Explanatory note

This Order designates a description of body corporate as suitable for investment and support (but not for support only) by building societies under section 18 of the Building Societies Act 1986, so as to add “mortgage indemnity insurance body” as a further type of designated body.

A mortgage indemnity insurance body is a body corporate owned by one or more building societies formed in any member State, or in any of the following countries or territories: Austria, Finland, Iceland, Liechtenstein, Norway, Sweden, Switzerland, Isle of Man, Jersey, Guernsey and Alderney. The purposes for which the body may be formed include carrying on mortgage indemnity insurance business. Mortgage indemnity insurance business is defined to mean entering into insurance contracts with any society which has invested in the body, for the purpose of reducing risk of loss which may be incurred by that society in respect of that society’s mortgage lending business.

Investment is defined by section 18 of the Act as acquiring and holding shares or corresponding membership rights in and forming and taking part in forming bodies corporate. Support is defined by that section as provision of loans, grants, guarantees, services or property to bodies corporate.