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Friendly Societies Act 1992

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E+W+S+N.I.

Friendly Societies Act 1992

1992 CHAPTER 40

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:—

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Modifications etc. (not altering text)

C1Act: functions transferred (18.11.1998) by S.I. 1998/2842, art. 2, Sch. Pt. II para. 65

C2Power to amend conferred (E.W.S.) (7.2.1994) by 1993 c. 48,s.162, (with s. 6(8), 164); S.I. 1994/86, art. 2

[F1Part IE+W+S+N.I. FUNCTIONS OF THE AUTHORITY

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Amendments (Textual)

F1Pt. I (s. 1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for Pt. I (ss. 1-4) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 54 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F21 Functions of the Financial Services Authority in relation to friendly societies.E+W+S+N.I.

(1)The Financial Services Authority (“the Authority") has the following functions under this Act and the 1974 Act in relation to friendly societies—

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

(b)to administer the system of regulation of the activities of friendly societies provided for by or under this Act and the 1974 Act; and

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

(2)The Authority also has, in relation to such societies, the other functions conferred on it by or under this Act or any other enactment.

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Amendments (Textual)

F2Pt. I (s. 1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for Pt. 1 (ss. 1-4) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 54 (with art. 13(3), Sch. 5); S.I. 2001/3538, 2(1)

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Part IIE+W+S+N.I. Incorporated Friendly Societies

Constitution and purposes of incorporated friendly societiesE+W+S+N.I.

5 Establishment of incorporated friendly societies.E+W+S+N.I.

(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 [F3Authority].

(4)The [F4Treasury may by order] 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.

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Amendments (Textual)

F3Words in s. 5(3) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 55(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F4Words in s. 5(4) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1, para. 55(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C3S. 5(4): Functions of the Friendly Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. II; S.I. 2001/3538, art. 2(1)

6 Incorporation of registered friendly societies.E+W+S+N.I.

(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 [F5Authority].

(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 [F6Authority]

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

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Amendments (Textual)

F5Words in s. 6(1)(b) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 56 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F6Words in s. 6(6) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para 56 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

7 Purposes and powers of an incorporated friendly society.E+W+S+N.I.

(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 [F7within section 10 below or] 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.

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Amendments (Textual)

F7Words in s. 7(5) inserted (1.8.1996) by S.I. 1996/1188 art. 3

8 Effect of the memorandum of an incorporated society.E+W+S+N.I.

(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.E+W+S+N.I.

(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.E+W+S+N.I.

(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.E+W+S+N.I.

(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 [F8Authority] 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 [F9Treasury] 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.

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Amendments (Textual)

F8Words in s. 11(5) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 57(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F9Words in s. 11(7) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 57(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C4S. 11(7): Functions of Friendly Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. II (with art. 5); S.I. 2001/3538, art. 2(1)

12 Reinsurance.E+W+S+N.I.

(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.E+W+S+N.I.

(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.

(4)An incorporated friendly society may not take part in forming or acquire control of a body corporate jointly with any person other than another incorporated friendly society without the consent of the Commission.

(5)The Commission may give consent without conditions or subject to such conditions as it thinks fit.

(6)Any alteration of the memorandum of an incorporated friendly society to include among its purposes and powers the carrying on of any activity such as is mentioned in subsection (1) above must be adopted by a special resolution of the society in general meeting; and any amendment of a provision in its memorandum which permits it to do so must also be so adopted.

(7)A registered friendly society may not include in a memorandum adopted for the purposes of paragraph 2(1)(c) of Schedule 3 to this Act any provision enabling it on incorporation to carry on any activity such as is mentioned in subsection (1) above unless its inclusion has been authorised by a special resolution of the society in general meeting.

(8)The Commission may by order made with the consent of the Treasury vary Schedule 7 to this Act by adding to or deleting from it any activity or by varying the description of any activity for the time being specified in it.

(9)For the purposes of this Act—

(a)an incorporated friendly society has control of a body corporate if the society—

(i)holds a majority of the voting rights in it; or

(ii)is a member of it and has the right to appoint or remove a majority of its board of directors; or

(iii)is a member of it and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in it;

(b)a body corporate is a subsidiary of an incorporated friendly society if the society has control of it.

(c)an incorporated friendly society has joint control of a body corporate if, in pursuance of an agreement or other arrangement between them, the society and another person—

(i)hold a majority of the voting rights in that body; or

(ii)are members of it and together have the right to appoint or remove a majority of its board of directors; or

(iii)are members of it and alone control, pursuant to an agreement with other shareholders or members, a majority of the voting rights in it;

(d)a body corporate is a body jointly controlled by an incorporated friendly society if the society has joint control of it;

and a society acquires joint control whenever any of the conditions mentioned in paragraph (c) above are satisfied with respect to a body corporate, notwithstanding that it may already be a subsidiary of the society.

(10)Schedule 8 to this Act shall have effect for supplementing this section.

(11)In this section “company” means a company within the meaning of the M1Companies Act 1985 or the M2Companies (Northern Ireland) Order 1986.

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Marginal Citations

Powers of incorporated friendly societiesE+W+S+N.I.

14 Investment of funds.E+W+S+N.I.

(1)An incorporated friendly society may invest its funds—

(a)in the purchase of land, or in the erection of offices or other buildings thereon;

(b)upon any other security expressly directed by the rules of the society, other than personal security (but without prejudice to any provision of this Act relating to loans); or

(c)in any other investment of a kind which trustees are for the time being by law authorised to make.

(2)An incorporated friendly society which falls within subsection (3) [F10 or (4)]below may also invest the funds of the society in any other manner authorised by its constitution.

(3)An incorporated friendly society falls within this subsection if—

(a)it is a society to which [F11rules in respect of margins of solvency, made by the Authority under section 138 of the Financial Services and Markets Act 2000, apply] and

(b)it maintains the margin of solvency which it is required to maintain by virtue of [F12such rules].

[F13(4)Anincorporatedfriendly society falls within this subsection if-

(a)it carries on insurance business in the United Kingdom;

(b)section 48 below does not apply to it; and

(c)it maintains a margin of solvency of such amount as may be prescribed by or determined in accordance with regulations made for the purposes of this section.]

(5)Once a society falls within subsection (3) [F10 or (4)] above, it shall be treated as continuing to do so for the purposes of subsection (2) above unless the [F14Authority] serves a notice under subsection (6) below on it.

(6)Where it appears to the [F14Authority] that an incorporated friendly society has ceased to fall within subsection (3) [F10 or (4)] above, it shall serve on the society a notice stating that fact.

(7)The powers of investment of a society on which a notice is served under subsection (6) above shall accordingly, until the notice is revoked under subsection (10) below, be limited to investment falling within subsection (1) above.

(8)A notice under subsection (6) above may direct a society to dispose of an investment which it could not have acquired except under subsection (2) above.

(9)Subject to subsection (8) above, a society may retain any investment which it could only have acquired under subsection (2) above.

(10)The [F14Authority] may, by a subsequent notice to the society, revoke a notice under this section at any time when it appears to it that the society again falls within subsection (3) [F10 or (4)] above.

[F15(11)On serving a notice under subsection (6) or (10) above on a society the Commission shall send a copyof it to the central office.]

(12)The [F16Authority] shall keep a copy of [F16any notice served on a society under subsection (6) or (10) above] in the public file of the society.

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Amendments (Textual)

F10Words in s. 14 omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 Pt. 1 para. 58(a) (with art. 13(3), Sch. 5) and are repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F11Words in s. 14(3)(a) substituted (17.8.2001 for sepcified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 13(1) Sch. 3 Pt. 1 para. 58(b) (with art. 13(3), Sch. 5)

F12Words in s. 14(3)(b) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 58(c) (with art. 13(3), Sch. 5)

F13S. 14(4) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S. I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 Pt. I para. 58(d) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F14Words in s. 14(5)(6)(10) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 Pt. 1 para. 58(e) (with art. 13(3), Sch. 5)

F15S. 14(11) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 58(d) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F16Words in s. 14(12) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 Pt. 1 para 58(g)(i)(ii) (with art. 13(3), Sch. 5)

15 Holding of land for purposes other than investment.E+W+S+N.I.

An incorporated friendly society may acquire and hold land—

(a)for the purpose of carrying on any of its activities; or

(b)for the purpose of enabling a subsidiary of the society, or a body jointly controlled by it, to conduct its business;

and may dispose of, or otherwise deal with, any land so held by it.

16 Assistance to subsidiaries and jointly controlled bodies.E+W+S+N.I.

(1)An incorporated friendly society may provide its subsidiaries or bodies which it jointly controls with any of the following services—

(a)loans of money, with or without security and whether or not at interest;

(b)the use of services or property, whether or not for payment;

(c)grants of money, whether or not repayable; and

(d)guarantees of the discharge of their liabilities.

(2)An incorporated friendly society may make payments towards the discharge of the liabilities of any of its subsidiaries.

17 Loans to assured members.E+W+S+N.I.

(1)An incorporated friendly society may advance to a member of at least one full year’s standing any sum not exceeding one half of the amount of an assurance of his life, on the written security of himself and two satisfactory sureties or, in Scotland, cautioners for repayment.

(2)The amount so advanced, with all interest on it, may be deducted from the sum assured, without prejudice in the meantime to the operation of the security.

(3)A person’s membership of a registered friendly society before the society’s incorporation is to be taken into account in calculating his standing for the purposes of this section.

Benefit termsE+W+S+N.I.

18 Terms on which benefits are available.E+W+S+N.I.

(1)The terms on which an incorporated friendly society provides any benefit shall be—

(a)specified in its rules; or

(b)determined in a manner specified in its rules.

(2)If the terms on which a benefit is provided are not specified in the society’s rules, the society—

(a)shall make copies of them available free of charge to members of the society at every office of the society; and

(b)shall send, free of charge, copies of them to any member of the society who demands them.

(3)If, on demand made of it under subsection (2) above, a society fails, in accordance with that subsection, to make available or, as the case may be, within 7 days of the demand, to send to a person a copy of the terms on which a benefit is provided, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(4)Schedule 9 to this Act shall have effect in relation to nominations by members of incorporated friendly societies and related matters.

Dissolution and winding upE+W+S+N.I.

19 Modes of dissolution and winding up.E+W+S+N.I.

(1)An incorporated friendly society—

(a)may be dissolved by consent of the members; or

(b)may be wound up voluntarily or by the court,

in accordance with this Part of this Act; and an incorporated friendly society may not, except where it is dissolved by virtue of section 85(4), 86(5) or 90(9) below, be dissolved or wound up in any other manner.

(2)An incorporated friendly society which is in the course of dissolution by consent, or is being wound up voluntarily, may be wound up by the court.

20 Dissolution by consent.E+W+S+N.I.

(1)An incorporated friendly society may be dissolved by an instrument of dissolution.

(2)An instrument of dissolution shall only have effect if it is approved by special resolution.

(3)An instrument of dissolution shall set out—

(a)the liabilities and assets of the society in detail;

(b)the number of members, and the nature of their interests in the society;

(c)the claims of creditors, and the provision to be made for their payment;

(d)the intended appropriation or division of the funds and property of the society;

(e)the names of one or more persons to be appointed as trustees for the purposes of the dissolution, and their remuneration.

(4)An instrument of dissolution may be altered, but the alteration shall only have effect if it is approved by special resolution.

(5)The provisions of this Act shall continue to apply in relation to an incorporated friendly society as if the trustees appointed under the instrument of dissolution were the committee of management of the society.

(6)The trustees shall—

(a)within 15 days of the passing of a special resolution approving an instrument of dissolution, give notice to the [F17Authority] of the fact and the date of commencement of the dissolution, enclosing a copy of the instrument; and

(b)within 15 days of the passing of a special resolution approving an alteration of such an instrument, give notice to the [F17Authority]of the fact, enclosing a copy of the altered instrument;

and if the trustees fail to comply with this subsection, they shall each be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(7)An instrument of dissolution or an alteration to such an instrument shall be binding on all members of the society as from the date on which the copy of the instrument or altered instrument, as the case may be, is placed on the public file of the society under subsection (12) below.

(8)The trustees shall, within 28 days from the termination of the dissolution, give notice to the [F17Authority] of the fact and the date of the termination, enclosing an account and balance sheet signed and certified by them as correct, and showing—

(a)the assets and liabilities of the society at the commencement of the dissolution; and

(b)the way in which those assets and liabilities have been applied and discharged.

(9)If the trustees fail to comply with subsection (8) above they shall each be guilty of an offence and liable on summary conviction—

(a)to a fine not exceeding level 2 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.

(10)Except with the consent of the [F18Authority], no instrument of dissolution or alteration to such an instrument shall be of any effect if the purpose of the proposed dissolution or alteration is to effect or facilitate the transfer of the society’s engagements to any other friendly society or to a company.

(11)Any provision in a resolution or document that members of an incorporated friendly society proposed to be dissolved shall accept membership of some other body in or towards satisfaction of their rights in the dissolution shall be conclusive evidence of such purpose as is mentioned in subsection (10) above.

(12)The [F17Authority]shall keep in the public file of the society any notice or other document received by it under subsection (6) or (8) above and shall record in that file the date on which the notice or document is placed in it.

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Amendments (Textual)

F17Words in s. 20(6)(a)(b),(8)(12) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 59(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F18Words in s. 20(10) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 59(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

21 Voluntary winding up.E+W+S+N.I.

(1)An incorporated friendly society may be wound up voluntarily under the applicable winding up legislation if it resolves by special resolution that it be wound up voluntarily.

(2)A copy of any special resolution passed for the voluntary winding up of an incorporated friendly society shall be sent by the society to the [F19Authority] within 15 days after it is passed; and the [F19Authority] shall keep the copy in the public file of the society.

(3)A copy of any such resolution shall be annexed to every copy of the memorandum or of the rules issued after the passing of the resolution.

(4)If an incorporated friendly society fails to comply with subsection (2) or (3) above, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(5)For the purposes of this section, a liquidator of the society shall be treated as an officer of it.

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Amendments (Textual)

F19Words in s. 21(2) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 60 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

22 Winding up by court: grounds and petitioners.E+W+S+N.I.

(1)An incorporated friendly society may be wound up under the applicable winding up legislation by the court on any of the following grounds, that is to say, if—

(a)the society has by special resolution resolved that it be wound up by the court;

(b)the number of members is reduced below 7;

(c)the number of members of the committee of management is reduced below 2;

(d)the society has not commenced business within a year from its incorporation or has suspended its business for a whole year;

(e)the society exists for an illegal purpose;

(f)the society is unable to pay its debts; or

(g)the court is of the opinion that it is just and equitable that the society should be wound up.

(2)Except as provided by subsection (3) below or the applicable winding up legislation, a petition for the winding up of an incorporated friendly society may be presented by—

(a)the [F20Authority];

(b)the society or its committee of management;

(c)any creditor or creditors (including any contingent or any prospective creditor); or

(d)any contributory or contributories,

or by all or any of those parties, together or separately.

(3)A contributory may not present a petition unless the number of members is reduced below 7 or he has been a contributory for at least six months before the winding up.

(4)In this section “contributory” has the meaning assigned to it by paragraph 9 of Schedule 10 to this Act.

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Amendments (Textual)

F20Word in s. 22(2)(a) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 61 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

23 Application of winding up legislation to incorporated friendly societies.E+W+S+N.I.

(1)In this section “the companies winding up legislation” means the enactments applicable in relation to England and Wales, Scotland and Northern Ireland which are specified in paragraph 1 of Schedule 10 to this Act (including any enactment which creates an offence by any person arising out of acts or omissions occurring before the commencement of the winding up).

(2)In its application to the winding up of an incorporated friendly society, by virtue of section 21(1) or 22(1) above, the companies winding up legislation shall have effect with the modifications effected by Parts I to III of Schedule 10 to this Act; and the supplementary provisions of Part IV of that Schedule also have effect in relation to such a winding up and in relation to a dissolution by consent.

(3)In section 21 and 22 above “the applicable winding up legislation” means the companies winding up legislation as so modified.

24 Continuation of long term business.E+W+S+N.I.

(1)This section has effect in relation to the winding up of an incorporated friendly society which carries on long term business (including any reinsurance business).

(2)The liquidator shall, unless the court otherwise orders, carry on the long term business of the society with a view to its being transferred as a going concern under this Act; and, in carrying on that business, the liquidator may agree to the variation of any contracts of insurance in existence when the winding up order is made but shall not effect any new contracts of insurance.

(3)If the liquidator is satisfied that the interests of the creditors in respect of liabilities of the society attributable to its long term business require the appointment of a special manager of the society’s long term business, he may apply to the court, and the court may on such application appoint a special manager of that business to act during such time as the court may direct, with such powers (including any of the powers of a receiver or manager) as may be entrusted to him by the court.

(4)Section 177(5) of the M3Insolvency Act 1986 or, as the case may be, Article 151 of the M4Insolvency (Northern Ireland) Order 1989 shall apply to a special manager appointed under subsection (3) above as it applies to a special manager appointed under that section or that Article.

(5)The court may, if it thinks fit and subject to such conditions (if any) as it may determine, reduce the amount of the contracts made by the society in the course of carrying on its long term business.

(6)The court may, on the application of the liquidator, a special manager appointed under subsection (3) above or the [F21Authority] appoint an independent actuary to investigate the long term business of the society and to report to the liquidator, the special manager or the [F21Authority], as the case may be, on the desirability or otherwise of that business being continued and on any reduction in the contracts made in the course of carrying on that business that may be necessary for its successful continuation.

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Amendments (Textual)

F21Words in s. 24(6) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 62 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Marginal Citations

25 Power of court to declare dissolution void.E+W+S+N.I.

(1)Where an incorporated friendly society has been dissolved under section 20 above or following a winding up, the court may, at any time within 12 years after the date on which the society was dissolved, make an order under this section declaring the dissolution to have been void.

(2)An order under this section may be made, on such terms as the court thinks fit, on an application by the trustees under section 20 above or the liquidator, as the case may be, or by any other person appearing to the court to be interested.

(3)When an order under this section is made, such proceedings may be taken as might have been taken if the society had not been dissolved.

(4)The person on whose application the order is made shall, within 7 days of its being so made, or such further time as the court may allow, furnish the [F22Authority] with a copy of the order; and the [F22Authority] shall keep the copy in the public file of the society.

(5)If a person fails to comply with subsection (4) above, he shall be guilty of an offence and liable on summary conviction—

(a)to a fine not exceeding level 3 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.

(6)In this section “the court” means—

(a)in relation to a society whose registered office is in England and Wales, the High Court;

(b)in relation to a society whose registered office is in Scotland, the Court of Session; and

(c)in relation to a society whose registered office is in Northern Ireland, the High Court in Northern Ireland.

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Amendments (Textual)

F22Words in s. 25(4) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 63 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

26 Cancellation of registration.E+W+S+N.I.

(1)Where the [F23Authority] is satisfied that an incorporated friendly society has been dissolved under section 20 above or following a winding up, the [F24it] shall cancel the society’s registration under this Act.

(2)Where the [F25Authority] is satisfied, with respect to an incorporated friendly society—

(a)that a certificate of incorporation has been obtained for the society by fraud or mistake; or

(b)that the society has ceased to exist,

  • [F26or

    (c)

    in the case of a society to which section 37(2) or (3) below applies, that the principal place of business of the society is outside the United Kingdom,]

  • the [F27it] may cancel the registration of the society.

(3)Without prejudice to subsection (2) above, the [F28Authority] may, if it thinks fit, cancel the registration of an incorporated friendly society at the request of the society, evidenced in such manner as the [F28Authority] may direct.

(4)Before cancelling the registration of an incorporated friendly society under subsection (2) above, the [F28Authority] shall give to the society not less than two months’ previous notice, specifying briefly the grounds of the proposed cancellation.

(5)Where the registration of an incorporated friendly society is cancelled under subsection (2) above, the society may appeal—

(a)where the registered office of the society is situated in England and Wales, to the High Court;

(b)where that office is situated in Scotland, to the Court of Session; or

(c)where that office is situated in Northern Ireland, to the High Court in Northern Ireland;

and on any such appeal the court may, if it thinks it just to do so, set aside the cancellation.

(6)Where the registration of a society is cancelled under subsection (2) or (3) above, then, subject to the right of appeal under subsection (5) above, the society, so far as it continues to exist, shall cease to be a society incorporated under this Act.

(7)Subsection (6) above shall not affect any liability actually incurred by an incorporated friendly society; and any such liability may be enforced against the society as if the cancellation had not taken place.

(8)Any cancellation of the registration of an incorporated friendly society under this section shall be effected [F29by written notice given by the Authority to the society].

(9)As soon as practicable after the cancellation of the registration of an incorporated friendly society under this section the [F30Authority] shall cause notice thereof to be published in the London Gazette, the Edinburgh Gazette or the Belfast Gazette according to the situation of the society’s registered office, and if it thinks fit, in one or more newspapers.

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Amendments (Textual)

F23Word in s. 26(1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 64(a)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F24Word in s. 26(1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para 64(a)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, 2(1)

F25Word in s. 26(2) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 64((b)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F26S. 26(2)(c) and the word “or" immediately preceding it inserted (18.7.1996) by S.I. 1996/1669, reg. 14(1)

F27Word in s. 26(2) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 64(b)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F28Words in s. 26(3)(4) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 64(c) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F29Words in s. 26(8) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 64(d) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F30Word in s. 26(9) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 64(e) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Part IIIE+W+S+N.I. Management and Administration

Committee of management and other officersE+W+S+N.I.

27 Committee of management.E+W+S+N.I.

(1)Every friendly society shall have a committee of management with at least 2 members.

(2)The committee of management shall appoint one of its members to be chairman of the committee.

(3)Members of the committee of management shall (unless co-opted on to the committee) be elected to office in accordance with the rules of the society.

(4)The committee of management may co-opt as a member of the committee (whether as an additional member or to fill any vacancy) any person—

(a)who appears to the committee to be fit and proper to be a member, and

(b)who has not failed, having been nominated at an election held within the preceding 12 months, to be elected as a member of the committee;

and such a person may be co-opted notwithstanding that he is not a member of the society.

(5)Part I of Schedule 11 to this Act shall have effect in relation to committees of management and Part II shall have effect with regard to dealings with members of committees of management of friendly societies and registered branches.

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Commencement Information

I4S. 27 wholly in force; s. 27 not in force at Royal Assent see s. 126(2); s. 27 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 27(5) in force to the extent specified for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2; s. 27 in force to the extent not already in force at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

28 Chief executive and secretary.E+W+S+N.I.

(1)Every friendly society shall have a chief executive and a secretary.

(2)The chief executive of a friendly society shall be a person appointed by the committee of management who (whether alone or jointly with one or more other persons) is responsible under the immediate authority of the committee for the conduct of the business of the society.

(3)The secretary of a friendly society shall be appointed by the committee of management or, if the rules of the society so provide, elected to office in accordance with the rules.

(4)The committee of management of a friendly society shall take all reasonable steps to secure that the person appointed as chief executive has the requisite knowledge and experience to discharge the functions of his office.

(5)The offices of chief executive and secretary may be held by the same person.

(6)Anything required or authorised to be done by or to the secretary or chief executive of a friendly society may, if the office is vacant or there is for any other reason no secretary or chief executive capable of acting, be done by or to—

(a)any assistant or deputy secretary or assistant or deputy chief executive, as the case may be; or

(b)if there is no assistant or deputy capable of acting, any member of the society’s staff who is authorised generally or specially for that purpose by the committee of management.

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Commencement Information

I5S. 28 wholly in force; s. 28 not in force at Royal Assent see s. 126(2); s. 28 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 28 in force to the extent not already in force at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

29 Notification of officers to central office.E+W+S+N.I.

(1)Where a person becomes or ceases to be a member of the committee of management of a friendly society, the society shall within one month give notice of that fact, including the information specified in subsection (2) below, to the [F31Authority]

(2)The notice shall state the person’s full name and address and the date on which he became, or ceased to be, a member of the committee and, in the case of a person becoming a member, the date of his birth.

(3)Where a person becomes or ceases to be the chief executive or the secretary of a friendly society, the society shall within one month give notice of that fact to the [F31Authority], stating the person’s full name and address and the date on which he became, or ceased to be, chief executive or secretary.

(4)If a friendly society fails to comply with subsection (1) or (3) above, it shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.

(5)On receipt of a notice under this section, the [F31Authority] shall record the name of the person to whom the notice relates and the date on which he began to hold, or, as the case may be, ceased to hold office, in the public file of the society.

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Amendments (Textual)

F31Words in S. 29 substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para. 65 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Commencement Information

I6S. 29 wholly in force; s. 29 not in force at Royal Assent see s. 126(2); s. 29 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 29 in force to the extent not already in force at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Meetings and resolutionsE+W+S+N.I.

30 Meetings and resolutions.E+W+S+N.I.

Schedule 12 to this Act shall have effect with respect to meetings and resolutions of friendly societies and registered branches.

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Commencement Information

I7S. 30 wholly in force; s. 30 not in force at Royal Assent see s. 126(2); s. 30 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 30 in force to the extent specified for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2; s. 30 in force to the extent not already in force at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Part IVE+W+S+N.I. Authorisation of Friendly Societies’ Business

Restriction on carrying on unauthorised businessE+W+S+N.I.

31 Restriction on carrying on unauthorised insurance or non-insurance business.E+W+S+N.I.

(1)Subject to subsections (2) and (3) below, a friendly society shall not carry on in the United Kingdom any insurance business or non-insurance business unless it is authorised by the Commission to do so.

(2)A friendly society which—

(a)carried on, before the commencement of this section—

(i)insurance business of any description that did not require to be authorised under the 1987 Regulations; or

(ii)non-insurance business of any description; and

(b)is not authorised by the Commission to carry on business of that description after that commencement,

may carry on without authorisation business of that description consisting of the carrying out of contracts effected by the society before that commencement.

(3)A friendly society may without authorisation effect an insurance contract, or a contract for non-insurance benefits, in pursuance of a term in a subsisting contract which the society may, by virtue of subsection (2) above, carry out without authorisation.

(4)A friendly society which carries on any business in contravention of subsection (1) above shall be guilty of an offence and liable—

(a)on conviction on indictment, to a fine;

(b)on summary conviction, to a fine not exceeding the statutory maximum.

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Commencement Information

I8S. 31 wholly in force 1.4.1995; s. 31 not in force at Royal Asent see s.126(2); s. 31 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 31 in force for certain purposes at 1.1.1994 by S.I. 1993/2213, art. 2(2)(3); s. 31 in force for certain purposes at 1.7.1994 by S.I. 1993/2213, art. 2(4); s. 31 in force for certain purposes at 1.1.1995 by S.I. 1993/3226, art. 2(2); S. 31 in force for certain purposes at 1.11.1994 and for all remaining purposes at 1.4.1995 by S.I. 1994/2543 arts. 2(1),(2)

Authorisation to carry on businessE+W+S+N.I.

32 Grant of authorisation by Commission: general.E+W+S+N.I.

(1)The Commission may, subject to this Part of this Act, authorise friendly societies to carry on in the United Kingdom any class, or any part of a class, of insurance business and any description of non-insurance business.

(2)Where, on an application duly made under this section or section 33 below, the Commission determines to grant authorisation to a friendly society, it shall do so in writing in terms specifying—

(a)each class of insurance business,

(b)in relation to any class of such business the whole of which is not covered, each part of the class, and

(c)each description of non-insurance business,

the carrying on of which is covered by the authorisation.

(3)Authorisation may be restricted to industrial assurance business; and a friendly society is not authorised to carry on industrial assurance business unless the terms of its authorisation expressly specify such business.

[F32(4)Authorisation entitles a friendly society to carry on business anywhere in the United Kingdom unless, in the case of a society which is not one to which section 37(2) or (3) below applies, the terms of its authorisation are at its request expressly restricted to a part of the United Kingdom.]

(5)Authorisation may be granted to a friendly society unconditionally or subject to written conditions to be complied with by the society as provided by section 34 below.

(6)Schedule 13 to this Act shall have effect in relation to the making and determination of applications for authorisation, the imposition of conditions and the withdrawal of authorisation.

(7)An authorisation granted to a friendly society by the Chief Registrar under regulation 5 or 6 of the 1987 Regulations which is in force immediately before the commencement of section 31 above shall have effect as if it were an authorisation granted by the Commission under this section which authorised the society to carry on insurance business of such classes (or such parts of classes) as correspond to the business specified in the authorisation.

(8)Where an application for authorisation under the 1987 Regulations has not been decided before the commencement of subsection (1) above, the Chief Registrar shall send to the Commission the information submitted by the society or otherwise received by him in relation to the application; and the application shall be treated as being an application under this section.

(9)In this Part of this Act “authorisation” (except where the context otherwise requires) means an authorisation which is granted by the Commission under this section or deemed by this section to have been so granted; and “authorise” and “authorised” shall be construed accordingly.

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Amendments (Textual)

F32S. 32(4) substituted (1.9.1994) by S.I. 1994/1984 reg. 4

Commencement Information

I9S. 32 wholly in force; s. 32 not in force at Royal Assent see s. 126(2); s. 32 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 32(1)-(6)(8)-(9) in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2; s. 32(7) in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

33 Applications from certain existing friendly societies.E+W+S+N.I.

(1)A friendly society which—

(a)is not authorised and has not made any previous application for authorisation;

(b)was, before the commencement of section 32 above, carrying on in the United Kingdom any insurance or non-insurance business; and

(c)was, immediately before that commencement, neither required to be authorised under the 1987 Regulations nor subject to an order under section [F3378(1) of the 1970 Act] (power of Chief Registrar to suspend business of friendly societies);

may apply under this section for authorisation to continue to carry on any business it was carrying on before that commencement.

(2)If the Commission is satisfied, on an application duly made under this section—

(a)that it has received adequate information about the society; and

(b)that there is no reason to believe that the interests of the members of the society require refusal of the application;

it shall, subject to section 37 below, authorise the society to carry on any class (or part of a class) of insurance business, and any description of non-insurance business, which corresponds to any business carried on by the society immediately before the commencement of section 32 above.

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Amendments (Textual)

F33Words in s. 33(1)(c) substituted (1.1.1994) by S.I. 1993/3226, art. 3, Sch.3

Commencement Information

I10S. 33 wholly in force; s. 33 not in force at Royal Assent see s. 126(2); s. 33 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 33 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

34 Grant of unconditional or conditional authorisation.E+W+S+N.I.

(1)On an application duly made by a friendly society (“the society”), the Commission shall, subject to section 37 below, grant unconditional or conditional authorisation, or refuse to grant authorisation, in accordance with the following provisions of this section.

[F34(1A)The Commission shall refuse to grant authorisation to a society which is or, if authorisation were granted, would be a society to which section 37(2) or (3) below applies if it appears to the Commission that the principal place of business of the society is outside the United Kingdom.

F34(1B)The Commission shall also refuse to grant authorisation to a society which is or, if authorisation were granted, would be a society to which section 37(2) or (3) below applies if it appears to the Commission that—

(a)the society is an undertaking which is closely linked with any person; and

(b)the society’s close links with that person, or any matters relating to any non-EEA laws or administrative provisions to which that person is subject, are such as would prevent the effective exercise by the Commission of its functions under this Act in relation to the society;

and in this subsection “non-EEA laws" means laws of a country or territory outside the European Economic Area and “non-EEA administrative provisions" shall be construed accordingly.]

(2)[F34Subject to subsections (1A) and (1B) above,]The Commission shall grant unconditional authorisation if it is satisfied that—

(a)the chairman of the committee of management, the secretary and the chief executive of the society are each fit and proper persons to hold their respective offices [F35and, in the case of a society to which section 37(2) or (3) below applies, each controller of the society is a fit and proper person to be such a controller];

(b)the members of the committee of management, with the secretary and chief executive, have the capacity and intention to direct the affairs of the society in accordance with the criteria of prudent management;

(c)the society is likely to comply with any requirements of this Act which relate to the business to be covered by the authorisation; and

(d)the interests of the members of the society will be adequately protected without the imposition of conditions.

(3)Subject to subsection (4) below, if the Commission is not satisfied as mentioned in subsection (2) above, it shall refuse to grant authorisation.

(4)[F34Subject to subsections (1A) and (1B) above,]Where the Commission is not satisfied as mentioned in subsection (2)(b), (c) and (d) above but is satisfied that the imposition of conditions will secure—

(a)the direction of the affairs of the society in accordance with the criteria of prudent management;

(b)the likelihood of compliance by the society with any requirements of this Act which relate to the business to be covered by the authorisation; and

(c)the adequate protection of the interests of the members of the society,

it shall grant authorisation subject to such conditions as it thinks fit for securing those objects.

(5)The conditions that may be so imposed may—

(a)relate to any class (or part of a class) or description of business in respect of which authorisation is sought;

(b)require the society to take steps or to refrain from adopting a particular course of action or to restrict the scope of its business in a particular way;

(c)require the society to take steps with regard to the activities of any subsidiary or body jointly controlled by the society.

(6)Without prejudice to the generality of subsection (5) above, conditions imposed under subsection (4) above may—

(a)impose limitations on the effecting of contracts of insurance or contracts for non-insurance benefits or the accepting of new members;

(b)require the removal of an officer of the society or of any registered branch;

(c)where the society has branches, require the society to take steps with regard to the activities of any registered branch.

(7)Conditions imposed under subsection (4) above—

(a)may be added to or varied from time to time by agreement between the Commission and the society; and

(b)may be revoked at any time by the Commission if it is satisfied that they are no longer needed for the purpose for which they were imposed;

and, on adding to, varying or revoking any such conditions, the Commission shall (unless it considers it unnecessary to do so by reason of the nature of the changes) send to the secretary of the society a statement of the terms of all the subsisting conditions to which its authorisation is subject.

(8)[F36Subsections (1A) to (7) above]above apply in relation to applications for authorisation made under section 33 above with the omission—

(a)of subsection (2)(a) and (b);

(b)of the reference to subsection (2)(b) in subsection (4); and

(c)of subsection (4)(a).

(9)[F36Subsections (1A) to (7) above] above apply in relation to a society applying for authorisation to carry on both long term and general business by virtue of section 37(8) below—

(a)with the substitution, in subsection (2), for the words “unconditional authorisation", of the words “ authorisation subject only to the conditions required by section 37 below ”;

(b)with the insertion in subsections (2)(d) and (4), after the words “imposition of", of the word “ further ”.

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Amendments (Textual)

F34S. 34(1A)(1B) inserted (18.7.1996) by S.I. 1996/1669, reg. 15(1)

Words in s. 34(2)(4) inserted (18.7.1996) by S.I.1996/1669, reg. 15(1)

F35Words in s. 34(2)(a) inserted (1.9.1994) by S.I. 1994/1984 reg. (5)

F36Words in s. 34(8) substituted (18.7.1996) by S.I. 1996/1669, reg. 15(2)

Words in s. 34(9) substituted (18.7.1996) by S.I. 1996/1669, reg. 15(2)

Commencement Information

I11S. 34 wholly in force; s. 34 not in force at Royal Assent see s. 126(2); s. 34 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 34 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

35 Extension of current authorisation.E+W+S+N.I.

(1)This section applies where an authorised friendly society applies under section 32 above for authorisation to carry on insurance business of a class (or part of a class), or non-insurance business of a description, which is not covered by the society’s current authorisation.

(2)On such an application, the conditions which the Commission may impose under section 34 above include—

(a)conditions relating to any business covered by the society’s current authorisation; and

(b)where the current authorisation is subject to conditions, conditions which vary the current conditions (whether by adding to, amending or replacing any of them).

(3)Where the Commission determines to grant authorisation on such an application, it shall be granted in terms including all current terms of the society’s authorisation (including any that were otherwise unaffected by the determination); and those terms shall have effect in place of the previously subsisting terms.

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Commencement Information

I12S. 35 wholly in force; s. 35 not in force at Royal Assent see s. 126(2); s. 35 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 35 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

36 Imposition of conditions on current authorisation.E+W+S+N.I.

(1)If the Commission considers it expedient to do so, it may (in accordance with Part II of Schedule 13 to this Act)—

(a)impose conditions on a friendly society’s authorisation, or

(b)where an authorisation is subject to conditions, impose conditions which vary the current conditions (whether by adding to, amending or replacing any of them);

and the conditions that may be so imposed include any condition that might be imposed on the grant of authorisation.

(2)Without prejudice to the generality of subsection (1) above, conditions so imposed may require—

(a)the submission to the Commission of a plan for the restoration of a sound financial position or a short-term financial scheme;

(b)modification of the plan or scheme (or the plan or scheme as previously modified) if the Commission considers it inadequate; and

(c)the implementation of the plan or scheme if the Commission consider it adequate.

(3)Subsection (7) of section 34 above applies to conditions imposed under this section as it applies to conditions imposed under that section.

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Commencement Information

I13S. 36 wholly in force; s. 36 not in force at Royal Assent see s. 126(2); s. 36 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 36 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

[F3736A Directions for deeming conditions to have been imposed.E+W+S+N.I.

(1)Subsection (2) below applies where—

(a)it appears to the Commission that there has been or is, on the part of an authorised friendly society to which section 37(2) or (3) below applies or its committee of management, a failure to satisfy the 8th criterion in section 50(3) below; and

(b)the Commission proposes, on that ground, to impose conditions under section 36 above on the society’s authorisation.

(2)If the Commission considers it expedient to do so in order to protect the interests of members of the society, the Commission may direct that, for the period—

(a)beginning with service of notice of the proposal underparagraph 7(1) or 8(2) of Schedule 13 to this Act, and

(b)ending with service of the Commission’s decision notice,

the proposed conditions shall be deemed to have been imposed under section 36 above on the society’s authorisation.

(3)In subsection (2) above “the Commission’s decision notice" means—

(a)in relation to a notice of the proposal under paragraph 7(1) of Schedule 13 to this Act, notice of the Commission’s decision under paragraph 7(5) of that Schedule or notice of an alternative proposal under paragraph 8(2) of that Schedule;

(b)in relation to a notice of the proposal under paragraph 8(2) of that Schedule, notice of the Commission’s decision under paragraph 8(6) of that Schedule or notice of an alternative proposal under the said paragraph 8(2).

(4)The Commission may revoke a direction under this section if it is satisfied that the direction is no longer needed for the purpose for which it was imposed.

(5)The provisions of this Act (so far as applicable)—

(a)apply in relation to a decision of the Commission to give a direction under this section as they apply in relation to a decision of the Commission to impose conditions under section 36 above, and

(b)apply to conditions which, by virtue of such a direction, are deemed to have been imposed under that section as they apply to conditions so imposed.]

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Amendments (Textual)

F37S. 36A inserted (1.1.1994) by S.I. 1993/2519, reg. 2(1)

Modifications etc. (not altering text)

C5S.36A(2) excluded (20.7.2001) by S.I. 2001/2636 , art. 45(3)

Restrictions on business of certain authorised societiesE+W+S+N.I.

37 Restriction on combinations of business.E+W+S+N.I.

(1)[F38Subject to subsections (1A) and (7A) below], an authorised friendly society to which subsection (2) or (3) below applies may not carry on business falling into more than one of the following categories, namely—

(a)long term business;

(b)general business; and

(c)non-insurance business;

and, accordingly, the Commission shall not grant such a society authorisation to do so.

F39(1A)Nothing in subsection (1) above shall prevent an authorised friendly society to which subsection (2) or (3) below applies from carrying on, or being authorised to carry on, both long term business and general business of either or both of classes 1 and 2 of Head B of Schedule 2 to this Act.

(2)This subsection applies to a friendly society which carries on long term business—

(a)if its rules do not contain provision for calling up additional contributions, for reducing benefits or for claiming assistance from other persons who have undertaken to provide it; or

(b)if its annual contribution income from long term business exceeded 500,000 ECU for 3 consecutive years and it is not the subject of a direction under subsection (5) below;

and, for the purposes of paragraph (b) above, years ending before 1st January 1985 shall be disregarded.

(3)This subsection applies to a friendly society which carries on general business—

(a)if its rules do not contain provision for calling up additional contributions or for reducing benefits; or

(b)if its annual contribution income from general business in any previous year exceeded 1,000,000 ECU and it is not the subject of a direction under subsection (5) below;

and, for the purposes of paragraph (b) above, years ending before 1st January 1993 shall be disregarded.

(4)In subsections (2) and (3) above a reference to a year, in relation to annual contribution income, is a reference to any financial year of a society for which, at the relevant time, accounts have been or ought to have been prepared.

(5)The [F40Authority] may, if it is satisfied that it is consistent with the international obligations of the United Kingdom to do so, direct that a friendly society—

(a)which is, by virtue only of paragraph (b) of subsection (2) above, a society to which that subsection applies; or

(b)which is, by virtue only of paragraph (b) of subsection (3) above, a society to which that subsection applies;

shall, unless the direction is revoked, be treated as not being a society to which subsection (2) or, as the case may be, subsection (3) above applies.

(6)If—

(a)the [F40Authority] has given a direction under subsection (5) above in relation to a society such as is mentioned in subsection (5)(a) above; and

(b)the society’s annual contribution income from long term business exceeds 500,000 ECU for 3 consecutive years ending after a date specified in the direction,

the [F40Authority] shall revoke the direction.

(7)If—

(a)the [F40Authority] has given a direction in relation to a society such as is mentioned in subsection (5)(b) above; and

(b)the society’s annual contribution income from general business in a year ending after a date specified in the direction exceeded 1,000,000 ECU,

the [F40Authority] shall revoke the direction.

F41(7A)Where a friendly society to which subsection (2) or (3) above applies was on 15th March 1979 carrying on long term and general business in the United Kingdom, the society may (if authorised to do so) carry on any class (or part of a class) of long term or general business.

(8)Where a friendly society to which subsection (2) or (3) above applies is authorised by virtue of subsection (1A) or (7A) above to carry on long term and general business in the United Kingdom—

(a)the Commission shall (whether or not other conditions are imposed) impose such conditions on the society’s authorisation as the Commission thinks fit for securing that the society’s long term business and general business are kept separate; and

(b)those conditions shall, subject to the exceptions mentioned in subsection (9) below, require that the assets representing the funds maintained in respect of the society’s long term business or, as the case may be, its general business are to be generally applicable for the purposes of that business only.

(9)The exceptions mentioned in subsection (8) above are—

(a)that assets representing funds in respect of long term business may be transferred so as to be available for general business if—

(i)they represent the excess of the long term business funds over the society’s liabilities in respect of that business; or

(ii)the transfer is by way of reimbursement of expenditure borne by other assets in respect of long term business; and

(b)that assets representing funds in respect of general business may be transferred so as to be available for long term business if they represent the excess of the general business funds over the society’s liabilities in respect of that business.

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Amendments (Textual)

F38Words in s. 37(1) substituted (1.1.1994) by S.I. 1993/2519, reg. 3(1)

F39S. 37(1A) inserted (1.1.1994) by S.I. 1993/2519, reg. 3(2)

F40Words in s. 37(5)-(7) substituted (17.8.2001 for specified purposes and otherwiseprosp) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 Pt. 1 para. 66 (with art. 13(3) Sch. 5)

F41S. 37(7A)(8) substituted (1.1.1994) for s. 37(8) by S.I. 1993/2519, reg. 3(3)

Modifications etc. (not altering text)

C6S. 37(4) excluded (1.5.1993) by S.I. 1993/932, reg. 7

Commencement Information

I14S. 37 wholly in force; s. 37 not in force at Royal Assent see s. 126(2); s. 37 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 37 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

38 Restriction on commercial business.E+W+S+N.I.

(1)An authorised friendly society to which section 37(2) or (3) applies shall not carry on any commercial business otherwise than in connection with or for the purposes of its insurance business.

(2)Subsection (1) above shall not prevent a friendly society which was on 15th March 1979 carrying on long term business and a savings business in the United Kingdom from continuing to carry on the savings business.

(3)Subsection (1) above has effect without prejudice to any stricter obligations imposed on friendly societies under this Part; and nothing in this section shall be taken to imply that a friendly society may carry out any activity other than for purposes permitted by this Act (or, in the case of registered societies, the 1974 Act) and the constitution of the society.

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Commencement Information

I15S. 38 wholly in force; s. 38 not in force at Royal Assent see s. 126(2); s. 38 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 38 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

Powers of Commission in relation to authorised societiesE+W+S+N.I.

39 Power to direct application for fresh authorisation.E+W+S+N.I.

(1)If, with respect to an authorised friendly society, the Commission has reason to believe—

(a)that the society’s business is being, or will in the future be, conducted—

(i)in a way that may not adequately protect the interests of members of the society; or

(ii)so as not to comply with the requirements of this Act which relate to the business for which the society’s authorisation was granted; or

(b)that by reason of any increase in the volume of its long term or its general business it is appropriate for the society’s affairs to be re-examined;

it may by notice direct the society to make within such period as is specified in the notice an application under section 32 above for fresh authorisation.

(2)The period so specified shall not be shorter than 3 nor longer than 6 months beginning with the date of the notice; but the Commission may, on representations being made to it, extend or further extend the period within which the application is to be made.

(3)A notice under subsection (1) above shall state the grounds on which the Commission decided to give the direction.

(4)The business covered by, and the conditions imposed on, a society’s fresh authorisation need not be the same as that covered by, or those imposed on, the previous one.

(5)If the Commission refuses to grant fresh authorisation, it may specify in the notice of its refusal a date for the expiry of the current authorisation; and the authorisation shall expire on that date.

(6)The making of an application for fresh authorisation shall not preclude the Commission, at any time while the application is pending, from exercising any power under this Part of this Act in relation to the society; but if it gives a direction under section 41 below, the proceedings on the application shall abate.

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Commencement Information

I16S. 39 wholly in force; s. 39 not in force at Royal Assent see s. 126(2); s. 39 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 39 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

40 Withdrawal of authorisation in respect of new business.E+W+S+N.I.

(1)Subject to the following provisions of this section, the Commission may by notice direct—

(a)that a friendly society authorised to carry on insurance business shall, from a date specified in the direction, cease to be authorised to effect contracts of insurance, or contracts of a class (or part of a class) so specified; or

(b)that a friendly society authorised to carry on non-insurance business shall, from a date specified in the direction, cease to be authorised to effect contracts for non-insurance benefits, or contracts of a description so specified.

(2)The Commission shall give such a direction in relation to a friendly society if—

(a)in the case of an incorporated society, a special resolution has been passed for its voluntary winding up;

(b)an order to wind up the society has been made;

(c)an event declared by the rules of the society to be the termination of the society has happened;

(d)an instrument of dissolution has been executed as mentioned in section 93(1)(b) of the 1974 Act or a special resolution approving an instrument of dissolution under section 20 above has been passed; or

(e)in the case of a registered society, the Commission has made an award under section 95(3) or 95A(1) of the 1974 Act for the dissolution of the society.

(3)The Commission may give such a direction in relation to a friendly society at the request of the society or if—

(a)it appears to the Commission that the society has failed to satisfy an obligation to which it is subject by virtue of the M5Industrial Assurance Act 1923, the 1974 Act, the M6Industrial Assurance (Northern Ireland) Order 1979 or this Act;

(b)there exists a ground on which the Commission would be prohibited from granting authorisation to the society;

(c)it appears to the Commission to be expedient to make the proposed direction in order to protect the interests of members of the society;

(d)the authorisation was subject to conditions and it appears to the Commission that the society has not complied with a condition;

(e)it appears to the Commission that information furnished to it on behalf of the society or, in connection with an application for authorisation, by or on behalf of an officer of the society is false in a material particular, misleading or inaccurate;

(f)it appears to the Commission that a friendly society has failed to satisfy an obligation to which it is subject by virtue of any provision of the law of a country or territory outside the United Kingdom; F42. . .

(g)the society, having been directed to apply for fresh authorisation under section 39 above, has either failed to make such an application within the period allowed or been refused fresh authorisation covering the effecting of new contracts of any description covered by the society’s previous authorisation [F43F42or

F43(h)the society is a society to which section 37(2) or (3) above applies and has not effected any contracts of insurance, or any contracts of insurance of a class (or part of a class), for a period of six months or more.]

(4)A direction under this section shall not prevent a friendly society from effecting an insurance contract, or a contract for non-insurance benefits, in pursuance of a term of a subsisting contract of that description.

(5)A direction under this section or section 41 below—

(a)shall be given in accordance with Part II of Schedule 13 to this Act, and

(b)may not be revoked or varied,

but has effect without prejudice to the subsequent grant to the society of authorisation to carry on any business to which the direction relates.

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Amendments (Textual)

F42Word in S. 40(3)(f) omitted (1.9.1994) by virtue of S.I. 1994/1984 reg. 6

F43S. 40(3)(h) and the word “or" immediately preceding it inserted (1.9.1994) by S.I. 1994/1984, reg. 6

Modifications etc. (not altering text)

C7S. 40(5)(b) excluded (20.7.2001) by S.I. 2001/2636, arts. 1(2)(b), 46(3)

Commencement Information

I17S. 40 wholly in force; s. 40 not in force at Royal Assent see s. 126(2); s. 40 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 40 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

Marginal Citations

41 Withdrawal of authorisation to carry on insurance business.E+W+S+N.I.

(1)Where the Commission is satisfied that a friendly society which is authorised to carry on insurance business—

(a)has ceased to carry on

[F44(i)in the case of a society to which section 37(2) or (3) above applies, in the [F45EEA States];

(ii)in any other case, in the United Kingdom,]

any insurance business, or insurance business of any class (or of any part of a class) specified in the society’s authorisation; or

(b)has not, since the grant of authorisation to carry on insurance business of any class (or part of a class), carried on

[F44(i)in the case of a society to which section 37(2) or (3) above applies, in the [F45EEA States];

(ii)in any other case, in the United Kingdom,]

any insurance business or insurance business of that class (or part of a class) and at least twelve months has elapsed since that grant;

the Commission may by notice direct that the society shall cease to be authorised to carry on insurance business or, as the case may be, insurance business of that class (or part of a class).

(2)Where the Commission is satisfied that a friendly society which is authorised to carry on non-insurance business—

(a)has ceased to carry on in the United Kingdom any non-insurance business or non-insurance business of a description specified in the authorisation; or

(b)has not, since the grant of authorisation to carry on non-insurance business of any description, carried on in the United Kingdom any non-insurance business or non-insurance business of that description, and at least twelve months has elapsed since that grant;

the Commission may direct that it shall cease to be authorised to carry on non-insurance business or, as the case may be, non-insurance business of that description.

(3)For the purposes of this section a friendly society shall be taken to have ceased to carry on business, or business of a particular class or description, if at no time

[F46(a)in the case of a society to which section 37(2) or (3) above applies, during the preceding six months;

(b)in any other case, during a financial year of the society which began and ended during the currency of the authorisation,]

did it carry on business or, as the case may be, business of that class or description.

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Amendments (Textual)

F44S. 41(1) words substituted (1.9.1994) by S.I. 1994/1984 reg. 7(1)

F45Words in s. 41(1)(a)(i) substituted (1.1.1998) by S.I. 1997/2849 reg. 4

Words in s. 41(1)(b)(i) substituted (1.1.1998) by S.I. 1997/2849 reg. 4

F46S. 41(3) words substituted (1.9.1994) by 1994/1984 reg. 7(2)

Commencement Information

I18S. 41 wholly in force; s. 41 not in force at Royal Assent see s. 126(2); s. 41 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 41 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

SupplementaryE+W+S+N.I.

42 Contracts effected in contravention of section 31(1).E+W+S+N.I.

(1)Where a contract of insurance or for non-insurance benefits is entered into between a friendly society and a member in contravention of section 31(1) above the member may, subject to subsection (2) below, elect—

(a)to enforce the contract; or

(b)to recover any money paid by him under the contract, together with compensation for any loss sustained by him as a result of having parted with it;

and the compensation so recoverable shall be such as the parties may agree or as any court of competent jurisdiction may, on the application of either party, determine.

(2)Any such court may allow money paid by a member under a contract to which subsection (1) applies to be retained by the friendly society if it is satisfied—

(a)that the society reasonably believed that its entering into the contract did not constitute a contravention of section 31(1) above; and

(b)that it is just and equitable for the money to be retained.

(3)A member who recovers the money paid under a contract to which subsection (1) above applies—

(a)shall not be entitled to any benefits under the contract; and

(b)shall repay any money and return any other property received by him under the contract;

and, where any property so received has passed to a third party, the reference in this subsection to that property shall be construed as a reference to its value at the time at which it was received by the member.

(4)A contravention of subsection (1) of section 31 above shall not make a contract of insurance or contract for non-insurance benefits illegal or invalid to any greater extent than is provided in this section; and a contravention of that subsection in respect of a contract of insurance shall not affect the validity of any reinsurance contract entered into in respect of that contract.

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Commencement Information

I19S. 42 wholly in force; s. 42 not in force at Royal Assent see s. 126(2); s. 42 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 42 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

43 Interpretation of Part IV.E+W+S+N.I.

In this Part of this Act—

  • authorisation” and related expressions shall be construed in accordance with section 32(9) above;

  • class”, in relation to insurance business, means a class specified in Schedule 2 to this Act;

  • contract for non-insurance benefits” means a contract effected in the course of carrying on any non-insurance business;

  • friendly society”, in relation to a registered friendly society with branches, means the central body and the branches of the society;

  • industrial assurance business” has the meaning given in section 1(2) of the M7Industrial Assurance Act 1923 or Article 3(1) of the M8Industrial Assurance (Northern Ireland) Order 1979;

  • the 1987 Regulations” means the M9Friendly Societies (Long Term Insurance Business) Regulations 1987.

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Commencement Information

I20S. 43 wholly in force; s. 43 not in force at Royal Assent see s. 126(2); s. 43 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 43. in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

Marginal Citations

Part VE+W+S+N.I. Regulation of Friendly Societies’ Business

PreliminaryE+W+S+N.I.

44 Appointment of actuary by societies with long term business.E+W+S+N.I.

(1)Subject to subsection (3) below, every friendly society which carries on long term business in the United Kingdom shall not later than the end of the relevant period appoint an actuary as actuary to the society; and whenever an appointment under this section comes to an end, the society shall as soon as practicable make a fresh appointment.

(2)In subsection (1) above “the relevant period” means—

(a)if the society is carrying on long term business on the day when this section comes into force, the period of one month beginning with that day; and

(b)if it is not carrying on long term business on that day, the period of one month beginning with the day on which it begins to carry on such business.

(3)The Commission may direct that a friendly society shall not be subject to the duty imposed by subsection (1) above if it considers it inappropriate that the society should be subject to it.

(4)A society making an appointment under this section shall serve on the Commission a notice stating that fact and the name and qualifications of the person appointed and that he has accepted the appointment.

(5)If an appointment under this section comes to an end, the society shall serve on the Commission a notice stating that fact and the name of the person concerned.

(6)A notice under subsection (4) above shall be served not later than the end of the period of 14 days commencing with the day on which the appointment is accepted.

(7)A notice under subsection (5) above shall be served not later than the end of the period of 14 days commencing with the day on which the appointment comes to an end.

(8)No person is qualified for appointment under this section unless he possesses qualifications prescribed by the Commission in regulations.

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Modifications etc. (not altering text)

C8S. 44(2)(a) excluded (1.1.1994) by S.I. 1993/3084, reg.10

Commencement Information

I21S. 44 wholly in force; s. 44 not in force at Royal Assent see s. 126(2); s. 44 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 44(8) in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2; s. 44 in force to the extent not already in force at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

45 Valuation of assets and liabilities.E+W+S+N.I.

(1)Any determination of the value of any assets or the amount of any liabilities of a friendly society which is required for the purposes of any provision of this Part of this Act shall be made in accordance with regulations made by the Commission with the consent of the Treasury.

(2)Without prejudice to the generality of subsection (1) above, regulations under this section may provide that, for any specified purpose, assets or liabilities of any specified class or description shall be left out of account or taken into account only to a specified extent.

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Commencement Information

I22S. 45 wholly in force; s. 45 not in force at Royal Assent see s. 126(2); s. 45 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 45 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

Actuarial investigationsE+W+S+N.I.

46 Annual investigation into condition of certain societies.E+W+S+N.I.

(1)A friendly society which is authorised under section 32 above to carry on long term business and which—

(a)is a society to which subsection 37(2) above applies; or

(b)is a society of a description prescribed by regulations,

shall, once in every period of 12 months, cause an investigation to be made by the appropriate actuary into the financial condition of the society in respect of its long term business.

(2)The first investigation into a society’s financial condition under this section shall be—

(a)in the case of a friendly society to which section 37(2) above applies which—

(i)is a registered friendly society that was authorised under the M10Friendly Societies (Long Term Insurance Business) Regulations 1987; or

(ii)is an incorporated friendly society which was formerly a registered friendly society so authorised,

an investigation into its condition at a date not later than 12 months after the date to which the accounts of the society were made up for the purposes of the last investigation under regulation 11 of those regulations;

(b)in the case of any other friendly society to which section 37(2) above applies, an investigation into its condition at a date not later than 12 months after the date on which it became such a society or the commencement of this section, whichever is later; and

(c)in the case of a friendly society which is of a description prescribed in regulations under subsection (1)(b) above, an investigation into its condition at a date not later than 12 months after it became such a society or the coming into operation of the regulations, whichever is later.

(3)When such an investigation has been made, the society shall—

(a)cause an abstract of the actuary’s report of the investigation to be made; and

(b)send three copies of that abstract to the Commission within the period of 6 months beginning with the date to which the accounts of the society were made up for the purposes of the investigation or such further period (not exceeding 3 months) as the Commission may by notice to the society direct;

and one of those copies shall be signed by such persons as may be prescribed by regulations.

(4)The Commission shall consider the abstract, and if it appears to the Commission to be inaccurate or incomplete in any respect, it shall communicate with the society with a view to the correction of any such inaccuracies and the supply of deficiencies.

(5)An investigation under this section shall include—

(a)a valuation of the liabilities of the society attributable to its long term business; and

(b)a determination of any excess over those liabilities of the assets representing the fund or funds maintained by the society in respect of that business and, where any rights of any long term policy holders to participate in profits relate to particular parts of such a fund, a determination of any excess of assets over liabilities in respect of each of those parts.

F47(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)The form and contents of any abstract F47. . . under this section shall be such as the Commission may direct; and a direction under this subsection may be given to societies of a specified description or to a specified society.

(8)Regulations under this section shall be made by the Commission with the consent of the Treasury.

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Amendments (Textual)

F47S. 46(6) repealed (1.8.1996) by S.I. 1996/1188 art. 4(a)

Words in s. 46(7) repealed (1.8.1996) by S.I. 1996/1188 art. 4(b)

Commencement Information

I23S. 46 wholly in force; s. 46 not in force at Royal Assent see s. 126(2); s. 46 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 46(1)(3)(8) in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2; s. 46 in force to the extent not already in force at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Marginal Citations

47 Triennial investigations into condition of certain societies.E+W+S+N.I.

(1)Subject to the following provisions of this section, a friendly society which—

(a)is not a society to which section 46 above applies and carries on insurance business; or

(b)is a society to which that section applies and carries on general business;

shall, at least once in every period of 3 years, cause an investigation to be made by the appropriate actuary into the financial condition of the society in respect of its insurance business.

(2)Where an investigation under this section is carried out, the society shall cause an abstract of the actuary’s report to be made and sent to the Commission within 6 months of the date to which the accounts of the society were made up for the purposes of that investigation or such further period (not exceeding 6 months) as the Commission may by notice to the society direct.

(3)The first investigation into a society’s financial condition under this section shall be—

(a)in the case of a registered friendly society, or an incorporated friendly society which was formerly a registered friendly society, an investigation into its condition at a date not later than 3 years after—

(i)the commencement of this section; or

(ii)the date as at which its assets and liabilities were last valued under section [F4834 of the 1970 Act],

whichever is earlier; or

(b)in the case of any other incorporated friendly society, an investigation into its condition at a date not later than 3 years after the date on which it is registered.

(4)Subject to subsection (5) below, a friendly society shall send to the Commission, not later than 6 months after each anniversary of the date to which the accounts of the society were made up for the purposes of the last investigation into its financial condition under this section—

(a)a certificate given by the appropriate actuary that there has been no material change in its financial condition in respect of its insurance business since it sent the last abstract under subsection (2) above; or

(b)a statement by the appropriate actuary that he is unable to give such a certificate.

(5)A society is not under the duty imposed by subsection (4) above if, before a date by which a certificate or statement must be sent, a further investigation under this section has been carried out and the requisite abstract has been sent to the Commission.

(6)If a society sends the Commission a statement under subsection (4)(b) above, it shall be the society’s duty to cause an investigation to be carried out under this section; and in such a case—

(a)the date to which the society’s accounts are made up for the purposes of the investigation shall be the latest anniversary of the date to which its accounts were made up for the purposes of the last investigation under this section; and

(b)the abstract required by subsection (2) above shall be sent to the Commission within 6 months of the date by which that statement was required to be sent under subsection (4) above.

(7)An investigation under this section into the financial condition of a society which falls within subsection (1)(a) above shall include—

(a)a valuation of the liabilities of the society attributable to its insurance business; and

(c)a determination of any excess over the liabilities so attributable of the assets representing the fund or funds maintained by the society in respect of its insurance business and, where any rights of any long term policy holders to participate in profits relate to particular parts of such a fund, a determination of any excess of assets over liabilities in respect of each of those parts.

(8)An investigation under this section into the financial condition of a society falling within subsection (1)(b) above shall include—

(a)a valuation of the liabilities of the society attributable to its general business; and

(b)a determination of any excess over the liabilities so attributable of the assets representing the fund or funds maintained by the society in respect of that business.

(9)The form and contents of any abstract under this section shall be such as the Commission may direct; and such a direction may be given to societies of a specified description or to a specified society.

(10)The Commission may dispense with the requirements of subsections (1) to (6) above in respect of societies to whose purposes, or the nature or scale of whose insurance business, it may deem those provisions inapplicable.

(11)The Commission may dispense with the requirements of subsections (1) to (6) above in respect of any particular insurance business of a society if, in the Commission’s opinion, those provisions are inapplicable to that business because of its nature or scale or the manner in which it is carried on.

(12)In relation to any society on which a partial exemption is conferred under subsection (11) above, subsections (1) to (8) above shall have effect as if—

(a)references to the financial condition of the society excluded its condition in relation to the business to which the partial exemption relates; and

(b)subsections (7) and (8) referred only to the assets and liabilities other than those attributable to that business.

(13)The Commission may direct that this section shall have effect, in relation to societies of a specified description or to a specified society, as if for any reference to 3 years there were substituted a reference to 5 years.

(14)A direction under subsection (12) or (13) above may make such transitional provision as the Commission considers appropriate.

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Amendments (Textual)

F48Words in s. 47(3)(a)(ii) substituted (1.1.1994) by S.I. 1993/3226, art. 3, Sch.3

Commencement Information

I24S. 47 wholly in force; s. 47 not in force at Royal Assent see s. 126(2); s. 47 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 47 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Margins of solvencyE+W+S+N.I.

48 Margins of solvency in relation to insurance business of certain societies.E+W+S+N.I.

(1)This section applies to a friendly society which—

(a)carries on long term business F49. . . and falls within subsection (2) of section 37 above;

(b)carries on general business F49. . . and falls within subsection (3) of that section; or

(c)not being a society to which either of those subsections applies, carries on insurance business in the United Kingdom and is of any such description as may be prescribed by regulations.

(2)A society to which this section applies shall maintain a margin of solvency in respect of its insurance business of such amount as may be prescribed by or determined in accordance with regulations made for the purposes of this section.

(3)If such a society fails to comply with a requirement to maintain a margin of solvency, the society—

(a)shall at the request of the Commission submit to it a plan for the restoration of a sound financial position;

(b)shall propose modifications to the plan (or the plan as previously modified) if the Commission considers it inadequate;

(c)shall give effect to any plan accepted by the Commission as adequate.

(4)Where a friendly society carries on both long term and general business, subsection (2) above shall have effect as if the requirement to maintain a margin of solvency were a requirement to maintain separate margins in respect of each of those two kinds of business.

(5)For the purposes of this Act a margin of solvency, in relation to a friendly society, is the excess of the value of the society’s assets over the amount of its liabilities.

(6)Regulations under this section may—

(a)make different provision with respect to societies of different descriptions;

(b)prescribe different margins of solvency with respect to different descriptions of business carried on by societies;

(c)prescribe the descriptions of assets or liabilities that are to be taken into account in determining whether a margin of solvency is being maintained; and

(d)prescribe different criteria for determining whether a margin of solvency is being maintained by reference to the different descriptions of long term or general business which may be carried on by societies.

(7)Regulations under this section shall be made by the Commission with the consent of the Treasury.

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Amendments (Textual)

F49Words in s. 48(1)(a) ceased to have effect (1.9.1994) by virtue of S.I. 1994/1984 reg. 8

Words in s. 48(1)(b) ceased to have effect (1.9.1994) by virtue of S.I. 1994/1984 reg. 8

Commencement Information

I25S. 48 wholly in force; s. 48 not in force at Royal Assent see s. 126(2); s. 48 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 48(1)(2)(6)(7) in force for certain purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 4; s. 48 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

49 Failure to maintain prescribed margin of solvency.E+W+S+N.I.

(1)If the margin of solvency maintained by a friendly society in respect of its insurance business falls below such amount as may be prescribed by or determined in accordance with regulations made for the purposes of this section by the Commission with the consent of the Treasury, the society shall at the request of the Commission submit to it a short-term financial scheme.

(2)A friendly society that has submitted a scheme to the Commission under subsection (1) above shall propose modifications to the scheme (or the scheme as previously modified) if the Commission considers it inadequate, and shall give effect to any scheme accepted by it as adequate.

(3)Where a friendly society carries on both long term and general business, subsection (1) above shall have effect as if the reference to the margin of solvency maintained by the society were a reference to the margin of solvency maintained in respect of each of those two kinds of business.

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Commencement Information

I26S. 49 wholly in force; s. 49 not in force at Royal Assent see s. 126(2); s. 49 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 49(1) in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2; s. 49 in force to the extent not already in force at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

[F50Adequacy of assets and premiums]E+W+S+N.I.

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Amendments (Textual)

F50Cross heading inserted (1.9.1994) by S.I. 1994/1984 reg. 9

[49AF51 Adequacy of assets.E+W+S+N.I.

(1)A friendly society to which section 37(2) or (3) above applies which has entered into contracts of insurance shall secure–

(a)that its liabilities under those contracts, other than liabilities in respect of linked benefits, are covered by assets of appropriate safety, yield and marketability having regard to the classes of business carried on; and

(b)without prejudice to the generality of paragraph (a) above, that its investments are appropriately diversified and adequately spread and that excessive reliance is not placed on investments of any particular category or description.

(2)A friendly society to which section 37(2) above applies which has entered into a linked long term contract shall secure that, as far as practicable, its liabilities under the contract in respect of linked benefits are covered as follows–

(a)if those benefits under the contract are linked to the value of units in an undertaking for collective investments in transfer– able securities or to the value of assets contained in an internal fund, by those units or assets;

(b)if those benefits under the contract are linked to a share index or other reference value not mentioned in paragraph (a) above, by units which represent that reference value, or by assets of appropriate safety, yield and marketability which correspond, as nearly as may be, to the assets on which that reference value is based.

(3)A friendly society to which section 37(2) above applies which has entered into a linked long term contract shall also secure that its liabilities under the contract in respect of linked benefits are covered by assets of a description prescribed by regulations under section 56 below.

(4)In this section–

“linked benefits", in relation to a linked long term contract, means benefits payable under the contract which are 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);

“linked long term contract" means a contract the effecting of which constitutes the carrying on of insurance business falling within class III in head A in Schedule 2 to this Act.]

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Amendments (Textual)

F51S. 49A inserted (1.9.1994) by S.I. 1994/1984 reg. 9

[F5249B Adequacy of premiums in respect of long term insurance.E+W+S+N.I.

(1)Before entering into a contract the effecting of which constitutes the carrying on of long term business, a friendly society to which section 37(2) above applies shall satisfy itself that the aggregate of–

(a)the premiums payable under the contract and the income which will be derived from them; and

(b)any other resources of the society which are available for the purpose,

will be sufficient, on reasonable actuarial assumptions, to meet all commitments arising under or in connection with the contract.

(2)A friendly society to which section 37(2) above applies shall not rely on other resources for the purposes of subsection (1) above in such a way as to jeopardise the solvency of the society in the long term.]

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Amendments (Textual)

F52S. 49B inserted (1.9.1994) by S.I. 1994/1984 reg. 10

Criteria of prudent managementE+W+S+N.I.

50 The criteria of prudent management.E+W+S+N.I.

(1)If it appears to the Commission—

(a)that there has been or is, on the part of a friendly society or its committee of management, a failure to satisfy any one or more of the following criteria of prudent management; or

(b)that the society’s officers do not have the capacity and intention to conduct its affairs so as to satisfy those criteria,

it shall be entitled to assume for the purposes of its relevant prudential powers that it is expedient to exercise the powers in order to protect the interests of members of the society.

(2)The prudential powers relevant for the purposes of this section are its powers—

(a)under section 34 above to impose conditions on a society’s authorisation;

(b)under section 40 above to give a direction by virtue of subsection (3)(c);

(c)under section 51 below to make an order forbidding the acceptance of new members;

(d)under section 53 below, to give a direction;

(e)under section 90 below, to order a transfer of the society’s engagements.

(3)For the purposes of this Act, the criteria of prudent management are—

1Maintenance of any margin of solvency required by section 48 above.

2Maintenance of liquid assets sufficient to meet the liabilities of the society as they become due.

3Maintenance of the requisite accounting records and systems of control of business and of inspection and report.

4Direction and management—

(a)by a sufficient number of persons who are fit and proper to be members of the committee of management or, as the case may be, other officers, in their respective positions,

(b)conducted by them, with prudence and integrity, in the interests of the members of the society.

5In relation to insurance business, direction and management which, in addition to satisfying the other requirements as to direction and management, is such as to fulfil the reasonable expectations of members of the society as to the conduct of such business.

6Conduct of the society’s activities with adequate professional skills.

7Supervision of the activities—

(a)of any subsidiary of the society or of any body of which the society has joint control; and

(b)of any registered branch of the society;

with due care and diligence in the interests of the members of the society and without detriment to the conduct of the society’s activities.

[F538. In the case of a society to which section 37(2) or (3) applies, direction and management which, in addition to satisfying the other requirements as to direction and management, is such as to secure compliance with any obligation imposed on the society by any provision (whether of the law of any part of the United Kingdom or of the law of another EEA State) which–

(a)gives effect to the general insurance or life Directives; or

(b) is otherwise applicable to the insurance activities of the society.]

(4)Nothing in this section implies that it is improper for a determination for any purpose of the Commission’s relevant prudential powers to take account of factors other than the criteria in subsection (3) above.

(5)In considering whether a society has satisfied the 7th criterion in subsection (3) above, the Commission shall have regard to the extent to which the operation of the subsidiary, jointly controlled body or registered branch is undertaken in accordance with [F54the other 7 criteria] in that subsection so far as they are relevant.

(6)A failure to satisfy any of the first 3 criteria in subsection (3) above shall be treated, for the purposes of this section, as a failure on the part of a society’s committee of management prudently to conduct the affairs of the society.

(7)A failure on the part of an authorised friendly society to comply with any conditions to which its authorisation under section 32 above is subject shall be treated, for the purposes of this section, as a failure on the part of the society’s committee of management prudently to conduct the affairs of the society.

(8)Any carrying on by a friendly society of an activity beyond its powers shall be treated, for the purposes of this section, as a failure on the part of the society’s committee of management prudently to conduct the affairs of the society.

(9)Any carrying on of activities which are beyond its powers—

(a)by a subsidiary of, or a body jointly controlled by, an incorporated friendly society; or

(b)by a registered branch of a registered friendly society,

shall be treated for the purposes of this section as a failure on the part of the society’s committee of management to supervise the activities of the subsidiary, jointly controlled body or registered branch with due care and diligence.

(10)The following provisions apply for the interpretation of the list of criteria in subsection (3) above in their application to a friendly society, that is to say—

  • activities” includes activities the society proposes to carry on;

  • requisite”, with reference to accounting records and systems of control, means such as are required by section 68 below; and

  • sufficient” with reference to the number of members of a committee of management or of other officers, means sufficient having regard to the range and scale of the society’s business.

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Amendments (Textual)

F53S. 50(3): eighth criterion substituted (1.9.1994) by S.I. 1994/1984 reg. 11(1)

F54Words in s. 50(5) substituted (1.1.1994) by S.I. 1993/2519, reg. 2(3)

Commencement Information

I27S. 50 wholly in force; s. 50 not in force at Royal Assent see s. 126(2); s. 50 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 50 in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2

Powers of [F55Authority]E+W+S+N.I.

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Amendments (Textual)

F55Word in the cross-heading substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 67; S.I. 2001/3538, art. 2(1)

51 Power to forbid acceptance of new members.E+W+S+N.I.

(1)Subject to the provisions of this section, if the Commission considers it expedient to do so in the interests of the members or potential members of a friendly society, it may give the society a direction forbidding it to accept any new members.

(2)If the Commission proposes to give such a direction, it shall serve on the society a notice stating that it proposes to give a direction.

(3)A notice under subsection (2) above shall specify the grounds for the proposed direction.

(4)The Commission shall consider any representations made by the society within such period (not being less than one month) from the date on which the society is served with the notice as the Commission may allow and, if the society so requests, shall afford to it an opportunity of being heard by the Commission within that period.

(5)The Commission may not give a direction unless all the grounds for giving it are those, or among those, which were specified in the notice served on the society under subsection (2) above.

(6)On giving a direction, the Commission shall—

(a)serve notice of it on the society, specifying the grounds for making it;

(b)publish notice of it in one or more of the London, Edinburgh and Belfast Gazettes and in any such other ways as it considers appropriate; and

(c)send a copy of it to the central office.

(7)A society which contravenes a direction given to it under this section shall be guilty of an offence and shall be liable—

(a)on conviction on indictment, to a fine; and

(b)on summary conviction, to a fine not exceeding the statutory maximum.

(8)The central office shall keep a copy of a direction given to a friendly society under this section in the public file of the society.

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Commencement Information

I28S. 51 wholly in force; s. 51 not in force at Royal Assent see s. 126(2); s. 51 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 51 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

52 Applications to court.E+W+S+N.I.

(1)Where the [F56Authority] has reason to believe that any of the conditions mentioned in subsection (2) below is satisfied, it may present a petition to the High Court for the winding up of the society under the applicable winding up legislation.

(2)The conditions referred to in subsection (1) above are—

(a)that a friendly society is carrying on activities that are not activities which such a society is permitted by this Act or the 1974 Act to carry on;

(b)that the society is not carrying on any activity falling within Schedule 2 to this Act;

[F57(c)that the society is failing to satisfy any obligation to which it is subject by virtue of any provision of the law of any EEA State other than the United Kingdom which–

(i)gives effect to the general insurance or life Directives; or

(ii)is otherwise applicable to the insurance activities of the society in that State;]

(d)that a subsidiary of an incorporated friendly society or a body jointly controlled by such a society is carrying on activities other than those mentioned in Schedule 7 to this Act;

and a court shall not make an order for the winding up of a society by virtue of this section unless it is satisfied that one or more of those conditions is satisfied.

(3)Where the [F56Authority] has reason to believe that any of the conditions mentioned in subsection (4) below is satisfied, it may make an application to the High Court for an order under subsection (5) below.

(4)The conditions referred to in subsection (3) above are—

(a)any of the conditions mentioned in subsection (2) above; or

(b)that an incorporated friendly society has taken part in forming or has acquired control of a body corporate jointly with any person other than another incorporated friendly society without the consent of the Commission;

and a court shall not make an order under subsection (5) below unless it is satisfied that one or both of the conditions mentioned in this subsection is satisfied.

(5)An order under this subsection is an order directing the society to modify its business as directed in the order or to take such other steps as may be so directed or, where the condition mentioned in subsection (4)(b) above is satisfied, an order directing the society to cease jointly controlling the body corporate.

(6)Where a court makes an order under subsection (5) above, the [F58Authority shall keep a copy of the order in the public file of the society.].

(7)The power to present a petition or to make an application for an order under subsection (5) above is available to the [F56Authority] whether or not it has previously presented a petition or made an application for such an order, as the case may be.

(8)In the application of this section to a friendly society whose registered office is in Scotland or Northern Ireland, references to the High Court shall be read as references to the Court of Session or, as the case may be, the High Court in Northern Ireland.

(9)In this section “the applicable winding up legislation”, in relation to an incorporated friendly society, has the same meaning as in section 23 above and, in relation to a registered friendly society, means Part V of the M11Insolvency Act 1986 or (where the society’s registered office is in Northern Ireland) Part VI of the M12Insolvency (Northern Ireland) Order 1989.

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Amendments (Textual)

F56Words in s. 52(1)(3)(7) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3. Pt. 1 para. 69(a) (with art. 13(3), Sch. 5)

F57S. 52(2)(c) substituted (1.9.1994) by S.I. 1994/1984 reg. 12

F58Words in s. 52(6) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 Pt. 1, para 69(b) (with art. 13(3), Sch. 5)

Commencement Information

I29S. 52 wholly in force; s. 52 not in force at Royal Assent see s. 126(2); s. 52 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 52 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

Marginal Citations

[F5952A Prohibition on disposal of assets.E+W+S+N.I.

(1)Where the Commission has reason to believe that any of the conditions mentioned in subsection (2) below is satisfied in relation to a friendly society to which section 37(2) or (3) applies, it may apply to the court for an injunction restraining, or in Scotland an interdict prohibiting, the society from disposing of or otherwise dealing with any of its assets to the value of its EC liabilities.

(2)The conditions referred to in subsection (1) above are–

(a)that the Commission has given (and not revoked) a direction in respect of the society under section 40 above; or

(b)that the society has failed to satisfy an obligation to which it is or was subject by virtue of section 48, 49, 49A above or Part III of the Friendly Societies (Insurance Business) Regulations 1994 F60; or

(c)that a submission by the society to the Commission of an account or statement specifies, as the amount of any liabilities of the society, an amount appearing to the Commission to have been determined otherwise than in accordance with–

(i)valuation regulations; or

(ii)where no such regulations are applicable, generally accepted accounting concepts, bases and policies or other generally accepted methods appropriate for friendly societies,

and a court shall not make an order under this section unless it is satisfied that one or more of those conditions are satisfied.

(3)Where a court makes an order under this section, it may by subsequent orders make provision for such incidental, consequential and supplementary matters as are necessary to enable the Commission to perform its functions under this Act.

(4)The jurisdiction conferred by this section shall be exercisable by the High Court and the Court of Session.

(5)In this section any reference to an EC liability is a reference to a liability of the business carried on by the society in the [F61EEA States].]

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Amendments (Textual)

F59S. 52A added (1.9.1994) by S.I. 1994/1984 reg. 13

F61S. 52A(5) words substituted (1.1.1998) by S.I. 1997/2849 reg. 4

[F6253 Residual power to impose requirements for protection of members.E+W+S+N.I.

(1)If the Commission considers it expedient to do so in order to protect the interests of members of a friendly society which does not require authorisation under section 32 above, it may direct the society to take such action as appears to the Commission to be appropriate, having regard to any risk—

(a)that the society may be unable to meet its liabilities; or

(b)that it will not be managed in the interests of its members.

(2)The power conferred by this section shall not be exercised in such a way as to restrict the society’s freedom to dispose of its assets except where the ground for intervention arises out of the submission by the society to the Commission of an account or statement specifying, as the amount of any liabilities of the society, an amount appearing to the Commission to have been determined otherwise than in accordance with—

(a)valuation regulations; or

(b)where no such regulations are applicable, generally accepted accounting concepts, bases and policies or other generally accepted methods appropriate for friendly societies.]

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Amendments (Textual)

F62Ss. 52A, 53 shall cease to have effect (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 70 (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

Commencement Information

I30S. 53 wholly in force; s. 53 not in force at Royal Assent see s. 126(2); s. 53 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 53 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

54 Supervision of activities of subsidiaries etc.E+W+S+N.I.

(1)In this section “friendly society group” means an incorporated friendly society, subsidiaries of that society and bodies jointly controlled by it.

(2)If it appears to the [F63Authority] that the activities of subsidiaries of an incorporated friendly society or bodies jointly controlled by it are or may become disproportionate to those of the friendly society group as a whole, it may direct the society—

(a)to take or refrain from taking steps specified in the direction with a view to securing that the activities in question cease to be or do not become disproportionate; or

(b)to take steps so specified with a view to securing—

(i)that it ceases to have control or joint control of any subsidiary or jointly controlled body in question; or

(ii)that any such subsidiary or jointly controlled body is wound up.

(3)If it appears to the [F63Authority] that any activity of a subsidiary of an incorporated friendly society or of a body jointly controlled by such a society is unsuitable for a member of a friendly society group, it may direct the society—

(a)to take steps specified in the direction with a view to securing that that activity ceases; or

(b)to take steps so specified with a view to securing—

(i)that it ceases to have control or joint control of the subsidiary or jointly controlled body; or

(ii)that the subsidiary or jointly controlled body is wound up.

(4)A direction under this section may specify [F64that the society is to comply with it—.

(a)immediately on receipt of a final notice in relation to the direction;

(b)before the end of such period as may be specified in the direction, beginning with the giving of a final notice in relation to the direction; or

(c)on the happening of an event subsequent to the giving of such a notice.]

(5)A society given a direction under this section must—

(a)comply with the direction; or

(b)convert itself into a company in accordance with Part VIII of this Act.

[F65(6)The Authority may by written notice to the society—

(a)vary a direction under this section at the request of the society; or

(b)revoke a direction under this section.]

(7)If a society requests the [F63Authority] to notify it as to whether in the opinion of the [F63Authority] it has complied with a direction under this section, the [F63Authority] shall comply with the request.

[F66(8)The Commission may issue to incorporated friendly societies (or to any description of such societies) such general guidance as it thinks appropriate as to circumstances in which a direction under this section is or is not likely to be given.]

(9)The [F67Authority shall keep] a copy—

(a)of a direction under this section;

(b)of a notice under subsection (6) above; or

[F68(ba)of a final notice varying a direction under this section;]

(c)of a notification under subsection (7) above;

[F69and the central office shall keep a copy] in the public file of the society.

[F70(10)“Final notice" means a final notice given under section 390 of the Financial Services and Markets Act 2000, as applied by section 58A(6) below.]

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Amendments (Textual)

F63Words in s. 54(2)(3)(7) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 71(a) (with art. 13(3), Sch. 5)

F64S. 54(4): words and paras. (a)-(c) substituted (17.8.2001 for specified purposes and otherwiseprosp.) for words by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 71(b) (with art. 13(3), Sch. 5)

F65S. 54(6) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 71(c) (with art. 13(3), Sch. 5)

F66S. 54(8) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 71(d) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F67Words in s. 54(9) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 71(e)(i) (with art. 13(3), Sch. 5)

F68S. 54(9)(ba) inserted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 71(e)(ii) (with art. 13(3), Sch. 5)

F69Words in s. 54(9) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 71(e)(iii) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F70S. 54(10) inserted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 71(f) (with art. 13(3), Sch. 5)

Commencement Information

I31S. 54 wholly in force; s. 54 not in force at Royal Assent see s. 126(2); s. 54 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 54 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

55 Supervision of group insurance business.E+W+S+N.I.

(1)This section applies where a friendly society carries on any group insurance business providing benefits for or in respect of a group of persons who are not members of the society.

(2)If it appears to the [F71Authority] that the business so carried on is or may become disproportionate to the other activities of the society (including any group insurance business carried on for the provision of benefits for or in respect of persons who are members of the society), it may direct the society to take or refrain from taking steps specified in the direction with a view to securing that the group business in question ceases to be or does not become disproportionate.

(3)Subsections (4) to (9) of section 54 above shall apply in relation to a direction under this section as they apply to a direction under that section.

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Amendments (Textual)

F71Words in s. 55(2) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1, para. 72 (with art. 13(3), Sch. 5); S.I. 2001/3538 art. 2(1)

Commencement Information

I32S. 55 wholly in force; s. 55 not in force at Royal Assent see s. 126(2); s. 55 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 55 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

[F7255A Supervision of controllers.E+W+S+N.I.

[F73(1)Schedule 13A to this Act shall have effect for making provision for or in connection with the supervision by the Commission of controllers of friendly societies to which section 37(2) or (3) above applies.]

(2)In this Act–

“controller", in relation to a friendly society to which section 37(2) or (3) of this Act applies, means a person who, either alone or with any associate or associates–

(a)is entitled to exercise or control the exercise of 10 per cent. or more of the voting power at any general meeting of the society; or

(b)is able to exercise a significant influence over the management of the society by virtue of an entitlement to exercise, or to control the exercise of, the voting power at any general meeting of the society;

[F74“notifiable voting rights", in relation to a friendly society to which section 37(2) or (3) above applies, means voting rights which, if acquired by any person, will result in his becoming a 10 per cent. controller, a 20 per cent. controller, a 33 per cent. controller, a 50 per cent. controller or a majority controller of the society.]

[F75(3)In this section and Schedule 13A to this Act, in relation to a friendly society to which section 37(2) or (3) above applies–

“10 per cent. controller”means a controller in whose case the percentage referred to in paragraph (a) of the definition of “controller”in subsection (2) above is 10 or more but less than 20;

“20 per cent. controller”means a controller in whose case that percentage is 20 or more but less than 33;

“33 per cent. controller”means a controller in whose case that percentage is 33 or more but less than 50;

“50 per cent. controller”means a controller in whose case that percentage is 50;

“majority controller”means a controller in whose case that percentage is more than 50.]]

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Amendments (Textual)

F72S. 55A added (1.9.1994) by S.I. 1994//1984 reg. 14(1)

F73S. 55A(1) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 73(a) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F74Definition of “notifiable voting rights” in s. 55A(2) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 73(b) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F75S. 55A(3) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 73(c) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

[F7656 Linked long-term insurance contracts.E+W+S+N.I.

(1)Regulations may be made by the Commission, with the consent of the Treasury, as respects the matters specified in subsection (2) below, in relation to contracts made by friendly societies the effecting of which constitutes the carrying on of insurance business falling within class III in head A in Schedule 2 to this Act.

(2)Regulations under this section may make provision for—

(a)restricting the descriptions of property or the indices of the value of property by reference to which benefits under the contracts may be determined;

(b)restricting the proportion of those benefits which may be determined by reference to property of a specified description or a specified index;

(c)regulating the manner in which and the frequency with which property of any description is to be valued for the purpose of determining those benefits and the times at which reference is to be made for that purpose to any index of the value of property;

(d)requiring friendly societies that enter into such contracts to appoint valuers for carrying out valuations of property of any description for the purpose of determining benefits under the contracts (being valuers who comply with the prescribed requirement as to qualifications and independence from the society) and to furnish the Commission with the prescribed information in relation to such appointments;

(e)requiring societies that enter into such contracts to furnish in such manner and at such times or intervals as may be prescribed such information relating to the value of the benefits under the contracts as may be prescribed, whether by sending notices to their members, depositing statements with the Commission, publication in the press or otherwise;

(f)requiring societies that enter into such contracts to furnish to the Commission in such manner and at such times or intervals as may be prescribed, such information certified in such manner as may be prescribed with respect to so much of their business as is concerned with the contracts or with any class or description of the contracts, and enabling the Commission to publish such information in such ways as it thinks appropriate.

(3)Regulations made for the purposes of subsection (2)(e) above may, in relation to notices required to be sent to members of friendly societies, impose requirements (whether as to type, size, colour or disposition of lettering, quality or colour of paper, or otherwise) for securing that such notices are easily legible.

(4)The Commission may, on the application of any friendly society, alter the requirements of regulations under this section so as to adapt those requirements to the circumstances of that society or to any particular kind of contract entered into or proposed to be entered into by that society.

(5)Regulations under this section may, to such extent as may be specified in them, apply in relation to contracts entered into before the coming into operation of the regulations, including contracts entered into before the passing of this Act.

(6)In this section “prescribed” means prescribed by regulations under this section.]

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Amendments (Textual)

F76Ss. 56, 57, 57A shall cease to have effect (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1) Sch. 3 para. 74 (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4) (with art. 13(2), Sch. 5)

Commencement Information

I33S. 56 wholly in force; s. 56 not in force at Royal Assent see s. 126(2); s. 56 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 56 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

Covering of risks situated in another member StateE+W+S+N.I.

[F77[F7857 Recognition of societies in accordance with insurance Directives.E+W+S+N.I.

Schedule 13B to this Act shall have effect for making provision for or in connection with the recognition in other EEA States of friendly societies to which section 37(2) or (3) of this Act applies.]

(2)After Schedule 13A to that Act insert Schedule 2 to these Regulations (recognition of friendly societies in other EEA States), as Schedule 13B.

(3)If a friendly society to which section 37(2) or (3) of the 1992 Act applies was immediately before the commencement date lawfully carrying on direct insurance business of a class or part of a class in a member State other than the United Kingdom through an overseas branch in that State, it shall be treated for the purposes of that Act as if the requirements of paragraph 1 of Schedule 13B to that Act had been complied with in relation to insurance business of that class or part of a class.

(4)If a friendly society to which section 37(2) or (3) of the 1992 Act applies was immediately before the commencement date lawfully providing insurance of a class or part of a class in a member State other than the United Kingdom through an establishment in another member State, it shall be treated for the purposes of that Act as if the requirements of paragraph 5 of Schedule 13B to that Act had been complied with in relation to insurance of that class or part of a class.

(6)Regulation 4 of the Friendly Societies (Amendment) Regulations 1993 (which is superseded by this regulation) shall cease to have effect.]

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Amendments (Textual)

F77S. 57 substituted (1.9.1994) by S.I. 1994/1984 reg. 15(1)

F78Ss. 56, 57, 57A shall cease to have effect (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 74 (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 4)

[F79[F8057A Notification by Commission of measures taken by it.E+W+S+N.I.

(1)This section applies where the Commission is considering taking or has taken any measures in relation to a friendly society to which section 37(2) or (3) above applies which–

(a)carries on insurance business through an overseas branch in an EEA State other than the United Kingdom; or

(b)provides insurance in an EEA State other than the United Kingdom through an establishment in another EEA State.

(2)The Commission–

(a)shall, if required by Article 24 of the first life Directive or Article 20 of the first general insurance Directive, or by any other provision of the life or general insurance Directives to do so, notify any supervisory authority of such a State of those measures or proposed measures; and

(b)may, if it is satisfied that it is expedient to do so, request that authority to take similar measures in relation to the friendly society.

(3)In this section “measure" includes imposing conditions which prohibit the disposals of assets and exercising any power conferred by this Part of the Act.]]

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Amendments (Textual)

F79S. 57A substituted (1.9.1994) by S.I. 1994/1984 reg. 16

F80Ss. 56, 57, 57A shall cease to have effect (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 74 (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

[F81Notices, hearings and appeals]E+W+S+N.I.

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Amendments (Textual)

F81S. 58A and the cross-heading substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 58-61 by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 Pt. 1 para 75 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F8258 Rights of appeal.E+W+S+N.I.

(1)A friendly society which is aggrieved by a decision of the Commission—

(a)to refuse to grant authorisation under section 32 above,

(b)to impose conditions, or as to the conditions imposed, under section 34 or 36 above,

(c)to withdraw authorisation under section 40 or 41 above,

(d)to give a direction under section 51 above; or

(e)to give a direction to the society, or as to the steps specified in a direction, under section 54 or 55 above,

may appeal against the decision to a tribunal constituted in accordance with section 59 below.

(2)Any person in relation to whom the Commission, in deciding to refuse to grant authorisation, to impose conditions or to withdraw authorisation—

(a)makes a determination that he is not a fit and proper person to hold or, as the case may be, to remain in an office in the society in question, or

(b)imposes a requirement that he be removed from an office in the society,

may appeal against the decision so far as it relates to that determination or requirement.

(3)The withdrawal of a society’s authorisation shall not have effect—

(a)until the end of the period within which an appeal can be brought against the Commission’s decision to withdraw that authorisation; and

(b)if such an appeal is brought, until it is determined or withdrawn.

(4)Where the Commission decides to refuse to grant authorisation to a society on an application made in pursuance of a direction under section 39 above, the society’s authorisation shall not expire under subsection (5) of that section—

(a)until the end of the period within which an appeal can be brought against the decision not to grant authorisation; and

(b)if such an appeal is brought, until it is determined or withdrawn.

(5)A direction under section 51, 54 or 55 above shall not have any effect until—

(a)the end of the period within which an appeal can be brought against the Commission’s decision to give the direction or as to any steps specified in the direction; and

(b)if such an appeal is brought, until it is determined or withdrawn.

(6)Subject to any order of the tribunal made under section 59(6) below, an appeal under subsection (1)(b) or (2) above shall not affect the operation, pending the determination of the appeal, of any condition which is the subject of the appeal.

(7)Subject to subsection (8) below, no determination of an appeal brought by any person under subsection (2) above shall affect any decision of the Commission on the ground of (or on grounds including) the determination made in relation to that person or, as the case may be, the failure of the society to comply with the requirement imposed in relation to that person.

(8)The tribunal may revoke a decision of the Commission to impose a condition which is the subject of an appeal under subsection (2) above in so far as it seeks to prevent the person making the appeal from holding, or continuing to hold, office in the society.

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Amendments (Textual)

F82S. 58A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 58-61 by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 75 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

[F8358A Notices, hearings and appeals.E+W+S+N.I.

(1)If the Authority proposes—

(a)to give a direction to a society under section 54 or section 55, or to vary such a direction other than at the request of the society, or

(b)to give a direction in relation to a society under section 90,

it must give the society a warning notice.

(2)The warning notice must set out the terms of the direction which the Authority proposes to give and, in the case of a proposal to give a direction under section 54 or 55, any provisions which the Authority proposes to include in the direction by virtue of section 54(4) (including that provision as applied by section 55(3)).

(3)If the Authority decides—

(a)to give a direction to a society under section 54 or section 55, or to vary such a direction other than at the request of the society, or

(b)to give a direction in relation to a society under section 90,

it must give the society a decision notice.

(4)The decision notice must set out the terms of the direction which the Authority has decided to give and, in the case of a decision to give a direction under section 54 or 55, any provisions to be included in the direction by virtue of section 54(4) (including that provision as applied by section 55(3)).

(5)A society to whom a decision notice is given under this section may refer the matter to the Financial Services and Markets Tribunal.

(6)Part XXVI of the Financial Services and Markets Act 2000 (notices) is to be treated as applying in respect of warning notices and decision notices given under this section as it applies in respect of warning notices and decision notices given under that Act, subject to subsection (8) below.

(7)The provisions of Part IX of the Financial Services and Markets Act 2000 (hearings and appeals) are to be treated as applying in respect of references to the Financial Services and Markets Tribunal made under this section as they apply in respect of references made to that Tribunal under that Act.

(8)In the application of Part XXVI of that Act in respect of warning notices and decision notices given under this section—

(a)section 388(1)(e)(i) (which requires a decision notice to indicate any right given under that Act to refer a decision to the Tribunal) is to be read as if, for the words “this Act", there were substituted “the Friendly Societies Act 1992";

(b)section 388(2) (which makes provision for the type of action to which a decision notice may relate if it was preceded by a warning notice) is to be read as if, for the word “Part", there were substituted “section";

(c)section 390(4) (which provides for the content of a final notice about an order) is to be read as if—

(i)for the words “an order" there were substituted “a direction", and

(ii)for the words “the order", in both places where they appear, there were substituted “the direction"; and

(d)section 392 (application of sections 393 (third party rights) and 394 (access to Authority material)) is to be read as if—

(i)paragraph (a) of that section contained a reference to a warning notice given under subsection (1) above, and

(ii)paragraph (b) of that section contained a reference to a decision notice given under subsection (3) above.]

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Amendments (Textual)

F83S. 58A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 58-61 by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 75 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F8459 Determination of appeals.E+W+S+N.I.

(1)Where an appeal is brought under section 58 above, a tribunal to determine the appeal shall be constituted in accordance with subsection (2) below.

(2)The tribunal shall consist of—

(a)a chairman appointed by the Lord Chancellor or, where the society concerned has its registered office in Scotland, by the Lord Chancellor in consultation with the Lord Advocate; and

(b)two other members appointed by the Treasury.

(3)The chairman shall be a person who—

(a)has a seven year general qualification, within the meaning of the M13Courts and Legal Services Act 1990;

(b)is an advocate or solicitor in Scotland of at least seven years’ standing; or

(c)is a member of the Bar of Northern Ireland or solicitor of the Supreme Court of Northern Ireland of at least seven years’ standing;

and the other two members shall be persons appearing to the Treasury to have experience of accountancy, the business of insurance or the business of friendly societies.

[F85(3A)A person shall not be appointed after the day on which he attains the age of 70 to be the chairman of a tribunal under this section.]

(4)Subject to subsection (5) below, on any appeal against a decision of the Commission the question for the determination of the tribunal shall be whether, for the reasons adduced by the appellant, the decision was unlawful or not justified by the evidence on which it was based.

(5)In the case of an appeal against a decision to give a direction under section 54 or 55 above—

(a)the tribunal shall, on the evidence adduced before it, reconsider the decision to give the direction and the steps specified in the direction (according to the extent of the appeal);

(b)if the tribunal determines that such a direction should not be given, it shall reverse the decision; and

(c)if the tribunal determines that those steps should not be so specified, it may give the Commission such guidance as it thinks fit as to what the appropriate steps might be.

(6)The tribunal may, on the application of the friendly society concerned, order that the operation of any condition which is the subject of an appeal by the society be suspended pending the determination of the appeal.

(7)The tribunal may confirm or reverse the decision which is the subject of the appeal but shall not have power to vary it except by directing the Commission—

(a)in the case of an appeal against a decision to refuse to grant authorisation, to determine conditions to which the grant of authorisation is to be subject;

(b)in the case of an appeal against the imposition of conditions or as to the conditions imposed by the decision, to determine conditions or different conditions subject to which the authorisation is to be granted or is to continue, as the case may be;

(c)in the case of an appeal against a decision to withdraw authorisation, to determine conditions or different conditions subject to which the authorisation is to continue in force, as the case may be;

(d)in the case of an appeal against a decision as to the steps specified in a direction under section 54 or 55 above, to determine, having taken account of any guidance given under subsection (5) above, the steps which are to be so specified.

(8)Where by virtue of subsection (7)(d) above the tribunal directs the Commission to determine the steps to be specified in the direction, the society may appeal against the steps so specified.

(9)Where by virtue of subsection (7) above the tribunal directs the Commission to determine conditions or different conditions—

(a)the Commission shall in accordance with section 34 or 36 above impose such conditions as it thinks fit; and

(a)paragraphs 7 and 8 of Schedule 13 to this Act shall apply subject to the modifications made by paragraph 9 of that Schedule;

and the society may appeal to the tribunal against any condition so imposed.

(10)On any such appeal the tribunal may confirm or reverse the Commission’s decision with respect to the conditions which are the subject of the appeal or may direct the Commission to determine different conditions; and where by virtue of this subsection the tribunal directs the Commission to determine different conditions, subsection (9) above shall apply as it applies where the tribunal gives such a direction by virtue of subsection (7) above.

(11)Where the tribunal reverses a decision of the Commission to refuse to grant authorisation, it shall direct the Commission to grant it; and where the tribunal reverses a decision of the Commission to make the grant of authorisation subject to conditions, it shall direct the Commission to grant it unconditionally.

(12)Notice of a tribunal’s determination, together with a statement of its reasons, shall be given to the appellant and to the Commission; and unless the tribunal has directed the Commission to determine conditions or, in any other case, the tribunal directs otherwise, the determination shall come into operation when the notice is given to the appellant.

(13)The Treasury may out of money provided by Parliament pay to the persons appointed as members of a tribunal under this section such fees and allowances in respect of expenses as the Treasury may determine and any other expenses incurred for the purposes of this section.

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Amendments (Textual)

F84S. 58A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 58-61 by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 75 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C9S. 59 restricted (31.3.1995) by 1993 c. 8, s. 26(8)(j) (with Sch. 7 paras. 2(2), 3(2), 4); S.I. 1995/631, art. 2

S. 59: power to transfer functions conferred (19.5.1999) by S.I. 1999/678, art. 2(1), Sch.

C10S. 59(2)(a): power to transfer certain functions conferred (1.7.1999) by S.I. 1999/1750, arts. 1(1), 2, Sch. 1

Marginal Citations

F8660 Costs, procedure and evidence.E+W+S+N.I.

(1)A tribunal may give such directions as it thinks fit for the payment of costs or expenses by any party to an appeal.

(2)On an appeal under section 58(2) above the friendly society in relation to which the determination was made, or upon which the requirement was imposed, shall be entitled to be heard.

(3)The Treasury may make regulations with respect to appeals under section 58 above; and those regulations may in particular make provision—

(a)as to the period within which and the manner in which such appeals are to be brought;

(b)as to the manner in which such appeals are to be conducted, including provision for any hearing to be held in private;

(c)for requiring any person, on tender of the necessary expenses of his attendance, to attend and give evidence or produce documents in his custody or under his control and for authorising the administration of oaths to witnesses;

(d)for granting to any person such discovery or inspection of documents or right to further particulars as might be granted by a county court in England and Wales or Northern Ireland or, in Scotland, for granting to any person such recovery or inspection of documents as might be granted by the sheriff;

(e)for enabling an appellant to withdraw an appeal or the Commission to withdraw its opposition to an appeal and for the consequences of any such withdrawal;

(f)for taxing or otherwise settling any costs or expenses directed to be paid by the tribunal and for the enforcement of any such direction;

(g)for enabling any functions in relation to an appeal to be discharged by the chairman of the tribunal; and

(h)as to any other matter connected with such appeals.

(4)Regulations under this section with respect to appeals where the friendly society concerned has its registered office in Scotland shall be made by the Lord Advocate.

(5)A person who, having been required in accordance with regulations under this section to attend and give evidence, fails without reasonable excuse to attend or give evidence shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(6)A person who intentionally alters, suppresses, conceals, destroys or refuses to produce any document which he has been required to produce in accordance with regulations under this section, or which he is liable to be so required to produce, shall be liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both;

(b)on summary conviction, to a fine not exceeding the statutory maximum.

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Amendments (Textual)

F86S. 58A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 58-61 by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 75 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C11S. 60: power to transfer functions conferred (19.5.1999) by S.I. 1999/678, art. 2(1), Sch.

C12S. 60(4): power to transfer certain functions conferred (1.7.1999) by S.I. 1999/1750, arts. 1(1), 2, Sch. 1

F8761 Further appeals on points of law.E+W+S+N.I.

(1)An appeal shall lie to the High Court at the instance of the friendly society or other person concerned or of the Commission on any question of law arising from any decision of a tribunal under section 59 above; and if the court is of the opinion that the decision was erroneous in law, it shall remit the matter to the tribunal for re-hearing and determination by it.

(2)In the application of this section to a friendly society whose registered office is in Scotland or Northern Ireland, references to the High Court shall be construed as references to the Court of Session or, as the case may be, the High Court in Northern Ireland.

(3)No appeal to the Court of Appeal or to the Court of Appeal in Northern Ireland shall be brought from a decision under subsection (1) above except with the leave of that court or of the court or judge from whose decision the appeal is brought.

(4)An appeal shall lie, with the leave of the Court of Session or the House of Lords, from any decision of the Court of Session under this section, and such leave may be given on such terms as to costs, expenses or otherwise as the Court of Session or the House of Lords may determine.

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Amendments (Textual)

F87S. 58A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 58-61 by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 75 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

InformationE+W+S+N.I.

62 Powers to obtain information and documents etc.E+W+S+N.I.

(1)This section applies to information, documents or other material, or explanations of matters which relate to—

(a)the activities or the plans for future development of a friendly society; or

(b)the activities or the plans for future development of a subsidiary of or body jointly controlled by an incorporated friendly society;

and, in relation to the imposition of requirements under this section, “the purposes of its supervisory functions” means the purposes of the discharge by the [F88Authority] of any of its functions under this Act.

(2)This section does not authorise any requirement in relation to information, documents or other material to be imposed on a subsidiary of or body jointly controlled by an incorporated friendly society unless that subsidiary or body carries on business in the United Kingdom; but a requirement may be imposed under this section on a friendly society in relation to information, documents or other material in the possession or control of a subsidiary of or body jointly controlled by the society which does not carry on business in the United Kingdom.

(3)Subject to subsection (2) above, the [F89Authority] may by notice to a friendly society or to a subsidiary of, or body jointly controlled by, an incorporated friendly society, require the body to which it is addressed—

(a)to furnish to it, within a specified period or at a specified time or times, such specified information as the [F89Authority]considers it needs for the purposes of its supervisory functions;

(b)to produce to it, at a specified time and place, such specified documents or other material as the [F89Authority]considers it needs for the purposes of its supervisory functions;

(c)to provide to it, within a specified period, such explanations of specified matters as the [F89 Authority] considers it needs for the purposes of its supervisory functions;

[F90(3A)Subject to subsection (2) above, any person authorised for the purpose by the Authority (“an authorised officer") may, on producing evidence of his authority, require a friendly society or a subsidiary of, or body jointly controlled by, an incorporated friendly society—

(a)to furnish to him forthwith such specified information as the Authority considers it needs for the purposes of its supervisory functions;

(b)to produce to him forthwith such documents or other material as the Authority considers it needs for those purposes;

(c)to provide to him forthwith such explanations of specified matters as the Authority considers it needs for those purposes.]

(4)Where by virtue of subsection (3)(a), (b) or (c) above the [F91Authority has power, or by virtue of subsection (3A) above an authorised officer has power,] to require the furnishing of any information, the production of any document or material or the provision of any explanation by a friendly society, the [F92Authority or authorised officer] shall have the like power as regards any person who—

(a)is or has been an officer, employee or agent of the society [F93or, in the case of a society to which section 37(2) or (3) above applies, a controller or manager of the society], or

(b)in the case of documents or material, appears to the [F92Authority or authorised officer] to have the document or material in his possession or under his control.

(5)Where by virtue of subsection (3)(a), (b) or (c) above the [F94Authority has power, or by virtue of subsection (3A) above an authorised officer has power,] to require the furnishing of any information, the production of any document or material or the provision of any explanation by a subsidiary of or body jointly controlled by an incorporated friendly society, the [F95Authority or authorised officer] shall have the like power as regards any person who—

(a)is or has been an officer, employee or agent of the subsidiary or jointly controlled body, or

(b)in the case of documents or material, appears to the [F95Authority or authorised officer] to have the document or material in his possession or under his control.

[F96[F97(5A)Any person authorised by the Commission may, on producing if required evidence of his authority, enter any premises occupied by–

(a)any body which is a friendly society to which section 37(2) or (3) above applies, or is a subsidiary of, or body jointly controlled by, such a society, and on which a notice has been served under subsection (3) above; or

(b)any person who is or has been a controller, manager, officer, employee or agent of such a society, or of a subsidiary of, or body jointly controlled by, such a society, and on whom a notice has been served under subsection (4) or (5) above,

for the purpose of obtaining the information or documents required by the notice and exercising the powers conferred by subsection (3) above.]]

(6)Where any person from whom production of a document or material is required under subsection (4) or (5) above claims a lien on the document or material, the production of it shall be without prejudice to the lien.

(7)Nothing in the foregoing provisions of this section shall compel the production—

(a)by a barrister, solicitor, advocate or licensed conveyancer of a document or material contained in a privileged communication or, in Scotland, a communication which is protected from disclosure on the ground of confidentiality, made by him or to him in that capacity or the furnishing of information contained in such communication so made;

(b)by a person who is not a barrister or solicitor of a document or material contained in a communication made by him or to him which is privileged by virtue of section 63 of the M14Courts and Legal Services Act 1990 or the furnishing of information contained in such a communication; or

(c)by an independent qualified conveyancer, an executry practitioner or a recognised financial institution of a document or material contained in a communication made by him or to him which is protected from disclosure by virtue of section 22 of the M15Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 or the furnishing of information contained in such a communication.

(8)Where, by virtue of subsection (3), [F98(3A),] (4) or (5) above, the [F99Authority or an authorised officer]requires the production by a friendly society or other body or any other person of documents or material, the [F100Authority or authorised officer] may—

(a)if the documents or material are not produced, require that person to state, to the best of his knowledge and belief, where the documents or material are;

(b)if the documents or material are produced, take copies of or extracts from them and require that person or any other person who is or has been an officer, employee or agent of the friendly society or other body, as the case may be, to provide an explanation of the documents or material.

(9)Any person who, when required to do so under this section, fails without reasonable excuse to furnish any information or report, to produce any documents or material, or to provide any explanation or make any statement, shall be guilty of an offence and liable on summary conviction—

(a)to a fine not exceeding level 5 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding one tenth of that level for every day during which the offence continues.

(10)Any friendly society which furnishes any information, provides any explanation or makes any statement which is false or misleading in a material particular, shall be guilty of an offence and liable—

(a)on conviction on indictment, to a fine; and

(b)on summary conviction to a fine not exceeding the statutory maximum.

(11)Any person who knowingly or recklessly furnishes any information, provides any explanation or makes any statement which is false or misleading in a material particular shall be guilty of an offence and liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine or both; and

(b)on summary conviction, to a fine not exceeding the statutory maximum.

(12)In this section—

  • specified” means specified in a notice under this section; and

  • agent”, in relation to a friendly society or a subsidiary of, or body jointly controlled by, an incorporated friendly society, includes its bankers, accountants, solicitors and auditors and the appropriate actuary.

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Amendments (Textual)

F88Word in s. 62(1) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 76(a) (with art. 13(3), Sch. 5)

F89Words in s. 62(3) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 76(b) (with art. 13(3), Sch. 5)

F90S. 62(3A) inserted (17.8.2001 for specified purposes and otherwiseprosp) by S.I. 2001/2617, art. 2(a), 8(1), 13(1), Sch. 3 Pt. 1, para. 76(c) (with art. 13(3), Sch. 5)

F91Words in s. 62(4) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 76(d)(i) (with art. 13(3), Sch. 5)

F92Words in s. 62(4) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 76(d)(ii) (with art. 13(3), Sch. 5)

F93S. 62(4)(a) words substitiuted (1.9.1994) by S.I. 1994/1984 reg. 17(1)

F94Words in s. 62(5) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 76(e)(i) (with art. 13(3), Sch. 5)

F95Words in s. 62(5) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 76(e)(ii) (with art. 13(3), Sch. 5)

F96S. 62(5A) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, art. 2(a), 8(1), 13(1), Sch. 3 Pt. 1 para 76(f) (with art. 13(3), Sch. 5)

F97S. 62(5A) inserted (1.9.1994) by S.I. 1994/1984, reg. 17(2)

F98Words in s. 62(8) inserted (17.8.2001 for specified purposes and otherwiseprosp) by S.I. 2001/2617, art. 2(a), 8(1), 13(1), Sch.3, Pt. 1 para. 76(g)(i) (with art. 13(3), Sch. 5)

F99Words in s. 62(8) substituted (17.8.2001 for specified purposes and otherwiseprosp) by S.I. 2001/2617, art. 2(a), 8(1), 13(1), Sch. 3, Pt. 1 para. 76(g)(ii) (with art. 13(3), Sch. 5)

F100Words in s. 62(8) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 76(g)(iii) (with art. 13(3), Sch. 5)

Commencement Information

I34S. 62 wholly in force; s. 62 not in force at Royal Assent see s. 126(2); s. 62 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 62 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

Marginal Citations

[F10162A Entry of premises under warrant under section 176 of the Financial Services and Markets Act 2000.E+W+S+N.I.

(1)A justice of the peace may issue a warrant under section 176 of the Financial Services and Markets Act 2000 if satisfied on information on oath given by or on behalf of the Authority, an authorised officer within the meaning of section 62(3A) above, or a person appointed as an investigator under section 65(1) below or as an inspector under section 66(1) below, that there are reasonable grounds for believing that the first or second set of conditions below is satisfied.

(2)The first set of conditions is that—

(a)there are on the premises specified in the warrant information, documents or other material in relation to which a requirement has been imposed on any person under section 62(3), (3A), (4) or (5) above or section 67(3) below, or which it is the duty of any person to produce under section 65(3) or 67(2) below, and

(b)that person has failed (wholly or in part) to comply with that requirement or, having been requested to do so, has failed (wholly or in part) to comply with that duty.

(3)The second set of conditions is that—

(a)there are on the premises specified in the warrant information, documents or other material in relation to which a requirement could be imposed on any person under section 62(3), (3A), (4) or (5) above or section 67(3) below, or which any person could be requested to produce in compliance with the duty imposed on them by section 65(3) or 67(2) below, and

(b)if such a requirement were imposed, or such a request made,—

(i)it would not be complied with, or

(ii)any information, documents or other material to which it related would be removed, tampered with or destroyed.]

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Amendments (Textual)

F101S. 62A inserted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 2, 13(1), Sch. 3, Pt. 1 para 77 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F10263 Confidentiality of certain information.E+W+S+N.I.

(1)Subject to section 64 below, no restricted information which relates to the business or other affairs of a friendly society, a registered branch of a friendly society or any other person shall be disclosed (otherwise than to an officer or employee of the primary recipient) by—

(a)the primary recipient; or

(b)any person obtaining the information directly or indirectly from him,

without the consent of the person from whom the primary recipient obtained the information and, if different, the person to whom it relates.

(2)For the purposes of this section—

  • the primary recipient” means the Commission, the Chief Registrar, the central office or any officer or servant of any such person; and

  • restricted information” means information which is obtained by the primary recipient for the purposes of, or in the discharge of his functions under, this Act or the 1974 Act;

but information shall not be treated as restricted information if it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purpose for which, disclosure is not precluded by this section.

(3)Any information disclosed to the Commission or the Chief Registrar by an overseas regulatory authority (within the meaning of section 64 below) shall be treated as restricted information for the purposes of this section.

(4)A person who discloses information in contravention of this section shall be guilty of an offence and liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and

(b)on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum, or both.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F102S. 63A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 63, 64 by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 78 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Commencement Information

I35S. 63 wholly in force; s. 63 not in force at Royal Assent see s. 126(2); s. 63 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 63 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

[F10363A Disclosure of information.E+W+S+N.I.

(1)For the purposes of sections 348 to 353 of the Financial Services and Markets Act 2000 (restrictions on disclosure of confidential information)—

(a)information to which this section applies is to be treated as confidential information; and

(b)in relation to such information, each of the following is a primary recipient—

(i)the Authority;

(ii)any person who is or has been employed by the Authority; and

(iii)any person appointed by the Authority to carry out functions under this Act or the 1974 Act.

(2)This section applies to information which—

(a)relates to the business or other affairs of a friendly society, a registered branch of a friendly society or any other person;

(b)was received by a primary recipient (within the meaning of subsection (1)(b)) for the purposes of, or in the discharge of, any functions of the Authority under any provision made by or under this Act or the 1974 Act; and

(c)is not excluded information by virtue of subsection (4).

(3)It is immaterial for the purposes of subsection (2) whether or not the information was received—

(a)by virtue of a requirement to provide it imposed by or under this Act;

(b)for other purposes as well as purposes mentioned in that subsection.

(4)Information is excluded information if—

(a)it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purposes for which, disclosure is not precluded by section 348 of the Financial Services and Markets Act 2000 (restrictions on disclosure of confidential information); or

(b)it is in the form of a summary or collection of information so framed that it is not possible to ascertain from it information relating to any particular person.]

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F103S. 63A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 63, 64 by S.I. 2001/2617, art. 2, 8(1), 13(1), Sch. 3, Pt. 1 para. 78 (with art. 13(3), Sch. 5); S.I. 2001/3538. art. 2(1)

F10263 Confidentiality of certain information.E+W+S+N.I.

(1)Subject to section 64 below, no restricted information which relates to the business or other affairs of a friendly society, a registered branch of a friendly society or any other person shall be disclosed (otherwise than to an officer or employee of the primary recipient) by—

(a)the primary recipient; or

(b)any person obtaining the information directly or indirectly from him,

without the consent of the person from whom the primary recipient obtained the information and, if different, the person to whom it relates.

(2)For the purposes of this section—

  • the primary recipient” means the Commission, the Chief Registrar, the central office or any officer or servant of any such person; and

  • restricted information” means information which is obtained by the primary recipient for the purposes of, or in the discharge of his functions under, this Act or the 1974 Act;

but information shall not be treated as restricted information if it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purpose for which, disclosure is not precluded by this section.

(3)Any information disclosed to the Commission or the Chief Registrar by an overseas regulatory authority (within the meaning of section 64 below) shall be treated as restricted information for the purposes of this section.

(4)A person who discloses information in contravention of this section shall be guilty of an offence and liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and

(b)on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum, or both.

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Amendments (Textual)

F102S. 63A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 63, 64 by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 78 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Commencement Information

I35S. 63 wholly in force; s. 63 not in force at Royal Assent see s. 126(2); s. 63 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 63 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

F10464 Exceptions from restrictions on disclosure.E+W+S+N.I.

(1)Information which is restricted information for the purposes of section 63 above may be disclosed—

(a)to any person with a view to the institution of, or otherwise for the purposes of, relevant proceedings;

(b)if it is information which is or has been available to the public from other sources;

(c)in the form of a summary or collection of information so framed as not to enable information related to any particular body or person to be ascertained from it;

(d)to the extent that it is information which is provided for the purpose, under any provision of this Act or the 1974 Act, of its being made available to the public in any manner;

(e)in pursuance of any Community obligation;

(f)for the purpose of facilitating the discharge by the Commission, the Chief Registrar or the central office of any of their functions under this Act or the 1974 Act;

(g)to the Treasury, if the disclosure is made for the purpose of facilitating the discharge of any functions of the Treasury under this Act or the 1974 Act or otherwise in the interests of members of friendly societies or in the public interest;

(h)for the purpose of enabling or assisting any person appointed investigator under section 65 below or inspector under section 66 below to discharge his duties under that section; or

(i)for the purpose of facilitating the discharge by the auditors of a friendly society of their duties to the Commission.

(2)For the purposes of subsection (1)(a) above “relevant proceedings” are—

(a)any criminal proceedings;

(b)any civil proceedings by or at the relation of or against the Commission or the Chief Registrar arising out of the discharge of any of their functions under this Act or the 1974 Act;

(c)any disciplinary proceedings relating to—

(i)the exercise by a solicitor, auditor, accountant, actuary or valuer of his professional duties;

(ii)the discharge by a public servant of his duties;

and in paragraph (c) above “public servant” means an officer or servant of the Crown (including an officer or servant of the Crown in right of Her Majesty’s Government in Northern Ireland) or of any public or other authority designated for the purpose by order made by the Treasury.

(3)Nothing in section 63 above prohibits the disclosure of information to the Secretary of State or the Department of Economic Development in Northern Ireland in circumstances where it is desirable or expedient—

(a)that the information should be disclosed in the interests of members of a friendly society or in the public interest; or

(b)it is desirable or expedient that the information should be disclosed for the purpose of facilitating the discharge—

(i)by the Secretary of State, of any functions of his under the enactments relating to companies, insurance companies, or insolvency or under the M16Financial Services Act 1986 or any provision of Parts II, III or VII of the M17Companies Act 1989; or

(ii)by the Department, of any of its functions relating to companies or insolvency, or under Part III of the M18Companies (Northern Ireland) Order 1990 or Part II or V of the M19Companies (No. 2) (Northern Ireland) Order 1990;

nor does that section prohibit further disclosure of the information by the Secretary of State or the Department with the consent of the Commission.

[F105(3A)Nothing in section 63 above prohibits the disclosure of information to the Treasury in circumstances where it is desirable or expedient that the information should be disclosed for the purpose of facilitating the discharge by the Treasury of any functions of theirs [F106under the enactments relating to insurance companies,] under the Financial Services Act 1986 or under Part III or Part VII of the Companies Act 1989 nor does that section prohibit further disclosure of the information by the Treasury with the consent of the Commission.]

(4)Nothing in section 63 above prohibits the disclosure of information to an authority mentioned in subsection (5) below (a “relevant authority") in circumstances where, in the opinion of the Commission, it is desirable or expedient that the information should be disclosed—

(a)in the interests of members of a friendly society or in the public interest; or

(b)with a view to facilitating the discharge by the authority, of any functions of the authority (including functions in relation to proceedings) mentioned in that subsection (“relevant functions”);

nor does that section prohibit further disclosure of the information, with the consent of the Commission.

(5)The relevant authorities mentioned in subsection (4) above and the relevant functions in relation to each such authority, are as follows—

AuthorityFunctions
[F1071.] An inspector appointed under Part XIV of the Companies Act 1985, Part XV of the Companies (Northern Ireland) Order 1986 or section 94 or 177 of the Financial Services Act 1986.Functions under that Part or that section or Article.
[F1072.] A person authorised to exercise powers under section 44 of the Insurance Companies Act 1982, section 447 of the Companies Act 1985, section 106 of the Financial Services Act 1986 or section 84 of the Companies Act 1989 or Article 440 of the Companies (Northern Ireland) Order 1986.Functions under that section or Article.
[F1073.]The Policyholders Protection Board.Functions under the Policyholders Protection Act 1975.
[F1074.]A designated agency within the meaning of the Financial Services Act 1986.Functions under that Act or Part VII of the Companies Act 1989.
[F1075.]A transferee body or the competent authority within the meaning of the Financial Services Act 1986.Functions under that Act.
[F1076.]A body administering a scheme under section 54 of the Financial Services Act 1986.Functions under the scheme.
[F1077.]A recognised self-regulating organisation, recognised professional body, recognised investment exchange, recognised clearing house, or recognised self-regulating organisation for friendly societies (within the meaning of the Financial Services Act 1986).Functions in its capacity as an organisation, body, exchange or clearing house recognised under that Act.
[F1078.]The Bank of England.[F108Any of its functions]
[F109The Financial Services Authority.Functions under the Financial Services Act 1986 (other than as a designated agency within the meaning of that Act), the Banking Act 1987 or section 171 of the Companies Act 1989.]
[F1079.] A body established by order under section 46 of the Companies Act 1989.Functions under Part II of that Act.
[F11010. A recognised supervisory or qualifying body (within the meaning of Part II of the Companies Act 1989 or Part III of the Companies (Northern Ireland) Order 1990). .Functions as such a body or functions in relation to disciplinary proceedings against auditors.]
[F10711.]The Industrial Assurance Commissioner for Northern Ireland.Functions under the enactments relating to industrial assurance.
F111. . ..F111. . ..
[F10713.]The Official Receiver or the Official Receiver for Northern Ireland.Functions under the enactments relating to insolvency.
[F112 14A recognised professional body (within the meaning of section 391 of the Insolvency Act 1986 or Article 350 of the Insolvency (Northern Ireland) Order 1989).Functions in its capacity as such a body under that Act or that Order or functions in relation to disciplinary proceedings against insolvency practitioners (within the meaning of that Act or that Order).]
[F10715.]The Building Societies Commission.Functions under the Building Societies Act 1986.
[F113The Occupational Pensions Regulatory Authority.Functions under the Pension Schemes Act 1993 or the Pensions Act 1995 or any enactment in force in Northern Ireland corresponding to either of them.]
[F10716.]The Director-General of Fair Trading.Functions under the Financial Services Act 1986.

[F11417An actuary exercising functions under this Act.

Those functions.

18The Institute of Actuaries or the Faculty of Actuaries.

Supervisory functions in relation to actuaries exercising functions under this Act.]

(6)The Commission, with the consent of the Treasury, may by order—

(a)amend the Table in subsection (5) above so as to—

(i)add any public or other authority to the Table and specify the relevant functions of that authority;

(ii)remove any authority from the Table; or

(iii)add functions to, or remove functions from, those which are relevant functions in relation to an authority specified in the Table;

(b)restrict the circumstances in which information may, by virtue of subsection (4) above, be disclosed or further disclosed; and

(c)impose conditions subject to which the information may be disclosed or further disclosed.

(7)Nothing in section 63 above prohibits the disclosure to an overseas regulatory authority of information for the purpose of assisting that authority in the discharge of its functions.

[F115(7A)In the case of restricted information which relates to the business or other affairs of a friendly society to which section 37(2) or (3) above applies, no disclosure may be made by virtue of subsection (1), (3), (4) or (7) above unless the disclosure appears to be in accordance with–

(a)Article 16 of the third general insurance Directive; or

(b)Article 15 of the third life Directive.]

(8)In this section—

  • authority” includes any body (corporate or unincorporate) which is charged with the regulation of the carrying on of any description of financial or insurance business or the practice of any profession to which the carrying on of such business is incidental;

  • overseas regulatory authority” means any government department or public or other authority in a country or territory outside the United Kingdom which is charged under the law of that country or territory with the regulation of companies, insurance companies, financial services, banking or any business corresponding to the business which may be carried on by friendly societies (or their subsidiaries); and

  • regulation”, in relation to any public or other authority, means regulation in the public interest or for the protection of private interests.

Annotations: Help about Annotation
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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F104S. 63A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 63, 64 by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 78 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F106Words in s. 64(3A) inserted (5.1.1998) by S.I. 1997/2781, art. 8(1), Sch. Pt. II para. 118(with art. 7)

F107Entries in table in s. 64(5) numbered 1-16 (18.7.1996) by S.I. 1996/1669, reg. 16(1)

F108S. 64(5): words in the entry relating to the Bank of England substituted (1.6.1998) by 1998 c. 11, s. 23, Sch. 5 Pt. IV Ch. II para. 68; S.I. 1998/1120, art. 2

F109S. 64(5); entry relating to The Financial Services Authority inserted (1.6.1998) by 1998 c. 11, s. 23, Sch. 5 Pt. IV Ch. II para. 68; S.I. 1998/1120, art. 2

F110Entry 10 in s. 64(5) has been substituted (18.7.1996) by S.I. 1996/1669, reg. 16(2)(a) (with saving in s. 16(3))

F111Entry in the Table of s. 64(5) omitted (30.4.2001) by virtue of S.I. 2001/1283, art. 3(6)

F112Entry 14 in s. 64(5) substituted (18.7.1996) by S.I. 1996/1669, reg. 16(2)(b) (with saving in s. 16(3)

F113Entry after 15 in s. 64(5) inserted (E.W.S.) (6.4.1997) by 1995 c. 26 s. 122, Sch. 3, para. 20 (with s. 121(5)); S.I. 1997/664, art. 2(3), Sch. Pt II

F114Entries 17 and 18 in s. 64(5) inserted (18.7.1996) by S.I. 1996/1669, reg. 16(2)(c) (with saving in s. 16(3))

F115S. 64(7A) inserted (1.9.1994) by S.I. 1994/1984, reg. 18

Modifications etc. (not altering text)

C13S. 64 amended (temp. from 3.9.2001 until 30.11.2001) by S.I. 2001/2966, art. 9

Commencement Information

I36S. 64 wholly in force; s. 64 not in force at Royal Assent see s. 126(2); s. 64 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 64 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

Marginal Citations

Inspections etc.E+W+S+N.I.

65 Investigations on behalf of [F116Authority].E+W+S+N.I.

(1)If it appears to the [F116Authority] desirable to do so for the purpose of its supervisory functions in relation to a friendly society, the [F116Authority] may appoint one or more competent persons to investigate and report to it on the state and conduct of the activities of the society, or any particular aspect of those activities.

[F117[F118(1A)Where a person has notified the Commission under paragraph 1 or 2 of Schedule 13A to this Act of his intention to become a controller of or to acquire notifiable voting rights in a friendly society to which section 37(2) or (3) above applies, the Commission may, if it appears to it desirable to do so, appoint one or more competent persons to investigate and report to it on whether, if that person became such a controller or acquired such voting rights, the criteria of prudent management would be fulfilled with respect to the society.]]

(2)If a person appointed under subsection (1) [F119[F118or (1A)]]above thinks it necessary for the purposes of his investigation, he may also investigate the activities of any body corporate which is or has at any relevant time been a subsidiary of, or jointly controlled by, the society under investigation.

(3)It shall be the duty of every person who is or has been an officer, employee and agent of a friendly society or other body which is under investigation—

(a)to produce to the persons appointed under subsection (1) [F119[F118or (1A)]]above all records, books and papers relating to the body concerned which are in his custody or power; and

(b)to attend before those persons when required to do so;

(c)to answer any question which is put to him by those persons with respect to any friendly society or other body which is under investigation,

and otherwise to give to those persons all assistance in connection with the investigation which he is reasonably able to give.

[F117[F118(3A)A person appointed under subsection (1) or (1A) above may enter any premises occupied by a friendly society to which section 37(2) or (3) above applies or any subsidiary of or body jointly controlled by such a society which is being investigated by him under this section; but he shall not do so without prior notice in writing unless he has reasonable cause to believe that if such a notice were given any documents whose production could be required would be removed, tampered with or destroyed.]]

(4)A person who, without reasonable excuse—

(a)fails to produce any records, books or papers which it is his duty to produce under subsection (3)(a) above; or

(b)fails to comply with his duty under subsection (3)(b) or (c) above;

shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(5)A person who is or has been an officer, employee or agent of a friendly society or other body and who knowingly or recklessly furnishes to any person appointed under subsection (1) [F119[F118or (1A)]] above any information which is false or misleading in a material particular, shall be guilty of an offence and liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and

(b)on summary conviction, to a fine not exceeding the statutory maximum.

[F118(5A)In relation to a friendly society to which section 37(2) or (3) above applies, any reference in subsection (3) or (5) above to a person who is or has been an officer shall be read as including a reference to a person who is or has been a controller or manager.]

(6)In this section—

  • agent”, in relation to a friendly society or other body whose activities are under investigation, includes its bankers, accountants, solicitors and auditors and the appropriate actuary;

  • the purposes of its supervisory functions”, in relation to the [F116Authority], has the same meaning as in section 62 above.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F116Words in s. 65(1)(6) and word in the sidenote substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 79(a) (with art. 13(3), Sch. 5)

F117S. 65(1A)(3A) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 79(b)(i) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F118S. 65(1A) inserted (1.9.1994) by S.I. 1994/1984 reg. 19(1)

Words in s. 65(2)(3) inserted (1.9.1994) by S.I. 1994/1984 reg. 19(2)

S. 65(3A) inserted (1.9.1994) by S.I. 1994/1984 reg. 19(3)

Words in s. 65(5) inserted (1.9.1994) by S.I. 1994/1984 reg. 19(4)

S. 65(5A) inserted (1.9.1994) by S.I. 1994/1984 reg. 19(5)

F119Words in s. 65(2)(3)(5) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 79(b)(ii) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

Commencement Information

I37S. 65 wholly in force; s. 65 not in force at Royal Assent see s. 126(2); s. 65 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 65 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

66 Inspections and special meetings: general.E+W+S+N.I.

(1)In the circumstances mentioned in subsection (2) below, the [F120Authority] may—

(a)appoint one or more competent inspectors to investigate and report on the affairs of a friendly society; or

(b)call a special meeting of a friendly society to consider its affairs; or

(c)appoint (whether on the same or on different occasions) an inspector or inspectors and call a special meeting for those purposes;

and, in the circumstances mentioned in subsection (3) below, the investigation or consideration may extend to the affairs of any body corporate which is or at any relevant time has been a subsidiary of or jointly controlled by the society concerned.

(2)The powers conferred by subsection (1) above may be exercised either—

(a)on the application of the requisite number of members of the society concerned; or

(b)where the is of the opinion that an investigation should be held into the affairs of the society, or that the affairs of the society call for consideration by a meeting of its members;

but paragraph (a) above shall not apply to a registered society with branches (regardless of the number of members) except with the consent of the central body of that society.

(3)The powers conferred by subsection (1) above may be exercised so as to extend the investigation or consideration to the affairs of a body which is or has been a subsidiary of or jointly controlled by a friendly society either—

(a)where an application referred to in subsection (2)(a) above so requests; or

(b)where the [F120Authority] is of the opinion that it is necessary for the purposes of the investigation into or consideration of the affairs of the friendly society that the affairs of the subsidiary or other body should also be investigated or considered.

(4)Where the inspectors are of the opinion mentioned in subsection (3)(b) above in relation to a subsidiary of or a body jointly controlled by the society under investigation they may, with the consent of the , extend their investigation to the affairs of the subsidiary or other body and make their report accordingly.

(5)For the purposes of subsections (1) to (3) above the requisite number of members—

(a)in the case of a friendly society having more than 1,000 members, is 100; and

(b)in the case of any other friendly society, is one-tenth of the whole number of members of the society.

(6)Where an application is made as mentioned in subsection (2) above—

(a)the application shall be supported by such evidence as the [F120Authority] may require for the purpose of showing that the applicants have good reason for making the application and are not actuated by malicious, frivolous, vexatious or scandalous motives;

(b)such notice of the application shall be given to the society concerned and, if the application extends to the affairs of a subsidiary of or body jointly controlled by that society, to that subsidiary or other body, as the [F120Authority] may direct;

(c)the [F120Authority] may require the applicants to give security for payment of the costs of the investigation or meeting before the inspector is appointed or the meeting is called subject, in the case of the costs of an investigation, to an amount not exceeding the corresponding Companies Act limit; and

(d)as regards the expenses of or incidental to the investigation or meeting—

(i)in the case of an investigation (in whichever way instituted), the expenses shall be defrayed in the first instance by the [F120Authority]but without prejudice to its rights to contribution under section 67(10) below;

(ii)in the case of a meeting, the expenses shall be defrayed by the applicants, or out of the funds of the society, or by the members or officers or former members or officers of the society, in such proportions as the [F120Authority] may direct.

(7)Before exercising its powers under subsection (1) above in a case falling within subsection (2)(b) above, the [F120Authority]shall inform the society of the action which it proposes to take and the grounds for that action, and the society shall, within 14 days of receiving the information, be entitled to give the [F120Authority] an explanatory statement in writing by way of a reply.

(8)Where the [F120Authority]proposes to exercise its powers under subsection (1) above in a case falling within subsection (3)(b) above, subsection (7) above shall apply in relation to the subsidiary or jointly controlled body as it applies in relation to the society.

(9)Inspectors appointed under this section shall, in addition to having the powers which are necessary for or incidental to the discharge of their functions under this section, have the power specified in section 67 below.

(10)Where a special meeting is called under this section—

(a)the [F120Authority] may—

(i)direct at what time and place the meeting is to be held and what matters are to be discussed and determined at the meeting; and

(ii)direct which members may attend and vote at the meeting,

and may give such other directions as it thinks fit with respect to the call, holding and conduct of the meeting;

(b)the [F120Authority] may appoint a person to be chairman at the meeting or, in default of such an appointment, the meeting may appoint its own chairman;

(c)the meeting shall have all the powers of a meeting called according to the rules of the society;

and the provisions of this subsection and any direction given under it shall have effect notwithstanding anything in the rules of the society.

(11)In this section “the corresponding Companies Act limit”, in relation to security for the payment of the costs of an investigation, is £5,000 or such other sum as is specified for the time being in an order under section 431(4) of the M20Companies Act 1985 or Article 424(4) of the M21Companies (Northern Ireland) Order 1986.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F120Words in s. 65 substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 2, 8(1), 13(1), Sch. 3, Pt. 1 para. 80, (with art. 13(3), Sch. 5); S.I. 2001/3538, art.2(1)

Commencement Information

I38S. 66 wholly in force; s. 66 not in force at Royal Assent see s. 126(2); s. 66 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 66 in force for all remaining purposes at 28.4.1993 by 1993/1186, art. 2(2), Sch. 2

Marginal Citations

67 Inspections: supplementary provision.E+W+S+N.I.

(1)In this section—

  • the body under investigation” means—

    (i)

    the friendly society whose affairs are the subject of the investigation, or

    (ii)

    the friendly society, and each subsidiary of or body jointly controlled by the society, whose affairs are so subject,

    as the case may be;

  • the inspectors” means the person appointed by the [F121Authority] under section 66 above to conduct the investigation;

  • the investigation” means the investigation under section 66 above which the inspectors have been appointed to hold;

and references to officers, employees or agents include past, as well as present, officers, employees or agents; and “agents”, in relation to a friendly society or any subsidiary of or body jointly controlled by an incorporated friendly society, includes its bankers, accountants, solicitors and auditors and the appropriate actuary.

(2)When the inspectors have been appointed, it is the duty of all officers, employees and agents of the body under investigation—

(a)to produce to the inspectors all documents and material of or relating to the body under investigation which are in their custody or power;

(b)to attend before the inspectors when required to do so; and

(c)otherwise to give the inspectors all assistance in connection with the investigation which they are reasonably able to give.

(3)If the inspectors consider that a person other than an officer, employee or agent of the body under investigation is or may be in possession of information concerning its affairs, they may require that person to produce to them any documents or material in his custody or power relating to the body under investigation, to attend before them and otherwise to give them all assistance in connection with the investigation which he is reasonably able to give; and it is that person’s duty to comply with the requirement.

(4)The inspectors may examine on oath the officers, employees and agents of the body under investigation, and any such person as is mentioned in subsection (3) above, in relation to the affairs of the body under investigation, and may administer an oath accordingly.

(5)An answer given by a person to a question put to him under the foregoing provisions of this section may be used in evidence against him.

[F122(5A)However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—

(a)no evidence relating to the statement may be adduced, and

(b)no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(5B)Subsection (5A) above applies to any offence other than—

(a)an offence under section 2 or 5 of the M22Perjury Act 1911 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath);

(b)an offence under section 44(1) or (2) of the M23Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made on oath or otherwise than on oath); or

(c)an offence under Article 7 or 10 of the Perjury (Northern Ireland) Order 1979 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath).]

(6)If an officer, employee or agent of the body under investigation or any such person as is mentioned in subsection (3) above—

(a)refuses to produce any document or material which it is his duty under this section to produce; or

(b)refuses to attend before the inspectors when required to do so; or

(c)refuses to answer any question put to him by the inspectors with respect to the affairs of the body under investigation,

the inspectors may certify the refusal in writing to the High Court; and the court may thereupon enquire into the case and, after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, may punish the offender in like manner as if he had been guilty of contempt of the court.

(7)The inspectors may, and if so directed by the [F121Authority] shall, make interim reports to the [F121Authority], but they may at any time in the course of the investigation, without making an interim report, inform the [F121Authority] of matters coming to their knowledge as a result of the investigation tending to show that an offence has been committed.

(8)The [F121Authority] may, if it thinks fit—

(a)send a copy of any report made by the inspectors to the body whose affairs are or were the subject of the investigation;

(b)furnish a copy of any such report on request [F123and on payment of the prescribed fee] to—

(i)any member of the body whose affairs are or were the subject of the investigation;

(ii)the auditors of that body;

(iii)any person whose conduct is referred to in the report;

(iv)any other person whose financial interests appear to the [F121Authority] to be affected by matters dealt with in the report, whether as creditor or otherwise; and

(c)cause the report to be printed and published.

[F124(8A)The Authority may charge a reasonable fee for furnishing to any person a copy of a report under subsection (8)(b) above.]

(9)A copy of a report of inspectors appointed under section 66 above to hold an investigation under that section, certified by the [F121Authority] to be a true copy, is admissible in any legal proceedings as evidence of the opinion of the inspectors in relation to any matter contained in the report; and a document purporting to be such a certificate shall be received in evidence and be deemed to be such a certificate, unless the contrary is proved.

(10)The [F121Authority] shall be entitled to be repaid the expenses of the investigation defrayed by it under section 66(6)(d) above as provided in the following paragraph, that is to say—

(a)by the applicants for the investigation, to such extent (if any) as the [F121Authority] may direct;

(b)by any body whose affairs were the subject of the investigation, to such extent (if any) as the [F121Authority] may direct;

(c)by any person convicted of an offence in proceedings instituted as a result of the investigation, to such extent (if any) as the court by or before which he was convicted may order;

and a person liable under any one of paragraphs (a) to (c) above is entitled to contribution from any other person liable under the same paragraph, according to the amount of their respective liabilities under it.

[F125(10A)In relation to a friendly society to which section 37(2) or (3) above applies–

(a)any reference in subsection (1), (2) or (4) above to officers shall be read as including a reference to controllers or managers; and

(b)any reference in subsection (3) or (6) above to an officer shall be read as including a reference to a controller or manager.]

(11)In the application of this section to a friendly society whose registered office is in Scotland or Northern Ireland, any reference to the High Court shall be read as a reference to the Court of Session or, as the case may be, to the High Court in Northern Ireland.

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Amendments (Textual)

F121Words in s. 67 substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 81(a) (with art. 13(3), Sch. 5)

F122S. 67(5A)(5B) inserted (14.4.2000 in relation to England and Wales and to Northern Ireland and 1.1.2001 in relation to Scotland) by 1999 c. 23, s. 59, Sch. 3 para. 24 (with s. 63(2), Sch. 7 para. 3(3)); S.I. 2000/1034, art. 2; S.S.I. 2000/445, art. 2

F123Words in s. 67(8)(b) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 81(b) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F124S. 67(8A) inserted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 81(c) (with art. 13(3), Sch. 5)

F125S. 67(10A) inserted (1.9.1994) by S.I. 1994/1984 reg. 20

Commencement Information

I39S. 67 wholly in force; s. 67 not in force at Royal Assent see s. 126(2); s. 67 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 67 in force for all remaining purposes at 28.4.1993 by S.I. 1993/1186, art. 2(2), Sch. 2

Marginal Citations

[F126[F12767A Information for members.E+W+S+N.I.

Schedule 13C to this Act shall have effect for requiring friendly societies to which section 37(2) or (3) above applies to furnish members with the information there mentioned.]]

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Amendments (Textual)

F126S. 67A inserted (1.9.1994) by S.I. 1994/1984 reg. 21(1)

F127S. 67A-67D shall cease to have effect (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, art. 2(a), 13(1), Sch. 3, Pt. 1 para. 82 (with art. 13(3), Sch. 5) and repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

[F128[F12967B Statutory notice.E+W+S+N.I.

(1)Subject to subsection (7) below, unless the requirements of subsection (2) below are fulfilled no friendly society to which section 37(2) above applies shall enter into a contract the effecting of which constitutes–

(a)the carrying on of long term business in the United Kingdom; or

(b)the provision there of long term insurance.

(2)The requirements of this subsection are that–

(a)the society sends by post to the other party to the contract, at or before the time when it is entered into, a statutory notice in relation to that contract; or

(b)a respresentative of the society gives such notice to that party at that time.

(3)Where a statutory notice is sent to the other party to the proposed contract before the time when it is entered into, the society shall, not later than 14 days after the contract has become binding, inform the party in writing that it has done so.

(4)For the purposes of this section a statutory notice is a notice which–

(a)contains such matters (and no others) and is in such form as may be prescribed by regulations made under section 2(2) of the European Communities Act 1972 F130 and complies with such requirements (whether as to type, size, colour or disposition of lettering, quality or colour of paper, or otherwise) as may be so prescribed for securing that the notice is easily legible; and

(b)has annexed to it a form of notice of cancellation of such description as may be so prescribed for use under section 67C below.

(5)The Commission may, on the application of a friendly society, alter the requirements in relation to the notice referred to in subsection (4)(a) above so as to adapt those requirements to the circumstances of that society or to any particular kind of contract proposed to be entered into by that society.

(6)Any society which contravenes this section shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale but, without prejudice to section 67C(2) below, no contract shall be invalidated by reason of the fact that the society has contravened this section in relation to that contract.

(7)Subsection (1) above does not apply to–

(a)a contract the effecting of which by the society constitutes the carrying on of investment business (within the meaning of the Financial Services Act 1986 F131);

(b)a contract the effecting of which by the society constitutes the carrying on of industrial assurance business;

(c)a contract the other party to which is habitually resident in [F132an EEA State] other than the United Kingdom;

(d)a contract the other party to which is not an individual;

(e)a contract of term assurance effected for a period of six months or less; or

(f)a contract of reinsurance.

(8)In sections 67C and 67D below “statutory notice" has the same meaning as in this section.]]

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Amendments (Textual)

F128S. 67B inserted (1.9.1994) by S.I. 1994/1984 reg. 22

F129Ss. 67A-67D shall cease to have effect (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3, Pt. 1 para. 82 (with art. 13(3), Sch. 5) and are repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F132S. 67B(7)(c) words substituted (1.1.1998) by S.I. 1997/2849 reg. 3

[F133[F13467C Right to withdraw from transaction.E+W+S+N.I.

(1)A person who has received a statutory notice in relation to a contract may, before the expiration of the fourteenth day after that on which he is informed in writing that the contract has become binding, serve a notice of cancellation on the friendly society.

(2)A person to whom a friendly society to which section 37(2) above applies ought to have, but has not, sent a statutory notice in relation to a contract may serve a notice of cancellation on the society; but if the society sends him a statutory notice in relation to the contract before he has served a notice of cancellation under this subsection, then without prejudice to his right to serve a notice of cancellation under subsection (1) above, his right to do so under this subsection shall cease.

(3)A notice of cancellation may, but need not, be in the form annexed to the statutory notice and shall have effect if, however expressed, it indicates the intention of the person serving it to withdraw from the transaction in relation to which the statutory notice was or ought to have been sent.

(4)Where a person serves a notice of cancellation, then–

(a)if at the time when the notice is served the contract has been entered into, the notice shall operate so as to rescind the contract;

(b)in any other case, the service of the notice shall operate as a withdrawal of any offer to enter into the contract which is contained in, or implied by, any proposal made to the society by the person serving the notice of cancellation and as notice to the society that any such offer is withdrawn.

(5)Where a notice of cancellation operates to rescind a contract or as the withdrawal of an offer to enter into a contract–

(a)any sum which the person serving the notice has paid in connection with the contract (whether by way of premium or otherwise and whether to the society or to a person who is the agent of the society for the purpose of receiving that sum) shall be recoverable from the society by the person serving the notice;

(b)any sum which the society has paid under the contract shall be recoverable by him from the person serving the notice.

(6)Any sum recoverable under subsection (5) above shall be recoverable in any court of competent jurisdiction.]]

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Amendments (Textual)

F133S. 67C inserted (1.9.1994) by S.I. 1994/1984 reg. 23

F134Ss. 67A-67D shall cease to have effect (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, art. 2(a), 8(1), 13(1), Sch. 3, Pt. 1 para. 82 (with art. 13(3), Sch. 5) and are repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

[F135[F13667D Service of notice of cancellation.E+W+S+N.I.

(1)For the purposes of section 67C above a notice of cancellation–

(a)shall be deemed to be served on the society if it is sent by post addressed to any person specified in the statutory notice as a person to whom a notice of cancellation may be sent, and is addressed to that person at an address so specified; and

(b)where paragraph (a) above applies, shall be deemed to be served on the society at the time when it is posted.

(2)Subsection (1) above shall have effect without prejudice to the service of a notice of cancellation (whether by post or otherwise) in any way in which the notice could be served apart from that subsection, whether the notice is served on the society or on a person who is the agent of the society for the purpose of receiving such a notice.

(3)A notice of cancellation which is sent by post to a person at his proper address, otherwise than in accordance with subsection (1) above, shall be deemed to be served on him at the time when it is posted.

(4)So much of section 7 of the Interpretation Act 1978 as relates to the time when service is deemed to have been effected shall not apply to a notice of cancellation.]]

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Amendments (Textual)

F135S. 67D inserted (1.9.1994) by S.I. 1994/1984 reg. 24

F136Ss. 67A-67D shall cease to have effect (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3, Pt. 1 para. 82 (with art. 13(3), Sch. 5) and are repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

Part VIE+W+S+N.I. Accounts and Audit

Records [F137 and systems]E+W+S+N.I.

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Amendments (Textual)

F137Words in the cross-heading omitted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I.2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 83(a) (with art. 13(3), Sch. 5) and repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

68 Accounting records [F138and systems of business control].E+W+S+N.I.

(1)Every friendly society and every registered branch shall—

(a)cause accounting records to be kept; [F139and]

[F139(b)establish and maintain systems of control of its business and records and of inspection and report,]

in accordance with this section.

(2)The accounting records must be sufficient to show and explain the transactions of the society or branch and—

(a)disclose, with reasonable accuracy and promptness, the financial position of the society or branch at any time;

(b)enable the committee of management properly to discharge the duties imposed on them by or under this Act or the 1974 Act and their function of direction of the affairs of the society or branch; and

(c)enable the society or branch properly to discharge the duties imposed on it by or under this Act or the 1974 Act,

and must be kept in an orderly manner.

(3)The accounting records shall in particular contain—

(a)entries from day to day of all sums received and paid by the society or branch and the matters in respect of which they are received or paid;

(b)entries from day to day of every transaction entered into by the society or branch which will or there is reasonable ground for expecting may give rise to liabilities or assets of the society or branch other than insignificant assets or liabilities in respect of the management of the society or branch; and

(c)a record of the assets and liabilities of the society or branch.

[F140(4)The system of control which is to be established and maintained by a friendly society or a registered branch is a system for the control of the conduct of its activities in accordance with this Act and the decisions of the committee of management and for the control of the accounting and other records of its activities.]

[F140(5)The system of inspection and report which is to be established and maintained by a friendly society or registered branch is a system of inspection on behalf of and report to the committee of management on the operation of the system of control of the activities of the society or branch and records required by subsection (1)(b) above.]

[F140(6)The systems of control and of inspection and report must be such as to—

(a)enable the committee of management properly to discharge the duties imposed on them by or under this Act or the 1974 Act and their functions of direction of the affairs of the society or branch; and

(b)enable the society or branch properly to discharge the duties imposed on it by or under this Act or the 1974 Act;

and no such system of control shall be treated as established or maintained unless there is kept available to the committee of management a detailed statement in writing of the system as in operation for the time being.]

[F140(7)Without prejudice to the generality of subsection (6) above, the systems of control and of inspection and report must be such as to secure that the activities of the society or branch are so conducted and its records so kept that—

(a)the information necessary to enable the committee of management and the society or branch to discharge their duties and functions is sufficiently accurate, and is available with sufficient regularity or at need and with sufficient promptness, for those purposes; and

(b)the information regularly obtained by or furnished to the Commission under or for the purposes of this Act is sufficiently accurate for the purpose for which it is obtained or furnished and is regularly furnished;

and in this subsection, in its application in relation to the Commission, “regularly” includes that regularity requested by or agreed with the Commission.]

(8)The accounting records shall be kept at the registered office of the society or branch or at such other place or places as the committee of management thinks fit, and shall at all times be open to inspection by the committee of management.

(9)Accounting records shall be preserved for 6 years from the date on which they were made.

(10)Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the society shall also secure that such accounting records are kept [F141and such systems of control and of inspection and report are established and maintained] by them as will enable the society to comply with the requirements of this section in relation to the business of the society and those subsidiaries and jointly controlled bodies.

[F142(11)The committee of management of every friendly society shall within the period of 6 months beginning with the end of each financial year make and send to the Commission a statement of their opinion whether the requirements of this section have been complied with in respect of that year by the society and also, in the case of a registered friendly society with registered branches, by each of those branches, and the statement shall be signed by the chairman on behalf of the committee of management and by the chief executive.]

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Amendments (Textual)

F138Words in the sidenote to s. 68 omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 83(b) (with art. 13(3), Sch. 5) and repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F139S. 68(1)(b) and the word “and ” immediately preceding it omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 83(c) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F140S. 68(4)-(7) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 83(d) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F141Words in s. 68(10) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 83(e) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F142S. 68(11) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 83(f) (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

Commencement Information

I40S. 68 wholly in force; s. 68 not in force at Royal Assent see s. 126(2); s. 68 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 68 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Annual accounts of friendly societies and registered branchesE+W+S+N.I.

69 Duty to prepare accounts.E+W+S+N.I.

(1)The committee of management of a friendly society or registered branch shall prepare for each financial year of the society or branch—

(a)a balance sheet as at the last day of the year, and

(b)an income and expenditure account.

(2)Except as provided by regulations under subsection (4) below, if at the end of its financial year an incorporated friendly society has subsidiaries, the committee of management shall also prepare group accounts.

(3)Group accounts shall be consolidated accounts comprising—

(a)a consolidated balance sheet dealing with the state of affairs of the society and its subsidiaries; and

(b)a consolidated income and expenditure account dealing with the income and expenditure of the society and its subsidiaries.

(4)The [F143Treasury may by regulations] exempt specified descriptions of incorporated friendly societies with subsidiaries from any duty to prepare group accounts.

F143(5)Regulations under subsection (4) above may exempt societies by reference to any criterion and may make different provision for different descriptions of societies.

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Amendments (Textual)

F143Words in s. 69(4) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 2, 13(1), Sch. 3 Pt. 1 para. 84 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C14S. 69(4)(5): functions of Friendly Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. II (with art. 5)

Commencement Information

I41S. 69 wholly in force; s. 69 not in force at Royal Assent see s. 126(2); s. 69 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 69 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

70 Contents and form of annual accounts.E+W+S+N.I.

(1)The annual accounts of a friendly society or a registered branch shall conform to the requirements of this section and regulations made under it.

(2)The balance sheet shall give a true and fair view of the state of the affairs of the society or branch as at the end of the financial year.

(3)The income and expenditure account shall give a true and fair view of the income and expenditure of the society or branch for the financial year.

(4)Subsections (2) and (3) above, in their application to the group accounts of an incorporated friendly society, are to be read as referring to the society and (so far as it concerns the members of the society) the subsidiaries dealt with in the group accounts.

(5)The annual accounts shall also contain, whether in the form of notes or otherwise, such supplementary information as is prescribed.

(6)The [F144Treasury shall by regulations], make provision with respect to the contents and the form of the annual accounts.

(7)Without prejudice to the generality of subsections (5) and (6) above, the regulations may—

(a)prescribe accounting principles and rules;

(b)require corresponding information for a preceding financial year;

(c)require the accounts of incorporated friendly societies to deal also with bodies jointly controlled by them;

(d)require the accounts to give particulars of the emoluments, pensions, compensation for loss of office and financial interests of members of the committee of management, other officers and employees of prescribed descriptions of the society;

(e)add to the classes of documents to be comprised in the annual accounts;

(f)make provision as to the matters to be included in any document so added;

(g)modify the requirements of this Part of this Act as to the matters to be stated in any document comprised in the annual accounts; and

(h)reduce the classes of documents to be comprised in the annual accounts;

and the regulations may make different provision for different cases.

(8)Where compliance with regulations under this section would not be sufficient to give a true and fair view, the necessary additional information shall be given in the accounts or in a note to them.

(9)If in special circumstances compliance with any provisions contained in regulations is inconsistent with the requirement to give a true and fair view, the committee of management shall depart from that provision to the extent necessary to give a true and fair view.

(10)Particulars of any such departure, the reasons for it and its effect shall be given in a note to the accounts.

(11)It is the duty of every member of the committee of management, other officer and employee of a society or registered branch as respects whom prescribed particulars are by virtue of subsection (7)(d) above required to be given in the accounts to give notice to the society of such matters as may be necessary to enable the society to give those particulars in the accounts.

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Amendments (Textual)

F144Words in s. 70(6) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 2, 13(1), Sch. 3, Pt. 1 para. 85 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C15S. 70(6): functions of Friendly Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. II (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Commencement Information

I42S. 70 wholly in force; s. 70 not in force at Royal Assent see s. 126(2); s. 70 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 70(5)(6)(7) in force for all remaining purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 2; s. 70(1)-(4)(8)-(11) in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Committee of management’s annual reportE+W+S+N.I.

71 Report on a friendly society’s affairs by the committee of management.E+W+S+N.I.

(1)The committee of management of a friendly society shall prepare for submission to the annual general meeting of the society a report on the activities of the society containing—

(a)a fair review of the development of the activities of the society during the financial year and of its position at the end of it; and

(b)such information relating to such aspects of the activities of the society as may be prescribed by regulations made by the [F145 Commission with the consent of the]Treasury; and

(c)a statement whether any and, if so, what activities carried on during the year by the society are believed to have been carried on outside its powers.

(2)Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the report shall-

(a)contain such information relating to such aspects of the activities of any subsidiaries or bodies which it jointly controls as may be prescribed by regulations made by the [F145Commission with the consent of the] Treasury;

(b)review the development of any such subsidiaries and bodies during the year and their position at the end of it; and

(c)contain a statement whether any and, if so, what activities carried on during the year by any of its subsidiaries or by any body which it jointly controls are believed to have been carried on outside the powers of the subsidiary or jointly controlled body.

(3)If a report under this section does not contain the prescribed information or the information in the report is not given in accordance with the regulations, each member of the committee of management shall be guilty of an offence and liable—

(a)on conviction on indictment, to a fine; and

(b)on summary conviction, to a fine not exceeding the statutory maximum.

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Amendments (Textual)

F145Words in s. 71(1)(b)(2)(a) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 86 (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

Commencement Information

I43S. 71 wholly in force; s. 71 not in force at Royal Assent see s. 126(2); s. 71 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 71(1)(2) in force for certain purposes 13.9.1993 by S.I. 1993/2213, art. 2(1), Sch. 4; s. 71 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

AuditorsE+W+S+N.I.

72 Auditors’ appointment, tenure, qualifications, etc.E+W+S+N.I.

(1)Every friendly society and every registered branch shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting.

(2)Schedule 14 to this Act has effect as regards—

(a)the appointment of auditors;

(b)their qualifications and grounds of disqualification;

(c)the resignation and removal of auditors; and

(d)the remuneration of auditors.

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Commencement Information

I44S. 72 partly in force; s. 72 not in force at Royal Assent see s. 126(2); s. 72 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 72(1) in force at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5; s. 72(2) in force for certain purposes at 13.9.1993 by S.I. 1993/2213, art. 2(1), Schs. 2, 3; s. 72(2) in force (except to the extent that it relates to any provision in Sch. 14 para. 7 not yet in force) at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Auditors’ report on annual accountsE+W+S+N.I.

73 Auditors’ report.E+W+S+N.I.

(1)The auditors of a friendly society 95.or of a registered branch shall make a report to the members on the annual accounts which are to be laid before the society or branch at the annual general meeting during their tenure of office.

(2)The auditors of a friendly society or registered branch shall, in preparing their report, carry out such investigations as will enable them to form an opinion as to—

(a)whether proper accounting records have been kept under section 68 above;

[F146(b)whether satisfactory systems of control of the business and records of the society or branch and of inspection and report under that section have been maintained; and]

(c)whether the annual accounts are in agreement with the accounting records;

and, if the auditors are of the opinion that proper accounting records have not been kept, they shall state that fact in their report.

(3)If the auditors fail to obtain all the information and explanations and the access to documents which, to the best of their knowledge and belief, are necessary for the purposes of their audit, they shall state that fact in their report.

(4)The auditors shall, in their report, also make a report to the members on the report of the committee of management, in so far as subsection (7) below requires them to do so.

(5)The auditors’ report shall state whether in the auditors’ opinion the annual accounts have been properly prepared in accordance with this Act and the regulations made under it and in particular whether a true and fair view is given—

(a)in the case of the income and expenditure account, of the income and expenditure of the society or branch for the financial year; and

(b)in the case of the balance-sheet, of the state of the affairs of the society or branch as at the end of the financial year; and

(c)in the case of the group accounts of an incorporated friendly society, of the state of affairs as at the end of the financial year of the society and any subsidiaries of the society.

(6)Subsection (5) above, in its application to the group accounts of an incorporated friendly society, is to be read as referring to the society and (so far as it concerns the members of the society) the subsidiaries dealt with in the group accounts.

(7)The auditors’ report, in so far as it deals with the report of the committee of management, shall state whether in the auditors’ opinion it has been prepared in accordance with this Act and the regulations made under it and whether the information given in the report of the committee of management is consistent with the accounting records and the annual accounts for the financial year.

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Amendments (Textual)

F146S. 73 (2)(b) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 87 (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

Modifications etc. (not altering text)

C16S. 73(5)(b) excluded (1.4.1995) by S.I. 1995/710, reg. 4(2)

Commencement Information

I45S. 73 wholly in force; s. 73 not in force at Royal Assent see s. 126(2); s. 73 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 73 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

74 Signature of auditors’ report.E+W+S+N.I.

(1)The auditors’ report to the members of a friendly society or registered branch shall state the names of the auditors and be signed by them.

(2)The copies of the auditors’ report which are sent to the [F147Authority] under section 78(1) or (2) below shall be signed by the auditors.

(3)Every copy of the auditors’ report which is laid before the society or branch in general meeting, sent to the [F147Authority] or is otherwise circulated, published or issued shall state the names of the auditors.

(4)If a copy of the auditors’ report—

(a)is laid before the society or branch, sent to the [F147Authority] or otherwise circulated, published or issued, without the required statement of the auditors’ names; or

(b)is sent to the [F147Authority] without being signed as required by this section,

the society or branch and every officer of it who is in default is guilty of an offence and liable on conviction on indictment to a fine.

(5)References in this section to signature by the auditors are, where the office of auditor is held by a body corporate or partnership, to signature in the name of the body corporate or partnership by a person authorised to sign on its behalf.

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Amendments (Textual)

F147Words in s. 74(2)-(4) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 88 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Commencement Information

I46S. 74 wholly in force; s. 74 not in force at Royal Assent see s. 126(2); s. 74 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 74 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

75 Auditors’ rights to information and to attend meetings.E+W+S+N.I.

(1)The auditors of a friendly society are entitled—

(a)to access at all times to the books, accounts and vouchers of the society;

(b)to require from the officers of the society such information and explanations as they think necessary for the performance of their duties as auditors;

(c)to receive from the society—

(i)notice of any general meeting of the society and of any matter relating to the business of such a meeting of which notice is given (by whatever means) to the society’s members; and

(ii)copies of any communications sent to the society’s members with respect to any such meeting; and

(d)to attend any general meeting of the society and to be heard on any part of the business of the meeting which concerns them as auditors;

and the auditors of a registered branch have the corresponding rights to those specified in paragraphs (a) to (d) above, with the substitution for references to the society of references to the branch.

(2)The right to attend or be heard at a meeting is exercisable in the case of a body corporate or partnership by an individual authorised by it in writing to act as its representative at the meeting.

(3)An officer of a friendly society is guilty of an offence if he knowingly or recklessly makes to the society’s auditors a statement (whether written or oral) which—

(a)conveys or purports to convey any information or explanations which the auditors require, or are entitled to require, as auditors of the society; and

(b)is misleading, false or deceptive in a material particular.

(4)An officer of a registered branch is guilty of an offence if he knowingly or recklessly makes to the auditors of the branch a statement (whether written or oral) which—

(a)conveys or purports to convey any information or explanations which the auditors require, or are entitled to require, as auditors of the branch; and

(b)is misleading, false or deceptive in a material particular.

(5)A person guilty of an offence under subsection (3) or (4) above is liable —

(a)on conviction on indictment, to imprisonment for a term not exceeding 2 years, or to a fine, or to both; and

(b)on summary conviction, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both.

(6)It shall be the duty of a subsidiary of a friendly society which is—

(a)a company within the meaning of the M24Companies Act 1985 incorporated in Great Britain; or

(b)a company within the meaning of the M25Companies (Northern Ireland) Order 1986 incorporated in Northern Ireland,

and of the auditors of such a subsidiary to give to the auditors of the society such information and explanations as those auditors may reasonably require for the purposes of their duties as auditors of that society.

(7)If—

(a)a subsidiary to which subsection (6) above applies fails to comply with that subsection; or

(b)an auditor of such a subsidiary fails without reasonable excuse to comply with that subsection,

the subsidiary or auditor is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(8)An incorporated friendly society having a subsidiary to which subsection (6) above does not apply shall, if required by its auditors to do so, take all such steps as are reasonably open to it to obtain from the subsidiary such information and explanations as they may reasonably require for the purposes of their duties as auditors of that society.

(9)If an incorporated friendly society fails to comply with subsection (8) above, it is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

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Commencement Information

I47S. 75 wholly in force; s. 75 not in force at Royal Assent see s. 126(2); s. 75 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 75 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Marginal Citations

76 Approval and signing of accounts.E+W+S+N.I.

(1)The annual accounts of a friendly society or a registered branch shall be approved by the committee of management.

(2)The accounts so approved shall be signed by the secretary of the society or branch; and the signature shall be on the balance sheet.

(3)Every copy of the balance sheet which is laid before the society or branch in general meeting, or is otherwise circulated, published or issued, shall state the name of the secretary of the society or branch.

(4)The copy of the balance sheet of a friendly society or a registered branch which is sent to the [F148Authority] under section 78 below shall be signed by the secretary of the society or branch.

(5)If annual accounts of a society or branch are approved which do not comply with the requirements of this Act, every member of the committee of management who is party to their approval and who knows that they do not comply or is reckless as to whether they comply is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

For this purpose every member of the committee at the time the accounts are approved shall be taken to be a party to their approval unless he shows that he took all reasonable steps to prevent their being approved.

(6)If a copy of the balance sheet of a society or branch—

(a)is laid before the society or branch, or otherwise circulated, published or issued, without the balance sheet having been signed as required by this section or without the required statement of the signatory’s name being included; or

(b)is sent to the [F148Authority] without being signed as required by this section,

the society or branch and every officer of it who is in default is guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

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Amendments (Textual)

F148Words in S. 76(4)(6)(b) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 13(1), Sch. 3, Pt. 1 para. 89 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Commencement Information

I48S. 76 wholly in force; s. 76 not in force at Royal Assent see s. 126(2); s. 76 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 76 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

77 Information on appointed actuary to be annexed to balance sheet.E+W+S+N.I.

(1)This section applies to any copy of a friendly society’s balance sheet which—

(a)is furnished to the [F149Authority] under section 78 below or at it’s [F150or their] request;

(b)is laid before the society at its annual general meeting; or

(c)is furnished to a member at his request.

(2)Subject to the provisions of this section, a friendly society shall annex to each copy of its balance sheet to which this section applies as respects every person who, at any time during the financial year to which the balance sheet relates, was its appointed actuary, a statement of the following information—

(a)whether the actuary was a member of the society or any subsidiary of the society at any time during that year;

(b)particulars of any pecuniary interest of the actuary in any transaction between the actuary and the society or any subsidiary of the society and subsisting at any time during that year or, in the case of transactions of a minor character, a general description of such interests;

(c)the aggregate amount of any remuneration and the value of any other benefits other than a pension or other future or contingent benefit under any contract of service of the actuary with, or contract for services by the actuary to, the society or any subsidiary of the society, receivable by the actuary in respect of any period in that year; and

(d)a general description of any other pecuniary benefit (including any pension and other future contingent benefit) received by the actuary from the society or any subsidiary of the society in that year or receivable by him from the society or any such subsidiary,

together with a statement that the society has made a request to the actuary to furnish to it the particulars specified in this subsection and identifying any particulars furnished pursuant to the request.

(3)Subsection (2) above applies in relation—

(a)to the actuary’s spouse;

(b)to a partner of the actuary;

(c)to any child or step-child of the actuary who is under 18;

(d)to any person (other than the society concerned or any subsidiary of that society) of whom the actuary is an employee; and

(e)to any body corporate (other than the society concerned or any subsidiary of that society) of which the actuary is a director or which is controlled by him,

as it applies in relation to the actuary.

(4)For the purposes of subsection (3) above, an actuary shall be taken to control a body corporate if he is a person—

(a)in accordance with whose directions or instructions the directors of that body corporate or of a body corporate of which it is a subsidiary are accustomed to act; or

(b)who, either alone or with any other person falling within that subsection, is entitled to exercise or controls the exercise of, one-third or more of the voting power at any general meeting of the body corporate or of a body corporate of which it is a subsidiary.

(5)If a friendly society fails to annex the statement required by subsection (2) above to a copy of its balance sheet to which this section applies, the society concerned shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

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Amendments (Textual)

F149Words in s. 77(1)(a) substituted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, art. 2(a), 13(1), Sch. 3, Pt. 1 para. 90(a) (with art. 13(3), Sch. 5)

F150Words in s. 77(1)(a) omitted (17.8.2001 for specified purposes and otherwiseprosp.) by S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 90(b) (with art. 13(3), Sch. 5) and repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

Commencement Information

I49S. 77 wholly in force; s. 77 not in force at Royal Assent see s. 126(2); s. 77 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 77 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Laying and furnishing of accounts and reportsE+W+S+N.I.

78 Laying and furnishing of accounts and reports.E+W+S+N.I.

[F151(1)The committee of management of a friendly society shall in each year—

(a)lay before the society, at the annual general meeting, copies of the annual accounts for the last financial year, the report of the committee of management for that year and the auditors’ report on those accounts; and

(b)send to the Authority, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and reports.

(2)The committee of management of a registered branch shall in each year—

(a)lay before the branch, at the annual general meeting, copies of the annual accounts for the last financial year and the auditors’ report on those accounts; and

(b)send to the Authority, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and that report.]

(3)Every friendly society shall, as from the date by which at the latest its committee of management is required by subsection (1) above to send them to the [F152Authority]

(a)make copies of the annual accounts, the report of the committee of management and the auditors’ report available free of charge to members of the society at every office of the society; and

(b)send, free of charge, copies of those documents to any member of the society who demands them;

and that duty shall cease, as respects those accounts, when the society comes to be under the same duty in respect of the accounts for the next financial year.

(4)Every registered branch shall, as from the date by which at the latest its committee of management is required by subsection (2) above to send them to the [F152Authority]

(a)make copies of the annual accounts and the auditors’ report available free of charge to members of the branch at every office of the branch; and

(b)send, free of charge, copies of those documents to any member of the branch who demands them;

and that duty shall cease, as respects those accounts, when the branch comes to be under the same duty in respect of the accounts for the next financial year.

(5)If default is made in complying with subsection (1) or (2) above, every person who was a member of the committee of management of the society or, as the case may be, the branch, at any time during the relevant period shall be guilty of an offence and liable on summary conviction—

(a)to a fine not exceeding level 5 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.

(6)If, on demand made of it under subsection (3) or (4) above, a friendly society or registered branch fails, in accordance with that subsection, to make available or, as the case may be, within 7 days of the demand, to send to a person a copy of the annual accounts, the society or branch shall be guilty of an offence and liable on summary conviction—

(a)to a fine not exceeding level 3 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.

(7)In subsection (5) above “the relevant period” means the period beginning at the end of the last financial year and ending with the date which falls 14 days before the annual general meeting following the end of that year.

(8)The [F153Authority shall keep one of]the copies of documents received by it from a friendly society under subsection (1) above in the public file of the society.

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Amendments (Textual)

F151S. 78(1)(2) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 91(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F152Words in s. 78(3)(4) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 2, 13(1), Sch. 3, Pt. 1 para. 91(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F153Words in s. 78(8) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 91(c) (with art. 13(3), Sch. 5); S.I. 2001/2617, art. 2(1)

Commencement Information

I50S. 78 wholly in force; s. 78 not in force at Royal Assent see s. 126(2); s. 78 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 78 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

[F15479 Auditors’ duties to Commission and related rights.E+W+S+N.I.

(1)The auditors of a friendly society shall, unless they are exempt from the requirements of this section, make a report to the Commission, as respects each financial year of the society, on the conduct of the activities of the society in that year in relation to the matters specified in subsection (2) below.

(2)The auditors’ report shall deal with—

(a)the accounting records kept by the society under section 68 above; and

(b)the systems of control of its business and records and of inspection and report maintained under that section.

(3)The report shall state the auditors’ opinion as respects the matters specified in subsection (2) above as follows, that is to say—

(a)as regards the accounting records of the society, whether or not they comply with the requirements of section 68 above and, if not, specifying each requirement not complied with and the respects in which it was not complied with;

(b)as regards the system of control of its business and records, whether or not the system complies with the requirements of section 68 above and, if not, specifying each requirement not complied with and the respects in which it was not complied with;

(c)as regards the system of inspection and report, whether or not the system complies with the requirements of section 68 above and, if not, specifying each requirement not complied with and the respects in which it was not complied with.

(4)Where an incorporated friendly society had, at any time during the year to which the report relates, subsidiaries or jointly controlled other bodies, the auditors’ report shall deal also with and contain corresponding statements of their opinion as to compliance with the requirements of section 68 above in its application to incorporated friendly societies having subsidiaries or jointly controlling other bodies.

(5)The auditors of a friendly society shall send their report under this section to the society and, subject to subsection (6) below, shall do so within the period of 6 months beginning with the end of the financial year to which it relates, and the society shall, within the period of 9 months so beginning, send the report to the Commission together with such comments as the committee of management thinks fit to make.

(6)A friendly society may allow its auditors a longer period in which to send their report than that specified in subsection (5) above, but not so as to prevent the society from complying with the duty imposed on it by that subsection as regards the Commission.

(7)If the committee of management of a friendly society makes any comments to the Commission under subsection (5) above, the committee shall cause a copy of the comments to be sent to the auditors before they send them to the Commission with the report under that subsection.

(8)

  • [F155The following, namely—

    (a)

    the auditors of a friendly society;

    (b)

    an accountant appointed to make a report under section 62(3)(d) above by a friendly society to which section 37(2) or (3) above applies; and

    (c)

    the auditors of any body with which a friendly society to which section 37(2) or (3) above applies is closely linked by control where either—

    (i)

    they are also the auditors of the society; or

    (ii)

    one of them is an accountant appointed by the society to make a report under section 62(3)(d) above,]

  • if they are satisfied that it is expedient to do so in order to protect the interests of members of the society or if they are requested to do so by the Commission on its being so satisfied, shall be entitled, notwithstanding any obligation of confidence incumbent on them and whether or not to do so would be contrary to the interests of the society, to furnish information to the Commission relating to the conduct of the activities of the society or, in the case of an incorporated friendly society, the business of any of its subsidiaries or any body of which it has joint control.

(9)The Treasury may by order impose on [F155such persons as are mentioned in paragraph (a), (b) or (c) of subsection (8) above] an obligation to furnish to the Commission, in such circumstances as may be prescribed in the order, relevant information available to them of such descriptions as may be prescribed in the order; and it shall be the duty of [F155any such person] to furnish information to which the obligation extends notwithstanding any obligation of confidence incumbent on him.

(10)In subsection (9) above, “relevant information” means information relating to the conduct of the business of friendly societies or their subsidiaries or bodies of which they have joint control.

(11)Subject to subsection (12) below, the auditors of a friendly society are exempt from the requirements of this section if the auditors of that society do not need to be members of a recognised supervisory body.

(12)The Commission may direct that the auditors of a society specified in the direction whose auditors would otherwise be exempt from the requirements of this section shall not be exempt from those requirements.]

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Amendments (Textual)

F154S. 79 shall cease to have effect (17.8.2001 for specified purposes and otherwiseprosp.) by virtue of S.I. 2001/2617, arts. 2(a), 8(1), 13(1), Sch. 3 para. 92 (with art. 13(3), Sch. 5) and is repealed (prosp.) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5)

F155Words in s. 79(8) substituted (18.7.1996) by S.I. 1996/1669, reg. 17(1)

Words in s. 79(9) substituted (18.7.1996) by S.I. 1996/1669, reg. 17(2)

Commencement Information

I51S. 79 wholly in force; s. 79 not in force at Royal Assent see s. 126(2); s. 79 in force for certain purposes at 13.1.1993 by S.I. 1993/16, art. 2, Sch. 1; s. 79 in force for all remaining purposes at 1.1.1994 by S.I. 1993/2213, art. 2(1), Sch. 5

Part VIIE+W+S+N.I. Disputes

Disputes relating to friendly societiesE+W+S+N.I.

80 Determination of certain disputes by arbitration.E+W+S+N.I.

(1)Subject to the following provisions of this section, any dispute between—

(a)a member or person claiming through a member or under the rules of a friendly society or registered branch and the society or branch;

(b)a person aggrieved who has ceased to be a member of a friendly society or registered branch, or a person claiming through such a person, and the society or branch or an officer of the society or branch;

(c)a registered branch and the society of which it is a registered branch;

(d)an officer of a registered branch and the society of which it is a registered branch; or

(e)two or more registered branches, or any of their officers,

shall be determined by arbitration in the manner directed by the rules of the society or branch.

[F156(1A)Nothing in subsection (1) above or in rules of a kind mentioned in that subsection prevents any person, in accordance with the scheme for which Part XVI of the Financial Services and Markets Act 2000 provides (the ombudsman scheme), from having a complaint dealt with under such a scheme before, or instead of, arbitration.]

(2)An application for the enforcement of an award on an arbitration under this section may be made to the county court.

(3)An award made in such an arbitration shall, in Scotland—

(a)subject to subsection (4) below, be final; and

(b)be enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff.

(4)An arbiter who has made an award in an arbitration under this section shall, on the application of a party to such arbitration, state a case for the opinion of the Court of Session on any question of law.

(5)If the parties to a dispute of a description specified in subsection (1) above agree that it shall be determined by the county court or, in Scotland, the sheriff, it may be so determined instead of being determined by arbitration under this section.

(6)If—

(a)a party to a dispute of a description specified in subsection (1) above applies to the society or branch in accordance with the rules for determination of the dispute by arbitration;

(b)no such determination has been made within the period of 40 days beginning with the day on which the application was made; and

(c)either party applies for determination of the dispute by the county court or, in Scotland, the sheriff,

the dispute may be so determined.

(7)If the society has registered branches—

(a)the period of 40 days shall not begin to run until application has been made in succession to all the bodies entitled to determine the dispute by arbitration in accordance with the rules; but

(b)the rules may not require a greater delay than 3 months between each successive determination by such a body.

(8)In this section “dispute”—

(a)includes any dispute arising on the question whether a member or person aggrieved is entitled to be, or to continue to be, a member or to be reinstated as a member; but

(b)in the case of a person who has ceased to be a member does not (except as provided in paragraph (a) above) include any dispute other than one on a question which arose while he was a member, or arises out of his membership; and

(c)does not include a dispute between parties mentioned in subsection (1)(a) or (b) above which has arisen as a result of and incidentally to a dispute between a member, or person aggrieved who has ceased to be a member and a person claiming through him or under the rules of a society or branch.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F156S. 80(1A) inserted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3, Pt. 1 para. 93 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

81 Complaints by members of friendly societies.E+W+S+N.I.

(1)Nothing in section 80 above shall affect the power of a friendly society or registered branch—

(a)to establish internal procedures for the resolution of complaints; or

(b)to make, to join with any other persons in making, or to accede to, schemes for the investigation and settlement by an adjudicator of complaints;

but a society or branch may not prevent a member from referring any dispute to arbitration under that section by purporting to require instead the making of a complaint or the acceptance of any determination of a complaint.

(2)The [F157Authority]shall have the function of promoting the establishment by friendly societies and registered branches of—

(a)internal complaints procedures; and

(b)schemes for the investigation and settlement of complaints;

and, in particular, the [F157Authority] may issue such guidance on those matters to friendly societies and registered branches as it thinks fit.

(3)In this section—

  • accede”, in relation to a scheme, means assume the obligations and rights of membership of the scheme;

  • complaint” includes any complaint made by a member about action of a friendly society or branch which constitutes (in relation to that member) unfair treatment, maladministration or breach of any contractual or other duty and causes him pecuniary loss or inconvenience;

  • member” in relation to a friendly society or branch includes any person who is or was a member of the society or branch or is claiming through a member or under the rules; and

  • action” includes omissions.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F157Words in s. 81(2) substituted (17.8.2001 for specified purposed and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1) ,13(1), Sch. 3, Pt. 1 para. 94 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

82 Disputes arising out of loans of surplus funds to so