The Insurance Companies (Cancellation No. 2) Regulations 1993

Explanatory Note

(This note is not part of the Regulations)

These Regulations make amendments to the Insurance Companies Regulations 1981 (“the principal Regulations”) and further implement Article 15 of Council Directive 90/619/EEC relating to life assurance (O.J. No. L330, 29.11.90, p. 50) as amended by Article 30 of Council Directive 92/96/EEC relating to life assurance (O.J. No. L360, 9.12.92, p. 1). Article 15 of Council Directive 90/619/EEC gives a policy holder who has purchased an individual life assurance contract on a cross border basis a period of between 14 and 30 days during which he may cancel that contract. Article 30 of Council Directive 92/96/EEC extends this right of cancellation to any policy holder who purchases an individual life assurance contract from an insurance undertaking with a head office in a member State. This right of cancellation may be removed where the policy holder does not require protection because of his status or because of the circumstances in which the contract is concluded. These Regulations set out the form of the statutory notice and the exemptions from the requirement to provide this right of cancellation.

The provisions to implement Article 15 of Council Directive 90/619/EEC as amended by Article 30 of Council Directive 92/96/EEC are contained in regulations 2, 3 and 4 and Schedules 1 and 2. These Articles are implemented in part by the Insurance Companies (Cancellation) Regulations 1993 S.I. 1993/1327.

Regulation 1makes provision for the citation and commencement of the Regulations.

Regulation 2amends the form of the statutory notice required by section 75 of the Insurance Companies Act 1982 by amending regulation 70 of the principal Regulations.

Regulation 3amends regulation 71 of the principal Regulations so that the following kinds of contract are exempt from the requirements of section 75 of the Insurance Companies Act 1982, namely contracts where none of the proposers or policy holders is an individual; contracts of reinsurance; contracts of term assurance effected for six months' duration or less; and some contracts which insure a policy holder’s obligations to make payments under a personal credit agreement of the kind mentioned in section 8(1) of the Consumer Credit Act 1974 or a consumer hire agreement of the kind mentioned in section 15(1) of that Act.

Regulation 4 and Schedules 1 and 2alter the contents of the statutory notice by amending Schedules 10 and 11 of the principal Regulations.