Financial Services and Markets Bill - continued        House of Commons

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Authority's general duty.     284. The Authority must-
    (a) keep itself informed about the affairs of Lloyd's and the activities carried on at Lloyd's; and
    (b) keep under review the desirability of exercising its powers under, or in connection with, this Part.
The Society
The Society: authorisation and permission.     285. - (1) The Society is an authorised person.
      (2) The Society-
    (a) has permission to carry on a regulated activity of any of the following kinds-
      (i) arranging deals in contracts of insurance written at Lloyd's ("the basic market activity");
      (ii) arranging deals in participation in Lloyd's syndicates ("the secondary market activity"); and
      (iii) an activity carried on in connection with, or for the purposes of, the basic or secondary market activity; and
    (b) must be issued by the Authority with a certificate of authorisation.
      (3) For the purposes of Part IV, the Society's permission is to be treated as if it had been given on an application for permission under that Part.
      (4) The power conferred on the Authority by section 40 may be exercised in anticipation of the coming into force of the Society's permission (or at any other time).
      (5) The Society is not subject to any requirement of this Act concerning the registered office of a body corporate.
Power to apply Act to Lloyd's underwriting
Direction by Authority.     286. - (1) The general prohibition or (if the general prohibition is not applied under this section) a core provision applies to the carrying on of an insurance market activity by-
    (a) a member of the Society, or
    (b) the members of the Society taken together,

only if the Authority so directs.
      (2) In subsection (1)-
    "core provision" means a provision of this Act mentioned in section 287; and
    "insurance market activity" means a regulated activity relating to contracts of insurance written at Lloyd's.
      (3) In deciding whether to give an insurance market direction, the Authority must have particular regard to-
    (a) the interests of policy holders and potential policy holders;
    (b) any failure by the Society to satisfy an obligation to which it is subject as a result of a provision of the law of another EEA State which-
      (i) gives effect to any of the insurance directives; and
      (ii) is applicable to an activity carried on in that State by a person to whom this section applies;
    (c) the need to ensure the effective exercise of the functions which the Authority has in relation to the Society as a result of section 285.
      (4) An insurance market direction-
    (a) must be in writing;
    (b) must specify each core provision, class of person and kind of activity to which it applies;
    (c) may apply different provisions in relation to different classes of person and different kinds of activity;
    (d) may not be made unless the Authority has first consulted, in the way it considers appropriate, persons appearing to it likely to be affected by the proposed direction (except where the Authority considers consultation impracticable or inappropriate).
      (5) An insurance market direction has effect from the date specified in it ("the effective date"), which may not be earlier than the date on which it is made.
The core provisions.     287. - (1) The core provisions are Parts V, IX, X, XI, XX and XXIV.
      (2) References in an applied core provision to an authorised person are (where necessary) to be read as references to a person in the class to which the direction applies.
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Prepared 18 November 1999