Credit Unions Act 1979

Insurance and other arrangements E+W+S

15 Insurance against fraud or other dishonesty. E+W+S

(1) A society shall not be registered as a credit union unless the [F1 Authority] is satisfied that on registration there will be in force in relation to that society a policy of insurance complying with the requirements of this section; and a credit union shall at all times maintain in force such a policy and if it fails to do so shall be guilty of an offence and liable on summary conviction to a fine not exceeding [F2 level 3 on the standard scale].

(2) In order to comply with this section, a policy of insurance—

(a) subject to such exceptions as may be prescribed, must insure the credit union in respect of every description of loss suffered or liability incurred by reason of the fraud or other dishonesty of any of its officers or employees;

(b) must so insure the credit union up to a limit of not less than £20,000 (or such other figure as may be prescribed) in respect of any one claim, except that the liability of the insurer may be restricted to an amount not less than £100,000 (or such other figure as may be prescribed) in respect of the total of the claims made in any one year;

(c) must not, except with the consent in writing of the [F1 Authority], provide in relation to any claim for any amount greater than one per cent. of the limit referred to in paragraph (b) above to be met by the credit union; and

[F3 (d) must be issued by—

(i) a person who has a permission under Part IV of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance of a relevant class, or

(ii) an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act, which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to effect or carry out contracts of insurance of a relevant class.]

(3) In paragraphs (a) and (b) of subsection (2) above “prescribed” means prescribed by regulations made by the F4 . . . Treasury.

[F5 (3A) Paragraph (d) of subsection (2) above must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.]

(4) Regulations made by virtue of paragraph (b) of that subsection may provide for different figures in relation to different descriptions of credit union, whether by reference to the amount of the assets of the credit union or to such other factors as appear to the [F6 Treasury] to be appropriate; and if such regulations do so provide the reference in paragraph (c) of that subsection to the limit referred to in the said paragraph (b) shall be construed as a reference to the limit applicable to the credit union in question.

Textual Amendments

F1 Words in s. 15(1)(2)(c) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 279(a)(i)(ii) (with art. 13(3)); S.I. 2001/3538, art. 2(1)

F2 Words substituted by virtue of (E.W.) Criminal Justice Act 1982 (c. 48, SIF 39:1), s. 46 and (S.) Criminal Procedure (Scotland) Act 1975 (c. 21, SIF 39:1), s. 289G

F3 S. 15(2)(d) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 191

F4 Words in s. 15(3) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1)(2), Sch. 3 Pt. IV para. 279(b), Sch. 4 (with art. 13(3)); S.I. 2001/3538, art. 2(1)

F5 S. 15(3A) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 192(3)

F6 Words in s. 15(4) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 279(c) (with art. 13(3)); S.I. 2001/3538, art. 2(1)

16 Guarantee funds. E+W+S

(1) Subject to the provisions of this section, a credit union, or any two or more credit unions, may enter into arrangements with a person carrying on the business of insurance for the purpose of making funds available to meet losses incurred by members of a credit union which is a party to the arrangements; and any two or more credit unions may enter into any other kind of arrangements for that purpose.

(2) Subject to subsection (3) below, a credit union shall have power to make contributions under arrangements made in accordance with subsection (1) above, and such arrangements may in particular provide for the vesting of a fund in trustees appointed under the arrangements.

(3) Arrangements under subsection (1) above shall not come into force and no contribution shall be made thereunder by a credit union, until they have been approved by the [F7 Authority]; and the [F7 Authority] shall not approve any such arrangements unless they provide that any variation of their terms shall also require [F8 its] approval.

Textual Amendments

F7 Words in s. 16(3) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 280(a) (with art. 13(3)); S.I. 2001/3538, art. 2(1)

F8 Word in s. 16(3) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 280(b) (with art. 13(3)); S.I. 2001/3538, art. 2(1)