The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001

Interpretative provisions relating to insurance companies

26.—(1) Amend section 431(2) (interpretative provisions relating to insurance companies)(1) as follows.

(2) After the definition of “closing liabilities” insert—

• ““contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contract of long-term insurance” means any contract which falls within Part II of Schedule 1 to that Order;”.

(3) For the definition of “insurance company” substitute—

““insurance business transfer scheme” means a scheme falling within section 105 of the Financial Services and Markets Act 2000, including an excluded scheme falling within Case 2, 3 or 4 of subsection (3) of that section;

“insurance company” means—

(a)

a person (other than a friendly society) who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, or

(b)

an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act or a firm qualifying for authorisation under Schedule 4 to that Act which—

(i)

carries on business which consists of the effecting or carrying out of contracts of insurance, and

(ii)

carries on that business through a branch or agency in the United Kingdom;”.

(4) In the definition of “liabilities” for the words from “liabilities of” to the end substitute “long-term liabilities of the company determined for the purposes of the company’s periodical return on actuarial principles in accordance with section 5.6 of the Prudential Sourcebook (Insurers) (excluding any that have been reinsured);”.

(5) For the definition of “long term business” substitute—

““long-term business” means business which consists of the effecting or carrying out of contracts of long-term insurance;”.

(6) After the definition of “long term business fund” insert—

““long-term liabilities” means liabilities of an insurance company arising under or in connection with contracts for long-term business (including liabilities arising from deposit back arrangements within the meaning given by section 11.1 of the Prudential Sourcebook (Insurers));”.

(7) In the definition of “periodical return” for “Treasury under Part II of the Insurance Companies Act 1982” substitute “Financial Services Authority under section 9.6 of the Prudential Sourcebook (Insurers)”.

(8) After the definition of “periodical return” insert—

““the Prudential Sourcebook (Insurers)” means the Interim Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000(2);”.

(9) The amendments made by paragraphs (3), (6) and (7) above have effect in relation to periods of account ending on or after 1st December 2001.

(1)

Section 431(2) was relevantly amended by paragraph 1(2)(b) of Schedule 6 to the Finance Act 1990, section 52(1) of the Finance Act 1995 and paragraph 114 of the Schedule to S.I. 1997/2781.

(2)

This sourcebook is part of the FSA Handbook. The FSA Handbook may be purchased on paper and on CD Rom from the Publications Department (Sales), Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS and is available on line at www.fsa.gov.uk.