Paragraph 4 Meaning of carrying on mortgage indemnity insurance business

(1)

For the purposes of this paragraph—

“advance” means any advance which is secured on land situated in the United Kingdom or in any country or territory designated under section 14 (power to make advances secured on land overseas) of the Act;
“mortgagor” means any person to whom the society has made an advance;
“society” means any society which owns shares or corresponding membership rights in the body.

(2)

In this Schedule, “carrying on mortgage indemnity insurance business” means that the body enters into an agreement (“the agreement”) with a society whereby the body, subject to the conditions specified below, agrees to indemnify the society against loss incurred by the society.

(3)

For the purposes of sub-paragraph (2) above the conditions are that:

(i)

the loss arises following failure by a mortgagor to make due payment in respect of an advance, and

(ii)

the body pays the society the amount specified in the agreement following sale of the land in respect of which that advance has been made.