Insurance (No. 2) Act, 1983
Acts of the Oireachtas
Source: Acts of the Oireachtas

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paragraphs: —(1) In this Act, except where the context otherwise requires—
“the Act of 1964” means the Insurance Act, 1964 ;
“an administrator” means a person appointed, whether under subsection (2) or (4) of section 2 of this Act, to perform the functions conferred on an administrator by this Act;
“authorisation” and “non-life insurance” have the meanings repectively assigned to them by the Regulations;
“body” means a body corporate or an unincorporated body of persons;
“the business”, in relation to an insurer, includes the business of managing investments and assets held by the insurer;
“company”, “contributory” and “director” have the meanings respectively assigned to them by the Companies Acts, 1963 to 1983;
“the court” means the High Court;
“functions” includes powers and duties and references to the performance of functions include references to the exercise of powers and the carrying out of duties;
“insurer” and “policy” have the meanings respectively assigned to them by the Act of 1964, as amended by this Act;
“policy holder”, in relation to an insurer, means a person (other than the insurer) who is a party to a policy issued by the insurer;
“the Regulations” means the European Communities (Non-Life Insurance) Regulations, 1976 (S.I. No. 115 of 1976).
(2) References to an administrator include, except where the context otherwise requires, references to an administrator provisionally appointed.
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paragraphs: —(1) The Minister may present a petition to the court for an order for the administration of an insurer and the appointment of an administrator in relation to such insurer and may do so notwithstanding that there is or may be another remedy or course of action available to him in relation to such insurer.
(2) The court may, on such petition, in relation to an insurer, if it considers—
(a) that—
(i) the manner in which the business of the insurer is being or has been conducted has failed to make adequate provision for its debts, including contingent and prospective liabilities, or
(ii) the business of the insurer is being or has been so conducted as to jeopardise or prejudice the rights and interests of persons arising under policies issued by the insurer, or
(iii) the insurer has become unable to comply with the requirements of the Regulations in a material respect,
and
(b) that the making of such an order for administration and the appointment of an administrator would assist in the maintenance, in the public interest, of the proper and orderly regulation and conduct of non-life insurance business,
make an order for the administration of the insurer and appoint a person nominated by the Minister (who shall be known as and is in this Act referred to as “an administrator”) to perform, in relation to the insurer, the functions conferred on an administrator by this Act.
(3) An administrator shall take over the management of the business of the insurer and shall carry on that business as a going concern with a view to placing it on a sound commercial and financial footing and the administrator shall have in relation to the insurer all such powers as may be necessary for or incidental to his functions in relation to the insurer, including the sole authority over and direction of all officers and employees of the insurer.
(4) (a) At any time after the presentation of a petition for an order for the administration of an insurer, the court may, upon the ex parte application of the Minister and upon prima facie proof by affidavit or otherwise of one or more of the matters mentioned in subparagraph (i), (ii) or (iii) of section 2 (2) (a) of this Act and without advertisement or notice to any person, appoint such person as may be nominated by the Minister to act as administrator provisionally pending the appointment of an administrator under section 2 (2) of this Act.
(b) If no order for the administration of the insurer is made upon the petition, the appointment of the provisional administrator shall be annulled but he shall nevertheless be entitled to be paid out of the assets of the insurer all the costs, charges and expenses properly incurred by him as provisional administrator, including such sum as the court may fix for his remuneration, and may retain out of such assets the amount of such costs, charges and expenses:
Provided that any such annulment shall not invalidate any act or function done or performed by the provisional administrator.
(5) The administration of an insurer under this Act shall be deemed to have commenced at the time of the presentation of the petition for an order for administration.
(6) (a) If at any time no rules of court in respect of the making of an order for administration or the appointment of an administrator by the court under this Act are in force, the provisions of Order 74 of the Rules of the Superior Courts (S.I. No. 72 of 1962), shall, with any necessary modifications, but subject to paragraph (b) of this subsection and subsection (4) of this section, apply.
(b) (i) A petition for the administration of an insurer or the appointment of an administrator to an insurer shall be served only on the insurer, unless the court shall otherwise direct.
(ii) Upon the hearing of a petition for the administration of an insurer or the appointment of an administrator to an insurer, only the Minister and the insurer concerned shall be entitled to be heard unless the court shall otherwise direct.
(iii) The provisions of the said Order 74 shall not, in so far as they relate in the case of an official liquidator to the giving of security, the filing of accounts, the lodging of monies to a bank account or the fixing of the remuneration of the liquidator, apply to an administrator.
(c) Any rules of court amending or replacing the said Order 74 shall, in their application for the purposes of this Act, be subject to the provisions of paragraph (b) of this subsection and subsection (4) of this section.
(7) The administration of an insurer under this Act and the appointment of an administrator shall terminate—
(a) upon the making of an order for the winding up of the insurer concerned, or
(b) upon the making of an order for such termination by the court on the application of the Minister or the administrator, with the approval of the Minister, or
(c) upon the making of an order for such termination by the court in circumstances where it considers—
(i) that, if the administration is terminated—
(I) the business of the insurer concerned will be conducted in such manner as to make adequate provision for its debts, including contingent and prospective liabilities, and
(II) the business of the insurer concerned will not be so conducted as to jeopardise or prejudice the rights and interests of persons arising under policies issued by the insurer, and
(III) the business of the insurer is and will continue to be in all other respects on a sound commercial and financial footing, and
(IV) any debt due to the Insurance Compensation Fund has been or will be paid,
and
(ii) that it would be unjust and inequitable not to make the order.
(8) In any proceedings upon a petition presented under this Act, evidence that the matters set out in subsection (2) (a) of this section pertained in relation to an insurer at the close of the period to which the latest returns of such insurer to the Minister under the Insurance Acts, 1909 to 1983, or under the Regulations or the European Communities (Non-Life Insurance Accounts) Regulations, 1977 (S.I. No. 401 of 1977), upon any subsequent date shall be evidence unless the contrary is proved that such matters pertain in relation to the insurer at the time of the hearing of any such proceedings.
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paragraphs: —(1) Subject to the provisions of this Act and, in particular, to the functions conferred on an administrator by section 2 of this Act—
(a) an administrator (whether appointed under subsection (2) or (4) of section 2 of this Act) shall as on and from his appointment have all the powers (including the power to sell the real and personal property and things in action of the insurer concerned) that he would have, and there shall apply in relation to him all the statutory provisions that would so apply, if he were a liquidator appointed by the court in respect of the insurer and (in a case where the insurer is not a company) the insurer were a company, and
(b) where an administrator stands appointed (whether under subsection (2) or (4) of section 2 of this Act), the court shall have under this Act all the powers that it would have if it had made a winding up order and appointed a liquidator in respect of the insurer concerned and (in a case where the insurer is not a company) the insurer were a company, and
(c) where a petition is presented to the court for an order for administration or the appointment of an administrator, the court shall thereupon have under this Act all the functions that it would have if a petition had been presented to it for the winding up of the insurer concerned,
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paragraphs: —(1) The court may, in relation to a body connected with an insurer, on application to it by the administrator (whether appointed under subsection (2) or (4) of section 2 of this Act), if it considers—
(a) that—
(i) the affairs of that body are being conducted, or are likely to be conducted, in a manner which is calculated or likely to jeopardise or prejudice the interests of the insurer or of the creditors or policy holders of the insurer, or
(ii) it is expedient, for the purpose of preserving the assets (including the investments) of the insurer or of safe guarding the interests of the insurer, its creditors or policy holders, that the carrying on of the business of that body or the exercise of the powers of its directors or management should be curtailed or regulated in any particular respect, or
(iii) having regard to the relationship between the insurer and that body, any part of the property or undertaking of the body should be preserved or controlled,
and
(b) that, to do so would be just and equitable and would, by facilitating and contributing to the safeguarding of the interests of the insurer or of the creditors or policy holders of the insurer, assist in the maintenance, in the public interest, of the proper and orderly regulation and conduct of non-life insurance business,
make such order as it thinks fit (including an order conferring powers on the administrator in relation to the affairs of that body) whether directing or prohibiting any act or restraining, cancelling or varying any agreement or transaction or the exercise of any power.
(2) Without prejudice to the generality of the foregoing, the court may, if it thinks fit, by order—
(a) appoint the administrator of an insurer to be a receiver and manager of all or any part of the property and assets of the connected body concerned and confer upon him such powers in that behalf as the court may think fit and specify in the order, including power to carry on the business of the body,
(b) appoint such additional directors or other members of the committee of management of the connected body as the administrator may nominate, notwithstanding any provision or restriction to the contrary contained in the articles of association of the connected body, or otherwise contained in its rules or constitution,
(c) provide that the exercise of the functions of the directors, secretary and other officers of the connected body engaged in its management shall be subject to the direct control of the administrator.
(3) The power to make an order under subsection (1) or (2) of this section shall extend to the making of an interim order upon the ex parte application of an administrator.
(4) A body shall be deemed for the purposes of this Act to be connected with an insurer if—
(a) it is the holding company or a subsidiary (within the meaning, in each case, of section 155 of the Companies Act, 1963 ) of the insurer, or
(b) effective control of the management of the insurer and of the body is held by or entrusted to the same persons or substantially the same persons, or
(c) in the opinion of the court, the effective management and control of either the insurer or the body is significantly influenced or capable of being significantly influenced (whether directly or indirectly, actually or potentially) by the other of them, or
(d) an inability on the part of either the insurer or the body to meet its debts as they fall due or for any reason to continue trading would jeopardise or prejudice the ability of the other of them to meet its debts or continue trading, whether by reason of the degree of financial interdependence between them or of a substantial common management or otherwise howsoever.
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paragraphs: —The whole or part of proceedings under this Act, or an appeal in relation thereto, may be heard otherwise than in public if the court considers that the interests of the insurer concerned or its creditors or policy holders or the public interest so requires.
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paragraphs: —(1) Whenever an administrator stands appointed to an insurer under subsection (2) or (4) of section 2 of this Act, the Minister may, if he considers that it is in the public interest to do so, make such regulations as he considers necessary or appropriate for the purpose of ensuring the proper and orderly regulation and conduct of non-life insurance business.
(2) Whenever, at a time when regulations under this section are in force, an administrator ceases to stand appointed under section 2 of this Act to an insurer to which an administrator stood appointed under that section at the time of the making of the regulations, the regulations shall, upon the expiration of seven days from such cesser, cease to be in force unless another administrator is appointed under that section to the insurer before such expiration.
(3) An insurer who contravenes a regulation under this section shall be guilty of an offence and shall be liable—
(a) on summary conviction, to a fine not exceeding £1,000, or
(b) on conviction on indictment, to a fine not exceeding £20,000.
(4) Where an offence under this section is committed by a body and the offence is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of, any person who, when the offence was committed, was a director, member of the committee of management or other controlling authority of the body or the manager, secretary or other officer of the body, that person shall also be deemed to have committed the offence and may be proceeded against and punished accordingly.
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paragraphs: —Section 1 of the Act of 1964 is hereby amended by—
(a) the substitution of the following definition for the definition of “insurer”:
“‘insurer’ means the holder of an authorisation;”,
(b) the insertion of the following definition:
“‘authorisation’ means an authorisation under the European Communities (Non-Life Insurance) Regulations, 1976;”, and
(c) the substitution of the following definition for the definition of “policy”:
“‘policy’ means any document or other writing by which a contract of insurance (other than a contract of re-insurance) as respects non-life insurance (within the meaning of the European Communities (Non-Life Insurance) Regulations, 1976) is made or agreed to be made or which is evidence of any such contract”.
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paragraphs: —Section 2 (3) of the Act of 1964 is hereby amended by the deletion of paragraph (b).
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paragraphs: —Section 3 of the Act of 1964 is hereby amended by—
(a) the insertion in subsection (1) after “the 1st day of January, 1963,” of “and before the passing of the Insurance (No. 2) Act, 1983,”,
(b) the insertion of the following subsection after subsection (1):
“(1A) Subject to the provisions of this section, there may, with the approval of the High Court, be paid out of the Fund to the liquidator of an insolvent insurer (including an insurer whose authorisation has been revoked by the Minister) the winding up of which has been commenced by the High Court after the passing of the Insurance (No. 2) Act, 1983—
(a) such amounts as may be necessary to pay any sum which is due to a person under a policy issued by the insurer in the State, together with the costs or expenses (if any) necessarily and reasonably incurred by the person in endeavouring to secure payment of the sum, and
(b) such amounts as may be necessary to pay any sum in respect of the refund of a premium,
and, upon receipt of the amounts by the liquidator, he shall pay to every such person the sum due to him as aforesaid together with the costs and expenses aforesaid (if any) incurred by him.”,
(c) the insertion of the following subsections after subsection (2):
“(2A) Where an amount is paid out of the Fund to the liquidator of an insurer under subsection (1A) of this section in respect of a sum due under a policy issued by the insurer and the costs and expenses (if any) incurred in relation to the sum, or in respect of a refund of a premium, the amount paid shall be admitted in the proceedings for the winding up of the insurer by the High Court as a proved debt of the insurer having the same priority as the sum due under the policy or in respect of the refund of the premium, as the case may be, and the Accountant shall, as respects the amount paid out of the Fund, be a creditor of the insurer.
(2B) Subject to the provisions of this section, there may, with the approval of the High Court, be paid out of the Fund to the administrator of an insurer such amounts as are, in the opinion of the High Court, required to enable the administrator to carry on the business of the insurer and to perform his other functions under this Act in relation to the insurer.
(2C) Where any sum has been paid out of the Fund to an administrator of an insurer pursuant to subsection (2B) of this section—
(a) the amount thereof shall be an unsecured debt of the insurer, and
(b) with a view to facilitating the placing of the business of the insurer on a sound commercial and financial footing, the Minister may at any time waive all or part of the said debt on behalf of the Fund; in exercising this power, the Minister shall have due regard to any amounts which may be realisable on a winding up of the insurer and to any representations made to him by the administrator or by any other insurer.
(2D) While an administrator stands appointed to an insurer, no dividends or other distributions to shareholders of the insurer shall be payable by the insurer if any debt due to the Fund by the insurer (not including any debt waived by the Minister under this section) has not been paid.”, and
(d) the deletion, as respects any insurer the winding up of which by the High Court is commenced after the passing of this Act, of subsection (5).
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paragraphs: —The Act of 1964 is hereby amended by the substitution of the following section for section 6:
“6.—(1) Subject to the provisions of this section, an insurer (other than an insolvent insurer which is being wound up by the High Court) shall, in any year in respect of which a percentage is determined under subsection (2) of this section, pay to the Minister, and the Minister shall transmit to the Fund, the appropriate contribution.
(2) (a) In every year in respect of which, in the opinion of the Minister, the state of the Fund is such that financial support should be provided for it, he shall determine the percentage, not exceeding 2 per cent., of the aggregate income of insurers in that year that, in his opinion, should be paid to the Fund.
(b) The contribution (in this section referred to as the appropriate contribution) payable by an insurer under subsection (1) of this section in any year in respect of which a percentage is determined under paragraph (a) of this subsection shall be a sum equal to that percentage of the aggregate income of the insurer in that year, but payment of the contribution shall be made quarterly in accordance with paragraph (c) of this subsection.
(c) An insurer shall, within 30 days from the end of each quarter in every year in respect of which a percentage is determined under paragraph (a) of this subsection, deliver to the Minister a statement in writing showing the aggregate income of that insurer in respect of that quarter and the statement shall be accompanied by the appropriate contribution calculated in accordance with paragraph (b) of this subsection.
(d) In this subsection—
‘aggregate income’, in relation to an insurer in respect of any period, means the gross amount of premiums paid or payable to the insurer in respect of policies issued by him in the State in that period;
‘quarter’ means a period of three months ending on the 31st day of March, the 30th day of June, the 30th day of September or the 31st day of December, and ‘quarterly’ shall be construed accordingly.
(3) An appropriate contribution payable by a syndicate shall be paid to the Minister by the Committee of Lloyd's.
(4) Where an appropriate contribution is not paid in accordance with the provisions of this section, it may be recovered by the Minister—
(a) in case the contribution is payable by a syndicate, from the Committee of Lloyd's, and
(b) in any other case, from the insurer by which it is payable,as a simple contract debt in any court of competent jurisdiction and shall, when recovered by the Minister, be transmitted to the Fund, and the Minister may, if he so thinks fit, on giving notice to the insurer by which the contribution is payable of not less than twenty-one days, revoke the authorisation of the insurer.”.
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paragraphs: —Every order and regulation made by the Minister under this Act shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order or regulation is passed by either such House within the next twenty-one days on which that House has sat after the order or regulation is laid before it, the order or regulation shall be annulled, accordingly, but without prejudice to the validity of anything previously done thereunder.
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paragraphs: —The following provisions of the Insurance Act, 1936 , are hereby repealed:
(a) paragraphs (b) and (c) of subsection (6) of section 12,
(b) the words “the issued shares of such company are, to an extent not less than two-thirds (in nominal value) thereof and carrying voting rights (whether immediate or to arise in certain future circumstances), in the beneficial ownership of a person who is or of two or more persons all of whom are citizens of Saorstat Ãireann, and the majority of the directors (other than a managing director giving the whole of his time to his duties as such director) are citizens of Saorstat Ãireann, and” in subsection (11) (b) of the said section 12, and
(c) section 19.
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paragraphs: —(1) This Act may be cited as the Insurance (No. 2) Act, 1983.
(2) The collective citation “the Insurance Acts, 1909 to 1983” shall include this Act.
(3) The Insurance Acts, 1909 to 1983, shall be construed together as one Act.