Paragraph 2

(1)

A friendly society to which section 37(2) or (3) above applies shall not change the requisite EC details of an overseas branch–

(a)

which has been established by it in a member State other than the United Kingdom (“the member State of the branch”); and

(b)

through which it carries on direct insurance business,

unless the requirements of this paragraph have been complied with in relation to its making of the change.

(2)

Subject to sub–paragraph (3) below, the requirements of this paragraph are–

(a)

that the society has given a notice to the Commission, and to the supervisory authority in the member State of the branch, stating the details of the proposed change not less than one month before the change is to take place;

(b)

that the Commission has sent to that authority a notice in accordance with sub–paragraph (4)(a) below; and

(c)

that either–

(i)

that authority has informed the society of any consequential changes in the conditions which, in the interest of the general good, must be complied with by the society in carrying on insurance business through the branch; or

(ii)

the period of two months beginning with the day on which the society gave that authority the notice of the proposed change in accordance with paragraph (a) above has elapsed.

(3)

In the case of a change occasioned by circumstances beyond the society’s control, the requirements of this paragraph are that the society shall as soon as practicable (whether before or after the change) give a notice to the Commission, and to the supervisory authority in the member State of the branch, stating the details of the change.

(4)

The Commission shall, as soon as practicable after receiving a notice under sub–paragraph (2)(a) above–

(a)

give notice to the the supervisory authority in the member State of the branch informing it of the proposed change; or

(b)

refuse to give such notice.

(5)

The Commission shall, as soon as practicable after making a decision under sub–paragraph (4) above, notify the society–

(a)

that it has given the notice referred to in that sub–paragraph, stating the date on which it did so; or

(b)

that it refused to give the notice, stating the reasons for that refusal.

(6)

The Commission shall not refuse to give the notice referred to in sub–paragraph (4)(a) above unless, having regard to the proposed change, it appears to it that the criteria of prudent management would not or might not continue to be fulfilled in respect of the society.