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Lord McIntosh of Haringey: There can never be a single answer to that point. The "Necessary margin of solvency" is defined in sub-paragraph (6) as,
- "the margin of solvency which the transferee, taking the proposed transfer into account, is required by the authority to maintain".
- "The party of the first part shall hereinafter be called the party of the first part";
Lord Peyton of Yeovil: I am tremendously grateful for that last piece of guidance from the noble Lord. He will not be surprised if I do not avail myself of it.
Of course I understand that the amount of money being moved will be important in deciding the margin of solvency. But what I was delicately trying to inquire into was whether the character of the transferee may be a source of concern and worry to the competent authority.
Lord McIntosh of Haringey: Since we are talking about margins of solvency, we are talking about financial calculations rather than the more philosophical matters to which the noble Lord referred. If he goes on like this he will catch me out properly. He knows that perfectly well.
On Question, amendment agreed to.
Clause 106, as amended, agreed to.
Schedule 11 [Transfer schemes: certificates]:
Lord McIntosh of Haringey moved Amendment No. 203:
- Page 251, line 6, at end insert--
.--(1) This paragraph applies to a proposal to execute under provisions corresponding to Part VII in a country or territory other than the United Kingdom an instrument transferring all the rights and obligations of the transferor under general or long-term insurance policies, or under such descriptions of such policies as may be specified in the instrument, to the transferee if any of the conditions in sub-paragraphs (2), (3) or (4) is met in relation to it.
(2) The transferor is an EEA firm falling within paragraph 5(d) of Schedule 3 and the transferee is an authorised person whose margin of solvency is supervised by the Authority.
(3) The transferor is a company authorised in an EEA State other than the United Kingdom under Article 27 of the first life insurance directive, or Article 23 of the first non-life insurance directive and the transferee is a UK authorised person which has received authorisation under Article 6 of either of those directives.
(4) The transferor is a Swiss general insurance company and the transferee is a UK authorised person which has received authorisation under Article 6 of the first life insurance directive or the first non-life insurance directive.
(5) In relation to a proposed transfer to which this paragraph applies, the Authority may, if they are satisfied that the transferee possesses the necessary margin of solvency, issue a certificate to that effect.
(6) "Necessary margin of solvency" means the margin of solvency which the transferee, taking the proposed transfer into account, is required by the Authority to maintain.
(7) "Swiss general insurance company" has the same meaning as in paragraph 2.
(8) "General policy" means a policy evidencing a contract which, if it had been effected by the transferee, would have constituted the carrying on of general insurance business.
(9) "Long-term policy" means a policy evidencing a contract which, if it had been effected by the transferee, would have constituted the carrying on of long-term insurance business.").
On Question, amendment agreed to.
Schedule 11, as amended, agreed to.
Clause 107 [Effect of order sanctioning business transfer scheme]:
Lord McIntosh of Haringey moved Amendments Nos. 204 and 205:
The noble Lord said: I have already spoken to Amendments Nos. 204 and 205. With the leave of the Committee I shall move them en bloc. I beg to move.
On Question, amendments agreed to.
Clause 107, as amended, agreed to.
Lord McIntosh of Haringey moved Amendment No. 206:
Page 49, line 13, leave out ("mortgage or").
Page 50, line 5, at end insert--
("( ) "Charge" includes a mortgage (or, in Scotland, a security over property).").
After Clause 107, insert the following new clause--
(".--(1) This section applies if an order has been made under section 106(1).
(2) The court making the order may, on the application of the Authority, appoint an independent actuary--
(a) to investigate the business transferred under the scheme; and
(b) to report to the Authority on any reduction in the benefits payable under policies entered into by the authorised person concerned that, in the opinion of the actuary, ought to be made.").
On Question, amendment agreed to.
Lord McIntosh of Haringey moved Amendments Nos. 207 and 208:
After Clause 108, insert the following new clause--
. Part III of Schedule 11 makes provision about certificates which the Authority may issue in relation to insurance business transfers taking place outside the United Kingdom.").
After Clause 108, insert the following new clause--
(".--(1) This section applies if, as a result of an authorised transfer, an EEA firm falling within paragraph 5(d) of Schedule 3 transfers to another body all its rights and obligations under any UK policies.
(2) This section also applies if, as a result of an authorised transfer, a company authorised in an EEA State other than the United Kingdom under Article 27 of the first life insurance directive, or Article 23 of the first non-life insurance directive, transfers to another body all its rights and obligations under any UK policies.
(3) If appropriate notice of the execution of an instrument giving effect to the transfer is published, the instrument has the effect in law--
(a) of transferring to the transferee all the transferor's rights and obligations under the UK policies to which the instrument applies, and
(b) if the instrument so provides, of securing the continuation by or against the transferee of any legal proceedings by or against the transferor which relate to those rights and obligations.
(4) No agreement or consent is required before subsection (3) has the effects mentioned.
(5) "Authorised transfer" means--
(a) in subsection (1), a transfer authorised in the home State of the EEA firm in accordance with--
(i) Article 11 of the third life directive; or
(ii) Article 12 of the third non-life directive; and
(b) in subsection (2), a transfer authorised in an EEA State other than United Kingdom in accordance with--
(i) Article 31a of the first life directive; or
(ii) Article 28a of the first non-life directive.
(6) "UK policy" means a policy evidencing a contract of insurance (other than a contract of reinsurance) to which the applicable law is the law of any part of the United Kingdom.
(7) "Appropriate notice" means--
(a) if the UK policy evidences a contract of insurance in relation to which an EEA State other than the United Kingdom is the State of the commitment, notice given in accordance with the law of that State;
(b) if the UK policy evidences a contract of insurance where the risk is situated in an EEA State other than the United Kingdom, notice given in accordance with the law of that EEA State;
(c) in any other case, notice given in accordance with the applicable law.
(8) Paragraph 6 of Schedule 11 applies for the purposes of this section as it applies for the purposes of that Schedule.").
The noble Lord said: I have already spoken to Amendments Nos. 207 and 208. With the leave of the Committee I shall move them en bloc. I beg to move.
On Question, amendments agreed to.
Clause 109 [Market abuse]:
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