Financial Services Act 1986

Long term insurance contracts

10 Rights under a contract the effecting and carrying out of which constitutes long term business within the meaning of the [1982 c. 50.] Insurance Companies Act 1982.

• Notes

  (1)

  This paragraph does not apply to rights under a contract of insurance if—

  (a)

  the benefits under the contract are payable only on death or in respect of incapacity due to injury, sickness or infirmity;

  (b)

  no benefits are payable under the contract on a death (other than a death due to accident) unless it occurs within ten years of the date on which the life of the person in question was first insured under the contract or before that person attains a specified age not exceeding seventy years;

  (c)

  the contract has no surrender value or the consideration consists of a single premium and the surrender value does not exceed that premium ; and

  (d)

  the contract does not make provision for its conversion or extension in a manner that would result in its ceasing to comply with paragraphs (a), (b) and (c) above.

  (2)

  Where the provisions of a contract of insurance are such that the effecting and carrying out of the contract—

  (a)

  constitutes both long term business within the meaning of the [1982 c. 50.] Insurance Companies Act 1982 and general business within the meaning of that Act; or

  (b)

  by virtue of section 1(3) of that Act constitutes long term business notwithstanding the inclusion of subsidiary general business provisions,

  references in this paragraph to rights and benefits under the contract are references only to such rights and benefits as are attributable to the provisions of the contract relating to long term business.

  (3)

  This paragraph does not apply to rights under a reinsurance contract.

  (4)

  Rights falling within this paragraph shall not be regarded as falling within paragraph 9 above.