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FRIENDLY SOCIETIES ACT 1992 (c. 40)

(The document as of February, 2008)

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FRIENDLY SOCIETIES ACT 1992 (c. 40)

1992 CHAPTER 40

ARRANGEMENT OF SECTIONS

Content
  1. Part I

    The Friendly Societies Commission

    1. 1. The Friendly Societies Commission.

    2. 2. Financial provision for Commission.

    3. 3. Accounts of Commission and audit.

    4. 4. Annual and other reports.

  2. Part II

    Incorporated Friendly Societies

    1. Constitution and purposes of incorporated friendly societies

      1. 5. Establishment of incorporated friendly societies.

      2. 6. Incorporation of registered friendly societies.

      3. 7. Purposes and powers of an incorporated friendly society.

      4. 8. Effect of the memorandum of an incorporated society.

      5. 9. Effect of the rules of an incorporated society.

      6. 10. Social and benevolent activities.

      7. 11. Group insurance.

      8. 12. Reinsurance.

      9. 13. Control of subsidiaries and other bodies corporate.

    2. Powers of incorporated friendly societies

      1. 14. Investment of funds.

      2. 15. Holding of land for purposes other than investment.

      3. 16. Assistance to subsidiaries and jointly controlled bodies.

      4. 17. Loans to assured members.

    3. Benefit terms

      1. 18. Terms on which benefits are available.

    4. Dissolution and winding up

      1. 19. Modes of dissolution and winding up.

      2. 20. Dissolution by consent.

      3. 21. Voluntary winding up.

      4. 22. Winding up by court: grounds and petitioners.

      5. 23. Application of winding up legislation to incorporated friendly societies.

      6. 24. Continuation of long term business.

      7. 25. Power of court to declare dissolution void.

      8. 26. Cancellation of registration.

  3. Part III

    Management and Administration

    1. Committee of management and other officers

      1. 27. Committee of management.

      2. 28. Chief executive and secretary.

      3. 29. Notification of officers to central office.

    2. Meetings and resolutions

      1. 30. Meetings and resolutions.

  4. Part IV

    Authorisation of Friendly Societies' Business

    1. Restriction on carrying on unauthorised business

      1. 31. Restriction on carrying on unauthorised insurance or non-insurance business.

    2. Authorisation to carry on business

      1. 32. Grant of authorisation by Commission: general.

      2. 33. Applications from certain existing friendly societies.

      3. 34. Grant of unconditional or conditional authorisation.

      4. 35. Extension of current authorisation.

      5. 36. Imposition of conditions on current authorisation.

    3. Restrictions on business of certain authorised societies

      1. 37. Restriction on combinations of business.

      2. 38. Restriction on commercial business.

    4. Powers of Commission in relation to authorised societies

      1. 39. Power to direct application for fresh authorisation.

      2. 40. Withdrawal of authorisation in respect of new business.

      3. 41. Withdrawal of authorisation to carry on insurance business.

    5. Supplementary

      1. 42. Contracts effected in contravention of section 31(1).

      2. 43. Interpretation of Part IV.

  5. Part V

    Regulation of Friendly Societies' Business

    1. Preliminary

      1. 44. Appointment of actuary by societies with long term business.

      2. 45. Valuation of assets and liabilities.

    2. Actuarial investigations

      1. 46. Annual investigation into condition of certain societies.

      2. 47. Triennial investigations into condition of certain societies.

    3. Margins of solvency

      1. 48. Margins of solvency in relation to insurance business of certain societies.

      2. 49. Failure to maintain prescribed margin of solvency.

    4. Criteria of prudent management

      1. 50. The criteria of prudent management.

    5. Powers of Commission

      1. 51. Power to forbid acceptance of new members.

      2. 52. Applications to court.

      3. 53. Residual power to impose requirements for protection of members.

      4. 54. Supervision of activities of subsidiaries etc.

      5. 55. Supervision of group insurance business.

      6. 56. Linked long-term insurance contracts.

    6. Covering of risks situated in another member State

      1. 57. Covering of risks situated in another member State.

    7. Appeals

      1. 58. Rights of appeal.

      2. 59. Determination of appeals.

      3. 60. Costs, procedure and evidence.

      4. 61. Further appeals on points of law.

    8. Information

      1. 62. Powers to obtain information and documents etc.

      2. 63. Confidentiality of certain information.

      3. 64. Exceptions from restrictions on disclosure.

    9. Inspections etc.

      1. 65. Investigations on behalf of Commission.

      2. 66. Inspections and special meetings: general.

      3. 67. Inspections: supplementary provision.

  6. Part VI

    Accounts and Audit

    1. Records and systems

      1. 68. Accounting records and systems of business control.

    2. Annual accounts of friendly societies and registered branches

      1. 69. Duty to prepare accounts.

      2. 70. Contents and form of annual accounts.

    3. Committee of management's annual report

      1. 71. Report on a friendly society's affairs by the committee of management.

    4. Auditors

      1. 72. Auditors' appointment, tenure, qualifications, etc.

    5. Auditors' report on annual accounts

      1. 73. Auditors' report.

      2. 74. Signature of auditors' report.

      3. 75. Auditors' rights to information and to attend meetings.

      4. 76. Approval and signing of accounts.

      5. 77. Information on appointed actuary to be annexed to balance sheet.

    6. Laying and furnishing of accounts and reports

      1. 78. Laying and furnishing of accounts and reports.

      2. 79. Auditors' duties to Commission and related rights.

  7. Part VII

    Disputes

    1. Disputes relating to friendly societies

      1. 80. Determination of certain disputes by arbitration.

      2. 81. Complaints by members of friendly societies.

      3. 82. Disputes arising out of loans of surplus funds to societies of different description.

    2. Disputes relating to industrial and provident societies

      1. 83. Disputes relating to industrial and provident societies.

    3. Disputes under National Savings Bank Act 1971 and National Debt Act 1972

      1. 84. Disputes under the National Savings Bank Act 1971 and National Debt Act 1972.

  8. Part VIII

    Amalgamations, Transfers of Engagements and Conversion of Friendly Societies into Companies

    1. Amalgamations

      1. 85. Amalgamation of friendly societies.

    2. Transfers of engagements

      1. 86. Transfer of engagements by or to friendly society.

      2. 87. Actuary's report as to margin of solvency.

      3. 88. Actuary's report on transfer of long term business.

      4. 89. Power of Commission to alter requirements for transfer by friendly society.

      5. 90. Power of Commission to effect transfer of engagements.

    3. Conversions

      1. 91. Conversion of friendly society into company.

    4. Supplementary

      1. 92. Compensation for loss of office.

  9. Part IX

    Miscellaneous

    1. Societies registered under 1974 Act

      1. 93. Registration of societies under 1974 Act.

      2. 94. Registered friendly societies and branches: validation and ratification by members.

      3. 95. Amendments of 1974 Act.

    2. Societies registered in Northern Ireland

      1. 96. Extension of 1974 Act to Northern Ireland.

    3. Other miscellaneous provisions

      1. 97. Insurance protection.

      2. 98. Financial services.

      3. 99. Insurance of lives of children under 10.

      4. 100. Industrial assurance.

      5. 101. Law applicable to contracts of insurance with friendly societies.

  10. Part X

    General and Supplementary

    1. General

      1. 102. Power to amend, etc. to assimilate to company law or law relating to persons carrying on insurance business.

      2. 103. Power to modify Parts V and VI in relation to particular friendly societies.

      3. 104. Public file of a friendly society.

      4. 105. Exemptions from stamp duty.

      5. 106. Officers and auditors not to be exempted from liability.

      6. 107. Time limit for commencing proceedings.

      7. 108. Offences by bodies corporate, partnerships and unincorporated associations.

      8. 109. Defence of due diligence.

      9. 110. Jurisdiction of magistrates' courts.

      10. 111. Evidence.

      11. 112. Records of friendly societies.

      12. 113. Service of notices.

      13. 114. Form of documents and power to prescribe fees.

      14. 115. Provision as to information supplied for purposes of social security.

    2. Interpretation

      1. 116. Friendly societies etc.

      2. 117. Insurance business etc.

      3. 118. Financial year of friendly societies.

      4. 119. General interpretation.

    3. Supplementary

      1. 120. Amendments and repeals.

      2. 121. Orders and regulations.

      3. 122. Expenses.

      4. 123. Power to make transitional, consequential etc. provisions.

      5. 124. Northern Ireland.

      6. 125. Channel Islands and Isle of Man.

      7. 126. Short title and commencement.

  11. Schedules:

    1. Schedule 1

      --The Friendly Societies Commission.

    2. Schedule 2

      --The activities of a friendly society.

    3. Schedule 3

      --Establishment, incorporation and constitution of incorporated friendly societies.

    4. Schedule 4

      --Incorporation of registered friendly societies: supplementary.

    5. Schedule 5

      --Additional activities of incorporated societies.

    6. Schedule 6

      --Making of contracts and execution of documents by incorporated friendly societies.

    7. Schedule 7

      --Activities which may be carried on by a subsidiary of or body jointly controlled by an incorporated friendly society.

    8. Schedule 8

      --Provisions supplementary to section 13.

    9. Schedule 9

      --Nominations by members of incorporated friendly societies and related matters.

    10. Schedule 10

      --Application of companies winding up legislation to incorporated friendly societies.

      1. Part I

        --General mode of application.

      2. Part II

        --Modified application of Insolvency Act 1986 Parts IV and XII.

      3. Part III

        --Modified application of Insolvency (Northern Ireland) Order 1989.

      4. Part IV

        --Supplementary.

    11. Schedule 11

      --Committee of management: supplementary.

      1. Part I

        --Eligibility and retirement of committee members.

      2. Part II

        --Dealings with members of committee of management.

    12. Schedule 12

      --Meetings and resolutions.

    13. Schedule 13

      --Authorisation: supplementary provisions.

      1. Part I

        --Applications for authorisation.

      2. Part II

        --Imposition of conditions and withdrawal of authorisation.

    14. Schedule 14

      --Auditors: appointment, tenure, qualifications and remuneration.

    15. Schedule 15

      --Amalgamations, transfers of engagements and conversion: supplementary.

      1. Part I

        --Provision of information to members.

      2. Part II

        --Confirmation by Commission.

    16. Schedule 16

      --Amendments of 1974 Act.

    17. Schedule 17

      --Amendments of Policyholders Protection Act 1975.

    18. Schedule 18

      --Amendments of Financial Services Act 1986.

      1. Part I

        --Amendments of provisions other than Schedule 11.

      2. Part II

        --Amendments of Schedule 11.

    19. Schedule 19

      --Industrial assurance.

      1. Part I

        --Great Britain.

      2. Part II

        --Northern Ireland.

    20. Schedule 20

      --Law applicable to certain contracts of insurance.

    21. Schedule 21

      --Amendments.

      1. Part I

        --Amendments of enactments.

      2. Part II

        --Amendments of Northern Ireland legislation.

    22. Schedule 22

      --Repeals.

      1. Part I

        --General.

      2. Part II

        --Northern Ireland legislation.

An Act to make further provision for friendly societies; to provide for the cessation of registration under the Friendly Societies Act 1974; to make provision about disputes involving friendly societies or other bodies registered under the Friendly Societies Act 1974 and about the functions of the Chief Registrar of friendly societies; and for connected purposes.

[16th March 1992]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:--



Part I The Friendly Societies Commission

1 The Friendly Societies Commission

(1) For the purposes of this Act and the 1974 Act there shall be established a body of Commissioners to be called the Friendly Societies Commission (in this Act referred to as "the Commission").

(2) The Commission shall consist of not less than 4 and not more than 10 members to be appointed by the Treasury and the Treasury shall appoint one member to be the chairman, and another member to be the deputy chairman, of the Commission.

(3) Any appointment under subsection (2) above may be on either a full-time or a part-time basis.

(4) The general functions of the Commission shall be--

(a) to promote the protection by each friendly society of its funds;

(b) to promote the financial stability of friendly societies generally;

(c) to secure that the purposes of each friendly society are in conformity with this Act and any other enactment regulating the purposes of friendly societies;

(d) to administer the system of regulation of the activities of friendly societies; and

(e) to advise and make recommendations to the Treasury and other government departments on any matter relating to friendly societies,

and the Commission shall have the other functions conferred on it by or under this Act or any other Act.

(5) The Commission shall have power to do anything which is calculated to facilitate the discharge of its functions, or is incidental or conducive to their discharge.

(6) The functions of the Commission, and of its officers and employees, shall be performed on behalf of the Crown.

(7) The Treasury may by order transfer some or all of the functions of the Commission to such other person or body as the order may specify.

(8) Without prejudice to the generality of section 121(3) below, an order under this section may in consequence of the transfer--

(a) amend any enactment or instrument;

(b) direct that the Commission shall cease to exist on a day specified in the order.

(9) Schedule 1 to this Act shall have effect with respect to the Commission.

2 Financial provision for Commission

(1) There shall be charged on friendly societies such a general charge towards the expenses of the Commission and such fees in respect of the exercise of its functions as are authorised under this section.

(2) The Treasury may, by regulations, make provision for--

(a) a general charge to be levied on friendly societies with respect to each accounting year of the Commission and to be paid at such rate computed by reference to such criteria, at such time and in such manner as may be prescribed by the regulations; and

(b) fees of such amounts as may be so prescribed to be paid by friendly societies in respect of the exercise of the Commission's functions in relation to them.

(3) The provision to be made from time to time under subsection (2) above, by way of the general charge and fees, shall be such as to produce an annual revenue of the Commission sufficient to meet its expenses properly chargeable to revenue account, taking one year with another.

(4) Regulations under subsection (2) above may include provision for any fees payable by societies to be reduced or for payment of any fees to be waived by the Commission in circumstances determined by or under the regulations.

(5) The amounts received by the Commission under this section shall be applied as an appropriation in aid of money provided by Parliament for the expenses of the Commission, and in so far as not so applied, shall be paid into the Consolidated Fund.

(6) In this Part of this Act "accounting year", in relation to the Commission, means the period of 12 months ending with 31st March in any year, except that the Commission's first accounting year shall end on 31st March 1993.

3 Accounts of Commission and audit

(1) The Commission shall keep proper accounts and proper accounting records and shall prepare in respect of each accounting year a statement of accounts in such form as the Treasury may direct.

(2) The statement of the accounts required by subsection (1) above may be combined with the statement of the accounts of the Chief Registrar which he is required to prepare as regards his functions.

(3) The Commission shall send to the Treasury and to the Comptroller and Auditor General, before the end of the period of seven months after the end of each accounting year, a copy of the statement of accounts for that year.

(4) The Comptroller and Auditor General shall examine, certify and report on every statement of accounts received by him from the Commission and shall lay a copy of the statement and of his report thereon before each House of Parliament.

4 Annual and other reports

(1) It shall be the duty of the Commission to lay before the Treasury and before Parliament as soon as possible after the end of each accounting year a report on the discharge of its functions during that year.

(2) The Commission may lay before Parliament from time to time such other reports relating to the discharge of its functions, whether in relation to friendly societies generally or a particular friendly society, as it thinks fit.



Part II Incorporated Friendly Societies

Constitution and purposes of incorporated friendly societies

<<<< >>>>

5 Establishment of incorporated friendly societies

(1) This Part of this Act has effect--

(a) to enable societies to be established in accordance with this Act and to be registered and incorporated under it; and

(b) to enable friendly societies registered under the 1974 Act to be registered and incorporated under this Act.

(2) A society may be established under this Act if under its proposed memorandum--

(a) its purposes are to include the carrying on of one or more activities falling within Head A, B, C or D of Schedule 2 to this Act;

(b) any such activity--

(i) is to be carried on by the society with a view to the provision, for its members and such persons connected with its members as may be prescribed in its rules, of insurance or other benefits; and

(ii) is to be funded by voluntary subscriptions from members of the society, with or without donations; and

(c) any other purposes which it is to have are within the permitted capacity of incorporated friendly societies under this Act.

(3) A society established under this Act is incorporated as from the date of its registration under this Act by the central office.

(4) The Commission may by order made with the consent of the Treasury vary Schedule 2 to this Act by adding to or deleting, or by varying the description of, any activity for the time being specified in it.

(5) No such order shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.

(6) Schedule 3 to this Act shall have effect in relation to--

(a) the procedure for registration of societies as societies incorporated under this Act (in this Act referred to as "incorporated friendly societies");

(b) the memorandum of the purposes and extent of the powers of, and the rules for the regulation of, such societies,

(c) the name and registered office of such societies,

and certain incidents of membership of incorporated friendly societies.

(7) In this Part of this Act references to the permitted capacity of incorporated friendly societies under this Act are to the capacity to carry on all the activities mentioned in section 7(2) below.

6 Incorporation of registered friendly societies

(1) A registered friendly society may be registered and incorporated under this Act if--

(a) the conditions mentioned in section 5(2) above are satisfied by reference to the society's proposed memorandum; and

(b) the society complies with the requirements in Schedule 3 to this Act which are applicable to its registration under this Act;

and such a society is so incorporated as from the date of its registration by the central office.

(2) On the incorporation of a registered friendly society all property held immediately before incorporation by any person in trust for the society shall become by virtue of this subsection the property of the society after incorporation.

(3) After its incorporation the society shall continue to be entitled to all rights and subject to all liabilities to which it was entitled or subject immediately before incorporation.

(4) On the incorporation of a registered society with registered or unregistered branches--

(a) all property held immediately before incorporation by any person in trust for any branch of the society, and

(b) all rights and liabilities to which any such branch was then entitled or subject,

shall, subject to subsection (5) below, become by virtue of this subsection property, rights and liabilities of the society.

(5) A registered friendly society may (in accordance with paragraph 2 of Schedule 4 to this Act) make a scheme identifying any property, rights or liabilities of any branch of the society which are not to be transferred to the society on its incorporation; and any such property, rights or liabilities shall be excluded from transfer under subsection (4) above.

(6) On the incorporation of a registered friendly society, its registration under the 1974 Act and that of any registered branch of the society shall be cancelled by the central office.

(7) Schedule 4 to this Act shall have effect for supplementing this section.

7 Purposes and powers of an incorporated friendly society

(1) The purposes of an incorporated friendly society shall be those provided for by the society's memorandum.

(2) The purposes for which an incorporated friendly society may exist are--

(a) the carrying on, subject to section 5(2)(b) above, of--

(i) any business of any description falling within a class specified in Head A or B or within Head C of Schedule 2 to this Act, or

(ii) any activity falling within Head D of that Schedule; and

(b) the carrying on, in addition to any business or activity falling within paragraph (a) above, of any of the following, namely--

(i) social or benevolent activities in accordance with section 10 below;

(ii) group insurance business in accordance with section 11 below;

(iii) reinsurance, in accordance with section 12 below, of risks insured by other friendly societies;

(iv) control or joint control of bodies corporate in accordance with section 13 below;

and the memorandum of an incorporated friendly society may also confer on the society power to do anything falling within Schedule 5 to this Act.

(3) The memorandum of an incorporated friendly society may confer on it any other power specified in this Part of this Act, but no such power may be exercised except for carrying out the society's purposes.

(4) An incorporated friendly society shall, subject to the provisions of this Act, its memorandum and its rules, have any other power which is incidental or conducive to the carrying out of its purposes or for doing anything falling within Schedule 5 to this Act.

(5) Nothing in this Act shall be taken as preventing an incorporated friendly society from providing in its rules--

(a) for such system of representation of the members in the making of decisions by the society as the society may think fit;

(b) for the division of the society's members into groups under the control of the society and bound to contribute to the funds of the society but, subject to that, having funds and property of their own vested in trustees and administered by themselves or through their own trustees, officers or committees (and in accordance with their own rules);

(c) for the delegation of authority to any such group (or to its committee or any of its officers) to act, within such limits as the society may set, on the society's behalf;

but no such group may do anything on its own account which does not fall within Head D of Schedule 2 or within Schedule 5 to this Act.

(6) Schedule 6 to this Act shall have effect in relation to the making of contracts and execution of documents by incorporated friendly societies.

8 Effect of the memorandum of an incorporated society

(1) The provisions of the memorandum of an incorporated friendly society are binding upon--

(a) each of the members and officers of the society,

(b) all persons claiming on account of a member or under its rules,

and all such members, officers and persons (but no others) shall be taken to have notice of the provisions of the memorandum.

(2) A person not of a description mentioned in subsection (1)(a) or (b) above who is a party to a transaction with an incorporated friendly society which is within the permitted capacity of such societies under this Act is not bound to enquire as to whether the transaction is within the capacity of the society in question.

(3) Subsection (4) below applies to any act of an incorporated society which is within the permitted capacity of such societies under this Act but is beyond the capacity of the society in question.

(4) In favour of a person who--

(a) is not a person mentioned in subsection (1) above;

(b) gives valuable consideration for the act; and

(c) does not know that the act is beyond the capacity of the society,

any act to which this subsection applies is deemed to be one which is within the capacity of the society to enter into, notwithstanding the provisions of the memorandum.

(5) Where an incorporated friendly society purports to transfer or grant an interest in property, the fact that the act was beyond the capacity of the society does not affect the title of a person who in good faith subsequently acquires the property or an interest in it for valuable consideration and without actual notice of the circumstances affecting the validity of the society's act.

(6) Subsection (4) above does not affect--

(a) the right of a member of an incorporated friendly society to bring proceedings to restrain the doing of an act (other than an act done in fulfilment of a legal obligation arising from a previous act of the society) which is beyond the capacity of the society;

(b) the duty of the committee of management to observe any limitation on their powers flowing from the society's memorandum; or

(c) any liability incurred by any person by reason of the society acting beyond its capacity.

(7) Relief from any liability mentioned in subsection (6)(c) above must be agreed to by special resolution.

(8) In any proceedings arising out of subsection (4) above, the burden of proving that a person knew that an act was beyond the capacity of the society in question lies on the person making the allegation.

(9) In this section "transaction" includes any act.

9 Effect of the rules of an incorporated society

(1) The provisions of the rules of an incorporated friendly society are binding upon--

(a) each of the members and officers of the society,

(b) all persons claiming on account of a member or under its rules,

and all such members, officers and persons (but no others) shall be taken to have notice of the provisions of the rules.

(2) A party to a transaction with an incorporated friendly society who is not of a description mentioned in subsection (1)(a) or (b) above is not bound to enquire as to any limitation on the powers of the committee of management to bind the society.

(3) Subsection (4) below applies in relation to any act of an incorporated friendly society which is, or is deemed by section 8(4) above to be, within the capacity of the society and is decided upon by the committee of management acting beyond their powers under the constitution of the society.

(4) In favour of a person who--

(a) is not a person mentioned in subsection (1) above;

(b) gives valuable consideration for an act to which this subsection applies; and

(c) does not know that the act is beyond the powers of the committee of management;

the power of the committee of management to bind the society shall be deemed free of any limitation in the society's constitution.

(5) Where an incorporated friendly society purports to transfer or grant an interest in property, the fact that the committee of management acted beyond their powers under the society's constitution does not affect the title of a person who in good faith subsequently acquires the property or an interest in it for valuable consideration and without actual notice of the circumstances (if any) affecting the validity of the society's act.

(6) Subsection (4) above does not affect--

(a) the right of a member of an incorporated friendly society to bring proceedings to restrain the doing of an act (other than an act done in fulfilment of a legal obligation arising from a previous act of the society) which is beyond the powers of the committee of management;

(b) the duty of the committee of management to act within their powers under the constitution of the society;

(c) any liability incurred by any person by reason of the committee of management exceeding their powers.

(7) Action by the committee of management of an incorporated friendly society which is beyond their powers under the society's constitution but is within its capacity may be ratified by the society in general meeting in such manner as its rules may provide; but relief from any liability mentioned in subsection (6)(c) above must be agreed to by special resolution separate from any resolution ratifying the committee's action.

(8) In this section--

(a) references to limitations on the committee's powers under the constitution of the society include limitations deriving from a resolution of the society in general meeting or any agreement between the members of the society; and

(b) "transaction" includes any act.

(9) In any proceedings arising out of subsection (4) above, the burden of proving that a person knew that an act was beyond the powers of the committee of management lies on the person making the allegation.

(10) This section shall not affect the application, in relation to an incorporated friendly society, of any rule of law relating to the validity of acts which are within the capacity of a body corporate but may have been affected by defects arising from its internal management under its constitution.

10 Social and benevolent activities

(1) An incorporated friendly society may include among its purposes the carrying on of any social or benevolent activity which is not inconsistent with the other purposes of the society.

(2) For the purposes of this section "benevolent activity" means the making of donations, the raising of funds or any other activity carried on for a charitable purpose or for any other benevolent purpose.

11 Group insurance

(1) An incorporated friendly society may include among its purposes the carrying on of any group insurance business.

(2) In this Act "group insurance business" means business (carried on in accordance with the society's rules) which--

(a) is of a description falling within Head A, or class 2 of Head B, of Schedule 2 to this Act; and

(b) is carried on as the business of providing benefits, in pursuance of a contract with a qualifying person, for or in respect of the members of a group scheme.

(3) For the purposes of this section--

  • "group scheme" means a scheme or other arrangement under which benefits are to be provided for or in respect of persons who are members of the scheme and who qualify for membership by virtue of--

(a) being employees of a particular employer, or

(b) being members of some other group of persons of a description prescribed in regulations under subsection (7) below;

  • "qualifying person" means a person who has established or is otherwise responsible for the operation of a group scheme or a trustee of such a scheme; and

  • "member", in relation to a group scheme, includes any person for or in respect of whom benefits are to be provided under the scheme, whatever the terms in which such persons are described in the scheme.

(3) Group insurance business may be carried on by an incorporated friendly society whether or not members of the group scheme are, or are required by the society to be, members of the society.

(4) Where an incorporated friendly society carries on any group insurance business and the rules of the society so provide, any qualifying person with whom the society contracts (or his nominee) may be accorded the rights of a member of the society (including any right to vote) for the purpose of participating in the affairs of the society in the interests of the members of the group scheme with which he is concerned.

(5) A person who is accorded the rights of a member of a society by virtue of subsection (4) above shall, for the purposes of any power conferred on the Commission by this Act which is exercisable in the interests of members of the society, be treated as if he were a member of the society.

(6) The rules of an incorporated friendly society may not prevent a person from being a member of the society in his private capacity by reason only of the fact that he has been accorded the rights of a member by virtue of subsection (4) above.

(7) The Commission may make regulations specifying the manner in which group insurance business may be carried on by incorporated friendly societies; and such regulations may in particular include limitations or requirements relating to--

(a) the contracts in pursuance of which group insurance business may be carried on; or

(b) the persons with whom, or the groups of persons for whose benefit, such contracts may be made.

12 Reinsurance

(1) An incorporated friendly society may include among its purposes the carrying on of any reinsurance business to which subsection (2) below applies to such extent or in such circumstances as may from time to time be approved by the appropriate actuary.

(2) This subsection applies to business consisting of the effecting and carrying out of contracts of reinsurance of risks which--

(a) are insured or to be insured by any other friendly society (whether incorporated or not); and

(b) are of a class or part of a class of insurance business which the society carrying on the reinsurance business itself carries on.

(3) An incorporated friendly society which carries on any insurance business may provide in its rules for the reinsurance to such extent as may from time to time be approved by the appropriate actuary of any risks against which persons are or are to be insured by the society.

13 Control of subsidiaries and other bodies corporate

(1) Subject to the following provisions of this section, an incorporated friendly society may include among its purposes any of the following activities--

(a) forming subsidiaries;

(b) taking part with others in forming bodies corporate to be jointly controlled by it;

(c) otherwise acquiring, or keeping, control or joint control of bodies corporate.

(2) An incorporated friendly society may form or take part in forming or may otherwise acquire control or joint control of the following bodies corporate (referred to as "qualifying bodies") but no others--

(a) companies whose objects are limited to the carrying on of any one or more of the activities specified in Schedule 7 to this Act; and

(b) bodies formed in another member State whose purposes are limited to the carrying on of any one or more of those activities in another member State.

(3) A company or other body corporate is not a qualifying body if its objects or purposes enable it to form or take part in forming or otherwise to acquire control or joint control of bodies corporate.

Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13 | P.14 | P.15 | P.16

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