# The Insurance Companies (Amendment) Regulations 1993, Note: Explanatory note (This note is not part of the Regulations) These regulations make amendments to the Insurance Companies Act 1982 (“the 1982 Act”), the Financial Services Act 1986 (“the 1986 Act”), the Insurance Companies (Amendment) Regulations 1992 (“the 1992 Regulations”) and the Contracts (Applicable Law) Act 1990. The purpose of these amendments is to implement Council Directive 90/619/EEC (O.J. No. L330, 29.11.90, p.50) relating to life insurance. Council Directive 79/267/EEC (O.J. No. L63, 13.3.79, p.1) created a supervisory regime for direct life “establishment” business (ie life insurance business carried on by insurers through an establishment in a member State). Directive 90/619/EEC introduces changes to that regime, and makes new provision for the regulation of insurers who provide direct life insurance to cover commitments in a member State on a “services” basis, ie otherwise than through an establishment in that State. These regulations also limit the application of section 183 of the 1986 Act (reciprocal facilities for financial business). Regulation 1 makes provision for the citation and commencement of the Regulations, describes their purpose as referred to above and defines the 1982 Act, the 1986 Act and the 1992 Regulations. Regulation 2 amends section 11(2), 37(2) and 54(1) and (2) of the 1982 Act by extending the grounds on which the Secretary of State may withdraw a company’s authorisation, exercise powers of intervention or present a winding-up petition, to cases where an insurance company has failed to satisfy an obligation to which it is subject under the law of another member State giving effect to Directives 79/267/EEC and 90/619/EEC. It also amends section 83A of the 1982 Act (introduced by the 1992 Regulations) to extend the Secretary of State’s powers of intervention under sections 38 to 41, 44 and 45 of the 1982 Act to Lloyd’s underwriters where they have failed to satisfy any such obligations. Regulation 3 amends section 49 of the 1982 Act (transfer of long term business) by requiring that before the court approves a transfer (other than a transfer of contracts of reinsurance) to a company whose head office is in a member State other than the United Kingdom the supervisory authorities of that State must have issued a certificate that the company possesses the necessary margin of solvency after taking the proposed transfer into account. It also makes provision to enable a transfer of policies covering commitments in the United Kingdom to an insurance company established in another member State. The regulation inserts a new section 49A which applies to transfers (other than transfers evidencing contracts of reinsurance) entered into by companies to which Part II of the 1982 Act applies on a services basis. Section 49A provides that before a court can approve a transfer to a company to which Part II of the 1982 Act applies it must be satisfied that the transferee company fulfils specified conditions in the member State of the commitment and that the supervisory authorities of that member State agree to the transfer. Where the transfer is to be to an insurance company established in another member State the court may only approve the transfer if the supervisory authorities in the member State where that establishment is situated and, if different, the supervisory authorities of the member State of the commitment agree to the transfer. Section 49A also requires that before the court approves a transfer to a company whose head office is in a member State other than the United Kingdom the supervisory authorities of that State must have issued a certificate that the company possesses the necessary margin of solvency after taking the proposed transfer into account. Notice of the transfer approved by the court must be published in the member State of the commitment and a policy holder has a right to cancel either as specified in the notice or in the event that the notice is not published. The regulation also amends section 52A of the 1982 Act which provides for the issue of certificates by the Secretary of State in cases where an insurance company’s head office is situated in the United Kingdom to cover insurance companies which intend to provide long term insurance on a services basis. Regulation 4 amends Part IIIA of the 1982 Act (provision of insurance from another member State) by extending sections 81A, 81B, 81C, 81F, 81G and 81H to apply to long term insurance. Regulation 5 amends section 94B of the 1982 Act and Schedule 3A by inserting new rules governing the law applicable to contracts of direct long term insurance covering commitments in the Community. Where a contract has a connection with more than one country (including different parts of the United Kingdom) the rules will determine which law is to govern the contract. Regulation 6 inserts new interpretation provisions in sections 96 and 96A of the 1982 Act. Regulation 7 inserts a new paragraph 3A in Schedule 10 to the 1986 Act to provide that companies which have complied with the notification requirements of Part IIIA of the 1982 Act in respect of commitments constituting investment business shall be deemed to have complied with those of section 32 of the 1986 Act in respect of those commitments. Regulation 8 precludes the issue of a notice under section 183 of the 1986 Act (reciprocal facilities for financial business) in relation to a subsidiary insurance company where the only ground for the issue of the notice is the failure of a third country with which the subsidiary company is connected to allow insurance companies connected with the United Kingdom to carry on direct insurance business on an equal basis. Regulation 9 amends section 2 of the Contracts (Applicable Law) Act 1990 to provide that the internal law for the purposes of Article 1(3) of the Rome Convention is as set out in Schedule 3A to the 1982 Act. Regulation 10 amends regulation 13 of the 1992 Regulations by requiring an insurance company which provides direct life insurance in another member State through an establishment in the United Kingdom to prepare additional information to be submitted to the Secretary of State in respect of those operations, namely an analysis of gross premiums. The form to be used for this purpose is specified in the Schedule. Regulation 11 introduces a transitional period for the coming into force of regulation 13(2A) of the 1992 Regulations. --- Source: https://www.legislation.gov.uk/uksi/1993/174/note (the official version) Page: https://openlegislation.uk/insurance-companies-amendment-regulations-1993/note Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.