Financial Services and Markets Act 2000

Section 198: Power to apply to the court for injunction in respect of certain overseas insurance companies

400. Under this section the Authority may act on behalf of an insurance authority in another EEA member State by applying to the courts for an injunction, or in Scotland an interdict, to freeze assets held in the United Kingdom by an insurer from that member State.

401. The power implements article 20(5) of the 1^st Non-Life Directive, relating to general insurance, and article 24(5) of the 1^st Life Directive, relating to long-term insurance.  Subsection (1) limits use of the power to where it is in accordance with those provisions, which means that it is exercisable where the firm’s home State authority has asked the Authority to prohibit the free disposal of assets of that firm and has confirmed that:

• the firm has failed to comply with the requirements of article 15 of the 1^st Non-Life Directive or article 17 of the 1^st Life Directive;

• the solvency margin of the firm has fallen below the minimum required by article 16(3) of the 1^st Non-Life Directive or article 19 of the 1^st Life Directive; or

• the solvency margin of the firm has fallen below the guarantee fund as defined in article 17 of the 1^st Non-Life Directive or article 20 of the 1^st Life Directive.