FRIENDLY SOCIETIES ACT 1992 (c. 40)

(The document as of February, 2008)

-- Back --

Page 3

Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13 | P.14 | P.15 | P.16

it shall grant authorisation subject to such conditions as it thinks fit for securing those objects.

(5) The conditions that may be so imposed may--

(a) relate to any class (or part of a class) or description of business in respect of which authorisation is sought;

(b) require the society to take steps or to refrain from adopting a particular course of action or to restrict the scope of its business in a particular way;

(c) require the society to take steps with regard to the activities of any subsidiary or body jointly controlled by the society.

(6) Without prejudice to the generality of subsection (5) above, conditions imposed under subsection (4) above may--

(a) impose limitations on the effecting of contracts of insurance or contracts for non-insurance benefits or the accepting of new members;

(b) require the removal of an officer of the society or of any registered branch;

(c) where the society has branches, require the society to take steps with regard to the activities of any registered branch.

(7) Conditions imposed under subsection (4) above--

(a) may be added to or varied from time to time by agreement between the Commission and the society; and

(b) may be revoked at any time by the Commission if it is satisfied that they are no longer needed for the purpose for which they were imposed;

and, on adding to, varying or revoking any such conditions, the Commission shall (unless it considers it unnecessary to do so by reason of the nature of the changes) send to the secretary of the society a statement of the terms of all the subsisting conditions to which its authorisation is subject.

(8) Subsections (2) to (7) above apply in relation to applications for authorisation made under section 33 above with the omission--

(a) of subsection (2)(a) and (b);

(b) of the reference to subsection (2)(b) in subsection (4); and

(9) Subsections (2) to (7) above apply in relation to a society applying for authorisation to carry on both long term and general business by virtue of section 37(8) below--

(a) with the substitution, in subsection (2), for the words "unconditional authorisation", of the words "authorisation subject only to the conditions required by section 37 below";

(b) with the insertion in subsections (2)(d) and (4), after the words "imposition of", of the word "further".

35 Extension of current authorisation

(1) This section applies where an authorised friendly society applies under section 32 above for authorisation to carry on insurance business of a class (or part of a class), or non-insurance business of a description, which is not covered by the society's current authorisation.

(2) On such an application, the conditions which the Commission may impose under section 34 above include--

(a) conditions relating to any business covered by the society's current authorisation; and

(b) where the current authorisation is subject to conditions, conditions which vary the current conditions (whether by adding to, amending or replacing any of them).

(3) Where the Commission determines to grant authorisation on such an application, it shall be granted in terms including all current terms of the society's authorisation (including any that were otherwise unaffected by the determination); and those terms shall have effect in place of the previously subsisting terms.

36 Imposition of conditions on current authorisation

(1) If the Commission considers it expedient to do so, it may (in accordance with Part II of Schedule 13 to this Act)--

(a) impose conditions on a friendly society's authorisation, or

(b) where an authorisation is subject to conditions, impose conditions which vary the current conditions (whether by adding to, amending or replacing any of them);

and the conditions that may be so imposed include any condition that might be imposed on the grant of authorisation.

(2) Without prejudice to the generality of subsection (1) above, conditions so imposed may require--

(a) the submission to the Commission of a plan for the restoration of a sound financial position or a short-term financial scheme;

(b) modification of the plan or scheme (or the plan or scheme as previously modified) if the Commission considers it inadequate; and

(3) Subsection (7) of section 34 above applies to conditions imposed under this section as it applies to conditions imposed under that section.

Restrictions on business of certain authorised societies

37 Restriction on combinations of business

(1) Subject to subsection (8) below, an authorised friendly society to which subsection (2) or (3) below applies may not carry on business falling into more than one of the following categories, namely--

(a) long term business;

(b) general business; and

and, accordingly, the Commission shall not grant such a society authorisation to do so.

(2) This subsection applies to a friendly society which carries on long term business--

(a) if its rules do not contain provision for calling up additional contributions, for reducing benefits or for claiming assistance from other persons who have undertaken to provide it; or

(b) if its annual contribution income from long term business exceeded 500,000 ECU for 3 consecutive years and it is not the subject of a direction under subsection (5) below;

and, for the purposes of paragraph (b) above, years ending before 1st January 1985 shall be disregarded.

(3) This subsection applies to a friendly society which carries on general business--

(a) if its rules do not contain provision for calling up additional contributions or for reducing benefits; or

(b) if its annual contribution income from general business in any previous year exceeded 1,000,000 ECU and it is not the subject of a direction under subsection (5) below;

and, for the purposes of paragraph (b) above, years ending before 1st January 1993 shall be disregarded.

(4) In subsections (2) and (3) above a reference to a year, in relation to annual contribution income, is a reference to any financial year of a society for which, at the relevant time, accounts have been or ought to have been prepared.

(5) The Commission may, if it is satisfied that it is consistent with the international obligations of the United Kingdom to do so, direct that a friendly society--

(a) which is, by virtue only of paragraph (b) of subsection (2) above, a society to which that subsection applies; or

(b) which is, by virtue only of paragraph (b) of subsection (3) above, a society to which that subsection applies;

shall, unless the direction is revoked, be treated as not being a society to which subsection (2) or, as the case may be, subsection (3) above applies.

(6) If--

(a) the Commission has given a direction under subsection (5) above in relation to a society such as is mentioned in subsection (5)(a) above; and

(b) the society's annual contribution income from long term business exceeds 500,000 ECU for 3 consecutive years ending after a date specified in the direction,

the Commission shall revoke the direction.

(7) If--

(a) the Commission has given a direction in relation to a society such as is mentioned in subsection (5)(b) above; and

(b) the society's annual contribution income from general business in a year ending after a date specified in the direction exceeded 1,000,000 ECU,

the Commission shall revoke the direction.

(8) Where a friendly society to which subsection (2) or (3) above applies was on 15th March 1979 carrying on long term and general business in the United Kingdom--

(a) the society may (if authorised to do so) carry on any class (or part of a class) of long term or general business which corresponds to business carried on by it on that date; but

(b) the Commission shall (whether or not other conditions are imposed) impose such conditions on the society's authorisation as the Commission thinks fit for securing that the society's long term business and general business are kept separate;

and those conditions shall, subject to the exceptions mentioned in subsection (9) below, require that the assets representing the funds maintained in respect of the society's long term business or, as the case may be, its general business are to be applicable for the purposes of that business only.

(9) The exceptions mentioned in subsection (8) above are--

(a) that assets representing funds in respect of long term business may be transferred so as to be available for general business if--

(i) they represent the excess of the long term business funds over the society's liabilities in respect of that business; or

(ii) the transfer is by way of reimbursement of expenditure borne by other assets in respect of long term business; and

(b) that assets representing funds in respect of general business may be transferred so as to be available for long term business if they represent the excess of the general business funds over the society's liabilities in respect of that business.

38 Restriction on commercial business

(1) An authorised friendly society to which section 37(2) or (3) applies shall not carry on any commercial business otherwise than in connection with or for the purposes of its insurance business.

(2) Subsection (1) above shall not prevent a friendly society which was on 15th March 1979 carrying on long term business and a savings business in the United Kingdom from continuing to carry on the savings business.

(3) Subsection (1) above has effect without prejudice to any stricter obligations imposed on friendly societies under this Part; and nothing in this section shall be taken to imply that a friendly society may carry out any activity other than for purposes permitted by this Act (or, in the case of registered societies, the 1974 Act) and the constitution of the society.

Powers of Commission in relation to authorised societies

39 Power to direct application for fresh authorisation

(1) If, with respect to an authorised friendly society, the Commission has reason to believe--

(a) that the society's business is being, or will in the future be, conducted--

(i) in a way that may not adequately protect the interests of members of the society; or

(ii) so as not to comply with the requirements of this Act which relate to the business for which the society's authorisation was granted; or

(b) that by reason of any increase in the volume of its long term or its general business it is appropriate for the society's affairs to be re-examined;

it may by notice direct the society to make within such period as is specified in the notice an application under section 32 above for fresh authorisation.

(2) The period so specified shall not be shorter than 3 nor longer than 6 months beginning with the date of the notice; but the Commission may, on representations being made to it, extend or further extend the period within which the application is to be made.

(3) A notice under subsection (1) above shall state the grounds on which the Commission decided to give the direction.

(4) The business covered by, and the conditions imposed on, a society's fresh authorisation need not be the same as that covered by, or those imposed on, the previous one.

(5) If the Commission refuses to grant fresh authorisation, it may specify in the notice of its refusal a date for the expiry of the current authorisation; and the authorisation shall expire on that date.

(6) The making of an application for fresh authorisation shall not preclude the Commission, at any time while the application is pending, from exercising any power under this Part of this Act in relation to the society; but if it gives a direction under section 41 below, the proceedings on the application shall abate.

40 Withdrawal of authorisation in respect of new business

(1) Subject to the following provisions of this section, the Commission may by notice direct--

(a) that a friendly society authorised to carry on insurance business shall, from a date specified in the direction, cease to be authorised to effect contracts of insurance, or contracts of a class (or part of a class) so specified; or

(b) that a friendly society authorised to carry on non-insurance business shall, from a date specified in the direction, cease to be authorised to effect contracts for non-insurance benefits, or contracts of a description so specified.

(2) The Commission shall give such a direction in relation to a friendly society if--

(a) in the case of an incorporated society, a special resolution has been passed for its voluntary winding up;

(b) an order to wind up the society has been made;

(d) an instrument of dissolution has been executed as mentioned in section 93(1)(b) of the 1974 Act or a special resolution approving an instrument of dissolution under section 20 above has been passed; or

(e) in the case of a registered society, the Commission has made an award under section 95(3) or 95A(1) of the 1974 Act for the dissolution of the society.

(3) The Commission may give such a direction in relation to a friendly society at the request of the society or if--

(a) it appears to the Commission that the society has failed to satisfy an obligation to which it is subject by virtue of the [1923 c. 8.] Industrial Assurance Act 1923, the 1974 Act, the [S.I. 1979/1574 (N.I.13)] Industrial Assurance (Northern Ireland) Order 1979 or this Act;

(b) there exists a ground on which the Commission would be prohibited from granting authorisation to the society;

(c) it appears to the Commission to be expedient to make the proposed direction in order to protect the interests of members of the society;

(d) the authorisation was subject to conditions and it appears to the Commission that the society has not complied with a condition;

(e) it appears to the Commission that information furnished to it on behalf of the society or, in connection with an application for authorisation, by or on behalf of an officer of the society is false in a material particular, misleading or inaccurate;

(f) it appears to the Commission that a friendly society has failed to satisfy an obligation to which it is subject by virtue of any provision of the law of a country or territory outside the United Kingdom; or

(g) the society, having been directed to apply for fresh authorisation under section 39 above, has either failed to make such an application within the period allowed or been refused fresh authorisation covering the effecting of new contracts of any description covered by the society's previous authorisation.

(4) A direction under this section shall not prevent a friendly society from effecting an insurance contract, or a contract for non-insurance benefits, in pursuance of a term of a subsisting contract of that description.

(5) A direction under this section or section 41 below--

(a) shall be given in accordance with Part II of Schedule 13 to this Act, and

(b) may not be revoked or varied,

but has effect without prejudice to the subsequent grant to the society of authorisation to carry on any business to which the direction relates.

41 Withdrawal of authorisation to carry on insurance business

(1) Where the Commission is satisfied that a friendly society which is authorised to carry on insurance business--

(a) has ceased to carry on in the United Kingdom any insurance business, or insurance business of any class (or of any part of a class) specified in the society's authorisation; or

(b) has not, since the grant of authorisation to carry on insurance business of any class (or part of a class), carried on in the United Kingdom any insurance business or insurance business of that class (or part of a class) and at least twelve months has elapsed since that grant;

the Commission may by notice direct that the society shall cease to be authorised to carry on insurance business or, as the case may be, insurance business of that class (or part of a class).

(2) Where the Commission is satisfied that a friendly society which is authorised to carry on non-insurance business--

(a) has ceased to carry on in the United Kingdom any non-insurance business or non-insurance business of a description specified in the authorisation; or

(b) has not, since the grant of authorisation to carry on non-insurance business of any description, carried on in the United Kingdom any non-insurance business or non-insurance business of that description, and at least twelve months has elapsed since that grant;

the Commission may direct that it shall cease to be authorised to carry on non-insurance business or, as the case may be, non-insurance business of that description.

(3) For the purposes of this section a friendly society shall be taken to have ceased to carry on business, or business of a particular class or description, if at no time during a financial year of the society which began and ended during the currency of the authorisation did it carry on business or, as the case may be, business of that class or description.

Supplementary

42 Contracts effected in contravention of section 31(1)

(1) Where a contract of insurance or for non-insurance benefits is entered into between a friendly society and a member in contravention of section 31(1) above the member may, subject to subsection (2) below, elect--

(a) to enforce the contract; or

(b) to recover any money paid by him under the contract, together with compensation for any loss sustained by him as a result of having parted with it;

and the compensation so recoverable shall be such as the parties may agree or as any court of competent jurisdiction may, on the application of either party, determine.

(2) Any such court may allow money paid by a member under a contract to which subsection (1) applies to be retained by the friendly society if it is satisfied--

(a) that the society reasonably believed that its entering into the contract did not constitute a contravention of section 31(1) above; and

(b) that it is just and equitable for the money to be retained.

(3) A member who recovers the money paid under a contract to which subsection (1) above applies--

(a) shall not be entitled to any benefits under the contract; and

(b) shall repay any money and return any other property received by him under the contract;

and, where any property so received has passed to a third party, the reference in this subsection to that property shall be construed as a reference to its value at the time at which it was received by the member.

(4) A contravention of subsection (1) of section 31 above shall not make a contract of insurance or contract for non-insurance benefits illegal or invalid to any greater extent than is provided in this section; and a contravention of that subsection in respect of a contract of insurance shall not affect the validity of any reinsurance contract entered into in respect of that contract.

43 Interpretation of Part IV

In this Part of this Act--

"authorisation" and related expressions shall be construed in accordance with section 32(9) above;
"class", in relation to insurance business, means a class specified in Schedule 2 to this Act;
"contract for non-insurance benefits" means a contract effected in the course of carrying on any non-insurance business;
"friendly society", in relation to a registered friendly society with branches, means the central body and the branches of the society;
"industrial assurance business" has the meaning given in section 1(2) of the [1923 c. 8.] Industrial Assurance Act 1923 or Article 3(1) of the [S.I. 1979/1514 (N.I.13).] Industrial Assurance (Northern Ireland) Order 1979;
"the 1987 Regulations" means the [S.I.1987/2132.] Friendly Societies (Long Term Insurance Business) Regulations 1987.

Part V Regulation of Friendly Societies' Business

Preliminary

44 Appointment of actuary by societies with long term business

(1) Subject to subsection (3) below, every friendly society which carries on long term business in the United Kingdom shall not later than the end of the relevant period appoint an actuary as actuary to the society; and whenever an appointment under this section comes to an end, the society shall as soon as practicable make a fresh appointment.

(2) In subsection (1) above "the relevant period" means--

(a) if the society is carrying on long term business on the day when this section comes into force, the period of one month beginning with that day; and

(b) if it is not carrying on long term business on that day, the period of one month beginning with the day on which it begins to carry on such business.

(3) The Commission may direct that a friendly society shall not be subject to the duty imposed by subsection (1) above if it considers it inappropriate that the society should be subject to it.

(4) A society making an appointment under this section shall serve on the Commission a notice stating that fact and the name and qualifications of the person appointed and that he has accepted the appointment.

(5) If an appointment under this section comes to an end, the society shall serve on the Commission a notice stating that fact and the name of the person concerned.

(6) A notice under subsection (4) above shall be served not later than the end of the period of 14 days commencing with the day on which the appointment is accepted.

(7) A notice under subsection (5) above shall be served not later than the end of the period of 14 days commencing with the day on which the appointment comes to an end.

(8) No person is qualified for appointment under this section unless he possesses qualifications prescribed by the Commission in regulations.

45 Valuation of assets and liabilities

(1) Any determination of the value of any assets or the amount of any liabilities of a friendly society which is required for the purposes of any provision of this Part of this Act shall be made in accordance with regulations made by the Commission with the consent of the Treasury.

(2) Without prejudice to the generality of subsection (1) above, regulations under this section may provide that, for any specified purpose, assets or liabilities of any specified class or description shall be left out of account or taken into account only to a specified extent.

Actuarial investigations

46 Annual investigation into condition of certain societies

(1) A friendly society which is authorised under section 32 above to carry on long term business and which--

(a) is a society to which subsection 37(2) above applies; or

(b) is a society of a description prescribed by regulations,

shall, once in every period of 12 months, cause an investigation to be made by the appropriate actuary into the financial condition of the society in respect of its long term business.

(2) The first investigation into a society's financial condition under this section shall be--

(a) in the case of a friendly society to which section 37(2) above applies which--

(i) is a registered friendly society that was authorised under the [S.I.1987/2132.] Friendly Societies (Long Term Insurance Business) Regulations 1987; or

(ii) is an incorporated friendly society which was formerly a registered friendly society so authorised,

an investigation into its condition at a date not later than 12 months after the date to which the accounts of the society were made up for the purposes of the last investigation under regulation 11 of those regulations;

(b) in the case of any other friendly society to which section 37(2) above applies, an investigation into its condition at a date not later than 12 months after the date on which it became such a society or the commencement of this section, whichever is later; and

(c) in the case of a friendly society which is of a description prescribed in regulations under subsection (1)(b) above, an investigation into its condition at a date not later than 12 months after it became such a society or the coming into operation of the regulations, whichever is later.

(3) When such an investigation has been made, the society shall--

(a) cause an abstract of the actuary's report of the investigation to be made; and

(b) send three copies of that abstract to the Commission within the period of 6 months beginning with the date to which the accounts of the society were made up for the purposes of the investigation or such further period (not exceeding 3 months) as the Commission may by notice to the society direct;

and one of those copies shall be signed by such persons as may be prescribed by regulations.

(4) The Commission shall consider the abstract, and if it appears to the Commission to be inaccurate or incomplete in any respect, it shall communicate with the society with a view to the correction of any such inaccuracies and the supply of deficiencies.

(5) An investigation under this section shall include--

(a) a valuation of the liabilities of the society attributable to its long term business; and

(b) a determination of any excess over those liabilities of the assets representing the fund or funds maintained by the society in respect of that business and, where any rights of any long term policy holders to participate in profits relate to particular parts of such a fund, a determination of any excess of assets over liabilities in respect of each of those parts.

(6) At least once in every period of 5 years a friendly society to which this section applies shall prepare a statement of its long term business at the date to which the accounts of the society are made up for the purposes of an investigation under this section.

(7) The form and contents of any abstract or statement under this section shall be such as the Commission may direct; and a direction under this subsection may be given to societies of a specified description or to a specified society.

(8) Regulations under this section shall be made by the Commission with the consent of the Treasury.

47 Triennial investigations into condition of certain societies

(1) Subject to the following provisions of this section, a friendly society which--

(a) is not a society to which section 46 above applies and carries on insurance business; or

(b) is a society to which that section applies and carries on general business;

shall, at least once in every period of 3 years, cause an investigation to be made by the appropriate actuary into the financial condition of the society in respect of its insurance business.

(2) Where an investigation under this section is carried out, the society shall cause an abstract of the actuary's report to be made and sent to the Commission within 6 months of the date to which the accounts of the society were made up for the purposes of that investigation or such further period (not exceeding 6 months) as the Commission may by notice to the society direct.

(3) The first investigation into a society's financial condition under this section shall be--

(a) in the case of a registered friendly society, or an incorporated friendly society which was formerly a registered friendly society, an investigation into its condition at a date not later than 3 years after--

(i) the commencement of this section; or

(ii) the date as at which its assets and liabilities were last valued under section 41 of the 1974 Act,

whichever is earlier; or

(b) in the case of any other incorporated friendly society, an investigation into its condition at a date not later than 3 years after the date on which it is registered.

(4) Subject to subsection (5) below, a friendly society shall send to the Commission, not later than 6 months after each anniversary of the date to which the accounts of the society were made up for the purposes of the last investigation into its financial condition under this section--

(a) a certificate given by the appropriate actuary that there has been no material change in its financial condition in respect of its insurance business since it sent the last abstract under subsection (2) above; or

(b) a statement by the appropriate actuary that he is unable to give such a certificate.

(5) A society is not under the duty imposed by subsection (4) above if, before a date by which a certificate or statement must be sent, a further investigation under this section has been carried out and the requisite abstract has been sent to the Commission.

(6) If a society sends the Commission a statement under subsection (4)(b) above, it shall be the society's duty to cause an investigation to be carried out under this section; and in such a case--

(a) the date to which the society's accounts are made up for the purposes of the investigation shall be the latest anniversary of the date to which its accounts were made up for the purposes of the last investigation under this section; and

(b) the abstract required by subsection (2) above shall be sent to the Commission within 6 months of the date by which that statement was required to be sent under subsection (4) above.

(7) An investigation under this section into the financial condition of a society which falls within subsection (1)(a) above shall include--

(a) a valuation of the liabilities of the society attributable to its insurance business; and

(c) a determination of any excess over the liabilities so attributable of the assets representing the fund or funds maintained by the society in respect of its insurance business and, where any rights of any long term policy holders to participate in profits relate to particular parts of such a fund, a determination of any excess of assets over liabilities in respect of each of those parts.

(8) An investigation under this section into the financial condition of a society falling within subsection (1)(b) above shall include--

(a) a valuation of the liabilities of the society attributable to its general business; and

(b) a determination of any excess over the liabilities so attributable of the assets representing the fund or funds maintained by the society in respect of that business.

(9) The form and contents of any abstract under this section shall be such as the Commission may direct; and such a direction may be given to societies of a specified description or to a specified society.

(10) The Commission may dispense with the requirements of subsections (1) to (6) above in respect of societies to whose purposes, or the nature or scale of whose insurance business, it may deem those provisions inapplicable.

(11) The Commission may dispense with the requirements of subsections (1) to (6) above in respect of any particular insurance business of a society if, in the Commission's opinion, those provisions are inapplicable to that business because of its nature or scale or the manner in which it is carried on.

(12) In relation to any society on which a partial exemption is conferred under subsection (11) above, subsections (1) to (8) above shall have effect as if--

(a) references to the financial condition of the society excluded its condition in relation to the business to which the partial exemption relates; and

(b) subsections (7) and (8) referred only to the assets and liabilities other than those attributable to that business.

(13) The Commission may direct that this section shall have effect, in relation to societies of a specified description or to a specified society, as if for any reference to 3 years there were substituted a reference to 5 years.

(14) A direction under subsection (12) or (13) above may make such transitional provision as the Commission considers appropriate.

Margins of solvency

48 Margins of solvency in relation to insurance business of certain societies

(1) This section applies to a friendly society which--

(a) carries on long term business in the United Kingdom and falls within subsection (2) of section 37 above;

(b) carries on general business in the United Kingdom and falls within subsection (3) of that section; or

(c) not being a society to which either of those subsections applies, carries on insurance business in the United Kingdom and is of any such description as may be prescribed by regulations.

(2) A society to which this section applies shall maintain a margin of solvency in respect of its insurance business of such amount as may be prescribed by or determined in accordance with regulations made for the purposes of this section.

(3) If such a society fails to comply with a requirement to maintain a margin of solvency, the society--

(a) shall at the request of the Commission submit to it a plan for the restoration of a sound financial position;

(b) shall propose modifications to the plan (or the plan as previously modified) if the Commission considers it inadequate;

(4) Where a friendly society carries on both long term and general business, subsection (2) above shall have effect as if the requirement to maintain a margin of solvency were a requirement to maintain separate margins in respect of each of those two kinds of business.

(5) For the purposes of this Act a margin of solvency, in relation to a friendly society, is the excess of the value of the society's assets over the amount of its liabilities.

(6) Regulations under this section may--

(a) make different provision with respect to societies of different descriptions;

(b) prescribe different margins of solvency with respect to different descriptions of business carried on by societies;

(c) prescribe the descriptions of assets or liabilities that are to be taken into account in determining whether a margin of solvency is being maintained; and

(d) prescribe different criteria for determining whether a margin of solvency is being maintained by reference to the different descriptions of long term or general business which may be carried on by societies.

(7) Regulations under this section shall be made by the Commission with the consent of the Treasury.

49 Failure to maintain prescribed margin of solvency

(1) If the margin of solvency maintained by a friendly society in respect of its insurance business falls below such amount as may be prescribed by or determined in accordance with regulations made for the purposes of this section by the Commission with the consent of the Treasury, the society shall at the request of the Commission submit to it a short-term financial scheme.

(2) A friendly society that has submitted a scheme to the Commission under subsection (1) above shall propose modifications to the scheme (or the scheme as previously modified) if the Commission considers it inadequate, and shall give effect to any scheme accepted by it as adequate.

(3) Where a friendly society carries on both long term and general business, subsection (1) above shall have effect as if the reference to the margin of solvency maintained by the society were a reference to the margin of solvency maintained in respect of each of those two kinds of business.

Criteria of prudent management

50 The criteria of prudent management

(1) If it appears to the Commission--

(a) that there has been or is, on the part of a friendly society or its committee of management, a failure to satisfy any one or more of the following criteria of prudent management; or

(b) that the society's officers do not have the capacity and intention to conduct its affairs so as to satisfy those criteria,

it shall be entitled to assume for the purposes of its relevant prudential powers that it is expedient to exercise the powers in order to protect the interests of members of the society.

(2) The prudential powers relevant for the purposes of this section are its powers--

(a) under section 34 above to impose conditions on a society's authorisation;

(b) under section 40 above to give a direction by virtue of subsection (3)(c);

Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13 | P.14 | P.15 | P.16

-- Back --

Stat