Paragraph 5

(1)

A friendly society to which section 37(2) or (3) above applies shall not provide insurance of any class or part of a class in a member State other than the United Kingdom unless–

(a)

the society is authorised under section 32 above to carry on insurance of that class or part of a class; and

(b)

the requirements of this paragraph have been complied with in relation to the provision of the insurance in that member State.

(2)

The requirements of this paragraph are–

(a)

that the society has given to the Commission a notice containing the requisite details; and

(b)

that the Commission has given to the supervisory authority in the member State in which the insurance is to be provided–

(i)

a notice which contains the requisite details; and

(ii)

a certificate in accordance with sub–paragraph (3) below.

(3)

A certificate is in accordance with this sub–paragraph if it–

(a)

attests that the society has the minimum margin of solvency calculated in accordance with such of the following as are appropriate–

(i)

Articles 16 and 17 of the first general insurance Directive, and

(ii)

Articles 19 and 20 of the first life Directive; and

(b)

indicates the classes of insurance business which the society is authorised to carry on in the United Kingdom.

(4)

Where the society intends to provide insurance in more than one member State, the requisite details may be contained in a single notification but must be set out separately in relation to each member State.

(5)

The Commission shall, within the period of one month beginning with the date on which the society’s notice was received–

(a)

give the notice and certificate referred to in sub–paragraph (2)(b) above to the supervisory authority in the member State in which the society intends to provide insurance; or

(b)

refuse to give either or both of those documents.

(6)

The Commission shall, within the period of one month referred to in sub–paragraph (5) above, notify the society–

(a)

that it has given the notice and certificate referred to in sub–paragraph (2)(b) above to the supervisory authority in the member State in which the society intends to provide insurance, stating the date on which it did so; or

(b)

that it has refused to give either or both of those documents, stating the reasons for the refusal.

(7)

The Commission shall not refuse to give the notice referred to in sub–paragraph (2)(b) above unless, having regard to the insurance to be provided in the member State, it appears to it that the criteria of prudent management would not or might not continue to be fulfilled in respect of the society.