FRIENDLY SOCIETIES ACT 1992 (c. 40)

(The document as of February, 2008)

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shall be made in such manner as may be prescribed, with respect to applications under that section, in regulations made by the Commission with the consent of the Treasury.

(2) An application for confirmation of an amalgamation shall be made jointly by the friendly societies concerned.

6 (1) Where a friendly society applies for confirmation of an amalgamation, transfer or conversion, it shall publish a notice of the application--

(a) in one or more of the London Gazette, the Edinburgh Gazette or the Belfast Gazette, as the Commission directs, and,

(b) if it so directs, in one or more newspapers.

(2) The notice shall--

(a) state that any interested party has the right to make representations to the Commission with respect to the application;

(b) specify a date determined by the Commission before which any written representations or notice of a person's intention to make oral representation must be received by the Commission; and

(3) Where a friendly society participating in a transfer is required under section 88 above to furnish an actuary's report, the society shall publish a notice in the manner required by sub-paragraph (1) above--

(a) stating that such a report has been obtained;

(b) stating the addresses of the offices of the society at which copies of the report shall be available for inspection for a period of not less than 21 days beginning with the date of the first publication of the notice; and

(c) containing such particulars of any other matter relating to the report which the Commission requires in the case of the transfer in question;

and such a society may include the notice required by this sub-paragraph in the notice required by sub-paragraph (1) above.

7 After the date specified in the notice in pursuance of paragraph 6(2)(b) above, the Commission shall--

(a) determine the time and place at which oral representations may be made;

(b) give notice of that determination to the friendly society applying for confirmation and to any persons who have give notice of their intention to make oral representations; and

and the Commission shall allow that society an opportunity to comment on the written representations (whether at a hearing or in writing) before the expiration of such period as the Commission specifies in a notice to the society.

Confirmation by Commission: General

8 (1) Where an application is duly made for confirmation by the Commission of an amalgamation, transfer of engagements or conversion, the Commission shall confirm the amalgamation, transfer or conversion unless it is precluded from doing so by any of the following provisions of this Schedule.

(2) If it appears to the Commission, in relation to any amalgamation or transfer of engagements, that there is a substantial risk that the successor society or the person taking the transfer will not be able lawfully to carry out the engagements to be transferred to it under section 85(4) or 86(5) above, the Commission--

(a) shall not confirm the amalgamation or transfer; and

(b) where it has confirmed the amalgamation or transfer, shall, by notice to the central office, withdraw its confirmation;

but it may not withdraw its confirmation on or after the transfer date for the amalgamation or transfer.

(3) For the purposes of sub-paragraph (2) above, the Commission may have regard to any requirements of the law of a country or territory outside the United Kingdom which appear to the Commission to be relevant.

9 (1) Subject to sub-paragraph (3) below, the Commission shall not confirm an amalgamation or transfer if it considers that--

(a) some information material to the members' decision (including any decision on an affected members' resolution under section 86 above) about the amalgamation or transfer was not made available to all the members eligible to vote;

(b) the vote on any resolution approving the amalgamation or transfer does not represent the views of the members eligible to vote; or

(c) some relevant requirement of this Act or the rules of any friendly society participating in the amalgamation or transfer was not fulfilled or not fulfilled as regards that society.

(2) Subject to sub-paragraph (3) below, the Commission shall not confirm the conversion of a society if it considers that--

(a) some information material to the members' decision about the conversion was not made available to all the members eligible to vote;

(b) the vote on any resolution approving the conversion does not represent the views of the members eligible to vote;

(c) there is a substantial risk, in the case of conversion into a company which will require to be authorised under Part I of the [1982 c. 50.] Insurance Companies Act 1982, that the company will not be so authorised; or

(d) some relevant requirement of this Act or the rules of the society was not fulfilled.

(3) The Commission shall not be precluded from confirming an amalgamation, transfer or conversion by virtue only of the non-fulfilment of some relevant requirement of this Act or the rules of a friendly society if it appears to the Commission that it could not have been material to the members' decision about the amalgamation, transfer or conversion and the Commission gives a direction that the failure is to be disregarded for the purposes of this paragraph.

10 (1) Where the Commission would be precluded--

(a) from confirming an amalgamation or transfer by reason of any of the defects specified in paragraph 9(1) above, or

(b) from confirming a conversion by reason of any of the defects specified in paragraph 9(2) above,

it may give to any friendly society participating in the amalgamation or transfer or, as the case may be, to the society proposing to convert a direction under sub-paragraph (2) below.

(2) A direction under this sub-paragraph is a direction requiring a friendly society--

(a) to take such steps to remedy the defect or defects, including the calling of a further meeting, as are specified in the direction; and

(b) to furnish the Commission with evidence that those steps have been taken;

and if the Commission is satisfied that the steps have been taken and the defect or defects has or have been substantially remedied, the Commission shall confirm the amalgamation, transfer or conversion.

Confirmation of amalgamations

11 The Commission shall not confirm an amalgamation unless it is satisfied--

(a) that the successor society will be able to carry on the business of the amalgamating societies in the United Kingdom without authorisation under section 32 above; or

(b) that there is no substantial risk that the successor society will not be granted such authorisation under that section as will permit it to carry on that business in the United Kingdom.

Confirmation of transfers of engagements

12 The Commission shall not confirm a transfer unless it is satisfied--

(a) that all the engagements included in the transfer may be transferred under section 86 above to the transferee;

(b) that the transfer is in the interests of the members of each friendly society participating in the transfer; and

(c) where the transfer is not of all the engagements of the transferor, that the purposes of each friendly society participating in the transfer will, after the transfer, continue to include the carrying on of one or more activities falling within Schedule 2 to this Act.

13 (1) The Commission shall not confirm a transfer in any case where the transferee is required by section 87 above to furnish the Commission with a report unless it is satisfied that the transferee will (after taking the proposed transfer into account)--

(a) where the report is furnished under section 87(2), possess the margin of solvency required by section 48 above;

(b) where the report is furnished under section 87(3), possess an excess of assets over liabilities.

(2) The Commission shall not confirm a transfer of any engagements the fulfilment of which will constitute the carrying on of insurance business in the United Kingdom in any case where the transferee is a person to whom Part II of the [1982 c. 50.] Insurance Companies Act 1982 applies unless the Secretary of State certifies that the transferee will, after taking the proposed transfer into account, possess any margin of solvency required by that Part of that Act.

14 The Commission shall not confirm a transfer of any engagements the fulfilment of which will constitute the carrying on in the United Kingdom of insurance business unless it is satisfied--

(a) that the proposed transferee will be able to fulfil the engagements without authorisation under Part I of the Insurance Companies Act 1982 or section 32 of this Act; or

(b) that there is no substantial risk that the proposed transferee will not have such authorisation as will permit it to fulfil them.

15 (1) This paragraph applies to a transfer of engagements (other than contracts of reinsurance) the effecting of which constituted the carrying on of general business.

(2) The Commission shall not confirm such a transfer if it is to a transferee who is or will be authorised under Part I of the [1982 c. 50.] Insurance Companies Act 1982 to carry on in the United Kingdom insurance business and whose head office is situated in another member State, unless the supervisory authorities of that State certify that the transferee will, after taking the proposed transfer into account, possess the margin of solvency required for compliance with the first general insurance Directive.

(3) The Commission shall not confirm such a transfer in relation to engagements entered into by way of provision of insurance in another member State unless--

(a) the transferee fulfils or will fulfil the conditions mentioned in Articles 13 to 16 of the second general insurance Directive in the member State where the risk is situated; and

(b) the supervisory authorities of that member State agree to the transfer.

(4) The Commission shall not confirm such a transfer, in relation to engagements which cover risks situated in the United Kingdom, to a transferee who is not or will not be authorised under section 32 above or Part I of the Insurance Companies Act 1982 unless--

(a) the transferee is an insurance company established in another member State which is or will be entitled in accordance with section 81B of the Insurance Companies Act 1982 to provide insurance in the United Kingdom in respect of those risks through that establishment; and

(b) the supervisory authorities of the member State of that establishment agree to the transfer.

(5) The Commission shall not confirm such a transfer, in relation to engagements which cover risks situated in another member State, to a transferee who is not or will not be authorised under section 32 above or Part I of the Insurance Companies Act 1982 unless--

(a) the transferee is an insurance company established in another member State and the supervisory authorities of that member State agree to the transfer; and

(b) where the risk is not situated in the transferee's member State of establishment--

(i) the transferee fulfills the conditions mentioned in Articles 13 to 16 of the second general insurance Directive in the member State where the risk is situated;

(ii) the law of that member State provides for the possibility of such a transfer; and

(iii) the supervisory authorities of that member State agree to the transfer.

16 The Commission shall not confirm a transfer to a friendly society of engagements the fulfilment of which will constitute the carrying on in the United Kingdom of non-insurance business of any description unless it is satisfied that there is no substantial risk that the society will not be authorised under section 32 above to carry on non-insurance business of that description.

Effect of failure to comply with relevant requirements

17 A failure to comply with a relevant requirement of this Act or any rules of a friendly society shall not invalidate any amalgamation, transfer of engagements or conversion; but a society which--

(a) participates in an amalgamation or transfer or converts into a company; and

(b) fails without reasonable excuse to comply with such a requirement;

shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.

Interpretation

18 In this Part of this Schedule--

(a) expressions which are defined in section 81A or 96A of the Insurance Companies Act 1982 (interpretation of expressions derived from European Directives relating to insurance) have the same meaning as they have for the purposes of that Act;

(b) "relevant requirement", with reference to this Act or the rules of a friendly society means a requirement of this Part of this Act or of any rules prescribing the procedure to be followed by the society in approving or effecting an amalgamation or transfer of engagements or its conversion into a company.

Section 95.

SCHEDULE 16 Amendments of 1974 Act

1 The 1974 Act shall be amended as follows.

2 (1) In subsection (1) of section 4--

(a) after the word "Act" there shall be inserted the words "and the 1992 Act"; and

(b) in paragraph (a), after the word "Wales," there shall be inserted the words "Northern Ireland,".

(2) After subsection (2) of that section there shall be inserted the following subsection--

" (2A) The central office shall maintain separate registers under this Act or, as the case may be, the 1992 Act in relation to societies whose registered offices are in Northern Ireland. "

(3) In subsection (3) of that section, after the word "Act", in each place where it occurs, there shall be inserted the words "or the 1992 Act".

3 Section 6(2) shall cease to have effect.

4 In section 7, in subsection (1)--

(a) for the words "may be" there shall be substituted the words "may remain";

(b) in paragraph (a), for the words from "any" to the end of the paragraph there shall be substituted the words "any purpose falling within Schedule 2 to the 1992 Act"; and

" but no society may become registered under this Act after the commencement of section 93 of the 1992 Act. "

5 In section 13(1), for the words from "except" to the end of the subsection there shall be substituted the words "after the commencement of section 93 of the 1992 Act".

6 (1) For section 15 there shall be substituted the following section--

" 15A Acknowledgement of registration and rules of new branch

(1) On being satisfied that a branch has complied with the provisions of this Act as to registration, the registrar shall issue to that branch an acknowledgement of registration.

(2) An acknowledgement under subsection (1) above shall be conclusive evidence that the branch in question is duly registered under this Act, unless it is proved that the registration of the society of which it is a branch has been suspended or cancelled.

(3) An acknowledgement under subsection (1) above shall also constitute an acknowledgement, and be conclusive evidence, of the rules of the branch in force at the date of its registration. "

(2) Section 17 shall cease to have effect.

(3) Sub-paragraphs (1) and (2) above shall not affect the operation of section 15(2) and section 17 in relation to an acknowledgement of registration issued to a registered society under section 15(1).

7 In section 21, for the words "sum not exceeding 10p" there shall be substituted the words "reasonable fee".

8 After section 23 there shall be inserted the following section--

" Reinsurance

23A Reinsurance

(1) The rules of a registered friendly society may provide for the carrying on by the society of any reinsurance business to which subsection (2) below applies but only to such extent or in such circumstances as may from time to time be approved by the appropriate actuary.

(2) This subsection applies to business consisting of the effecting and carrying out of contracts of reinsurance which--

(a) are insured or to be insured by any other registered society or any incorporated friendly society; and

(b) are of a class or part of a class of insurance business which the society carrying on the re-insurance business itself carries on.

(3) In this section "the appropriate actuary" has the same meaning as in the 1992 Act. "

9 For section 24 there shall be substituted the following section--

" 24 Trustees of registered societies and branches

(1) Every registered society and branch shall have one or more trustees.

(2) The trustees may be appointed--

(a) by a resolution of the society or branch in general meeting; or

(b) in such other manner as the rules of the society or branch may provide.

(3) If a trustee is appointed under subsection (2)(a) above, the society or branch shall send to the registrar a copy of the resolution appointing him, signed by the trustee so appointed and by the secretary of the society or branch.

(4) If a trustee is appointed under subsection (2)(b) above, the society or branch shall send to the registrar--

(a) notice of his appointment signed by the secretary of the society or branch; and

(b) an acceptance of office signed by the trustee so appointed.

(5) In the case of the appointment of a trustee of a branch, any document referred to in subsection (3) or (4) above shall be sent to the registrar through an officer appointed in that behalf by the society of which the branch forms part.

(6) The same person may not be a secretary or treasurer of a registered society or branch and also a trustee of that society or branch. "

10 For section 26 there shall be substituted the following section--

" 26 Proof of appointment of officers and trustees

If any such list as is referred to in section 12(1)(c) above is signed--

(a) by every trustee and other officer named in the list; and

(b) by the secretary of the branch,

then on the registration of the branch the list shall be evidence that the persons so named have been duly appointed. "

11 Sections 27 and 28 shall cease to have effect.

12 Sections 29 to 45 shall cease to have effect in relation to registered friendly societies and registered branches of such societies.

13 In section 35, after subsection (5) there shall be inserted the following subsection--

" (5A) In the application of subsection (4) above to a society whose registered office is in Northern Ireland, the reference to the High Court shall be construed as a reference to the High Court in Northern Ireland. "

14 In section 40, after subsection (2) there shall be added the following subsection--

" (3) For the purposes of regulations made by virtue of this section, section 10 of the Friendly and Industrial and Provident Societies Act 1968 shall be taken to extend to Northern Ireland. "

15 (1) In section 46, in subsection (1), paragraphs (a) and (b) shall be omitted.

(2) Sub-paragraph (1) above has effect without prejudice to the generality of paragraph (e) of that subsection.

(3) After subsection (2) of that section there shall be inserted the following subsection--

" (2A) Subsections (2) to (12) of section 14 of the 1992 Act shall apply in respect of the powers of investment of the trustees of a registered friendly society as they apply to the powers of investment of an incorporated friendly society; and the consent required for any such investment as is available to the trustees of a registered friendly society by virtue of this subsection shall be the same as that required under subsection (1) above. "

16 In section 49--

(a) in paragraph (b), for "£200" there shall be substituted "£800"; and

(b) in paragraph (c), for "£50" there shall be substituted "£200".

17 In section 50, after subsection (2) there shall be inserted the following subsection--

" (2A) Subsection (2) above does not apply to advances made by a registered friendly society or a branch of such a society. "

18 In section 51--

(a) at the end of subsection (2) there shall be added the words "; but those restrictions shall not apply to investments made by the trustees of a registered friendly society or of a branch of such a society"; and

(b) at the end of subsection (4) there shall be inserted the words "or Part II of the Housing (Northern Ireland) Order 1981.".

19 (1) In section 53, for subsection (1) there shall be substituted the following subsection--

" (1) A registered society or branch may, if its rules so provide, acquire and hold land for the purpose of carrying on any of its activities in the names of its trustees and may dispose of, or otherwise deal with, any land so held; and--

(a) no person shall be bound to enquire as to the authority of the trustees to dispose of or deal with land;

(b) the receipt of the trustees shall be a discharge for all sums of money arising from, or in connection with, the disposal of or other dealing with land. "

(2) Subsection (3) of that section shall be omitted.

20 In section 55, at the end of subsection (4) there shall be added the words "or Northern Ireland".

21 After section 57 there shall be inserted the following section--

" 57A Discharge of certain mortgages in Northern Ireland

(1) Where, in the case of any mortgage to a registered society or branch of any property, a receipt in full for any moneys secured thereby on that property is endorsed on or annexed to the mortgage, being a receipt--

(a) signed by the trustees of the society or branch and counter-signed by the secretary thereof; and

(b) in the form set out in Schedule 4 to this Act or in any other form specified in the rules of the society or branch or any schedule thereto,

that receipt shall be fully effective to vacate the mortgage and vest in the mortgagor the estate of and in the property comprised in the mortgage.

(2) If the mortgage is registered in accordance with the Registration of Deeds Act (Northern Ireland) 1970 the registrar under that Act shall--

(a) on production of the receipt mentioned in subsection (1) above make a note in the Abstract Book against the entry relating to the mortgage that the mortgage is satisfied; and

(b) grant a certificate, either on the mortgage or separately, that the mortgage is satisfied.

(3) The certificate granted under subsection (2)(b) above shall--

(a) be received in all courts and proceedings without further proof; and

(b) have the effect of clearing the register of the mortgage.

(4) In this section "mortgage" includes a further charge and "mortgagor", in relation to a mortgage, means the person for the time being entitled to the equity of redemption.

(5) This section extends to Northern Ireland only. "

22 After section 63 there shall be inserted the following section--

" 63A Register of members of registered friendly societies

(1) Every registered friendly society shall maintain a register of the names and addresses of the members of the society.

(2) The register shall be kept at the registered office of the society or at such other place or places as the committee of management thinks fit.

(3) A society need not enter in the register the address of a member who became a member before the commencement of this section while it has no address for him and his whereabouts are unknown.

(4) Where it appears to a society that the address shown in the register for a member is no longer current, the society--

(a) may remove that address from the register; and

(b) need not enter in the register an address for that member while it has no address for him and his whereabouts are unknown.

(5) If a society contravenes subsection (1) above, it shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale. "

23 After section 65 there shall be inserted the following sections--

" 65A Group insurance business

(1) If the rules of a registered friendly society expressly so direct, the society may carry on any group insurance business.

(2) In this Act "group insurance business" means business (carried on in accordance with the society's rules and subject to any regulations under section 11 of the 1992 Act) which--

(a) is of a description falling within Head A, or class 2 of Head B, of Schedule 2 to the 1992 Act; and

(b) is carried on as the business of providing benefits, in pursuance of a contract with a qualifying person, for or in respect of the members of a group scheme.

(3) For the purposes of this section--

"group scheme" means a scheme or other arrangement under which benefits are to be provided for or in respect of persons who are members of the scheme and who qualify for membership by virtue of--

(a) being employees of a particular employer; or

(b) being members of some other group of persons of a description specified in regulations under section 11 of the 1992 Act;

"qualifying person" means a person who has established or is otherwise responsible for the operation of a group scheme or a trustee of such a scheme;

and "member", in relation to a group scheme, includes any person for or in respect of whom benefits are to be provided under the scheme, whatever the terms in which such persons are described in the scheme.

(4) Group insurance business may be carried on by a registered friendly society whether or not members of the group scheme are, or are required by the society to be, members of the society.

(5) Where a registered friendly society carries on any group insurance business and the rules of the society so provide, any qualifying person with whom the society contracts (or his nominee) may be accorded the rights of a member of the society (including any right to vote) for the purpose of participating in the affairs of the society in the interests of the members of the group scheme with which he is concerned.

(6) The rules of an incorporated friendly society may not prevent a person from being a member of the society in his private capacity by reason only of the fact that he has been accorded the rights of a member by virtue of subsection (5) above.

(7) A person who is accorded the rights of a member of a society by virtue of subsection (5) above shall, for the purposes of any power which is conferred on the registrar or the Commission by this Act or the 1992 Act and is exercisable in the interests of members of the society, be treated as if he were a member of the society.

(8) The Commission may make regulations under section 11(7) of the 1992 Act which apply to group insurance business carried on by registered friendly societies.

65B Terms on which benefits are provided by friendly societies

(1) The terms on which a registered friendly society provides any benefit shall be--

(a) specified in its rules; or

(b) determined in a manner specified in its rules.

(2) If they are not specified in the society's rules, the society--

(a) shall make copies of them available free of charge to members of the society at every office of the society; and

(b) shall send, free of charge, copies of them to any member of the society who demands them.

(3) If, on demand made of it under subsection (2) above, a society fails, in accordance with that subsection, to make available or, as the case may be within 7 days of the demand, to send to a person a copy of the terms on which a benefit is to be provided, the society shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale. "

24 Sections 70 to 75 shall cease to have effect.

25 (1) Section 76 shall be amended as follows.

(2) In subsection (1)--

(a) for the words "section 77 below" there shall be substituted the words "subsection (3A) below"; and

(b) in paragraphs (c) to (e) the words "or branch" shall be omitted in each place where they occur.

(3) For subsection (3) there shall be substituted the following subsections--

" (3A) This section does not apply to a dispute if--

(a) the registered society concerned is a registered friendly society; or

(b) the registered branch concerned is a branch of a registered friendly society.

(3B) The county court or, in Scotland, the sheriff may hear and determine a dispute falling within subsection (1) above if the parties agree that it shall be so determined instead of being determined under the rules. "

(4) In subsection (4), at the end of paragraph (b) there shall be added the words " ; and

(c) does not include a dispute between the parties mentioned in subsection (1)(a) or (b) above which has arisen as a result of and incidentally to a dispute between a member, or a person aggrieved who has ceased to be a member, of a registered society or branch and a person claiming through him or under the rules of the registered society or branch. "

26 Section 77 shall cease to have effect.

27 In section 78(1), after the words "Act 1950" there shall be inserted the words "or the corresponding provisions of the Arbitration Act (Northern Ireland) 1937".

28 In section 80--

(a) in subsection (1), at the beginning there shall be inserted the words "Subject to subsection (1A) below,";

(b) after subsection (1) there shall be inserted the following subsection--

" (1A) Subsection (1) above does not apply in any case where the lender is a registered friendly society or a branch of such a society. "

29 (1) Section 82 (amalgamation and transfer of engagements) shall be amended as follows.

(2) In subsection (2), after the word "transfer" there shall be inserted the words "to any extent".

(3) In subsection (3)--

(a) after the word "transfer" there shall be inserted the words "to any extent"; and

(b) at the end there shall be added the words "or to an industrial and provident society".

(4) After subsection (3) there shall be inserted the following subsections--

" (3A) A registered society, in order to transfer some but not all of its engagements, must in addition to passing the special resolution required by subsection (2) or (3) above resolve to do so by an affected members' resolution, that is, a resolution passed by the appropriate majority of the members whose engagements with the society are included in the transfer and who, under the rules of the society, would be entitled to vote on a special resolution.

(3B) In subsection (3A) above, "appropriate majority" means a majority consisting of not less than three quarters of those members who vote. " .

(5) After subsection (7) there shall be added the following subsections--

" (8) This section does not apply to an amalgamation of or transfer of engagements by a registered friendly society.

(9) In this section "industrial and provident society" means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969. "

30 (1) In section 83(3), in subsection (3), after "1950" there shall be inserted the words "or, in Northern Ireland, the Arbitration Act (Northern Ireland) 1937".

(2) In subsection (8) of that section, after the word "district" there shall be inserted "or division".

31 Section 84 shall cease to apply to registered friendly societies.

32 After section 84 there shall be inserted the following section--

" 84A Conversion of registered societies into industrial and provident societies

(1) A registered society other than a registered friendly society may apply for registration under the Industrial and Provident Societies Act 1965 if the proposal to apply for registration has been submitted to the members of the society for their consent by the procedure required for a proposal to amend the rules of the society and consent has been obtained in accordance with that procedure.

(2) On the registration under the Industrial and Provident Societies Act 1965 of a registered society all property held immediately before that registration by any person in trust for the society or any branch of the society (whether or not a registered branch) shall become by virtue of this subsection property of the industrial and provident society.

(3) After its registration under that Act, the society shall continue to be entitled to all rights and subject to all liabilities to which it was entitled or subject immediately before registration.

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