Article 2 Interpretation

In these Rules, unless the context otherwise requires—

• “the 1923 Act” means the Industrial Assurance Act 1923^f1;

• “the 1985 Act” means the Companies Act 1985^f2;

• “the 1986 Act” means the Insolvency Act 1986;

• “the 2000 Act” means the Financial Services and Markets Act 2000;

• “the Authority” means the Financial Services Authority;

• “company” means an insurer which is being wound up;

• “contract of general insurance” and “contract of long-term insurance” have the meaning given by article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001^f3;

• “excess of the long-term business assets” means the amount, if any, by which the value of the assets representing the fund or funds maintained by the company in respect of its long-term business as at the liquidation date exceeds the value as at that date of the liabilities of the company attributable to that business;

• “excess of the other business assets” means the amount, if any, by which the value of the assets of the company which do not represent the fund or funds maintained by the company in respect of its long-term business as at the liquidation date exceeds the value as at that date of the liabilities of the company (other than liabilities in respect of share capital) which are not attributable to that business;

• “Financial Services Compensation Scheme” means the scheme established under section 213 of the 2000 Act;

• “general business” means the business of effecting or carrying out a contract of general insurance;

• “the general regulations” means the Insolvency Regulations 1994^f4;

• “the Industrial Assurance Acts” means the 1923 Act and the Industrial Assurance and Friendly Societies Act 1948^f5;

• “insurer” has the meaning given by article 2 of the Financial Services and Markets Act 2000 (Insolvency) (Definition of “Insurer”) Order 2001^f6;

• “linked liability” means any liability under a policy the effecting of which constitutes the carrying on of long-term business the amount of which is determined by reference to—

  1. (a)

     the value of property of any description (whether or not specified in the policy),

  2. (b)

     fluctuations in the value of such property,

  3. (c)

     income from any such property, or

  4. (d)

     fluctuations in an index of the value of such property;

• “linked policy” means a policy which provides for linked liabilities and a policy which when made provided for linked liabilities is deemed to be a linked policy even if the policy holder has elected to convert his rights under the policy so that at the liquidation date there are no longer linked liabilities under the policy;

• “liquidation date” means the date of the winding-up order or the date on which a resolution for the winding up of the company is passed by the members of the company (or the policyholders in the case of a mutual insurance company) and, if both a winding-up order and winding-up resolution have been made, the earlier date;

• “long-term business” means the business of effecting or carrying out any contract of long-term insurance;

• “non-linked policy” means a policy which is not a linked policy;

• “other business”, in relation to a company carrying on long-term business, means such of the business of the company as is not long-term business;

• “the principal rules” means the Insolvency Rules 1986^f7;

• “stop order”, in relation to a company, means an order of the court, made under section 376(2) of the 2000 Act, ordering the liquidator to stop carrying on the long-term business of the company;

• “unit” in relation to a policy means any unit (whether or not described as a unit in the policy) by reference to the numbers and value of which the amount of the liabilities under the policy at any time is measured.

Unless the context otherwise requires, words or expressions contained in these Rules bear the same meaning as in the principal rules, the general regulations, the 1986 Act, the 2000 Act or any statutory modification thereof respectively.