Dormant Assets Act 2022

Long-term insurance assets U.K.

2 Transfer of eligible insurance proceeds to reclaim fund U.K.

(1) This section applies where—

(a) an insurance institution transfers to an authorised reclaim fund dormant eligible insurance proceeds owing to a person, and

(b) the reclaim fund consents to the transfer.

(2) On the transfer of the eligible insurance proceeds—

(a) a person to whom the proceeds are payable immediately before the transfer ceases to have any right against any insurance institution to payment of the proceeds, but

(b) that person acquires against the reclaim fund whatever right to payment of the proceeds the person would have had against the institution if the transfer had not happened.

(3) In this Act “insurance institution”, in relation to any eligible insurance proceeds, means (subject to subsection (4)) a person who—

(a) under Part 4A of FSMA 2000 has permission to perform a regulated activity for the purposes of FSMA 2000 by virtue of article 10(2) of the RAO 2001 (carrying out a contract of insurance as principal),

(b) owes the proceeds in the course of, or in connection with, that regulated activity, and

(c) has its head office or an establishment in the United Kingdom.

(4) “Insurance institution” does not include—

(a) a mutual insurer, or

(b) a person who is specified, or is within a class of persons specified, by an order under section 38 of FSMA 2000 (exemption orders).

Modifications etc. (not altering text)

C1 S. 2 applied (6.6.2022) by 2008 c. 9, s. 39(2)(a) (as substituted by Finance Act 2022 (c. 3), Sch. 6 paras. 2, 6; S.I. 2022/569, reg. 2)

C2 S. 2 applied (6.6.2022) by 1992 c. 12, s. 26A(2)(a) (as substituted by Finance Act 2022 (c. 3), Sch. 6 paras. 1, 6; S.I. 2022/569, reg. 2)

Commencement Information

I1 S. 2 not in force at Royal Assent, see s. 34(3)

I2 S. 2 in force at 6.6.2022 by S.I. 2022/582, reg. 2

3 “Eligible insurance proceeds” U.K.

(1) In this Act “eligible insurance proceeds” are (subject to subsections (2) and (3)) the cash proceeds of a contract of long-term insurance, after the appropriate adjustments have been made for such things as interest due and fees and charges payable.

(2) A contract is excluded from subsection (1) if it is—

(a) a with-profits policy,

(b) an industrial assurance policy, or

(c) a policy that is the subject of a trust.

(3) Proceeds of a contract of long-term insurance held in a Lifetime ISA are excluded from subsection (1) if their transfer to an authorised reclaim fund would result in liability to pay a withdrawal charge to HMRC.

(4) In relation to a time after a transfer has been made as mentioned in section 2(1)(a), the adjustments referred to in subsection (1) above include those that would fall to be made but for the transfer.

(5) In this section—

• “contract of long-term insurance” has the meaning given by article 3(1) of the RAO 2001;

• “industrial assurance policy” has the same meaning as it has in the FCA Handbook as in force when this Act is passed;

• “with-profits policy” means a contract of insurance which provides benefits through eligibility to participate in discretionary distributions based on profits arising from the insurer’s business or a particular part of its business.

Commencement Information

I3 S. 3 not in force at Royal Assent, see s. 34(3)

I4 S. 3 in force at 6.6.2022 by S.I. 2022/582, reg. 2

4 Meaning of “dormant” in relation to eligible insurance proceeds U.K.

(1) For the purposes of this Act eligible insurance proceeds are “dormant” at a particular time if any of the following four conditions are met at that time.

(2) The first condition is that the responsible institution—

(a) has been notified that the person in respect of whom the proceeds are payable has died, and

(b) is satisfied that there is no person to whom the proceeds are payable.

(3) The second condition is that—

(a) there has been a period of at least 7 years since the responsible institution was notified that the person in respect of whom the proceeds are payable has died, and

(b) the responsible institution has not received any communication since that time from—

(i) anyone administering the estate of that person, or

(ii) the person to whom the proceeds are payable (or a person acting on behalf of that person).

(4) The third condition is that—

(a) the responsible institution is satisfied that the person in respect of whom the proceeds are payable would be at least 120 years old, and

(b) the responsible institution has not received any communication from—

(i) anyone administering the estate of that person, or

(ii) the person to whom the proceeds are payable (or a person acting on behalf of that person),

during the preceding 7 years.

(5) The fourth condition is that—

(a) the proceeds have become payable by virtue of the insurance contract term ending,

(b) a period of at least 7 years has elapsed since the end of the term, and

(c) the responsible institution has not received any communication from the person to whom the proceeds are payable (or a person acting on behalf of that person) since that time.

(6) In this section, “responsible institution” means the insurance institution that is responsible, in relation to the proceeds concerned, for doing any of the following—

(a) receiving notification of the kind mentioned in subsection (2)(a) or (3)(a),

(b) making an assessment of the kind mentioned in subsection (2)(b) or (4)(a), and

(c) receiving communications as mentioned in subsection (3)(b), (4)(b) or (5)(c).

Commencement Information

I5 S. 4 not in force at Royal Assent, see s. 34(3)

I6 S. 4 in force at 6.6.2022 by S.I. 2022/582, reg. 2