(1)Section 16 of the 1975 Act (which enables the Board to take measures to protect policyholders of companies in financial difficulties) shall be amended as follows.
(2)In subsection (2) (under which the Board’s powers are exercisable for the purpose of safeguarding policyholders of a company in financial difficulties who are eligible for protection under the section)—
(a)for “policyholders of a company in financial difficulties who are eligible for protection under this section” there shall be substituted “those who are qualifying persons in relation to a company in financial difficulties”, and
(b)for “such policyholders” there shall be substituted “such persons”.
(3)In subsection (3) (power to secure or facilitate transfer of business of company in financial difficulties on terms including reducing liabilities or benefits under any policies), for the words from “the liabilities” to “policies)” there shall be substituted “any of the things to which any of those who are qualifying persons in relation to the company in financial difficulties are entitled in their capacity as such)”.
(4)In subsection (5) (power to assist company in financial difficulties conditionally on reduction of liabilities or benefits under any of its policies), for the words from “any liabilities” to “the company” there shall be substituted “of the things to which any of those who are qualifying persons in relation to the company are entitled in their capacity as such”.
(5)In subsection (8) (restriction on exercise of powers)—
(a)for “any policyholders of” there shall be substituted “any of those who are qualifying persons in relation to”, and
(b)for “the policyholders” there shall be substituted “the persons”.
(6)After subsection (8B) there shall be inserted—
“(8C)For the purposes of this section, a person is a qualifying person in relation to a company in financial difficulties if—
(a)he is a policyholder of the company who is eligible for protection under this section,
(b)he is a security holder in respect of a security given by the company who is eligible for protection under this section, or
(c)he is a person to whom the company is liable to pay any sum in respect of his entitlement to the benefit of a judgment under the provisions mentioned in paragraphs (a) and (b) of section 7 above.”
(7)After subsection (9) there shall be inserted—
“(9A)A security holder in respect of a security given by a company in financial difficulties is eligible for protection under this section if—
(a)it is a security to which section 6 above applies, and
(b)it would have been a United Kingdom policy at the relevant time if it had been an insurance policy and the contract governing the security had been a contract of insurance.”