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Application provision

1.1 Unless otherwise stated, this Part applies to a non-directive friendly society.

1.1

01/01/2016

Unless otherwise stated, this Part applies to a non-directive friendly society.

1.2

01/01/2016

In this Part, the following definitions shall apply:

ancillary risk

means, in relation to a principal risk belonging to a class of general insurance business, a risk included in another such class which is:

(1) connected with the principal risk;

(2) concerned with the object which is covered against the principal risk; and

(3) the subject of the same contract of insurance as the principal risk.

annual contribution income

means, in relation to a firm’s long-term insurance business, the income of the firm in a financial year without any deduction for reinsurance cessions.

implicit items

means economic reserves arising in respect of assets which relate to future surpluses, zillmerising or hidden reserves.

initial fund

means the items of capital that were available to a mutual on the date it received a Part 4A permission to effect contracts of insurance or carry out contracts of insurance.

1.3

01/01/2016

For the purposes of this Part:

  1. (1) a contract of insurance is to be treated as falling within a class of long-term insurance business notwithstanding the fact that it contains supplementary provisions falling within general insurance business class 1 (accident) or class 2 (sickness) if:
    1. (a) its principal object is that of a contract falling within a class of long-term insurance business;
    2. (b) it is effected or carried out by a firm which has Part 4A permission to effect contracts of insurance or carry out contracts of insurance falling within long-term insurance business class I (life and annuity); and
  2. (2) a contract of insurance whose principal risk falls within any of general insurance business classes 1, 2 or 16 is to be treated as falling within that class and no other, notwithstanding the fact that it also covers ancillary risks.