Friendly Societies Act 1992

• (1) No person shall act as an auditor under this Act if he is ineligible for appointment to the office.

• (2) If during his term of office an auditor appointed under this Schedule become ineligible for appointment to the office, he shall thereupon vacate office and shall forthwith give notice in writing to the society concerned that he has vacated it by reason of ineligibility.

• (3) A person who acts as auditor under this Act in contravention of sub-paragraph (1) above, or fails to give notice of vacating his office as required by sub-paragraph (2) above, is guilty of an offence and liable—

• (a) on conviction on indictment, to a fine; and

• (b) on summary conviction, to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to an additional fine not exceeding one-tenth of the statutory maximum one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences for every day during which the offence continues.

• (4) In proceedings against a person for an offence under this paragraph it is a defence for him to show that he did not know and had no reason to believe that he was, or had become, ineligible for appointment.

Power of appropriate authority to require second audit

9

• (1) Where a person appointed auditor under this Schedule was, for any part of the period during which the audit was conducted, ineligible for appointment to that office, the appropriate authority may direct the friendly society or registered branch concerned to retain a person eligible for appointment as auditor under this Schedule—

• (a) to audit the relevant accounts again; or

• (b) to review the first audit and to report (giving his reasons) whether a second audit is needed;

and the society or branch shall comply with such a direction within 21 days of its being given.

• (2) If a second audit is recommended, the society or branch shall forthwith take such steps as are necessary to comply with the recommendation.

• (3) Where a direction is given to a society or branch under this paragraph the PRA must send a copy of the direction to the FCA and the FCA must place a copy of the direction in the public file of the society.

• (3A) Where a society or branch receives a report under sub-paragraph (1)(b) above, it shall within 21 days send a copy of it to the FCA and, if the society is a PRA-authorised person, the PRA, and the FCA must place a copy of the report in the public file.

• (4) Any statutory or other provisions applying in relation to the first audit shall apply, so far as practicable, in relation to a second audit under this paragraph.

• (5) If a society or branch fails to comply with the requirements of this paragraph, it is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale; and in the case of a continuing offence to an additional fine not exceeding one-tenth of that level one-tenth of the greater of £5,000 or level 4 on the standard scale for every day during which the offence continues.

• (6) A direction under this paragraph is, on the application of the appropriate authority, enforceable by injunction or, in Scotland, by an order under section 45 of the Court of Session Act 1988.

• (7) If a person accepts an appointment, or continues to act, as an auditor under this Act at a time when he knows he is ineligible, the society concerned may recover from him any costs incurred by it in complying with the requirements of this paragraph.

Removal of auditors

10

• (1) A friendly society or registered branch may by ordinary resolution in general meeting remove an auditor before the expiration of his term of office, notwithstanding anything in any agreement between it and him.

• (2) Where such a resolution is passed, the society or branch shall within 14 days give notice of that fact to the FCA and, if the society is a PRA-authorised person, the PRA.

• (3) If a friendly society or branch fails to give the notice required by sub-paragraph (2) above, it shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale and in the case of a continuing offence to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.

• (4) Nothing in this paragraph is to be taken as depriving a person removed under it of compensation or damages that may be payable to him in respect of the termination of his appointment as auditor or of any appointment terminating with that as auditor.

• (5) An auditor of a friendly society or registered branch who has been removed has, not withstanding his removal, the rights conferred by section 75 above in relation to any general meeting of the society or branch at which—

• (a) his term of office would otherwise have expired; or

• (b) it is proposed to fill the vacancy caused by his removal.

• (6) An auditor may not be removed from office before the expiration of that auditor’s term of office except—

• (a) by resolution under this paragraph, or

• (b) in accordance with paragraph 6 of Schedule 14A.

Rights of auditors who are removed or not re-appointed

11

• (1) Special notice is required for a resolution at a general meeting of a friendly society or registered branch—

• (a) removing an auditor before the expiration of his term of office; or

• (b) appointing as auditor a person other than a retiring auditor.

• (2) On receipt of notice of such an intended resolution the friendly society or branch shall forthwith send a copy of it to the person proposed to be removed or, as the case may be, to the person proposed to be appointed and to the retiring auditor.

• (3) The auditor proposed to be removed or (as the case may be) the retiring auditor may make with respect to the intended resolution representations in writing to the society or branch (not exceeding a reasonable length) and request their notification to members of the society.

• (4) The society or branch shall (unless the representations are received by it too late for it to do so)—

• (a) in any notice of the resolution given to members of the society or branch, state the fact of the representations having been made;

• (b) include in or with any such notice a copy of the representations; and

• (c) make copies of them available to members at the meeting at which the resolution is to be moved.

• (5) If notice of any such representations is not given as required by sub-paragraph (4) above because received too late or because of the default of the society or branch, the auditor may (without prejudice to his right to be heard orally) require that the representations be read out at the meeting.

• (6) The steps required by sub-paragraphs (4) or (5) above need not be taken if, on the application of the society or branch or of any other person claiming to be aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; and the court may order the costs of the society or branch on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

Resignation of auditors

12

• (1) An auditor of a friendly society or registered branch may resign his office by depositing a notice in writing to that effect at the society’s registered office.

• (2) The notice is not effective unless it is accompanied by the statement required by paragraph 14 below.

• (3) An effective notice of resignation operates to bring the auditor’s term of office to an end as of the date on which the notice is deposited or on such later date as may be specified in it.

• (4) The society or branch shall within 14 days of the deposit of a notice of resignation send a copy of the notice to the FCA and, if the society is a PRA-authorised person, the PRA.

• (5) If default is made in complying with sub-paragraph (4) above, the society or branch is guilty of an offence and liable—

• (a) on conviction on indictment, to a fine; and

• (b) on summary conviction, to a fine not exceeding the statutory maximum and in the case of a continuing offence, to an additional fine not exceeding one-tenth of the statutory maximum one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences for every day during which the offence continues.

Rights of resigning auditors

13

• (1) This paragraph applies where an auditor’s notice of resignation is accompanied by a statement of circumstances which he considers should be brought to the attention of members or creditors of the society or branch.

• (2) He may deposit with the notice a signed requisition calling on the committee of management of the society or branch forthwith duly to convene an extraordinary general meeting of the society or branch for the purpose of receiving and considering such explanation of the circumstances connected with his resignation as he may wish to place before the meeting.

• (3) The society or branch shall, at the request of the auditor (unless the statement is received too late to comply)—

• (a) in any notice of the meeting convened on his requisition or of any general meeting at which his term of office would otherwise have expired or at which it is proposed to fill the vacancy caused by his resignation, state the fact that the statement has been made;

• (b) include in or with that notice a copy of a statement in writing by him (not exceeding a reasonable length) of the circumstances connected with his resignation; and

• (c) make copies of the statement available to members at any such meeting.

• (4) If the committee of management does not within 21 days from the date of the deposit of a requisition under this paragraph proceed duly to convene a meeting for a day not more than 28 days after the date on which the notice convening the meeting is given, every member of the committee who failed to take all reasonable steps to secure that a meeting was convened as mentioned above is guilty of an offence and liable—

• (a) on conviction on indictment, to a fine; and

• (b) on summary conviction, to a fine not exceeding the statutory maximum.

• (5) If notice of the statement mentioned above is not given as required because received too late or because of the default of the society or branch, the auditor may (without prejudice to his right to be heard orally) require that the statement be read out at the meeting in question.

• (6) The steps required by sub-paragraphs (3) and (5) above need not be taken if, on the application of the society or branch or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; and the court may order the costs of the society or branch on such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

• (7) An auditor who has resigned has, notwithstanding his resignation, the rights conferred by section 75 above in relation to any such general meeting of the society or branch as is mentioned in sub-paragraph (3) above; and in such a case, the references in that section to matters concerning the auditors as auditors shall be construed as references to matters concerning him as a former auditor.

Statement by person ceasing to hold office

14

• (1) Where an auditor of a friendly society or registered branch ceases for any reason to hold office, he shall deposit at the registered office of the society or branch concerned—

• (a) a statement of any circumstances connected with his ceasing to hold office which he considers should be brought to the attention of the members or creditors of the society or branch; or

• (b) if he considers that there are no such circumstances, a statement that there are none.

• (2) In a case falling within sub-paragraph (1)(a) above it shall also be the duty of the auditor, unless he receives notice of an application under sub-paragraph (4) below before the end of the period of 21 days beginning with the day on which he deposited the statement, to send the FCA and the PRA a copy within a further 7 days.

• (3) In the case of resignation, the statement shall be deposited along with the notice of resignation; in the case of failure to seek re-appointment, the statement shall be deposited not less than 14 days before the end of the time allowed for next appointing auditors; in any other case, the statement shall be deposited not later than the end of the period of 14 days beginning with the date on which he ceases to hold office.

• (4) If the statement is of circumstances which the auditor considers should be brought to the attention of the members or creditors of the society or branch, the society shall within 14 days of the deposit of the statement either—

• (a) send a copy of it to every member who is, when the statement is deposited, entitled to vote at a meeting of the society or branch; or

• (b) apply to the court.

• (5) The society or branch shall if it applies to the court notify the auditor of the application.

• (6) If the court is satisfied that the auditor is using the statement to secure needless publicity for defamatory matter—

• (a) it shall direct that copies of the statement need not be sent out; and

• (b) it may further order the costs of the society or branch on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application;

and the society or branch shall within 14 days of the court’s decision send to the persons mentioned in sub-paragraph (4)(a) above a statement setting out the effect of the order.

• (7) If the court is not so satisfied, the society or branch shall within 14 days of the court’s decision—

• (a) send copies of the statement to the persons mentioned in sub-paragraph (4)(a) above; and

• (b) notify the auditor of the court’s decision;

and the auditor shall within 7 days of receiving such notice send a copy of the statement to the FCA and the PRA.

• (8) A society is to be regarded as sending a person a copy of the statement for the purposes of sub-paragraph (4)(a) or (7)(a) if it makes the information available to the person on a website; and the end date for the purposes of section 119AB(4)(b) is the day falling 28 days after the later of the two dates referred to in section 119AB(4)(a).

Offences of failing to comply with paragraph 14

15

• (1) If a person ceasing to hold office as auditor fails to comply with paragraph 14 above, he is guilty of an offence and liable—

• (a) on conviction on indictment, to a fine; and

• (b) on summary conviction, to a fine not exceeding the statutory maximum.

• (2) If a society or branch makes default in complying with paragraph 14 above, it is guilty of an offence and liable—

• (a) on conviction on indictment, to a fine, and

• (b) on summary conviction, to a fine not exceeding the statutory maximum and in the case of a continuing offence, to an additional fine not exceeding one-tenth of the statutory maximum one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences for every day during which the offence continues.

Remuneration of auditors

16

• (1) The remuneration of auditor appointed by a friendly society or registered branch in general meeting shall be fixed by the society or branch in general meeting or in such manner as the society or branch in general meeting may determine.

• (2) The remuneration of auditor appointed by the committee of management or the appropriate authority shall be fixed by the committee of management or the appropriate authority as the case may be.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) For the purposes of this paragraph “remuneration” includes sums paid in respect of expenses.

• (5) This paragraph applies in relation to benefits in kind as to payments in cash ....

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Remuneration of auditors or their associates for non-audit work

17

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SCHEDULE 15

Part I — Provision of Information to Members

Statements relating to amalgamations and transfers

1

• (1) A friendly society which desires—

• (a) to amalgamate under section 85 above; or

• (b) to transfer its engagements to any person, or to undertake to fulfil the engagements of another friendly society, under section 86 above;

shall, subject to sub-paragraph (2) below, send a statement concerning the matters specified in paragraph 2 below to every member entitled (when the statements are sent) to vote on any resolution required by section 85, 86 or 90.

• (2) Sub-paragraph (1) above does not apply, in the case of a friendly society desirous of undertaking to fulfil another society’s engagements, where the appropriate authority has consented under section 86(3)(b) or 90(2)(b) above to its proceeding by resolution of the committee of management.

• (3) The statement referred to in sub-paragraph (1) above shall be sent so as to arrive no later than 14 days (or such longer period as the rules may require for notice of any resolution required by section 85, 86 or 90 above) before—

• (a) the meeting at which any such resolution is to be moved; or

• (b) where proxy voting is permitted, such earlier date as may be specified by the society, under its rules, as the final date for the receipt of appointments of proxies to vote at the meeting.

• (4) If it appears to the appropriate authority that it is impractical to include the summary mentioned in paragraph 2(1)(d) below in the statement referred to in sub-paragraph (1) above, the appropriate authority may direct that the summary shall be sent separately from that statement within such period as the appropriate authority may specify in the direction.

2

• (1) The matters of which a statement required by paragraph 1 above is to give particulars are the following, namely—

• (a) the financial position of the society and that of every other society or person participating in the amalgamation or transfer;

• (b) any interest of the members of the committee of management of the society in the amalgamation or transfer;

• (c) the compensation or other consideration (if any) proposed to be paid to or in respect of—

• (i) the members of the committee of management or other officers of the society; and

• (ii) the officers of every other society or person participating in the amalgamation or transfer;

• (d) in the case of a transfer, a summary of any actuary’s report which the society is directed to furnish to the appropriate authority under section 88 above; and

• (e) any other matter which the appropriate authority requires in the case of the particular amalgamation or transfer.

• (2) No statement shall be sent unless its contents, so far as they concern the matters specified in this paragraph, have been approved by the appropriate authority.

• (3) The PRA must consult the FCA before approving a statement under sub-paragraph (2).

Statements relating to conversion of society into company

3

• (1) A friendly society which desires to convert into a company under section 91 above shall send a statement concerning—

• (a) such matters as may be prescribed in regulations made by the . . . Treasury; and

• (b) such other matters as may be required by the appropriate authority in the case of the particular conversion;

to every member entitled (when the statements are sent) to vote on any resolution required by subsection (2) of that section.

• (2) Regulations under sub-paragraph (1) above may include among the prescribed matters any alternatives to a proposed conversion which may be available.

4

The statement referred to in paragraph 3 above shall be sent so as to arrive no later than 14 days (or such longer period as the rules may require for notice of any resolution required by section 91 above) before—

• (a) the meeting at which any such resolution is to be moved; or

• (b) where proxy voting is permitted, such earlier date as may be specified by the society, under its rules, as the final date for the receipt of appointments of proxies to vote at the meeting;

but no such statement may be sent unless its contents, so far as they concern the matters mentioned in that paragraph, have been approved by the appropriate authority.

Part II — Confirmation by appropriate authority

Applications for confirmation

5

• (1) An application by a friendly society for confirmation by the appropriate authority—

• (a) of an amalgamation under section 85 above,

• (b) of a transfer of engagements of a friendly society under section 86 above, or

• (c) of the conversion of a friendly society into a company under section 91 above,

shall be made in such manner as the appropriate authority may direct.

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

• (3) The appropriate authority may, on the application or with the consent of a friendly society, direct in relation to any provision of regulations made for the purposes of sub-paragraph (1) above that the provisions shall not apply to the society, or shall apply to it with such modifications as may be specified in the direction.

• (4) A direction under sub-paragraph (3) above may be subject to conditions.

• (5) A direction under sub-paragraph (3) above may be revoked by the appropriate authority at any time; and the appropriate authority may at any time vary any such direction on the application or with the consent of the society to which it applies.

• (5A) The PRA must send the FCA a copy of any direction, variation or revocation it makes under this paragraph.

• (6) Where the appropriate authority—

• (a) makes a direction under subsection (3) above, or

• (b) revokes or varies such a direction,

the FCA must cause the direction, variation or revocation to be entered on a register kept by it for the purposes of this subsection.

• (7) The register kept for the purposes of subsection (6) above shall be available for inspection on reasonable notice by members of the public.

• (8) The FCA shall keep a copy of—

• (a) any direction made ... under subsection (3) above, and

• (b) any revocation or variation of any such direction,

. . . in the public file of the society to which it relates.

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.

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) The notice shall—

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

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

• (c) specify a date determined by the appropriate authority as the day on which it intends to hear any oral representations.

• (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–

• (i) the addresses of the offices of the society, ...

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

After the date specified in the notice in pursuance of paragraph 6(2)(b) above, the appropriate authority 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

• (c) send copies of any written representations received by the appropriate authority to that society;

and the appropriate authority 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 appropriate authority specifies in a notice to the society.

Confirmation by appropriate authority: General

8

• (1) Where an application is duly made for confirmation by the appropriate authority of an amalgamation, transfer of engagements or conversion, the appropriate authority 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 appropriate authority, 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 appropriate authority—

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

• (b) where it has confirmed the amalgamation or transfer, shall . . . 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 appropriate authority may have regard to any requirements of the law of a country or territory outside the United Kingdom which appear to the appropriate authority to be relevant.

9

• (1) Subject to sub-paragraph (3) below, the appropriate authority 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 appropriate authority 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (3) The appropriate authority 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 appropriate authority that it could not have been material to the members’ decision about the amalgamation, transfer or conversion and the appropriate authority gives a direction that the failure is to be disregarded for the purposes of this paragraph.

10

• (1) Where the appropriate authority 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, or

• (c) from confirming a conversion by reason of paragraph 11 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, or (as the case may be) to remove the risk referred to in paragraph 11 below, as are specified in the direction; and

• (b) to furnish the appropriate authority with evidence that those steps have been taken;

and if the appropriate authority is satisfied that the steps have been taken and the defect or defects has or have been substantially remedied, or (as the case may be) that the risk has been removed, the appropriate authority shall confirm the amalgamation, transfer or conversion.

. . .

11

The appropriate authority shall not confirm an amalgamation, transfer of engagements or conversion unless it is satisfied that there is no substantial risk that the successor society, the proposed transferee, or the company into which the society is converted, will not have—

• (a) such permission (if any) under Part 4A of the Financial Services and Markets Act 2000, ...

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

as will enable it to carry on the business which it will have as a result of the amalgamation, transfer or conversion without contravening section 19 of that Act (the general prohibition).

Confirmation of transfers of engagements

12

The appropriate authority 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 appropriate authority shall not confirm a transfer in any case where the transferee is required by section 87 above to furnish the appropriate authority with a report unless it is satisfied (after taking the proposed transfer into account) either that the transferee will possess the margin of solvency required by rules made by the appropriate authority under Part 9A of the Financial Services and Markets Act 2000 or, where no margin of solvency is required by such rules, that the value of the transferee’s assets will exceed its liabilities.

• (2) The appropriate authority shall not confirm a transfer of any engagements the fulfilment of which will constitute effecting or carrying out contracts of insurance in the United Kingdom unless it is satisfied (after taking the proposed transfer into account) either that the transferee will possess the margin of solvency required by rules made by the appropriate authority under Part 9A of the Financial Services and Markets Act 2000 or, where no margin of solvency is required by such rules, that the value of the transferee’s assets will exceed its liabilities.

• (3) This paragraph does not apply to any transfer of engagements to which paragraph 15 or 15A below applies.

• (4) The reference in sub-paragraph (2) to effecting or carrying out contracts of insurance must be read with—

• (a) section 22 of the Financial Services and Markets Act 2000;

• (b) any relevant order under that section; and

• (c) Schedule 2 to 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 any transfer of engagements (other than contracts of reinsurance) where–

• (a) the effecting of the engagements constituted the carrying on of general business;

• (b) the transferor is a friendly society to which section 37(3) above applies; and

• (c) the transferee is–

• (i) a friendly society to which section 37(2) or (3) above applies;

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (v) an insurance company whose head office is in Switzerland, which has permission under Part 4A of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, which permission is not limited to reinsurance business;

• (vi) an insurance company whose margin of solvency is supervised in accordance with rule 3.1 to 3.3 and rule 6.4 and 6.5 of the Third Country Branches Part of the Rulebook made by the Prudential Regulation Authority under the Financial Services and Markets Act 2000.

• (1A) For the purposes of sub-paragraph (1)(c)(vi), references to rules made by the Prudential Regulation Authority are to those rules as they have effect on IP completion day.

• (2) The appropriate authority shall not confirm the transfer unless–

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) it is . . . satisfied that every policy included in the transfer evidences a contract which was entered into before the date of the application; and

• (c) the relevant authority certifies that the transferee possesses the necessary margin of solvency after taking the proposed transfer into account; ...

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .

• (6) In this paragraph “the relevant authority" means—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) if the transferee falls within paragraph (1)(c)(v), the supervisory authority in Switzerland;

• (c) if the transferee falls within paragraph (1)(c)(vi), the appropriate authority or other supervisory body responsible for the supervision;

• (d) in any other case, the appropriate authority.

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

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In this Part of this Schedule–

“policy" means a contract (other than a contract of reinsurance) the effecting of which by a friendly society to which section 37(2) or (3) above applies constituted the carrying on of insurance business of any class;

“policy holder" means a member whose contract with such a society is a contract the effecting of which by the society constituted the carrying on of insurance business (other than reinsurance business) of any class;

“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.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 16

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

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (c) after paragraph (f) there shall be inserted the words—

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) (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—

(23A) (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) (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) 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

• (1) 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

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) (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) (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) (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— 1. being employees of a particular employer; or 2. 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) (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

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31

Section 84 shall cease to apply to registered friendly societies.

32

After section 84 there shall be inserted the following section—

(84A) (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. (4) It is hereby declared for the avoidance of doubt that— (a) the reference in subsection (2)(a) above to property includes a reference to property situated outside the United Kingdom; and (b) the reference to rights and liabilities of such a society or branch includes a reference and liabilities under the law of any country or territory outside the United Kingdom. (5) Not later than the end of the period of 90 days beginning with the day on which a registered society is registered under the Industrial and Provident Societies Act 1965— (a) the trustees of the society shall deliver to the registered office of the industrial and provident society any property of the registered society or any branch of the registered society held by them and any documents relating to the property, rights and liabilities of the registered society or to its financial affairs; (b) the trustees of any branch of the registered society shall deliver to that office any property of the branch or any other branch of the society held by them and any documents relating to the property, rights and liabilities of the branch or to its financial affairs; and (c) if he holds property on trust for the society or any branch of the society, the Public Trustee shall deliver to that office the property so held by him and any documents relating to it; but nothing in this Act shall have effect to relieve the trustees of a registered society or branch or the Public Trustee from any liability arising from acts or omissions before that registration. (6) If a registered society is registered under the Industrial and Provident Societies Act 1965, the registration of that society under this Act shall thereupon become void and shall be cancelled by the Chief Registrar or, under the direction of the Chief Registrar, by the assistant registrar for Scotland. (7) Schedule 6A to this Act shall have effect to supplement this section. (8) In the application of this section to Northern Ireland, references in this section and Schedule 6A to the Industrial and Provident Societies Act 1965 shall be construed as references to the Industrial and Provident Societies Act (Northern Ireland) 1969.

33

In section 86—

• (a) in subsection (1), at the beginning there shall be inserted the words “ Subject to subsection (2A) below ” and, after the words “registered society", there shall be inserted the words “ or branch ”;

• (b) after subsection (2) there shall be inserted the following subsection—

(2A) For the purposes of this Act “special resolution”, in relation to a registered friendly society, shall be construed in accordance with paragraph 7 of Schedule 12 to the 1992 Act.

34

For section 87 there shall be substituted the following section—

(87) (1) If, on receiving the report on the state and conduct of the activities of a registered friendly society from a person appointed under section 65 of the 1992 Act, it appears to the Commission that it is in the interests of the members of the society or of the public that the society should be wound up, then, unless the society is already being wound up by the court, the Commission may present a petition to the High Court or, in Scotland, to the Court of Session for the society to be wound up by the court in accordance with the Insolvency Act 1986 or, as the case may be, the Insolvency (Northern Ireland) Order 1989 if the court thinks it just and equitable that this should be done. (2) Subsection (1) above applies in relation to a registered branch of a registered friendly society as it applies in relation to such a society.

35

Sections 88 and 89 shall cease to have effect.

36

Section 90 shall cease to have effect in relation to registered friendly societies.

37

In section 91(4), after the words “section 85(4) above" there shall be inserted the words “ or under any provision of the 1992 Act ”.

38

In section 93—

• (a) in subsection (1)(b), for the words from the beginning to “dissolution" there shall be substituted the words “ by an instrument of dissolution approved by a special resolution of the society or branch; ”;

• (b) in subsection (1)(c), after the words “section 95(3)" there shall be inserted the words “ or 95A(1) ”; and

• (c) in subsection (3), for the words from “to the county" to “within" there shall be substituted the words

— (a) in England and Wales, to the county court for the district, (b) in Scotland, to the sheriff of the sheriffdom, or (c) in Northern Ireland, to the county court for the division, within

.

39

Section 95 shall cease to have effect in relation to registered friendly societies and, after that section, there shall be inserted the following section—

(95A) the Commission may, if it considers it expedient to do so, award that the society or branch be dissolved and its affairs wound up; and where such an award is made the Commission shall direct in what manner the assets of the society or branch shall be divided or appropriated. (1) Subject to subsection (2) below, if upon an investigation under section 65 of the 1992 Act it appears to the Commission— (a) that the funds of a registered friendly society or of a registered branch of such a society are insufficient to meet the existing claims on them, or (b) that the rates of contribution fixed in the rules of the society or branch are insufficient to cover the benefits assured to be given by the society or branch, (2) Where the Commission makes an award under this section, it may suspend the operation thereof for such period as it may deem necessary to enable the society or branch to make such alterations and adjustments of contributions and benefits as will in its judgment prevent the necessity of the award of dissolution coming into operation; and where within that period the alterations and adjustments are made, the Commission may cancel the award. (3) The Commission proceeding under this section shall have the same powers and authorities, enforceable by the same penalties, as the Chief Registrar has under section 95 above. (4) Within twenty-one days after the making of an award under this section, the Commission shall send to the central office notice of the award of dissolution and upon its receipt the central office shall cause notice of the award to be advertised in the Gazette and in some newspaper in general circulation in the neighbourhood of the registered office of the society or branch; and unless— (a) within three months from the date on which that advertisement appears, a member or other person interested or having any claim on the funds of the society or branch commences proceedings to set aside the dissolution of the society or branch consequent upon the award, and (b) the dissolution is set aside accordingly, the society or branch shall be legally dissolved from the date of the advertisement. (5) The expenses of every award, and of advertising every notice, under this section shall be paid out of the funds of the society or branch before any other appropriation thereof is made.

40

In section 96, after the words “section 95(3)" there shall be inserted the words “ or 95A(1) ”.

41

In section 97, in subsection (1)(b) after the words “section 95 (6)(a)" there shall be inserted the words “ or 95A(4)(a) ”.

42

In section 98—

• (a) in subsection (1)(g), for the words from “a certificate" to “false" there shall be substituted the words “ to the society or branch from which the money is claimed a false death ”;

• (b) in subsection (2), at the end there shall be inserted the words “ or the Industrial Assurance (Northern Ireland) Order 1979 ”;

• (c) in subsection (8), after “1923" there shall be inserted the words “ and Article 46(2) of the Industrial Assurance (Northern Ireland) Order 1979 ”.

43

In section 100(a), at the end there shall be added the words “ other than a registered friendly society or branch of such a society ”.

44

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45

Section 106 shall cease to have effect.

46

In section 107, after subsection (2) there shall be inserted the following subsection—

(2A) In the application of this section to Northern Ireland, references to the Secretary of State shall be construed as references to the Department of Health and Social Services for Northern Ireland.

47

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48

In section 111(1)—

• (a) in the definition of “collecting society" at the end there shall be added the words “ or the Industrial Assurance (Northern Ireland) Order 1979 ”;

• (b) after that definition there shall be inserted the following definition—

• “Commission” means the Friendly Societies Commission;

;

• (c) in the definition of “the Companies Acts" after “1985" there shall be inserted the words “ or, in Northern Ireland, the Companies (Northern Ireland) Order 1986 ”;

• (d) in the definition of “Gazette", after paragraph (b) there shall be inserted the following paragraph—

(c) the Belfast Gazette if the registered office of the society or branch is in Northern Ireland

;

• (e) after the definition of “signed" there shall be inserted the following definition—

“the 1992 Act” means the Friendly Societies Act 1992

.

49

Section 115 shall cease to have effect.

50

In section 117(3), after the words “extends to" there shall be inserted the words “ Northern Ireland, ”.

51

• (1) In paragraph 3 of Schedule 2—

• (a) in sub-paragraph (1), for the words “sub-paragraph (2)" there shall be substituted the words “ sub-paragraphs (2) and (3) ” and the words “the fines and" and “or fine" shall be omitted;

• (b) after sub-paragraph (2) there shall be inserted the following sub-paragraph—

(3) Nothing in sub-paragraph (1) above shall prevent a registered friendly society from specifying in its rules the manner in which the conditions under which any member may become entitled to any benefit assured by the society are to be determined, instead of specifying the conditions themselves.

• (2) Paragraphs 7, 12 and 15 of that Schedule shall cease to have effect in relation to registered friendly societies.

52

After Schedule 6 there shall be inserted the following Schedule—

SCHEDULE 6A (1) This Schedule has effect in relation to any registered society (“the society”) which is registered under the Industrial and Provident Societies Act 1965 and, in this Schedule, “registration” means registration under that Act. (2) (1) On the registration of the society any appointment as trustee of the society or any branch of it shall determine. (2) All officers of the society other than its trustees shall upon its registration become officers of the industrial and provident society holding corresponding offices in that society. (3) Any agreement made, transaction effected or other thing done by, to or in relation to the society or any branch of it (whether registered or not) which is in force or effective immediately before its registration shall have effect as if made, effected or done by, to or in relation to the industrial and provident society, in all respects, as if the industrial and provident society were the same person as the society or branch and accordingly references to the society or branch— (a) in any agreement (whether or not in writing) and in any deed, bond or instrument; (b) in any process or other document issued, prepared or employed for the purposes of any proceeding before any court or other tribunal or authority; and (c) in any other document whatsoever (other than an enactment) relating to or affecting any property, right or liability of the registered society or branch, shall be taken as referring to the industrial and provident society. (4) (1) Any agreement made by the society or any branch of it which is in force immediately before the society’s registration shall have effect as if— (a) for references to members of the society or branch there were substituted references to members of the industrial and provident society; (b) for references to officers of the society or branch other than its trustees there were substituted references to the corresponding officers of the industrial and provident society; and (c) for references to the trustees of the registered society or branch there were substituted references to the industrial and provident society. (2) References in sub-paragraph (1) above to an agreement include references to a deed, bond or other instrument. (3) It is hereby declared for the avoidance of doubt that— (a) the effect of section 84A of this Act in relation to any contract of employment with the society or any of its branches in force immediately before the society’s registration is merely to modify the contract by substituting the industrial and provident society as the employer (and not to terminate the contract or vary it in any other way); and (b) that section is effective to vest the rights and liabilities of the society or branch under any agreement or arrangement for the payment of pensions, allowances or gratuities in the industrial and provident society along with all other rights and liabilities of the society or branch; and accordingly any period of employment with the society or branch shall count for all purposes as a period of employment with the industrial and provident society.

SCHEDULE 17

1

• (1) In section 1 (the Policyholders Protection Board), in subsection (2), after paragraph (a) there shall be inserted the following paragraph—

(aa) to take the measures provided for by sections 8A to 16 below for the purpose of indemnifying (in whole or in part) or otherwise assisting or protecting— (i) members of friendly societies carrying on insurance business in the United Kingdom who have entered into contracts of insurance with societies of which they are members; and (ii) others who have been or may be prejudiced in consequence of the inability of friendly societies to meet their liabilities under such contracts; and (iii) persons who have entered into contracts of insurance with friendly societies for the provision of group insurance benefits to the members of a group scheme (within the meaning of section 11 of the Friendly Societies Act 1992); but, in relation to benefits provided by a friendly society in pursuance of such a scheme, a person falling within sub-paragraph (iii) above is not entitled to be indemnified, assisted or protected if the members of the scheme are required to be members of the society.

• (2) In paragraph (b) of that subsection, after the word “companies” there shall be inserted “friendly societies”.

2

After section 3 there shall be inserted the following section—