing to the High Court; and the court may thereupon enquire into the case and, after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, may punish the offender in like manner as if he had been guilty of contempt of the court.
refuses to produce any document or material which it is his duty under this section to produce; or
refuses to attend before the inspectors when required to do so; or
refuses to answer any question put to him by the inspectors with respect to the affairs of the body under investigation,
However, in criminal proceedings in which that person is charged with an offence to which this subsection applies— by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.
no evidence relating to the statement may be adduced, and
no question relating to it may be asked,
The inspectors may, and if so directed by the FCA or the PRA shall, make interim reports to the FCA or the PRA, but they may at any time in the course of the investigation, without making an interim report, inform the FCA or the PRA of matters coming to their knowledge as a result of the investigation tending to show that an offence has been committed.
Subsection (5A) above applies to any offence other than—
an offence under section 2 or 5 of the Perjury Act 1911 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath);
an offence under section 44(1) or (2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made on oath or otherwise than on oath); or
an offence under Article 7 or 10 of the Perjury (Northern Ireland) Order 1979 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath).
The FCA or the PRA may, if it thinks fit—
send a copy of any report made by the inspectors to the body whose affairs are or were the subject of the investigation;
furnish a copy of any such report on request . . . to—
any member of the body whose affairs are or were the subject of the investigation;
the auditors of that body;
any person whose conduct is referred to in the report;
any other person whose financial interests appear to the FCA or the PRA to be affected by matters dealt with in the report, whether as creditor or otherwise; and
cause the report to be printed and published.
A copy of a report of inspectors appointed under section 66 above to hold an investigation under that section, certified by the FCA or the PRA to be a true copy, is admissible in any legal proceedings as evidence of the opinion of the inspectors in relation to any matter contained in the report; and a document purporting to be such a certificate shall be received in evidence and be deemed to be such a certificate, unless the contrary is proved.
The FCA or the PRA shall be entitled to be repaid the expenses of the investigation defrayed by it under section 66(6)(d) above as provided in the following paragraph, that is to say— and a person liable under any one of paragraphs (a) to (c) above is entitled to contribution from any other person liable under the same paragraph, according to the amount of their respective liabilities under it.
by the applicants for the investigation, to such extent (if any) as the FCA or the PRA may direct;
by any body whose affairs were the subject of the investigation, to such extent (if any) as the FCA or the PRA may direct;
by any person convicted of an offence in proceedings instituted as a result of the investigation, to such extent (if any) as the court by or before which he was convicted may order;
In the application of this section to a friendly society whose registered office is in Scotland or Northern Ireland, any reference to the High Court shall be read as a reference to the Court of Session or, as the case may be, to the High Court in Northern Ireland.
The FCA or the PRA may charge a reasonable fee for furnishing to any person a copy of a report under subsection (8)(b) above.
In relation to a friendly society to which section 37(2) or (3) above applies–
any reference in subsection (1), (2) or (4) above to officers shall be read as including a reference to controllers or managers; and
any reference in subsection (3) or (6) above to an officer shall be read as including a reference to a controller or manager.
Every friendly society and every registered branch shall— in accordance with this section.
cause accounting records to be kept; . . .
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The accounting records must be sufficient to show and explain the transactions of the society or branch and— and must be kept in an orderly manner.
disclose, with reasonable accuracy and promptness, the financial position of the society or branch at any time;
enable the committee of management properly to discharge the duties imposed on them by or under this Act or the 1974 Act (and, where applicable, section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework) and their function of direction of the affairs of the society or branch; and
enable the society or branch properly to discharge the duties imposed on it by or under this Act or the 1974 Act (and, where applicable, section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework),
The accounting records shall in particular contain—
entries from day to day of all sums received and paid by the society or branch and the matters in respect of which they are received or paid;
entries from day to day of every transaction entered into by the society or branch which will or there is reasonable ground for expecting may give rise to liabilities or assets of the society or branch other than insignificant assets or liabilities in respect of the management of the society or branch; and
a record of the assets and liabilities of the society or branch.
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enable the committee of management properly to discharge the duties imposed on them by or under this Act or the 1974 Act and their functions of direction of the affairs of the society or branch; and
enable the society or branch properly to discharge the duties imposed on it by or under this Act or the 1974 Act;
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the information necessary to enable the committee of management and the society or branch to discharge their duties and functions is sufficiently accurate, and is available with sufficient regularity or at need and with sufficient promptness, for those purposes; and
the information regularly obtained by or furnished to the Commission under or for the purposes of this Act is sufficiently accurate for the purpose for which it is obtained or furnished and is regularly furnished;
The accounting records shall be kept at the registered office of the society or branch or at such other place or places as the committee of management thinks fit, and shall at all times be open to inspection by the committee of management.
Accounting records shall be preserved for 6 years from the date on which they were made.
Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the society shall also secure that such accounting records are kept . . . by them as will enable the society to comply with the requirements of this section in relation to the business of the society and those subsidiaries and jointly controlled bodies.
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The committee of management of a friendly society or registered branch shall prepare for each financial year of the society or branch—
a balance sheet as at the last day of the year, and
an income and expenditure account.
Except as provided by regulations under subsection (4) below, if at the end of its financial year an incorporated friendly society has subsidiaries, the committee of management shall also prepare group accounts.
Group accounts shall be consolidated accounts comprising—
a consolidated balance sheet dealing with the state of affairs of the society and its subsidiaries; and
a consolidated income and expenditure account dealing with the income and expenditure of the society and its subsidiaries.
The Commission may by regulations made with the consent of the Treasury exempt specified descriptions of incorporated friendly societies with subsidiaries from any duty to prepare group accounts.
Regulations under subsection (4) above may exempt societies by reference to any criterion and may make different provision for different descriptions of societies.
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The annual accounts of a friendly society or a registered branch shall conform to the requirements of this section and regulations made under it.
The balance sheet shall give a true and fair view of the state of the affairs of the society or branch as at the end of the financial year.
The income and expenditure account shall give a true and fair view of the income and expenditure of the society or branch for the financial year.
Subsections (2) and (3) above, in their application to the group accounts of an incorporated friendly society, are to be read as referring to the society and (so far as it concerns the members of the society) the subsidiaries dealt with in the group accounts.
The annual accounts shall also contain, whether in the form of notes or otherwise, such supplementary information as is prescribed.
The Commission shall, by regulations made with the consent of the Treasury, make provision with respect to the contents and the form of the annual accounts.
Without prejudice to the generality of subsections (5) and (6) above, the regulations may— and the regulations may make different provision for different cases.
prescribe accounting principles and rules;
require corresponding information for a preceding financial year;
require the accounts of incorporated friendly societies to deal also with bodies jointly controlled by them;
require the accounts to give particulars of the emoluments, pensions, compensation for loss of office and financial interests of members of the committee of management, other officers and employees of prescribed descriptions of the society;
add to the classes of documents to be comprised in the annual accounts;
make provision as to the matters to be included in any document so added;
modify the requirements of this Part of this Act as to the matters to be stated in any document comprised in the annual accounts; and
reduce the classes of documents to be comprised in the annual accounts;
Where compliance with regulations under this section would not be sufficient to give a true and fair view, the necessary additional information shall be given in the accounts or in a note to them.
If in special circumstances compliance with any provisions contained in regulations is inconsistent with the requirement to give a true and fair view, the committee of management shall depart from that provision to the extent necessary to give a true and fair view.
Particulars of any such departure, the reasons for it and its effect shall be given in a note to the accounts.
It is the duty of every member of the committee of management, other officer and employee of a society or registered branch as respects whom prescribed particulars are by virtue of subsection (7)(d) above required to be given in the accounts to give notice to the society of such matters as may be necessary to enable the society to give those particulars in the accounts.
The committee of management of every friendly society or registered branch must prepare accounts for the society or branch for each of its financial years. Those accounts are referred to in this Part as the society’s or branch’s “individual accounts”.
The individual accounts of a friendly society or registered branch of a society may be prepared— This subsection is subject to subsections (2A) and (3), and section 69I (consistency of accounts).
in accordance with section 69B (“Friendly Societies Act individual accounts”), or
in accordance with UK-adopted international accounting standards (“IAS individual accounts”).
The individual accounts of— must be Friendly Societies Act individual accounts.
a friendly society that is a charity, or
a registered branch of a friendly society that is a charity,
After the first financial year in which the committee of management of a friendly society or registered branch prepares IAS individual accounts (“the first IAS year”), all subsequent individual accounts of the society or branch must be prepared in accordance with UK-adopted international accounting standards unless there is a relevant change of circumstance. This is subject to subsection (4A).
There is a relevant change of circumstance if, at any time during or after the first IAS year— “UK regulated market” has the meaning given in Article 2.1.13A of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 and amending Regulation (EU) No. 648/2012.
the society or branch becomes a subsidiary undertaking of another undertaking and individual accounts for that undertaking are not prepared in accordance with UK-adopted international accounting standards,
the society or branch ceases to be a subsidiary undertaking,
the society or branch ceases to be a society or part of a society with securities admitted to trading on a UK regulated market, or
a parent undertaking of the society or branch ceases to be an undertaking with securities admitted to trading on a UK regulated market.
After a financial year in which the committee of management of a friendly society or registered branch prepares IAS individual accounts, the committee of management may change to preparing Friendly Societies Act individual accounts for a reason other than a relevant change of circumstance provided it has not changed to Friendly Societies Act individual accounts in the period of five years preceding the first day of that financial year.
In calculating the five year period for the purpose of subsection (4A), no account should be taken of a change due to a relevant change of circumstance.
If, having changed to preparing Friendly Societies Act individual accounts ..., the committee of management again prepares IAS individual accounts for the society or branch, subsections (3) and (4) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.
Friendly Societies Act individual accounts must comprise—
a balance sheet as at the last day of the financial year, and
an income and expenditure account.
The balance sheet must give a true and fair view of the state of affairs of the society or branch as at the end of the financial year; and the income and expenditure account must give a true and fair view of the income and expenditure of the society or branch for the financial year.
Friendly Societies Act individual accounts must comply with the requirements of regulations made under section 69C as to the form and content of the balance sheet and income and expenditure account and additional information to be provided by way of notes to the accounts or otherwise.
Where compliance with the provisions of those regulations, and the other provisions of this Act as to the matters to be included in a society’s or branch’s individual accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them.
If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the committee of management must depart from that provision to the extent necessary to give a true and fair view.
Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.
The Treasury may by regulations –
add to the classes of documents to be comprised in a society’s or branch’s Friendly Societies Act individual accounts under subsection (1);
make provision as to the matters to be included in any document so added;
modify the requirements of this Part as to the matters to be stated in any document comprised in the society’s or branch’s Friendly Societies Act individual accounts;
reduce the classes of documents to be comprised in a society’s or branch’s Friendly Societies Act individual accounts.
Regulations under subsection (7) –
may make different provision for different cases, and
may include incidental and supplementary provisions.
The Treasury must by regulations make provision with respect to the form and content of Friendly Societies Act individual accounts.
The Treasury may by regulations make provision with respect to additional information to be contained in Friendly Societies Act individual accounts, whether in the form of notes or otherwise.
The regulations may, in particular–
prescribe accounting principles and rules;
require corresponding information for a preceding financial year;
make different 'provision for different descriptions of society or branch.
Where the committee of management of a friendly society prepare IAS individual accounts for a society or branch, it must state in the notes to those accounts that the accounts have been prepared in accordance with UK-adopted international accounting standards.
If at the end of a financial year an incorporated friendly society has subsidiary undertakings, the committee of management, in addition to preparing individual accounts for the year, must prepare consolidated accounts for the year for the society and those undertakings taken as a whole, except as provided by regulations under subsection (7). Those accounts are referred to in this Part as the society’s “group accounts”.
Certain friendly societies are obliged by section 403(1) of the Companies Act 2006 to prepare their group accounts in accordance with UK-adopted international accounting standards (“IAS group accounts”).
The group accounts of other friendly societies may be prepared – This subsection is subject to the following provisions of this section and section 69I (consistency of accounts).
in accordance with section 69F (“Friendly Societies Act group accounts”), or
in accordance with UK-adopted international accounting standards (“IAS group accounts”).
The group accounts of a friendly society that is a charity must be Friendly Societies Act group accounts.
After the first financial year in which the committee of management of a friendly society prepares IAS group accounts (“the first IAS year”), all subsequent group accounts of the society must be prepared in accordance with UK-adopted international accounting standards unless there is a relevant change of circumstance. This is subject to subsection (5A).
There is a relevant change of circumstance if, at any time during or after the first IAS year— ...
the society becomes a subsidiary undertaking of another undertaking and accounts for that undertaking and its subsidiary undertakings (taken as a whole) are not prepared in accordance with UK-adopted international accounting standards,
the society ceases to be a society with securities admitted to trading on a UK regulated market, or
a parent undertaking of the society ceases to be an undertaking with securities admitted to trading on a UK regulated market.
After a financial year in which the committee of management of a friendly society prepares IAS group accounts, the committee of management may change to preparing Friendly Societies Act group accounts for a reason other than a relevant change of circumstance provided it has not changed to Friendly Societies Act group accounts in the period of five years preceding the first day of that financial year.
In calculating the five year period for the purpose of subsection (5A), no account should be taken of a change due to a relevant change of circumstance.
If, having changed to preparing Friendly Societies Act group accounts ..., the committee of management again prepares IAS group accounts for the society, subsections (4) and (5) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.
The Treasury may by regulations exempt specified descriptions of incorporated friendly societies with subsidiaries from any duty to prepare group accounts.
Regulations under subsection (7) may exempt societies by reference to any criterion and may make different provision for different descriptions of societies.
In this subsection “UK regulated market” has the meaning given in Article 2.1.13A of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 and amending Regulation (EU) No. 648/2012.
Friendly Societies Act group accounts must comprise—
a balance sheet dealing with the state of affairs of the society and its subsidiary undertakings;
an income and expenditure account showing the income and expenditure of the society and its subsidiary undertakings.
Friendly Societies Act group accounts must give a true and fair view of the state of affairs as at the end of the financial year, and the income and expenditure for the financial year, of the society and the subsidiary undertakings included in the group accounts as a whole, so far as concerns the members of the society.
Friendly Societies Act group accounts must comply with the requirements of regulations made under section 69G as to the form and content of the group accounts and additional information to be provided by way of notes to the accounts or otherwise.
Where compliance with the provisions of those regulations, and the other provisions of this Act as to the matters to be included in a society’s group accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them.
If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the committee of management must depart from that provision to the extent necessary to give a true and fair view.
Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.
The Treasury may by regulations—
add to the classes of documents to be comprised in a society’s Friendly Societies Act group accounts under subsection (1);
make provision as to the matters to be included in any document so added;
modify the requirements of this Part as to the matters to be stated in any document comprised in the society’s Friendly Societies Act group accounts; and
reduce the classes of documents to be comprised in a society’s Friendly Societies Act group accounts.
Regulations under subsection (7)—
may make different provision for different descriptions of society; and
may include incidental and supplementary provisions.
The Treasury must by regulations make provision with respect to the form and content of Friendly Societies Act group accounts.
The Treasury may by regulations make provision with respect to additional information to be contained in Friendly Societies Act group accounts, whether in the form of notes or otherwise.
The regulations may, in particular—
prescribe accounting principles and rules;
require corresponding information for a preceding financial year; and
make different provision for different descriptions of society.
Where the committee of management of a friendly society prepares IAS group accounts, it must state in the notes to those accounts that the accounts have been prepared in accordance with UK-adopted international accounting standards.
The committee of management of a friendly society that prepares group accounts must secure that the individual accounts of— are all prepared using the same financial reporting framework, except to the extent that in their opinion there are good reasons for not doing so.
the friendly society,
each of its subsidiary undertakings, and
each of its registered branches,
Subsection (1) only applies to accounts of subsidiary undertakings which are—
required to be prepared under Part 15 of the Companies Act 2006, or
required to be prepared under Part 6 of this Act.
Subsection (1) does not require accounts of undertakings that are charities to be prepared using the same financial reporting framework as accounts of undertakings which are not charities.
Subsection (1)(a) does not apply where the committee of management of a friendly society prepares IAS group accounts and IAS individual accounts.
The committee of management of a society which has subsidiary undertakings must ensure that, except where in its opinion there are good reasons against it, the financial year of each of its subsidiary undertakings coincides with the society’s own financial year.
The information specified in Schedule 13D must be given in notes to a friendly society’s or a registered branch’s annual accounts, subject to the provisions of subsection (5).
In that Schedule— Part 1 relates to emoluments and other benefits of members of the committee of management and others and to loans and other dealings in favour of members of the committee and connected persons; and Part 2 relates to information about the employees of a society.
It is the duty of any member of the committee of management, and any person who has been at any time in the preceding five years a member of the committee, to give notice to the society of such matters relating to himself as may be necessary for the purposes of Part 1 of Schedule 13D.
A person who makes default in complying with subsection (3) commits an offence and is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
Paragraphs 11 and 13 of Schedule 13D do not apply to non-directive friendly societies or their registered branches.
The annual accounts of a friendly society which is required to produce group accounts under section 69E must include the material specified by paragraphs 11 to 13 not only in respect of the society but also in respect of the society and its subsidiaries in combination.
The Treasury may, by order, modify the provisions of Schedule 13D.
An order under this section may—
make consequential amendments or repeals of other provisions of this Act;
make such transitional or saving provisions as appear to the Treasury to be necessary or expedient;
make different provision for different cases.
The information specified in Schedule 13E must be given in notes to a friendly society’s or a registered branch’s annual accounts.
In the case of a friendly society whose committee of management is not required to prepare consolidated accounts, the information specified in Part 1 of that Schedule must be given.
In the case of a friendly society whose committee of management is required to prepare consolidated accounts, the information specified in Part 2 of that Schedule must be given.
The Treasury may, by order, modify the provisions of Schedule 13E.
An order under this section may also—
make consequential amendments of or repeals in other provisions of this Act;
make such transitional or saving provisions as appear to the Treasury to be necessary or expedient;
make different provision for different cases.
If in any financial year— the information required by this section must be given in notes to the society’s or branch’s annual accounts.
a friendly society or registered branch has been party to arrangements that are not reflected in its balance sheet, and
at the balance sheet date the risks or benefits arising from those arrangements are material,
The information required is—
the nature and business purpose of the arrangements, and
the financial impact of the arrangements on the society or branch.
The information need only be given to the extent necessary for enabling the financial position of the society or branch to be assessed.
Where a friendly society is required to prepare consolidated group accounts, this section applies in relation to those accounts as if the undertakings included in the consolidation were a single friendly society.
The information specified in Schedule 13F must be given in notes to a friendly society’s or a registered branch’s annual accounts.
The Treasury may, by order, modify the provisions of Schedule 13F.
An order under this section may—
make consequential amendments or repeals of other provisions of this Act;
make such transitional or saving provisions as appear to the Treasury to be necessary or expedient, or
make different provision for different cases.
The committee of management of a friendly society shall prepare for submission to the annual general meeting of the society a report on the activities of the society containing—
a fair review of the business of the society, its subsidiary undertakings and bodies that it jointly controls (if any) complying with section 71A;
such information relating to such aspects of the activities of the society as may be prescribed by regulations made by the . . . Treasury; and
a description of the principal risks and uncertainties facing the society, its subsidiary undertakings and bodies that it jointly controls (if any);
a statement whether any and, if so, what activities carried on during the year by the society are believed to have been carried on outside its powers.
Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the report shall-
contain such information relating to such aspects of the activities of any subsidiaries or bodies which it jointly controls as may be prescribed by regulations made by the . . . Treasury;
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contain a statement whether any and, if so, what activities carried on during the year by any of its subsidiaries or by any body which it jointly controls are believed to have been carried on outside the powers of the subsidiary or jointly controlled body.
If the friendly society has subsidiary undertakings, the report may, where appropriate, give greater emphasis to those matters which are significant to the society and its subsidiary undertakings taken as a whole.
If a report under this section does not contain the prescribed information or the information in the report is not given in accordance with the regulations, each member of the committee of management shall be guilty of an offence and liable—
on conviction on indictment, to a fine; and
on summary conviction, to a fine not exceeding the statutory maximum.
The review required for the purposes of section 71(1)(a) is a balanced and comprehensive analysis of— consistent with the size and complexity of the business.
the development and performance of the business of the friendly society, its subsidiary undertakings and bodies that it jointly controls (if any) during the financial year, and
the position of the friendly society, its subsidiary undertakings and bodies that it jointly controls (if any) at the end of that year,
The review must, to the extent necessary for an understanding of the development, performance or position of the business of the society, its subsidiary undertakings and bodies that it jointly controls (if any), include—
analysis using financial key performance indicators, and
where appropriate, analysis using other key performance indicators, including information relating to environmental matters and employee matters.
The review must, where appropriate, include references to additional explanations of amounts included in the annual accounts of the society.
In this section “key performance indicators” means factors by reference to which the development, performance or position of the business of the society, any subsidiary undertakings it has and any bodies that it jointly controls, can be measured effectively.
Every friendly society and every registered branch shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting.
Schedule 14 to this Act has effect as regards—
the appointment of auditors;
their qualifications and grounds of disqualification;
the resignation and removal of auditors; and
the remuneration of auditors.
Schedule 14A to this Act has effect with regard to the appointment and removal of auditors of societies subject to special requirements.
The auditor of a friendly society or of a registered branch shall make a written report to the members on the annual accounts which are to be laid before the society or branch at the annual general meeting during his tenure of office.
The auditor of a friendly society or registered branch shall, in preparing his report, carry out such investigations as will enable him to form an opinion as to— ...
whether adequate accounting records have been kept under section 68 above;
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whether the annual accounts are in agreement with the accounting records;
If the auditor fails to obtain all the information and explanations and the access to documents which, to the best of his knowledge and belief, are necessary for the purposes of his audit, he shall state that fact in his report.
If the auditor is of the opinion that— the auditor must state that fact in his report.
adequate accounting records have not been kept under section 68, or
the annual accounts are not in agreement with the accounting records,
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in the case of the income and expenditure account, of the income and expenditure of the society or branch for the financial year; and
in the case of the balance-sheet, of the state of the affairs of the society or branch as at the end of the financial year; and
in the case of the group accounts of an incorporated friendly society, of the state of affairs as at the end of the financial year of the society and any subsidiaries of the society.
Subsection (5) above, in its application to the group accounts of an incorporated friendly society, is to be read as referring to the society and (so far as it concerns the members of the society) the subsidiaries dealt with in the group accounts.
The auditor shall, in his report—
state whether, in his opinion, based on the work undertaken in the course of the audit—
the information given in the report of the committee of management for the financial year for which the annual accounts are prepared is consistent with those accounts,
that report has been prepared in accordance with this Act and the regulations made under it,
state whether, in the light of the knowledge and understanding of the society or registered branch and its environment obtained in the course of the audit, the auditor has identified material misstatements in the report of the committee of management, and
if applicable, give an indication of the nature of each of the misstatements referred to in paragraph (b).
The auditors' report, in so far as it deals with the report of the committee of management, shall state whether in the auditors' opinion it has been prepared in accordance with this Act and the regulations made under it and whether the information given in the report of the committee of management is consistent with the accounting records and the annual accounts for the financial year.
The auditor’s report must include—
the identity of the friendly society or registered branch whose annual accounts are the subject of the audit,
a description of the annual accounts that are the subject of the audit (including the period covered by those accounts),
a description of the financial reporting framework that has been applied in the preparation of those accounts, and
a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.
The report must clearly state the opinion of the auditor as to whether the annual accounts—
give a true and fair view—
in the case of an individual balance sheet, of the state of affairs of the society or branch as at the end of the financial year,
in the case of an individual income and expenditure account, of the income and expenditure of the society or branch for the financial year, and
in the case of the group accounts of an incorporated friendly society, of the state of affairs as at the end of the financial year and of the income and expenditure for the financial year of the society and the subsidiary undertakings dealt with in the group accounts, so far as concerns members of the society,
have been properly prepared in accordance with the relevant financial reporting framework, and
have been prepared in accordance with the requirements of this Act (and where applicable, section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework).
The auditor’s report must—
be either unqualified or qualified,
include a reference to any matters to which the auditor wishes to draw attention by way of emphasis without qualifying the report,
include a statement on any material uncertainty relating to events or conditions that may cast significant doubt about the ability of the friendly society or registered branch to continue to adopt the going concern basis of accounting, and
identify the auditor’s place of establishment.
Where more than one person is appointed as auditor, all the persons appointed must jointly make a report under this section, which must include a statement as to whether they all agree on—
the matters contained in the report,
the statements given under subsections (2A), (3) and (4A), and
the indications given under subsection (4A).
Where the persons do not all agree on all of those things, the report must—
include the opinions of each person appointed, and
give reasons for the disagreement.
The auditor’s report to the members of a friendly society or registered branch must state the name of the auditor (or, where more than one person is appointed as auditor, all of their names) and be signed and dated.
Where the auditor is an individual, the report must be signed by him.
Where the auditor is a firm, the report must be signed—
in the case of a friendly society subject to special requirements, by the senior statutory auditor in his own name, for and on behalf of the firm;
in any other case—
in the name of the firm by a person authorised to sign on its behalf, or
if the firm has identified a senior statutory auditor in relation to the audit, by that person, in his own name, for and on behalf of the firm.
Where more than one person is appointed as auditor, the report must be signed by all those appointed.
is laid before the society or branch, sent to the Commission or central office or otherwise circulated, published or issued, without the required statement of the auditors' names; or
is sent to the Commission or the central office without being signed as required by this section,
References in this section to signature by the auditors are, where the office of auditor is held by a body corporate or partnership, to signature in the name of the body corporate or partnership by a person authorised to sign on its behalf.
The auditor of a friendly society is entitled— and the auditor of a registered branch has the corresponding rights to those specified in paragraphs (a) to (d) above, with the substitution for references to the society of references to the branch.
to access at all times to the books, accounts and vouchers of the society;
to require from the officers of the society such information and explanations as he thinks necessary for the performance of his duties as auditor;
to receive from the society—
notice of any general meeting of the society and of any matter relating to the business of such a meeting of which notice is given (by whatever means) to the society’s members; and
copies of any communications sent to the society’s members with respect to any such meeting; and
to attend any general meeting of the society and to be heard on any part of the business of the meeting which concerns him as auditor;
The right to attend or be heard at a meeting is exercisable in the case of a body corporate or partnership by an individual authorised by it in writing to act as its representative at the meeting.
An officer of a friendly society is guilty of an offence if he knowingly or recklessly makes to the society’s auditor a statement (whether written or oral) which—
conveys or purports to convey any information or explanations which the auditor requires, or is entitled to require, as auditor of the society; and
is misleading, false or deceptive in a material particular.
An officer of a registered branch is guilty of an offence if he knowingly or recklessly makes to the auditor of the branch a statement (whether written or oral) which—
conveys or purports to convey any information or explanations which the auditor requires, or is entitled to require, as auditor of the branch; and
is misleading, false or deceptive in a material particular.
A person guilty of an offence under subsection (3) or (4) above is liable —
on conviction on indictment, to imprisonment for a term not exceeding 2 years, or to a fine, or to both; and
on summary conviction, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both.
Where a subsidiary of a friendly society is a company (as defined in section 1(1) of the Companies Act 2006), the subsidiary and its auditors must give to the auditors of the friendly society such information and explanations as they may reasonably require for the purposes of their duties as auditors of the society.
a company within the meaning of the Companies Act 1985 incorporated in Great Britain; or
a company within the meaning of the Companies (Northern Ireland) Order 1986 incorporated in Northern Ireland,
If— the subsidiary or auditor is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
a subsidiary to which subsection (6) above applies fails to comply with that subsection; or
an auditor of such a subsidiary fails without reasonable excuse to comply with that subsection,
An incorporated friendly society having a subsidiary to which subsection (6) above does not apply shall, if required by its auditor to do so, take all such steps as are reasonably open to it to obtain from the subsidiary such information and explanations as he may reasonably require for the purposes of his duties as auditor of that society.
If an incorporated friendly society fails to comply with subsection (8) above, it is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
The senior statutory auditor means the individual identified by the firm as senior statutory auditor in relation to the audit in accordance with the standards or guidance mentioned in section 504(1) of the Companies Act 2006.
The person identified as senior statutory auditor must be eligible for appointment as auditor of the society in question in accordance with—
in the case of a friendly society subject to special requirements, Chapter 2 of Part 42 of the Companies Act 2006;
in any other case, Schedule 14 to this Act.
The senior statutory auditor is not, by reason of being named or identified as senior statutory auditor or by reason of his having signed the auditor’s report, subject to any civil liability to which he would not otherwise be subject.
The annual accounts of a friendly society or a registered branch shall be approved by the committee of management.
The accounts so approved shall be signed by the secretary of the society or branch; and the signature shall be on the balance sheet.
Every copy of the balance sheet which is laid before the society or branch in general meeting, or is otherwise circulated, published or issued, shall state the name of the secretary of the society or branch.
The copy of the balance sheet of a friendly society or a registered branch which is sent ... under section 78 below shall be signed by the secretary of the society or branch.
If annual accounts of a society or branch are approved which do not comply with the requirements of this Act, every member of the committee of management who is party to their approval and who knows that they do not comply or is reckless as to whether they comply is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale. For this purpose every member of the committee at the time the accounts are approved shall be taken to be a party to their approval unless he shows that he took all reasonable steps to prevent their being approved.
If a copy of the balance sheet of a society or branch— the society or branch and every officer of it who is in default is guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
is laid before the society or branch, or otherwise circulated, published or issued, without the balance sheet having been signed as required by this section or without the required statement of the signatory’s name being included; or
is sent ... without being signed as required by this section,
The copies of the auditor’s report sent ... under section 78(1) or (2) below, and every copy of the auditor’s report that is published by or on behalf of the friendly society or registered branch, must—
state the name of the auditor and (where the auditor is a firm and the report is signed by a senior statutory auditor) the name of the person who signed it as senior statutory auditor, or
if the conditions in section 74C (circumstances in which names may be omitted) are met, state that a resolution has been passed and notified ... in accordance with that section.
If more than one person is appointed as auditor, the reference in subsection (1)(a) to the name of the auditor is to be read as a reference to the names of all the auditors.
For the purposes of this section a society or branch is regarded as publishing the report if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it.
If a copy of the auditor’s report is sent ... or published without the statement required by this section, an offence is committed by—
the society or branch, and
every officer of the society or branch who is in default.
A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
This section applies to any copy of a friendly society’s balance sheet which—
is furnished under section 78 to the FCA and, if the society is a PRA-authorised person, the PRA;
is laid before the society at its annual general meeting; or
is furnished to either the FCA or the PRA at its request;
is furnished to a member at his request.
Subject to the provisions of this section, a friendly society shall annex to each copy of its balance sheet to which this section applies as respects every person who, at any time during the financial year to which the balance sheet relates, was its appointed actuary, a statement of the following information— together with a statement that the society has made a request to the actuary to furnish to it the particulars specified in this subsection and identifying any particulars furnished pursuant to the request.
whether the actuary was a member of the society or any subsidiary of the society at any time during that year;
particulars of any pecuniary interest of the actuary in any transaction between the actuary and the society or any subsidiary of the society and subsisting at any time during that year or, in the case of transactions of a minor character, a general description of such interests;
the aggregate amount of any remuneration and the value of any other benefits other than a pension or other future or contingent benefit under any contract of service of the actuary with, or contract for services by the actuary to, the society or any subsidiary of the society, receivable by the actuary in respect of any period in that year; and
a general description of any other pecuniary benefit (including any pension and other future contingent benefit) received by the actuary from the society or any subsidiary of the society in that year or receivable by him from the society or any such subsidiary,
Subsection (2) above applies in relation— as it applies in relation to the actuary.
to the actuary’s spouse or civil partner;
to a partner of the actuary;
to any child or step-child of the actuary who is under 18;
to any person (other than the society concerned or any subsidiary of that society) of whom the actuary is an employee; and
to any body corporate (other than the society concerned or any subsidiary of that society) of which the actuary is a director or which is controlled by him,
For the purposes of subsection (3) above, an actuary shall be taken to control a body corporate if he is a person—
in accordance with whose directions or instructions the directors of that body corporate or of a body corporate of which it is a subsidiary are accustomed to act; or
who, either alone or with any other person falling within that subsection, is entitled to exercise or controls the exercise of, one-third or more of the voting power at any general meeting of the body corporate or of a body corporate of which it is a subsidiary.
If a friendly society fails to annex the statement required by subsection (2) above to a copy of its balance sheet to which this section applies, the society concerned shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
An auditor’s name, and (where applicable) the name of the person who signed the report as senior statutory auditor, may be omitted from— if the following conditions are met.
the copies of the report sent to the FCA and, if the society is a PRA-authorised person, the PRA under section 78(1) or (2) below, and
published copies of the report,
The conditions are that the friendly society or registered branch—
considering on reasonable grounds that statement of the name would create or be likely to create a serious risk that the auditor or senior statutory auditor, or any other person, would be subject to violence or intimidation, has resolved in general meeting that the name should not be stated, and
has given notice of the resolution to the FCA and, if the society is a PRA-authorised person, the PRA, stating—
the name of the society or branch,
the financial year of the society to which the report relates, and
the name of the auditor and (where applicable) the name of the person who signed the report as senior statutory auditor.
The committee of management of a friendly society shall in each year—
lay before the society, at the annual general meeting, copies of the annual accounts for the last financial year, the report of the committee of management for that year and the auditor’s report on those accounts; and
send to the FCA and, if the society is a PRA-authorised person, the PRA, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and reports.
The committee of management of a registered branch shall in each year—
lay before the branch, at the annual general meeting, copies of the annual accounts for the last financial year and the auditor’s report on those accounts; and
send to the FCA and, if the society is a PRA-authorised person, the PRA, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and that report.
Every friendly society shall, as from the date by which at the latest its committee of management is required by subsection (1) above to send them to the FCA and, if the society is a PRA-authorised person, the PRA— and that duty shall cease, as respects those accounts, when the society comes to be under the same duty in respect of the accounts for the next financial year.
make copies of the annual accounts, the report of the committee of management and the auditor’s report available free of charge to members of the society at every office of the society; and
send, free of charge, copies of those documents to any member of the society who demands them;
Every registered branch shall, as from the date by which at the latest its committee of management is required by subsection (2) above to send them to the FCA and, if the society is a PRA-authorised person, the PRA— and that duty shall cease, as respects those accounts, when the branch comes to be under the same duty in respect of the accounts for the next financial year.
make copies of the annual accounts and the auditor’s report available free of charge to members of the branch at every office of the branch; and
send, free of charge, copies of those documents to any member of the branch who demands them;
If default is made in complying with subsection (1) or (2) above, every person who was a member of the committee of management of the society or, as the case may be, the branch, at any time during the relevant period shall be guilty of an offence and liable on summary conviction—
to a fine not exceeding level 5 on the standard scale; and
in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level one-tenth of the greater of £5,000 or level 4 on the standard scale for every day during which the offence continues.
A friendly society or registered branch is to be regarded as sending a copy of a document to a member for the purposes of subsection (3)(b) or (4)(b) if it makes the document available to the member on a website; and the end date for the purposes of section 119AB(4)(b) is the date when the duty ceases.
If, on demand made of it under subsection (3) or (4) above, a friendly society or registered branch fails, in accordance with that subsection, to make available or, as the case may be, within 7 days of the demand, to send to a person a copy of the annual accounts, the society or branch shall be guilty of an offence and liable on summary conviction—
to a fine not exceeding level 3 on the standard scale; and
in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.
In subsection (5) above “the relevant period” means the period beginning at the end of the last financial year and ending with the date which falls 14 days before the annual general meeting following the end of that year.
The FCA shall keep one of the copies of documents received by it from a friendly society under subsection (1) above in the public file of the society.
The auditors of a friendly society shall, unless they are exempt from the requirements of this section, make a report to the Commission, as respects each financial year of the society, on the conduct of the activities of the society in that year in relation to the matters specified in subsection (2) below.
The auditors' report shall deal with—
the accounting records kept by the society under section 68 above; and
the systems of control of its business and records and of inspection and report maintained under that section.
The report shall state the auditors' opinion as respects the matters specified in subsection (2) above as follows, that is to say—
as regards the accounting records of the society, whether or not they comply with the requirements of section 68 above and, if not, specifying each requirement not complied with and the respects in which it was not complied with;
as regards the system of control of its business and records, whether or not the system complies with the requirements of section 68 above and, if not, specifying each requirement not complied with and the respects in which it was not complied with;
as regards the system of inspection and report, whether or not the system complies with the requirements of section 68 above and, if not, specifying each requirement not complied with and the respects in which it was not complied with.
Where an incorporated friendly society had, at any time during the year to which the report relates, subsidiaries or jointly controlled other bodies, the auditors' report shall deal also with and contain corresponding statements of their opinion as to compliance with the requirements of section 68 above in its application to incorporated friendly societies having subsidiaries or jointly controlling other bodies.
The auditors of a friendly society shall send their report under this section to the society and, subject to subsection (6) below, shall do so within the period of 6 months beginning with the end of the financial year to which it relates, and the society shall, within the period of 9 months so beginning, send the report to the Commission together with such comments as the committee of management thinks fit to make.
A friendly society may allow its auditors a longer period in which to send their report than that specified in subsection (5) above, but not so as to prevent the society from complying with the duty imposed on it by that subsection as regards the Commission.
If the committee of management of a friendly society makes any comments to the Commission under subsection (5) above, the committee shall cause a copy of the comments to be sent to the auditors before they send them to the Commission with the report under that subsection.
The auditors of a friendly society, if they are satisfied that it is expedient to do so in order to protect the interests of members of the society or if they are requested to do so by the Commission on its being so satisfied, shall be entitled, notwithstanding any obligation of confidence incumbent on them and whether or not to do so would be contrary to the interests of the society, to furnish information to the Commission relating to the conduct of the activities of the society or, in the case of an incorporated friendly society, the business of any of its subsidiaries or any body of which it has joint control.
The Treasury may by order impose on the auditors of friendly societies an obligation to furnish to the Commission, in such circumstances as may be prescribed in the order, relevant information available to them of such descriptions as may be prescribed in the order; and it shall be the duty of any auditor to furnish information to which the obligation extends notwithstanding any obligation of confidence incumbent on him.
In subsection (9) above, “relevant information” means information relating to the conduct of the business of friendly societies or their subsidiaries or bodies of which they have joint control.
Subject to subsection (12) below, the auditors of a friendly society are exempt from the requirements of this section if the auditors of that society do not need to be members of a recognised supervisory body.
The Commission may direct that the auditors of a society specified in the direction whose auditors would otherwise be exempt from the requirements of this section shall not be exempt from those requirements.
In this Part—
“IAS accounts” means IAS individual accounts or IAS group accounts;
References in this Part to accounts giving a “true and fair view” are references—
in the case of Friendly Societies Act individual accounts, to the requirement under section 69B that such accounts give a true and fair view;
in the case of Friendly Societies Act group accounts, to the requirement under section 69F that such accounts give a true and fair view; and
in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.
References in this Part to a friendly society subject to special requirements are to a friendly society that ... —
would be an insurance undertaking within the meaning given by Article 2.1 of Council Directive 1991/674/EEC on the annual accounts and consolidated accounts of insurance undertakings were the United Kingdom a member State, or
is an issuer whose transferable securities are admitted to trading on a regulated market.
In subsection (3)—
“issuer” and “regulated market” have the same meaning as in Part 6 of the Financial Services and Markets Act 2000; and
“transferable securities” means anything which is a transferable security for the purposes of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments.
Subject to the following provisions of this section, any dispute between— shall be determined by arbitration in the manner directed by the rules of the society or branch.
a member or person claiming through a member or under the rules of a friendly society or registered branch and the society or branch;
a person aggrieved who has ceased to be a member of a friendly society or registered branch, or a person claiming through such a person, and the society or branch or an officer of the society or branch;
a registered branch and the society of which it is a registered branch;
an officer of a registered branch and the society of which it is a registered branch; or
two or more registered branches, or any of their officers,
An application for the enforcement of an award on an arbitration under this section may be made to the county court.
Nothing in subsection (1) above or in rules of a kind mentioned in that subsection prevents any person, in accordance with the scheme for which Part XVI of the Financial Services and Markets Act 2000 provides (the ombudsman scheme), from having a complaint dealt with under such a scheme before, or instead of, arbitration.
An award made in such an arbitration shall, in Scotland—
subject to subsection (4) below, be final; and
be enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff.
An arbiter who has made an award in an arbitration under this section shall, on the application of a party to such arbitration, state a case for the opinion of the Court of Session on any question of law.
If the parties to a dispute of a description specified in subsection (1) above agree that it shall be determined by the county court or, in Scotland, the sheriff, it may be so determined instead of being determined by arbitration under this section.
If— the dispute may be so determined.
a party to a dispute of a description specified in subsection (1) above applies to the society or branch in accordance with the rules for determination of the dispute by arbitration;
no such determination has been made within the period of 40 days beginning with the day on which the application was made; and
either party applies for determination of the dispute by the county court or, in Scotland, the sheriff,
If the society has registered branches—
the period of 40 days shall not begin to run until application has been made in succession to all the bodies entitled to determine the dispute by arbitration in accordance with the rules; but
the rules may not require a greater delay than 3 months between each successive determination by such a body.
In this section “dispute”—
includes any dispute arising on the question whether a member or person aggrieved is entitled to be, or to continue to be, a member or to be reinstated as a member; but
in the case of a person who has ceased to be a member does not (except as provided in paragraph (a) above) include any dispute other than one on a question which arose while he was a member, or arises out of his membership; and
does not include a dispute between parties mentioned in subsection (1)(a) or (b) above which has arisen as a result of and incidentally to a dispute between a member, or person aggrieved who has ceased to be a member and a person claiming through him or under the rules of a society or branch.
Nothing in section 80 above shall affect the power of a friendly society or registered branch— but a society or branch may not prevent a member from referring any dispute to arbitration under that section by purporting to require instead the making of a complaint or the acceptance of any determination of a complaint.
to establish internal procedures for the resolution of complaints; or
to make, to join with any other persons in making, or to accede to, schemes for the investigation and settlement by an adjudicator of complaints;
The FCA shall have the function of promoting the establishment by friendly societies and registered branches of— and, in particular, the FCA may issue such guidance on those matters to friendly societies and registered branches as it thinks fit.
internal complaints procedures; and
schemes for the investigation and settlement of complaints;
In this section—
...
Where— subject to subsection (3) below, section 80 above shall apply in relation to the determination of a dispute between the lender and the borrower relating to such an advance or agreement or to the rights of the lender or an officer of the lender under the rules of the borrower, as if the borrower were a branch of the lender.
a registered friendly society or a registered branch (“the lender”) has made or agreed to make advances under section 50 of the 1974 Act to another society or branch (“the borrower”); and
the lender is by reason of this empowered by the rules of the borrower to take part in the government or control of the borrower,
In the application of section 80 above to any such dispute, references in that section to the rules of the society are references to the rules of the borrower.
Section 80 above shall not prevent the bringing of legal proceedings for the determination of any such dispute unless, before the commencement of the proceedings, application has been made for a reference under the rules of the borrower.
Proceedings for the determination of any such dispute may be brought in England and Wales in the county court or, in Northern Ireland, in a county court or, in Scotland, before the sheriff, whether or not the court would apart from this subsection have jurisdiction to entertain them.
The reference in subsection (1) above to advances under section 50 of the 1974 Act includes, in the case of a society formerly registered in Northern Ireland, a reference to advances made under section 42 of the Friendly Societies Act (Northern Ireland) 1970.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The jurisdiction as to disputes such as are mentioned— shall be exercisable by a person (“the adjudicator”) appointed by the Treasury.
in subsection (1) of section 10 of the National Savings Bank Act 1971 (disputes between the Director of Savings and depositors etc); and
in subsection (1) of section 5 of the National Debt Act 1972 (disputes between the Director and the holder of any stock registered in the National Savings Stock Register or a person claiming to be entitled to any such stock),
The adjudicator shall be a person who—
has a seven year general qualification, within the meaning of the Courts and Legal Services Act 1990;
is an advocate or solicitor in Scotland of at least seven years' standing; or
is a member of the bar of Northern Ireland or solicitor of the Supreme Court of Northern Ireland of at least seven years' standing.
Subject to subsections (4) and (5) below, the adjudicator shall hold and vacate office in accordance with the terms of his appointment.
A person may at any time resign office as adjudicator by giving the Treasury a signed notice stating that he resigns that office.
The adjudicator may be removed from office by the Chancellor of the Exchequer on the ground of incapacity or misbehaviour.
The Treasury may pay, or make such payments towards the provision of, such remuneration, pensions, allowances or gratuities to the adjudicator as the Treasury may determine.
The Chancellor of the Exchequer may appoint for the adjudicator such staff as he thinks fit with such remuneration and other terms and conditions of service as he thinks fit.
Payments under this section shall be made out of money provided by Parliament.
Any two or more friendly societies may, in accordance with this Part of this Act, amalgamate by establishing an incorporated friendly society as their successor.
In order to establish a society as their successor, friendly societies proposing to amalgamate must— and, on obtaining that confirmation, the successor may be registered and incorporated under this Act.
comply with the applicable requirements of Part I of Schedule 15 to this Act;
take the steps required by paragraph 1(2) of Schedule 3 to this Act;
each approve the proposed amalgamation and the terms on which it is to take place by special resolution; and
obtain the confirmation of the appropriate authority of the amalgamation;
If the FCA or the PRA confirms the amalgamation and the successor society is registered under this Act, the certificate of incorporation issued by the FCA shall specify a date as the transfer date for that amalgamation.
On the transfer date— but the transfer from each such society effected by paragraph (a) above shall be deemed to have been effected immediately before the dissolution of that society.
all the property, rights and liabilities of each society participating in the amalgamation shall become by virtue of this subsection the property, rights and liabilities of the successor society; and
each such society shall be dissolved;
Where a friendly society is dissolved by subsection (4)(b) above, its registration under this Act or the 1974 Act shall be cancelled by the FCA.
If, on the transfer date, each of the societies whose amalgamation was confirmed has permission under Part 4A of the Financial Services and Markets Act 2000, the appropriate regulator (within the meaning of section 55A of that Act) must, with effect from that date, give their successor such permission under that Part as it considers appropriate, subject to such requirements as it considers appropriate, and must notify the successor of the permission by giving the successor a decision notice under that Act.
Schedule 15 to this Act has effect for supplementing this section.
Part XXVI of the Financial Services and Markets Act 2000 applies to a decision notice given under this section as it applies to a decision notice given under subsection (5) of section 55V of that Act by virtue of paragraph (a) or (b) of that subsection, except that—
section 390 (final notices) does not apply, and
for the purposes of section 391 (publication) the decision notice is to be treated as if it were a final notice rather than a decision notice.
The giving of permission pursuant to subsection (4A) above is to be treated for the purposes of section 55Z1 of the Financial Services and Markets Act 2000 (right to refer matters to the Upper Tribunal) as if it were the determination of an application made by the successor under Part 4A of that Act, and Part IX of that Act (hearings and appeals) applies accordingly (but subject to subsection (4D) below).
In the application of Part IX of that Act by virtue of subsection (4C) above, section 133A(4) (which prevents the action specified in a decision notice from being taken until after any reference and appeal) is omitted.
A friendly society may, in accordance with this Part of this Act, transfer its engagements to any extent to any of the following persons, that is to say—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to an industrial and provident society;
to a company registered under the Companies Act 2006;
in relation to engagements the fulfilment of which will constitute the carrying on of insurance business, to any other person who is an insurer;
in relation to engagements the fulfilment of which will not constitute the carrying on of insurance business, to a person (or body of persons) who is not of a description specified in paragraph (b), (c) or (d) above.
A friendly society, in order to transfer any of its engagements, must— and, on obtaining that confirmation, the instrument of transfer of engagements may be registered under subsection (4) below.
comply with the applicable requirements of Part I of Schedule 15 to this Act;
resolve to transfer the engagements by special resolution;
if the transfer is of some but not all of its engagements, resolve to do so by an affected members’ resolution;
record the extent of the transfer as so resolved in an instrument of transfer of engagements; and
obtain the confirmation of the appropriate authority of the transfer;
Where it is proposed to transfer the engagements of one friendly society to another friendly society, the proposed transferee, in order to undertake to fulfil them, must—
comply with the applicable requirements of Part I of Schedule 15 to this Act and, if required, with sections 87 and 88 below; and
resolve to undertake to fulfil the engagements by special resolution or, if the appropriate authority consents to that mode of proceeding, by resolution of the committee of management.
Where the appropriate authority confirms a transfer of engagements, the FCA shall, on the application of the society proposing to transfer them and the proposed transferee— and a registration certificate shall specify a date as the transfer date for that transfer.
register a copy of the instrument of transfer of engagements; and
issue a registration certificate to the transferee,
The PRA must consult the FCA before giving its consent under subsection (3)(b).
On the transfer date— but the transfer shall be deemed to have been effected immediately before any such dissolution.
the property, rights and liabilities of the society transferring its engagements shall by virtue of this subsection become, to the extent provided in the instrument of transfer of engagements, the property, rights and liabilities of the transferee; and
if the transfer is of all the society’s engagements, the society shall be dissolved;
The FCA shall keep a copy of the instrument and of the registration certificate issued under subsection (4) above—
where the transferee is a friendly society, in the public file of that society;
in any other case, in the public file of the society transferring the engagements.
Where a friendly society is dissolved by subsection (5)(b) above, its registration under this Act or the 1974 Act shall be cancelled by the FCA.
Where it is proposed that any engagements of a person other than a friendly society should be transferred to a friendly society, the proposed transferee, in order to undertake to fulfil them, must resolve to do so by special resolution.
For the purposes of this section— and sub-paragraphs (1)(b) and (c), (4), (5) and (6) of paragraph 7 of Schedule 12 to this Act shall apply to an affected members’ resolution as they apply to a special resolution.
an “affected members’ resolution” is a resolution approving a transfer of engagements which is passed by the appropriate majority of those members whose contracts with the society are included in the transfer and who are entitled to vote on the resolution; and
the “appropriate majority” means a majority consisting of not less than three quarters of those who vote on the resolution (in person or by proxy) at a meeting of the society or in a ... ballot;
Delegate voting may not take place on an affected members’ resolution; and where the rules of a friendly society provide for delegate voting on any matter, they must provide for voting by individual members on such resolutions.
Schedule 15 to this Act has effect for supplementing this section.
In this section “insurer" means—
a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, ...
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsection (12) must be read with—
section 22 of the Financial Services and Markets Act 2000;
any relevant order under that section; and
Schedule 2 to that Act.
This section applies where a friendly society (“the transferor”) proposes to transfer any of its engagements under section 86 above to another friendly society (“the transferee”).
Where— the transferee shall furnish the appropriate authority with a report by the appropriate actuary as to whether it will immediately after the proposed transfer, possess that margin of solvency.
the fulfilment of any of the engagements to be transferred will constitute the carrying on of insurance business in the United Kingdom or Gibraltar, and
the transferee will, after taking the proposed transfer into account, be required by rules made by the appropriate authority under Part 9A of the Financial Services and Markets Act 2000 to maintain the margin of solvency required by such rules,
Where— the appropriate authority may direct the transferee to furnish the appropriate authority with a report by the appropriate actuary as to whether it will, immediately after the proposed transfer, possess an excess of assets over liabilities.
the fulfilment of any of the engagements will constitute the carrying on of long-term business, and
a report is not required to be furnished under subsection (2) above,
The appropriate actuary has a right of access at all times to the books, accounts and vouchers of the transferor and of the transferee, and is entitled to require from the officers of either society such information and explanations as he thinks necessary to enable him to prepare a report under this section.
If the appropriate actuary fails to obtain all the information and explanations and the access to documents which, to the best of his knowledge and belief, are necessary for the purposes of a report under this section, he shall state that fact in his report.
An officer of a transferor or of the transferee shall be guilty of an offence if he knowingly or recklessly makes to the appropriate actuary a statement (whether written or oral) which—
conveys or purports to convey any information or explanations which he requires, or is entitled to require, for the purposes of a report under this section; and
is misleading, false or deceptive in a material particular.
A person guilty of an offence under subsection (6) above is liable—
on conviction on indictment, to imprisonment for a term not exceeding 2 years, or to a fine, or to both; and
on summary conviction, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both.
This section applies where—
a friendly society (“a transferor society”) proposes to transfer to any person engagements the fulfilment of which will constitute the carrying on of long term business in the United Kingdom or Gibraltar; or
a friendly society (a “transferee society”) proposes to undertake to fulfil any such engagements to be transferred to it from another friendly society.
The appropriate authority may direct a transferor society or a transferee society to furnish the appropriate authority with a report by an independent actuary on the terms of the proposed transfer and as to his opinion on the likely effects of the transfer on the members of the society who are long term policyholders.
A friendly society which is directed to furnish a report under this section shall, on payment of a reasonable fee, furnish a copy of the report to any person who asks for one at any time before the transfer in question is confirmed by the appropriate authority.
Subsections (4) to (7) of section 87 above shall apply in relation to an actuary preparing a report under this section as they apply to the appropriate actuary preparing a report under that section.
In this section—
“long term policyholder” means a member whose contract with a friendly society is a contract the effecting of which by the society constituted the carrying on of long term business.
If the appropriate authority is satisfied that it is expedient to do so in the interests of the members or potential members of a friendly society, it may give a direction under this section (“a direction”)— in relation to a particular proposed transfer or to all transfers made by the society after the making of the direction.
modifying the requirements of subsection (2)(b) and (c) of section 86 above; and
modifying or disapplying the requirements of Part I of Schedule 15 to this Act,
A direction may not modify the requirements of section 86(2) above so as to permit a society to resolve to make a transfer by a resolution passed by less than a majority, or to require more than a three-quarters majority, of those voting on the resolution.
The PRA must consult the FCA before giving a direction under this section.
The appropriate authority shall not give a direction unless—
an application has been made to it by not less than 10 per cent. of the members of the society concerned or, in the case of a society with more than 1000 members, by not less than 100 members of the society;
not less than one month before giving the direction the appropriate authority has served on the society concerned a notice stating that it proposes to make a direction and specifying the considerations which have led it to conclude that it would be expedient to give it;
the appropriate authority has considered any representations made by the society with respect to the notice mentioned in paragraph (b) above within such period (not being less than one month) from the date on which the society was served with the notice as the appropriate authority may allow; and
if the society so requests, the appropriate authority has afforded to it an opportunity of being heard by it within that period.
If the appropriate authority considers it expedient to do so in the interests of the members or potential members of the society concerned, it may vary or revoke a direction by a further direction.
On giving a direction in relation to a society, the appropriate authority shall serve on the society a copy of the direction, specifying the considerations which have led it to conclude that it is expedient to give the direction; but the appropriate authority may not give a direction unless all the considerations so specified were those, or among those, which were specified in the notice served on the society under subsection (3) above.
Notice of a direction shall be published by the appropriate authority in one or more of the London Gazette, the Belfast Gazette or the Edinburgh Gazette, as it thinks appropriate, and in such other ways as appear to the appropriate authority expedient for informing the public.
The FCA shall keep a copy of any direction given under this section in the public file of the society concerned.
The PRA must send to the FCA a copy of any direction it issues under this section.
Subject to the following provisions of this section the appropriate authority may give a direction under this section (“a direction”) providing for the transfer of such of the engagements of a friendly society (“the society”) as are specified in the order to a person so specified (“the transferee”).
The appropriate authority may give a direction if— but the appropriate authority may direct that paragraph (b) above shall be modified in relation to a particular proposed transfer (but not to permit a society to resolve to undertake to fulfil the engagements by less than a majority or more than a three-quarters majority of those voting).
it considers that—
the society is unable to manage its affairs satisfactorily in relation to the engagements specified in the order; and
a transfer of those engagements would be expedient to protect the interests of the members of the society; and
the proposed transferee has complied with paragraph 1 of Schedule 15 to this Act and has resolved to undertake to fulfil the engagements by special resolution or, if the appropriate authority consents to that mode of proceeding, by resolution of the committee of management;
The appropriate authority may not give a direction if, were the transfer to be proposed to be made under section 86 above, it would be precluded from confirming it by paragraph 11 or any provision of paragraphs 13 to 17 of Schedule 15 to this Act.
The PRA must consult the FCA before giving a direction under this section.
At the same time as giving a warning notice to the society in accordance with section 58A(1) in relation to its proposal to give a direction, the appropriate authority shall publish notice of the proposed direction in one or more of the London Gazette, the Belfast Gazette or the Edinburgh Gazette, as it thinks appropriate, and, if it thinks appropriate, in one or more newspapers.
serve on the society a notice stating that it proposes to give the direction and specifying the considerations which have led it to conclude that giving the direction would be expedient to protect the interests of the members of the society; and
publish notice of the proposed direction in one or more of the London Gazette, the Belfast Gazette or the Edinburgh Gazette, as it thinks appropriate, and, if it thinks appropriate, in one or more newspapers.
A notice published in pursuance of subsection (4)(b) above shall—
state that any interested party has the right to make representations to the appropriate authority with respect to the proposed direction;
specify a date determined by the appropriate authority before which any written representations or notice of a person’s intention to make oral representations must be received by the appropriate authority; and
specify a date determined by the appropriate authority as the day on which it intends to hear any oral representations.
After the date specified in pursuance of subsection (5)(b) above, the appropriate authority shall—
determine the time and place at which oral representations may be made;
give notice of that determination to the society and the proposed transferee and to any persons who have given notice of their intention to make oral representations; and
send copies of the written representations received by the appropriate authority to the society concerned and the proposed transferee.
Before the appropriate authority decides whether to give the society a decision notice in accordance with section 58A(3), the appropriate authority shall allow the society and the proposed transferee an opportunity to comment on the written representations, whether at a hearing or in writing before the expiration of such period as the appropriate authority specifies in a notice to it.
If the PRA gives a direction, it must send a copy of the direction to the FCA.
register that copy; and
issue a registration certificate to the transferee;
On the transfer date— but the transfer shall be deemed to have been effected before any such dissolution.
the property, rights and liabilities of the society shall by virtue of this subsection become, to the extent provided in the direction, the property, rights and liabilities of the transferee; and
if the transfer is of all the society’s engagements, the society shall be dissolved;
The FCA shall keep a copy of a direction and of the registration certificate—
if the transferee is a friendly society, in the public file of that society;
in any other case, in the public file of the society transferring the engagements.
The FCA must—
keep a copy of a direction issued under this section (whether by the FCA or by the PRA);
register that copy; and
issue a registration certificate to the transferee.
Where a friendly society is dissolved by subsection (9)(b) above, its registration under this Act or the 1974 Act shall be cancelled by the FCA.
The registration certificate must specify a date as the transfer date for the transfer.
A friendly society may, in accordance with this Part of this Act, convert itself into a company registered under the Companies Act 2006 (“a company”).
In order to convert itself into a company a friendly society must— and, on obtaining that confirmation, the society may apply for registration as a company.
comply with the applicable requirements of Part I of Schedule 15 to this Act ;
approve the proposed conversion, the terms on which it is to take place and the proposed memorandum and articles of association for the company by special resolution; and
obtain the confirmation of the appropriate authority of the conversion;
The terms on which the conversion of a friendly society into a company is to take place may include provision for part of the funds of the society or the company to be distributed among, or for other rights in relation to shares in the company to be conferred on, members of the society.
The PRA must consult the FCA before giving a confirmation under this section.
Where— a copy of that resolution under the seal and stamp of the FCA has the same effect as a memorandum of association duly authenticated as required by subsection (2) of that section.
a special resolution of the society contains the particulars required by subsection (1) of section 8 of the Companies Act 2006 to be contained in the memorandum of association of a company, and
the memorandum of association of a company; or
the articles of association of a company; and
a copy of the resolution has been registered by the FCA,
On the registration of a friendly society as a company the registration of the society under this Act or the 1974 Act shall be cancelled by the FCA.
Where a friendly society converts into a company the terms approved by the society and confirmed by the appropriate authority shall, in so far as they provide for the conferral of rights on members or officers of the society, be enforceable as if they had been the subject of an agreement between the society and those members and officers.
Registration of a friendly society as a company shall not affect any right or claim subsisting against the society or any penalty incurred by the society; and for the purpose of enforcing any such right, claim or penalty, the society may be sued and proceeded against in the same manner as if it had not become registered as a company.
The Treasury, may make regulations providing for the regulation of the conversion of friendly societies into companies; and such regulations may, in particular make provision—
for and in connection with the transition from regulation by and under this Act or the 1974 Act to regulation by and under any other enactments on a society’s ceasing to be registered under that Act; and
for the treatment, in the hands of the company into which a friendly society has converted, of the property, rights and liabilities of the society immediately before its conversion and for the modification of any enactment in its application to any such property, rights and liabilities.
Schedule 15 to this Act has effect for supplementing this section.
Subject to subsection (3) below, the terms of— may include provision for compensation for loss of office or diminution of emoluments attributable to the amalgamation, transfer or conversion to be paid by a participating friendly society to or in respect of any of the persons mentioned in subsection (2) below.
an amalgamation under section 85 above,
a transfer of engagements of a friendly society under section 86 above, or
a conversion under section 91 above,
Those persons are—
the officers of the society which is to pay the compensation;
in the case of an amalgamation or transfer, the officers of any other participating society;
in the case of a transfer, the officers of any other person participating in the transfer; and
the appointed actuary (if any) of any society participating in the amalgamation or transfer.
Any such provision as is mentioned in subsection (1) above must be approved by the society which is to pay the compensation by a special resolution separate from any resolution approving the other terms of the amalgamation, transfer or conversion.
If compensation which has not been authorised in accordance with subsection (3) above is received by an officer, it shall be repaid.
In this section—
“participating society”, in relation to an amalgamation or transfer, means a friendly society participating in the amalgamation or transfer and, in relation to the conversion of a friendly society, that society.
No society may be registered under the 1974 Act after the commencement of this section.
Subject to section 7 of the 1974 Act, a society registered under the 1974 Act immediately before the commencement of this section (an “existing society”) shall continue as a registered society in accordance with the provisions of that Act.
Nothing in subsection (1) above shall be taken as preventing the registration after the commencement of this section of a branch of an existing society as a registered branch.
Nothing in this Act shall be taken as preventing—
the performance by an existing friendly society of any contract which is in force immediately before the commencement of this section; or
the carrying on by such a society of any social or benevolent activity which is not inconsistent with the other activities of the society.
Before the end of the transitional period each existing friendly society shall—
by special resolution agree upon the alterations to be made to its rules so that they conform to this Act and the 1974 Act; and
send to the FCA three copies of the rules as altered each signed by the secretary and accompanied by a statutory declaration by the secretary that that agreement was effected by a resolution passed as a special resolution.
On agreeing upon any such alteration to its rules a society shall, subject to subsection (7) below, determine the date on which the society intends it to take effect, and any alteration to the society’s rules sent to the FCA shall be accompanied by a record specifying that date (in this paragraph referred to as “the specified date”).
No date shall be specified under subsection (6) above which falls more than six months after the date of the meeting at which the society agreed upon the alteration to its rules.
The FCA, if satisfied that the rules as altered are in conformity with this Act and the 1974 Act, shall retain and register a copy of the altered rules.
On registering a copy of the altered rules under subsection (8) above, the FCA shall—
return another copy to the secretary of the society, together with a certificate of registration, and
keep another copy with the record of the specified date sent to it under subsection (6) above and a copy of that certificate, in the public file of the society.
Rules registered under this paragraph shall take effect on the specified date for the rule or, if registration of the rules is not effected until a later date, that later date.
If the FCA has not, before the end of the transitional period, received from an existing registered friendly society copies of its rules as altered in accordance with subsection (5) above, the society shall be treated as having agreed upon such alteration of its rules as the FCA directs.
Where the FCA proposes to give a direction under subsection (11) above in relation to a society it shall— and, if the society so requests, the FCA shall afford to it an opportunity of being heard by the FCA within that period.
serve on the society a notice stating that it proposes to give a direction; and
consider any representations made by the society within such period (not being less than fourteen days) from the date on which the notice is served as the FCA may allow;
Where under this section a society is treated as having agreed upon altered rules, the FCA shall prepare three copies of rules for the society and shall— and the rules so registered shall be for all purposes the rules of the society until amended under the 1974 Act.
retain and register one copy,
send another to the secretary of the society, together with a certificate of registration, and
keep another copy, together with a copy of that certificate, in the public file of the society;
In this section “the transitional period” means the period beginning with the commencement date for this section and expiring with such day as the Treasury prescribe by order.
Subsections (5) to (14) above apply to the rules of a registered branch of an existing friendly society as they apply to the rules of the society.
Subject to subsection (3) below, if action not permitted by the rules of a registered friendly society or a registered branch is taken by or on behalf of the society or branch, the action is valid (whether or not it would be valid apart from this subsection) if all the members of the society or branch—
signified their agreement to it in writing before it was taken; or
signified their approval of it in writing before the end of the period of 28 days commencing with the day on which it was taken.
Subject to subsection (3) below, if a contract between a registered friendly society or branch and its members purports to create rights and obligations as to which the rules of the society or branch do not permit rights and obligations to be created, the contract shall be valid and shall bind all members of the society or branch if all members of the society or branch are parties to it.
This section does not validate the taking of any action or any term in a contract unless the matter falls within the capacity of a registered friendly society or branch under the 1974 Act or this Act.
In this section references to the members of a society or branch are to the members entitled to vote at a meeting of the society or branch.
Schedule 16 to this Act (which contains amendments to the 1974 Act) shall have effect.
The 1974 Act shall extend to Northern Ireland.
Societies which, immediately before the commencement of subsection (1) above, were societies registered under any provision of section 1 of the Friendly Societies Act (Northern Ireland) 1970 shall be treated as if they were societies registered under the corresponding provision of section 7 of the 1974 Act.
A branch of a society registered under that Act of 1970 which is, immediately before the commencement of subsection (1) above, a registered branch of the society under that Act, shall be treated as a branch registered under the 1974 Act.
In consequence of subsections (1) to (3) above, the Friendly Societies Act (Northern Ireland) 1970 is repealed.
the amendments in Part I relate to the provisions of that Act other than Schedule 11; and
the amendments in Part II relate to Schedule 11 to that Act (friendly societies).
Subject to the following provisions of this section, if— the obligation of the society, branch or company as to payment of benefit is only to pay £800 (without prejudice to any person’s right to recover part of the premiums paid).
after this section comes into force a friendly society or registered branch or an industrial assurance company enters into a contract of insurance under which benefit in excess of £800 is payable on the death of any person; and
that person dies under the age of 10,
Subsection (1) above does not apply where the benefit is payable to a person who has an interest in the life of the person on whose death it is payable.
The Treasury may by order substitute some other sum for the sum for the time being specified in subsection (1) above.
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For the purposes of this section—
“industrial assurance company" means a person, other than a friendly society, who immediately before the repeal of the Industrial Assurance Act 1923, carried on industrial assurance business, and after that repeal is subject to an existing liability or a liability which may accrue under any policy effected in the course of that business;
“industrial assurance business" means business which, immediately before the repeal of the Industrial Assurance Act 1923, fell within section 1(2) of that Act.
The law applicable to a contract of insurance made by a friendly society the effecting of which constitutes long term business or general business and which covers risks situated in the United Kingdom or another member State shall be determined in accordance with the provisions of Schedule 20 to this Act.
Those provisions do not apply in relation to a contract of reinsurance.
If, on any modification of the statutory provisions in force in Great Britain or Northern Ireland relating— it appears to the Treasury to be expedient to modify the relevant provisions of this Act for the purpose of assimilating the law relating to friendly societies to the law as so modified, the Treasury may, by order, make such modifications of the relevant provisions of this Act as they think appropriate for that purpose.
to companies; or
to persons or bodies of persons, other than friendly societies, whether incorporated or not, carrying on insurance business (including reinsurance business),
The “relevant provisions of this Act” are the following provisions as for the time being in force, that is to say—
so much of Part II as relates to winding up;
Part IV;
Part V;
Part VI; and
Part VIII.
The power conferred by subsection (1) above includes power to modify the relevant provisions of this Act so as to—
confer power to make orders, regulations, rules or other subordinate legislation;
create criminal offences; or
provide for the charging of fees but not any charge in the nature of taxation.
An order under this section may—
make consequential amendments of or repeals in other provisions of this Act; or
make such transitional or saving provisions as appear to the Treasury to be necessary or expedient.
In this section—
The appropriate authority may, on the application or with the consent of a friendly society, . . . direct that all or any of the provisions of Part . . . VI of this Act , or any provision of regulations made for the purposes of that Part, shall not apply to the society or shall apply to it with such modifications as may be specified in the direction.
A direction under this section may be subject to conditions.
A direction under this section may be revoked by the appropriate authority at any time; and the appropriate authority, may at any time vary any such direction on the application or with the consent of the society to which it applies.
The PRA must consult the FCA before making, varying or revoking a direction under this section.
The PRA must send the FCA a copy of any direction, variation or revocation under this section.
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The FCA must keep in a register kept by it for the purposes of this subsection a copy of any direction, variation or revocation under this section.
The register kept for the purposes of subsection (7) above shall be available for inspection on reasonable notice by members of the public.
The FCA shall keep a copy of— and the central office shall keep the copy in the public file of the society to which it relates.
any direction ... under this section, and
any revocation or variation of any such direction,
The FCA shall prepare and maintain a file relating to each friendly society (to be known as the public file) and the file shall—
contain the documents or, as the case may be, copies of the documents and the records of the matters directed by or under any provision of this Act to be kept in the public file of the society; and
be available for inspection on reasonable notice by members of the public subject to paragraph (2A) below below.
Any member of the public shall be entitled, subject to paragraph (2A) below, to be furnished with a copy of all or any of the documents or records kept in the public file of a friendly society.
The requirement to prepare and maintain the public file of a friendly society does not apply in relation to a document, a copy of a document or a record, if the FCA—
prepares and maintains an electronic copy of the document, copy or record; and
places the electronic copy on the FCA’s website.
The FCA may keep in the public file of a registered friendly society any documents relating to a registered branch of the society which correspond to documents relating to the society which it is required to keep on that file.
The FCA may charge a reasonable fee for making the public file available to any person for inspection under subsection (1)(b) above, for making an electronic copy available under subsection (1A) above or for furnishing any person with a copy of any documents or records under subsection (2) above.
Stamp duty shall not be chargeable upon any document required or authorised by this Act, the 1974 Act or by the constitution of an incorporated friendly society or of a registered friendly society or registered branch.
Subject to subsection (3) below, any provision to which this section applies, whether contained in the constitution of a friendly society or in any contract with a friendly society or otherwise, shall be void.
This section applies to any provision for—
exempting any member of the committee of management, other officer, or person employed as auditor of a friendly society from any liability which, by virtue of any rule of law, would otherwise attach to him in respect of the negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the society; or
indemnifying any such person against any such liability.
Subsection (1) above shall not prevent a friendly society—
from purchasing and maintaining for such a person insurance against any such liability; or
from indemnifying such a person against any liability incurred by him in defending any proceedings (whether criminal or civil) in which judgement is given in his favour or in which he is acquitted.
Section 1157 of the Companies Act 2006 (... which empowers the court to grant relief in certain cases of negligence, default, breach of duty or breach of trust) shall apply in relation to officers and auditors of a friendly society as it applies in relation to officers and auditors of a company.
For the purposes of this section a reference to an officer of a friendly society includes a reference to the appropriate actuary.
A land transaction effected by or in consequence of— is exempt from charge for the purposes of stamp duty land tax.
an amalgamation of two or more friendly societies under section 85,
a transfer of the engagements of a friendly society under section 86; or
a transfer of the engagements of a friendly society pursuant to a direction given by the appropriate authority under section 90,
Relief under this section must be claimed in a land transaction return or an amendment of such a return.
In this section—
Notwithstanding any limitation on the time for the taking of proceedings contained in any enactment, summary proceedings for any offence under this Act , other than an offence in relation to which provision is made in subsection (1A), may, subject to subsection (2) below, be commenced by the FCA at any time within the period of one year beginning with the date on which evidence sufficient in its opinion to justify a prosecution for the offence, comes to its knowledge.
Nothing in subsection (1) or (1A) above shall authorise the commencement of proceedings for any offence at a time more than three years after the date on which the offence was committed.
Notwithstanding any limitation on the time for taking proceedings contained in any Act, summary proceedings for the offences under the provisions listed in subsection (1B), in the circumstances specified in that subsection in relation to those provisions, may be commenced by the PRA, after notifying the FCA, or by the FCA, after notifying the PRA, at any time within the period mentioned in subsection (1C).
For the purposes of subsections (1) and (1C) above a certificate, purporting to be signed by or on behalf of the FCA or the PRA, as to the date on which such evidence as is mentioned in the relevant subsection came to its knowledge, shall be conclusive evidence of that date.
The provisions and the circumstances are—
section 20 (dissolution by consent), if the failure referred to in subsection (6) or (8) of that section relates to a failure to give notice to the PRA;
section 21 (voluntary winding up), if the failure referred to in subsection (4) of that section relates to a failure to send a copy of the resolution to the PRA in accordance with subsection (2) of that section;
section 25 (power of court to declare dissolution of building society void), if the failure referred to in subsection (5) of that section relates to a failure to send a copy of an order to the PRA in accordance with subsection (4) of that section;
section 62 (powers to obtain information and documents etc.), if—
the failure referred to in subsection (9) of that section is a failure to furnish any information or report, to produce any documents or material, or to provide any explanation or make any statement to the PRA, or
the information, explanation or statement referred to in subsection (10) or (11) of that section is furnished, provided or made to the PRA;
section 65(4) and (5) (investigations), if the person appointed under subsection (1) of that section was appointed by the PRA;
section 87(6) (actuary’s report), if the PRA directed the transferee to furnish it with a report under subsection (3) of that section;
Schedule 10, paragraph 24 (winding up by the court), if the failure referred to in sub-paragraph (4) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (3) of that paragraph;
Schedule 10, paragraph 54 (winding up by the High Court), if the failure referred to in sub-paragraph (4) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (3) of that paragraph;
Schedule 14, paragraph 3 (auditors: appointment), if the failure referred to in sub-paragraph (2) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (1) of that paragraph;
Schedule 14, paragraph 9 (power of appropriate authority to require second audit), if the failure referred to in sub-paragraph (5) of that paragraph relates to a direction given by the PRA under paragraph (1) of that paragraph or a direction to send a copy of the report to the PRA in accordance with sub-paragraph (3) of that paragraph;
Schedule 14, paragraph 10 (removal of auditors), if the failure referred to in sub-paragraph (3) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (2) of that paragraph;
Schedule 14, paragraph 12 (resignation of auditors), if the default referred to in sub-paragraph (5) of that paragraph relates to a failure to give a copy of the notice to the PRA in accordance with sub-paragraph (4) of that paragraph; and
Schedule 14, paragraph 15 (offences of failing to comply with paragraph 14 (statement by person ceasing to hold office)), if—
the default referred to in sub-paragraph (1) of that paragraph relates to a failure to send a copy of a notice to the PRA in accordance with paragraph 14(2) or (7) of that Schedule, or
the default referred to in sub-paragraph (2) is the default of a PRA-authorised person.
In the application of this section to Scotland—
in subsection (1), omit the words “by the FCA”,
omit subsections (1A), (1B) and (1C), and
references to the FCA are to be read as references to the Lord Advocate.
The period is one year beginning with the date on which evidence comes to the knowledge of one or both of the FCA and the PRA, being evidence sufficient in the opinion of the FCA or the PRA (as the case may be) to justify a prosecution.
In the application of this section to Scotland, section 136(1) of the Criminal Procedure (Scotland) Act 1995 shall apply for the purposes of this section as it applies for the purposes of that section.
Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of any member of the committee of management, director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of that offence and liable to be proceeded against and punished accordingly.
Where the affairs of a body corporate are managed by the members, subsection (1) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
Where a partnership is guilty of an offence under this Act, every partner, other than a partner who is proved to have been ignorant of or to have attempted to prevent the commission of the offence, shall also be guilty of that offence and be liable to be proceeded against and punished accordingly.
Where an unincorporated association (other than a partnership) is guilty of an offence under this Act— shall also be guilty of the offence and be liable to be proceeded against and punished accordingly.
every officer of the association who is bound to fulfil any duty of which the breach is the offence; or
if there is no such officer, every member of the governing body other than a member who is proved to have been ignorant of or to have attempted to prevent the commission of the offence,
In any proceedings for an offence under this Act, it shall be a defence for a person charged to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control.
In Northern Ireland, a friendly society or an officer of a friendly society may be prosecuted for a summary offence under this Act before a magistrates' court acting for the county court division in which the registered office of the society is situated.
where the prosecution is against a friendly society or any officer of a friendly society, before a magistrates' court acting for the petty sessions area in which the registered office of the society is situated; and
where the prosecution is against a person other than a friendly society or an officer of a friendly society, before a magistrates' court acting for the petty sessions area in which the person is resident at the time of the institution of the prosecution.
Subsection (1) is without prejudice to the provisions of the Magistrates' Courts (Northern Ireland) Order 1981 as to the jurisdiction of a magistrates' court.
for the reference in paragraph (a) to a magistrates' court acting for a petty sessions area there shall be substituted a reference to a magistrates' court acting for a county court division; and
paragraph (b) shall be omitted.
Any document bearing the seal or stamp of the FCA shall be received in evidence without further proof.
Any printed document purporting to be a copy of the rules or memorandum of an incorporated friendly society or the rules of a registered friendly society or a registered branch and certified by the secretary or other officer of the society or branch to be a true copy of its rules or memorandum as registered, shall be received in evidence and shall, in the absence of any evidence to the contrary, be deemed to be a true copy of its rules or memorandum.
Any document purporting to have been signed by a person authorised to do so on behalf of the FCA or the PRA, and every document purporting to be signed by any inspector or public valuer under this Act, shall, in the absence of any evidence to the contrary, be received in evidence without proof of the signature.
In subsections (1) and (1A), “document" means any document issued, received or created by the FCA or the PRA (or, as the case may be, by any inspector or public valuer under this Act) for the purposes of or in connection with this Act.
Subject to any other provision of this Act or regulations under it, any record to be kept by a friendly society may be kept in any manner.
Where any such record is not kept by making entries in a bound book, but by some other means, adequate precautions shall be taken for guarding against falsification and facilitating its discovery.
The power in subsection (1) above includes power to keep the record by recording matters otherwise than in legible form so long as the recording is capable of being reproduced in a legible form; and any duty imposed by or under this Act to allow inspection of, or to furnish a copy of, the record or any part of it is to be treated as a duty to allow inspection of, or to furnish, a reproduction of the recording or of the relevant part of it in a legible form.
The Treasury may by regulations, make such provision in addition to subsection (3) above as they consider appropriate in connection with such records as are kept otherwise than in legible form; and the regulations may make modifications of this Act so far as it relates to the records of friendly societies.
If default is made in complying with this section the society shall be guilty of an offence and liable on summary conviction—
to a fine not exceeding level 4 on the standard scale; and
in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.
This section has effect in relation to any notice, directions or other document required or authorised by or under any provision of this Act or by the rules of a friendly society to be served on any person other than the FCA or the PRA but subject, in the case of notices or other documents to be given or sent to members of a friendly society, to any provision of its rules.
Any such document may be served on the person in question—
by delivering it to him;
by leaving it at his proper address; ...
by sending it by post to him at that address ; or
by sending it by electronic means to an electronic address notified by the person for the purpose.
Any such document may—
in the case of a friendly society, be served on the secretary of the society;
in the case of a body corporate (other than an incorporated friendly society), be served on the secretary or clerk of that body;
in the case of a partnership, be served on any partner;
in the case of an unincorporated association, other than a partnership or a registered friendly society or registered branch, be served on any member of its governing body.
For the purposes of this section and section 7 of the Interpretation Act 1978 (service of documents) in its application to this section, the proper address of any person is— and, in any other case, his last-known address (whether of his residence or of a place where he carries on business or is employed).
in the case of a friendly society or its secretary, the address of its registered office;
in the case of a member of an incorporated friendly society, his registered address;
in the case of a member of the committee of management or the chief executive of a friendly society, his officially notified address;
in the case of a body corporate (other than an incorporated friendly society), its secretary or clerk, the address of its registered or principal office in the United Kingdom;
in the case of an unincorporated association (other than a partnership, registered friendly society or registered branch) or a member of its governing body, its principal office in the United Kingdom;
Each of the FCA and the PRA may, by directions under this section, make provision with respect to the form of, and the particulars to be included in , and the authentication of, any document to be sent to it under this Act or the 1974 Act.
The directions have effect subject to any other provision of or made under this Act.
The PRA and the FCA must each consult the other before issuing a direction under this section if the document in question is required to be sent to both of them.
As regards the authentication of a document sent to it electronically, each of the FCA and the PRA may—
require the document to be authenticated by a particular person or a person of a particular description;
specify the means of authentication;
require the document to contain or be accompanied by the name or registered number of the society to which it relates (or both).
As regards the procedure to be followed in sending a document electronically, each of the FCA and the PRA may specify requirements as to the hardware and software to be used, and technical specifications (for example, matters relating to protocol, security, anti-virus protection or encryption).
Directions made by the FCA or the PRA under this section must not require documents to be sent electronically.
In this section, a document is sent electronically if is it sent by electronic means or in electronic form.
Subject to any exceptions or conditions prescribed by regulations of the Secretary of State, the Secretary of State shall at the request of any person claiming benefit from an incorporated friendly society provide the society for the purposes of the claim with a copy or abstract of any medical certificate relating to that person and supplied by him to the Secretary of State for the purposes of the enactments relating to social security.
Where the Secretary of State furnishes an incorporated friendly society, in connection with a claim for benefit from the society with information relating to a claim or award under those enactments, the expenses incurred in connection with his doing so by the Secretary of State or any other government department shall be treated as expenses in carrying those enactments into effect.
In this section, references to the Secretary of State shall be construed as including references to the Department of Health and Social Services for Northern Ireland.
In this Act—
“long term business” means insurance business of any of the classes specified in head A of Schedule 2 to this Act; and
any subsidiary of the society, other than a subsidiary in respect of which severe long-term restrictions substantially hinder the exercise of rights of the society over the assets or management of that subsidiary; or
For the purposes of this Act—
For the purposes of any provision of Parts IV, V, VI and VIII of this Act, unless the context otherwise requires— and “reinsurance business” means the effecting and carrying out of contracts of reinsurance.
references to insurance business include references to reinsurance business; and
reinsurance business consisting of the effecting and carrying out of a contract of reinsurance of risks of any class shall be taken to constitute the carrying on of insurance business of that class;
For the purposes of this Act the effecting and carrying out of a contract whose principal object is within one class of insurance business, but which contains related and subsidiary provisions within another class or classes, shall be taken to constitute the carrying on of insurance business of the first-mentioned class, and no other, if subsection (4) or (5) below applies to the contract.
This subsection applies to a contract whose principal object is within any class of long term business, but which contains subsidiary provisions within general business class 1 or 2, if the society concerned is authorised under section 32 above to carry on long term business class I.
This subsection applies to a contract whose principal object is within one of the classes of general business but which contains subsidiary provisions within another of those classes.
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Subject to subsection (2) below, in this Act “financial year” means the period of 12 months ending with 31st December.
The initial financial year of a friendly society shall be such period as expires with the end of the calendar year in which it is registered under the 1974 Act or incorporated under this Act and the final financial year of the society shall be such shorter period than 12 months as expires with the date as at which the society makes up its final accounts.
In this Act, unless the context otherwise requires— “the 1974 Act” means the Friendly Societies Act 1974; “actuary” means an actuary possessing such qualifications, if any, as may be specified in rules made by the Authority under section 340 of the Financial Services and Markets Act 2000 (and subsections (3) to (6) of that section apply in relation to an actuary appointed by virtue of any provision of this Act as they apply in relation to an actuary appointed in compliance with such rules); “annuities on human life” does not include superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of persons engaged or who have been engaged in any particular profession, trade or employment, or of the dependants of such persons; ... “appointed actuary” means the actuary appointed in accordance with rules made under section 340 of the Financial Services and Markets Act 2000; “the appropriate actuary” means— if the society is under a duty imposed by rules made by the Authority under section 340 of the Financial Services and Markets Act 2000, the society’s appointed actuary; and if it is not under such a duty, an actuary appointed to perform the function in question; “the appropriate authority” means— in relation to a society which is a PRA-authorised person, the PRA; and in relation to a society which is not a PRA-authorised person, the FCA; ... ... ... ... “committee of management” means the committee of management or other directing body of a society or branch; ... “contract of insurance” includes any contract the effecting of which constitutes the carrying on of insurance business by virtue of section 117 above; “controller” has the meaning given by section 55A above; “the court” except in relation to the winding-up of an incorporated friendly society, means— in the case of a body whose registered office is situated in England and Wales, the county court; in the case of a body whose registered office is situated in Northern Ireland, the county court for the district in which the office is situated; in the case of a body whose registered office is situated in Scotland, the sheriff in whose jurisdiction the office is situated; and, in relation to the winding-up of an incorporated friendly society, means the court which has jurisdiction under the applicable winding-up legislation to wind-up the society; ... ... “EEA State” has the meaning given by Schedule 1 to the Interpretation Act 1978 (c. 30); “EFTA State” means an EEA State which is not a member State; “electronic address” means any number or address used for the purposes of sending or receiving documents or information by electronic means; “the FCA” means the Financial Conduct Authority; “financial year” is to be construed in accordance with section 118; ... ... ... “group business” is to be construed in accordance with section 11 above; “jointly controlled body” is to be construed in accordance with section 13 above; ... “manager”, in relation to a friendly society to which section 37(2) or (3) above applies, means any person (other than an employee of a society) appointed by the society to manage any part of its insurance business, or any employee of the society (other than a chief executive) who, under the immediate authority of a member of the committee of management or chief executive of the society– exercises managerial functions, or is responsible for maintaining accounts or other records of the society; and is not a person whose functions relate exclusively to business conducted from a place of business which is not in the United Kingdom or Gibraltar; “memorandum” has the meaning given by paragraph 4(3) of Schedule 3 to this Act; “modifications”, in relation to enactments, includes additions, omissions and amendments and cognate expressions are to be construed accordingly; “non-insurance business” means business falling within head C of Schedule 2 to this Act; “notice” means written notice and “notice to” a person means notice given to that person, and “notify” shall be construed accordingly; ... “officer” means— in relation to a registered friendly society or a registered branch— a trustee; the treasurer, secretary and chief executive (however described); a member of the committee of management; and a person appointed by the society or branch to sue or be sued on its behalf; or in relation to an incorporated friendly society, a member of the committee of management, the chief executive (however described) and the secretary; “the PRA” means the Prudential Regulation Authority; “PRA-authorised person” has the meaning in section 2B of the Financial Services and Markets Act 2000; “the public file”, in relation to a friendly society, means the file relating to the society which the FCA is required to maintain under section 104 above; “registered address”, in relation to a member of an incorporated friendly society, has the meaning given by paragraph 14(6) of Schedule 3 to this Act; ... ... “the Solvency 2 Directive” means Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II); “special resolution” has the meaning given by paragraph 7 of Schedule 12 to this Act; “subscription” includes any premium or other sum (however described) payable, in respect of the provision of benefits, by (or on behalf of) a member of a friendly society under the rules of the society; “subsidiary” is to be construed in accordance with section 13 above; 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“the 1974 Act” means the Friendly Societies Act 1974;
“insurance business” means long term business and general business but , except for the purposes of sections 87 and 88 above, does not include the operations of a society whose benefits vary according to the resources available and which require each of its members to contribute on a flat-rate basis;
“direct insurance business" means insurance business other than reinsurance business and “direct insurance" shall be construed accordingly;
References in this Act to the “ECU” are to the unit of account of that name defined in Council Regulation (EEC) No.3180/78 as amended; and the exchange rates as between the ECU and pounds sterling to be applied for each year beginning on 31st December shall be the rates applicable on the last day of the preceding October for which exchange rates for the currencies of all the member States were published in the Official Journal of the Communities.
Any reference in this Act to the seal of the FCA is a reference to the seal provided for in regulations made under section 109(1)(b) of the Friendly Societies Act 1974 (and not to the FCA’s common seal).
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In this Act “associate", in relation to any person entitled to exercise or control the exercise of voting power in relation to a friendly society to which section 37(2) or (3) above applies, means–
the wife or husband or civil partner or minor son or daughter of that person;
any company of which that person is a director;
any person who is an employee or partner of that person;
if that person is a company–
any director of that company;
any subsidiary undertaking of that company;
any director or employee of any such subsidiary under– taking; and
if that person has made an agreement or arrangement with any other person under which they undertake to act together in exercising their voting power in relation to the society, that other person.
In this section– “minor", in relation to Scotland, means not having attained the age of sixteen; “son" includes stepson and “daughter" includes stepdaughter; “subsidiary undertaking" has the same meaning as in the Insurance Companies Act 1982 .
The following provisions apply for the purposes of this Act.
A document or information is sent in electronic form if it is sent— References to “electronic copy” have a corresponding meaning.
by electronic means (for example, by email or fax), or
by any other means while in electronic form (for example, sending a disk in the post).
A document or information is sent by electronic means if it is— References to “electronic means” have a corresponding meaning.
sent initially and received at its destination by means of electronic equipment for the processing (which expression includes digital compression) or storage of data, and
entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means.
A document or information sent in electronic form must be sent in a form, and by a means, that the sender reasonably considers will enable the recipient—
to read it, and
to retain a copy of it.
For the purposes of this section, a document or information can be read only if—
it can be read with the naked eye, or
to the extent that it consists of images (for example photographs, pictures, maps, plans or drawings), it can be seen with the naked eye.
The provisions of this section apply whether the provision of this Act in question uses the word “send” or uses other words (such as “furnish”, “circulate”, “provide”, “produce”, “supply”, “give” or “deliver”) to refer to the sending of a document or information.
For the purposes of this Act, a person (A), other than the FCA and the PRA, makes a document or information available on a website to another person (B) if each of the following conditions is satisfied.
The first condition is that B—
has agreed (generally or specifically) that A may make the document or information available to B in that manner, and
has not revoked that agreement.
The second condition is that A has notified B of—
the presence of the document or information on the website,
the address of the website,
the place on the website where the document or information may be accessed, and
how to access the document or information.
The third condition is that the document or information is present on the website for the whole of the period—
beginning when A sends B the notification referred to in subsection (3) or, if later, when the document or information first appears on the website, and
ending with the end date specified for the purposes of this paragraph in the provision of, or made under, this Act that requires or permits A to send the document to B.
If the document or information is absent from the website for part of the period referred to in subsection (4), the absence is to be disregarded if it is wholly attributable to circumstances that it would not be reasonable to have expected A to prevent or avoid.
A is not to be regarded as making a document available on a website for the purposes of this section if the website is the the FCA’s or the PRA’s website (an electronic copy of the document having been placed there in reliance on section 104(1A)(b)).
The enactments specified in Schedule 21 to this Act shall have effect with the amendments made by that Schedule.
The enactments specified in Schedule 22 to this Act are repealed to the extent specified in the third column of that Schedule.
Any power of the Treasury . . . to make regulations or an order under this Act is exercisable by statutory instrument.
Any statutory instrument containing such regulations or such an order, other than an order under section 5 above or section 126 below, shall be subject to annulment in pursuance of a resolution of either House of Parliament.
Any power conferred by this Act to make such regulations or such an order includes power—
to make different provision for different cases; and
to make transitional, consequential or supplementary provision.
any expenses incurred by the Commission which are attributable to the provisions of this Act;
any expenses incurred by the Chief Registrar which are attributable to any functions of his or of the central office under this Act;
any increase attributable to this Act in the sums so payable under any other enactment.
The Treasury may by regulations make such transitional and consequential provisions and such savings as they consider necessary or expedient in preparation for, in connection with, or in consequence of—
the coming into force of any provision of this Act; or
the operation of any enactment repealed or amended by a provision of this Act during any period when the repeal or amendment is not wholly in force.
Regulations under this section may make modifications of any enactment contained in this or in any other Act.
This Act extends to Northern Ireland.
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Her Majesty may by Order in Council direct that any of the provisions of this Act or any instrument made under it shall extend, with such modifications (if any) as may be specified in the Order, to—
any of the Channel Islands; or
the Isle of Man.
An Order in Council under this section may make such transitional, incidental or supplementary provision as appears to Her Majesty to be necessary or expedient.
This Act may be cited as the Friendly Societies Act 1992.
This Act shall come into force on such day as the Treasury may by order appoint and different days may be appointed for different provisions or different purposes.
An order under subsection (2) above may contain such transitional provisions and savings (whether or not involving the modification of any statutory provision) as appear to the Treasury necessary or expedient in connection with the provisions brought into force.
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Section 69J
The aggregate amount of committee members' emoluments must be shown. In this paragraph, “committee members' emoluments” means the emoluments paid to or receivable by any person in respect of— There must also be shown, separately, the aggregate amounts within sub-paragraph (2)(a), sub-paragraph (2)(b)(i) and sub-paragraph (2)(b)(ii). For the purposes of this paragraph the “emoluments” of a person include— and emoluments in respect of a person’s accepting office as a member of the committee must be treated as emoluments in respect of his services as a member of the committee.
Where the amount shown in compliance with paragraph 1(1) is £60,000 or more, the emoluments of the chairman must be shown. Where sub-paragraph (1) requires an amount to be shown and there has been more than one chairman during the year, the emoluments of each must be stated so far as attributable to the period during which he was chairman. Where the amount shown in compliance with paragraph 1(1) is £60,000 or more, the following information must be given with respect to the committee members' emoluments— Where more than one person has been chairman during the year, the reference in paragraph (3)(b) to the emoluments of the chairman is to the aggregate of the emoluments of each person who has been chairman, so far as attributable to the period during which he was chairman. The information required by sub-paragraph (3)(a) need not be given in respect of a member of the committee who discharged his duties as such wholly or mainly outside the United Kingdom; and any such member of the committee must be left out of account for the purposes of sub-paragraph (3)(b). In this paragraph “emoluments” has the same meaning as in paragraph 1, except that it does not include contributions paid in respect of a person under a pension scheme.
There must be shown— For the purposes of this paragraph it must be assumed that a sum not receivable in respect of a period would have been paid at the time at which it was due, and if such sum was payable only on demand, it must be deemed to have been due at the time of the waiver. In this paragraph “emoluments” has the same meaning as in paragraph 1.
There must be shown the aggregate amount of pensions of members of the committee and past members of the committee. This amount does not include any pension paid or receivable under a pension scheme if the scheme is such that the contributions under it are substantially adequate for the maintenance of the scheme, but, subject to this, it includes any pension paid or receivable in respect of any such services of a member of the committee or past member of the committee as are mentioned in paragraph 1(2) whether to or by him or on his nomination or by virtue of dependence on or other connection with him, to or by any other person. The amount shown must distinguish between pensions in respect of services as a member of the committee or a director of any of its associated bodies, and other pensions. References in this paragraph to pensions include benefits otherwise than in cash and in relation to so much of a pension as consists of such a benefit references to its amount are to the estimated money value of the benefit. The nature of any such benefit as is mentioned in sub-paragraph (4) must be disclosed.
There must be shown the aggregate amount of any compensation to members of the committee and past members of the committee in respect of loss of office. This amount includes compensation received or receivable by members of the committee or past members of the committee for — References to compensation in this paragraph include benefits otherwise than in cash, and in relation to such compensation— References to compensation for loss of office include compensation in consideration for, or in connection with, a person’s retirement from office.
There must be shown the aggregate amount of any consideration paid to or receivable by third parties for making available the services of any person— The reference in sub-paragraph (1) to consideration includes benefits paid or receivable otherwise than in cash, and in relation to such consideration— The reference in sub-paragraph (1) to third parties is to a person other than—
The following applies with respect to the amounts to be shown under paragraphs 1, 4, 5 and 6. The amount in each case includes all relevant sums paid by or receivable from— The amount to be shown under paragraph 5 must distinguish between the sums respectively paid by or receivable from the society, its associated bodies and persons other than the society and its associated bodies. References in this paragraph to amounts paid to or receivable by a person, include amounts paid to or receivable by a person connected with him or a body corporate associated with him (but not so as to require an amount to be counted twice).
The amounts to be shown for any financial year under paragraphs 1, 2, 5 and 6 are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year. But where— those sums must, to the extent to which the liability is released or not enforced or they are charged as mentioned (as the case may be), be shown in a note to the first accounts in which it is practicable to show them and must be distinguished from the amounts to be shown apart from this provision.
Where the Chief Executive of the society is not also a member of the committee of the society, he must be treated, for the purposes of paragraphs 1 to 8 as a member of that committee. In such circumstances there must be a note in the accounts specifying that the Chief Executive has been so treated.
In paragraphs 1 to 9— In paragraphs 6 and 7, references to a person being “connected” with a member of the committee, and to a member of the committee being “associated with” a body corporate, must be construed in accordance with section 70 of the Building Societies Act 1986 (as applied to friendly societies by paragraph 9 of Schedule 11 to this Act).
This paragraph applies, subject to sub-paragraph (5), in relation to— The notes to the annual accounts must contain a statement, in relation to such loans, transactions, and arrangements showing; The notes to the annual accounts must, in relation to any loan or other transaction or arrangement subsisting during or at the end of the financial year, make the following disclosures— This paragraph applies in relation to loans to, and other transactions and arrangements with, a person connected with a member of the committee where the society (or in the case of a subsidiary undertaking incorporated in the United Kingdom, the subsidiary undertaking) has notice of the connection between that member of the committee and that person.
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The following information with respect to the employees of a society must be given in notes to the society’s individual accounts— The average number required by sub-paragraph (1)(a) or (b) is determined by dividing the relevant annual number by the number of complete calendar months in the financial year. The relevant annual number is determined by ascertaining for each complete calendar month in the financial year— and, in either case, adding together all the monthly numbers. In respect of all persons employed by the society during the financial year who are taken into account in determining the relevant annual number for the purposes of paragraph (1)(a) there must also be stated the aggregate amounts respectively of— This does not apply in so far as those amounts, or any of them, are stated elsewhere in the society’s accounts. For the purposes of sub-paragraph (1)(b) the categories of person employed by the society are such as the directors may select, having regard to the manner in which the society’s activities are organised.
In this Schedule “associated body”, in relation to a society, means a body in which the society holds shares or corresponding membership rights.
Section 69K
The following information must be given with respect to the undertakings that are subsidiary undertakings of the society at the end of the financial year. The name of each subsidiary undertaking must be stated. There must be stated with respect to each subsidiary undertaking— The specific reason why each subsidiary undertaking is not required to be included in consolidated accounts must be stated.
There must be stated in relation to shares of each class held by the society in a subsidiary undertaking— The shares held by or on behalf of the society itself must be distinguished from those attributed to the society which are held by or on behalf of a subsidiary undertaking.
There must be disclosed with respect to each subsidiary undertaking— The information referred to in sub-paragraph (1) need not be given if the society’s investment in the subsidiary undertaking is included in the society’s accounts by way of the equity method of valuation or if— Information otherwise required by this paragraph need not be given if it is not material— For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is—
Where— there must be stated in relation to that undertaking the date on which its last financial year before the end of the society’s financial year ended.
disclosure is made under paragraph 3(1) with respect to a subsidiary undertaking; and
that undertaking’s financial year does not end with that of the society,
The information required by paragraphs 6 and 7 must be given where at the end of the financial year the society has a significant holding in a body corporate which is not a subsidiary undertaking of the society. A holding is significant for this purpose if—
The name of the body corporate must be stated. There must be stated— There must also be stated— Information otherwise required by this paragraph need not be given if it is not required in order for the society’s individual accounts and group accounts to give a true and fair view.
There must also be stated— That information need not be given if the investment of the society in all bodies corporate in which it has a significant holding is shown, in aggregate, in the notes to the accounts by way of the equity method of valuation. That information need not be given in respect of a body corporate if— Information otherwise required by this paragraph need not be given if it is not material— For the purposes of this paragraph the “relevant financial year” of a body corporate is—
References in this Part of this Schedule to shares held by a society shall be construed as follows. For the purposes of paragraphs 2 and 3— For the purposes of paragraphs 5 to 7— For the purposes of paragraphs 2 to 7, shares held by way of security shall be treated as if they were held by the person providing the security where—
The following information must be given with respect to the bodies corporate that are subsidiary undertakings of the society at the end of the financial year. The name of each body corporate must be stated. There must be stated— It must be stated whether the subsidiary undertaking is included in the consolidation and, if it is not, the reason for excluding it from the consolidation must be given. It must be stated with respect to each subsidiary undertaking of the society by virtue of which of the conditions specified in section 1162 of the Companies Act 2006 (as applied by section 78A of this Act) it is a subsidiary undertaking of the society. Sub-paragraph (5) does not apply in relation to a subsidiary undertaking if—
The following information must be given with respect to the shares of a subsidiary undertaking held— and the information required under paragraphs (a) and (b) must (if different) be shown separately. There must be stated—
There must be shown with respect to each subsidiary undertaking not included in the consolidation— The information referred to in sub-paragraph (1) need not be given if the group’s investment in the subsidiary undertaking is included in the accounts by way of the equity method of valuation or if— Information otherwise required by this paragraph need not be given if it is not required in order for the society’s group accounts to give a true and fair view. For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is—
The following information must be given where a body corporate included in the consolidation has an interest in a jointly controlled body. The name of the jointly controlled body must be stated. There must be stated— The following information must be given with respect to the shares of the jointly controlled body held— and the information required under paragraphs (a) and (b) must (if different) be given separately. There must be stated—
The information required by paragraphs 14 and 15 must be given where at the end of the financial year the society has a significant holding in a body corporate which is not one of its subsidiary undertakings and does not fall within paragraph 12 (jointly controlled bodies). A holding is significant for this purpose if—
The name of the body corporate must be stated. There must be stated— There must also be stated— The information otherwise required by this paragraph need not be given if it is not material—
There must be stated— That information need not be given in respect of a body corporate if— Information otherwise required by this paragraph need not be given if it is not material— For the purposes of this paragraph the “relevant financial year” of an undertaking is—
The information required by paragraphs 17 and 18 must be given where at the end of the financial year the group has a significant holding in a body corporate which is not a subsidiary undertaking of the society and does not fall within paragraph 12 (jointly controlled bodies). A holding is significant for this purpose if—
The name of the body corporate must be stated. There must be stated— There must also be stated— Information otherwise required by this paragraph need not be given if it is not required in order for the society’s group accounts to give a true and fair view.
There must be stated— That information need not be given if— Information otherwise required by this paragraph need not be given if it is not material— For the purposes of this paragraph the “relevant financial year” of an undertaking is—
References in this Part of this Schedule to shares held by the society or the group shall be construed as follows. For the purposes of paragraphs 10, 12(4) and (5) and 13 to 15— References to shares held by the group are to any shares held by or on behalf of the society or any of its subsidiary undertakings; but shares held on behalf of a person other than the society or any of its subsidiary undertakings are not treated as if they were held by the group. Shares held by way of security are treated as if they were held by the person providing the security—
In this Schedule “group” means a friendly society and its subsidiary undertakings.
Section 69M
The following must be shown— Where the remuneration includes benefits in kind, the nature and estimated money-value of those benefits must also be shown. Separate disclosure is required in respect of the auditing of the accounts in question and of each type of service specified in paragraph 2, but not in respect of each service falling within a type of service. Separate disclosure is required in respect of services supplied to the society and its subsidiaries on the one hand and to associated pension schemes on the other. Where more than one person has been appointed as a society’s auditor in respect of the financial year, separate disclosure is required in respect of the remuneration of each such person and his associates. Where a friendly society is required to prepare consolidated group accounts—
The types of service in respect of which disclosure is required are—
the auditing of accounts of any associate of the society;
audit-related assurance services;
taxation compliance services;
any taxation advisory services not falling within paragraph (c);
internal audit services;
any assurance services not falling within paragraphs (a) to (e);
any services relating to corporate finance transactions entered into, or proposed to be entered into, by or on behalf of the society or any of its associates not falling within paragraphs (a) to (f);
any other non-audit services.
Disclosure is not required of remuneration receivable for the supply of services falling within paragraph 2(h) supplied by a distant associate of the society’s auditor where the total remuneration receivable for all of those services supplied by that associate does not exceed— In sub-paragraph (1)(b)—
The auditor of a friendly society must supply the directors of the society with such information as is necessary to enable the disclosure required by paragraph 1(1)(b) to be made.
This paragraph defines what is meant in this Schedule by an “associate” or a “distant associate” of a friendly society’s auditor. The following are associates of a society’s auditor— Where the society’s auditor is a partnership, the following are also associates of the auditor— Where a society’s auditor is a body corporate (other than one which is also a partnership as defined in sub-paragraph (6)(d)), the following are also associates of the auditor— A distant associate of a society’s auditor is a person who is an associate of that auditor by reason only that that person is an associate within one or more of— For the purposes of this paragraph—
In this Schedule—
This Schedule applies to a registered branch as it applies to a friendly society.
Section 72(3)
This Schedule makes provision in relation to the appointment and removal of the auditor or auditors of a friendly society subject to special requirements. For the purposes of this Schedule, a person is auditor of a friendly society in respect of a financial year if the person is required to report on the accounts of that society for that financial year.
This paragraph applies to the appointment under section 72 of an auditor or auditors if the society has an audit committee. Before an appointment is made— Before the audit committee makes a recommendation or the committee of management makes a proposal under sub-paragraph (2), the audit committee must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation. The audit committee must in its recommendation— The committee of management must include in its proposal— Where the audit committee recommends re-appointment of the society’s existing auditor or auditors, and the committee of management is in agreement, sub-paragraphs (3) and (4)(a) and (b) do not apply.
This paragraph applies to the appointment under section 72 of an auditor or auditors if the society does not have an audit committee. Before the appointment is made, the committee of management must propose an auditor or auditors for appointment. Before the committee of management makes a proposal under sub-paragraph (2), it must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation, from which their proposed auditor or auditors must be drawn. Sub-paragraph (3) does not apply in relation to a proposal to re-appoint the society’s existing auditor or auditors.
A person who has been, or will have been, auditor of the society in respect of every financial year comprised in the maximum engagement period may not be appointed as auditor of the society in respect of any financial year which begins within the period of 4 years beginning with the day after the last day of the last financial year of the maximum engagement period. A person who is a member of the same network as the auditor mentioned in sub-paragraph (1) may not be appointed as auditor of the society in respect of any financial year which begins within the period of 4 years mentioned in that sub-paragraph. In this paragraph “network” means an association of persons, other than a firm, co-operating in audit work by way of—
If— the appropriate authority may appoint another auditor or auditors in place of the auditor or auditors referred to in paragraph (a). The breach of paragraph 2, 3 or 4 does not invalidate any report made under this Part by the auditor or auditors on the society’s annual reports or accounts before the auditor or auditors are replaced under sub-paragraph (1) of this paragraph. But where the breach in question is a breach of paragraph 4, paragraph 9 of Schedule 14 (appropriate authority’s power to require second audit) applies as if the auditor was, or auditors were, ineligible for appointment to that office for the period during which the audit was conducted. Within one week of becoming aware of the breach of paragraph 2, 3 or 4, the society must give notice to the appropriate authority that the power under sub-paragraph (1) of this paragraph has become exercisable. If a society fails to give the notice required by sub-paragraph (4), the society or branch shall be guilty of an offence and liable on summary conviction— and so shall any officer who is also guilty of the offence.
Where a person is auditor of the society in respect of consecutive financial years, the maximum engagement period of the person as auditor of the society— Where the first financial year of the maximum engagement period begins on or after 17 June 2003, the maximum engagement period may be extended by a period of no more than 2 years with the approval of the competent authority. Such approval may be given by the competent authority only if it is satisfied that exceptional circumstances exist. Where the competent authority gives its approval as mentioned in sub-paragraph (2)— In this paragraph “qualifying selection procedure” means—
The competent authority may apply to the High Court for an order removing an auditor of the society from office if the authority considers that there are proper grounds for removing the auditor from office. The members of the society may apply to the High Court for an order removing an auditor of the society from office if the applicant or applicants consider that there are proper grounds for removing the auditor from office. If the court is satisfied, on hearing an application under sub-paragraph (1), that there are proper grounds for removing the auditor from office, it may make an order removing the auditor from office. If the court is satisfied, on hearing an application under sub-paragraph (2), that— the court may make an order removing the auditor from office. For the purposes of this paragraph, divergence of opinions on accounting treatments or audit procedures are not to be taken to be proper grounds for removing an auditor from office.
In this Schedule— For the purposes of the definition of “audit committee”, references to rules made by the Prudential Regulation Authority or the Financial Conduct Authority are to those rules as they have effect on IP completion day.