Regulation 43 Linked contracts

Changes not yet applied. Later legislation changes this provision in ways not yet written into the text below:

reg.43(4)(a) rev in pt and amended by Insurance Companies 1994 reg.6(2)
reg.43(4)(b) revoked by Insurance Companies 1994 reg.6(3)
reg.43(4)(c) amended by Insurance Companies 1994 reg.6(4)
reg.43(4)(d) amended by Insurance Companies 1994 reg.6(5)
reg.43(9) added by Insurance Companies 1994 reg.6(6)

(1)

Benefits payable under any contract to which this regulation applies shall not be determined, either wholly or partly, by reference to the value of, or the income from, or fluctuations in the value of, property of any description other than property of any of the descriptions specified in Part I of Schedule 10 which, where appropriate, comply with the provisions of paragraph 16 of that Schedule.

(2)

Benefits payable under any contract to which this regulation applies shall not be determined, whether directly or indirectly, either wholly or partly by reference to fluctuations in any index of the value of property other than an index described in Part II of Schedule 10.

(3)

This regulation applies to ordinary long-term contracts which are—

(a)

contracts entered into by—

(i)

insurance companies to which Part II of the Act applies;

(ii)

EC companies the effecting of which constitutes the carrying on of ordinary long-term insurance business in the United Kingdom; or

(iii)

members of Lloyd's,

or have been entered into by any such insurance company or other person at any time before 1st July 1975 and are still in force;

(b)

contracts under which the benefits payable to the policy holder are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contract) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified); and

(c)

not contracts specified in paragraph (4) below as being contracts to which this regulation does not apply.

(4)

The contracts referred to in paragraph (3)(c) above to which this regulation does not apply are—

(a)

contracts entered into before, or in pursuance of a contract subsisting at the date of, the coming into force of these Regulations to the extent that they provide for benefits to be determined by reference to the value of, or the income from, or fluctuations in property of any description to which benefits were permitted to be determined before the coming into force of these Regulations;

(b)

contracts with any policy holder who is a person not ordinarily resident in the United Kingdom;

(c)

contracts entered into by an insurance company to which Part II of the Act applies by reason only that the policy holder is eligible to participate in any established surplus as defined in section 30(4) of the Act;

(d)

contracts entered into by an EC company by reason only that the policy holder is eligible to participate in an excess of assets representing the whole or a particular part of the fund or funds maintained by the company in respect of its long term business over the liabilities, or a particular part of the liabilities, of the company attributable to that business as determined in accordance with the law of the member State in which the head office of the company is situated;

(e)

subject to paragraph (5) below, contracts to manage the investments of pension funds that are not combined with contracts of insurance covering either conservation of capital or payment of a minimum interest;

(f)

contracts entered into before 30th June 1995 to the extent that they provide for benefits to be determined by reference to a collective investment scheme within the meaning of the Financial Services Act 1986 which was a listed security immediately before the coming into force of these Regulations.

(5)

Benefits payable under contracts referred to in paragraph (4)(e) above shall not be determined, either wholly or partly, by reference to the value of, or the income from, or fluctuations in the value of derivative contracts other than permitted derivative contracts as defined in paragraph 15 of Schedule 10.

(6)

In this regulation, “ordinary long-term contract” means a contract for ordinary long-term insurance business.

(7)

Any reference in this regulation to contracts of a similar description to any specified contract is a reference to contracts which correspond with that contract in both the following respects—

(a)

the provisions defining the descriptions of property or indices by reference to which the benefits payable thereunder are to be determined are the same as in that contract; and

(b)

the insurance company or other person undertaking to pay the benefits provided for thereunder is the same as in that contract.

(8)

This regulation does not apply in relation to contracts linked to property of the description in paragraph 11(b) of Schedule 10 entered into before 1st February 1992 save to the extent that responsibility as mentioned in that paragraph extends at least to acts or omissions after that date.