FRIENDLY SOCIETIES PART I GENERAL Citation, commencement and extent 1 1 These Regulations may be cited as the Friendly Societies Act 1992 (Amendment) Regulations 1994, and shall come into force on 1st September 1994. 2 These Regulations extend to Northern Ireland. Interpretation 2 1 In these Regulations– “the 1992 Act ” means the Friendly Societies Act 1992 ; “the commencement date” means 1st September 1994. 2 In these Regulations expressions which are also used in the 1992 Act have the same meanings as in that Act. PART II FRIENDLY SOCIETIES COMMISSION Functions of Commission 3 1 At the end of subsection (4) of section 1 of the 1992 Act (Friendly Societies Commission) insert the words “or any provisions of the law of an EEA State other than the United Kingdom which give effect to the general insurance or life Directives”. 2 After that subsection insert– 4A There shall be conferred on the Commission by virtue of this subsection any functions required to be conferred on it by the general insurance or life Directives. . PART III AUTHORISATION OF FRIENDLY SOCIETIES Authorisation to carry on business Grant of authorisation by Commission: general 4 For subsection (4) of section 32 of the 1992 Act (grant of authorisation by Commission: general) substitute– 4 Authorisation entitles a friendly society to carry on business anywhere in the United Kingdom unless, in the case of a society which is not one to which section 37(2) or (3) below applies, the terms of its authorisation are at its request expressly restricted to a part of the United Kingdom. . Grant of unconditional or conditional authorisation 5 In subsection (2) of section 34 of the 1992 Act (grant of unconditional or conditional authorisation), at the end of paragraph (a) insert the words “and, in the case of a society to which section 37(2) or (3) below applies, each controller of the society is a fit and proper person to be such a controller”. Powers of Commission in relation to authorised societies Withdrawal of authorisation in respect of new business 6 In subsection (3) of section 40 of the 1992 Act (withdrawal of authorisation in respect of new business), omit the word “or” at the end of paragraph (f) and after paragraph (g) insert or h the society is a society to which section 37(2) or (3) above applies and has not effected any contracts of insurance, or any contracts of insurance of a class (or part of a class), for a period of six months or more. . Withdrawal of authorisation to carry on insurance business 7 1 In subsection (1) of section 41 of the 1992 Act (withdrawal of authorisation to carry on insurance business), for the words “in the United Kingdom”, in both places where they occur, substitute– i in the case of a society to which section 37(2) or (3) above applies, in the European Community; ii in any other case, in the United Kingdom, . 2 In subsection (3) of that section, for the words from “during”, in the first place where it occurs, to “authorisation” substitute– a in the case of a society to which section 37(2) or (3) above applies, during the preceding six months; b in any other case, during a financial year of the society which began and ended during the currency of the authorisation, . 3 In sub–paragraph (1) of paragraph 11 of Schedule 13 to that Act (authorisation: supplementary provisions), after paragraph (c) insert– d in the case of a direction given in relation to a society to which section 37(2) or (3) above applies which is or has been– i carrying on insurance business in an EEA State other than the United Kingdom through an overseas branch in that State, or ii providing insurance in an EEA State other than the United Kingdom through an establishment in another EEA State, notify the supervisory authority in that State, or, as the case may be, in each of those States of the direction. . PART IV REGULATION OF BUSINESS Financial resources Margins of solvency 8 In subsection (1) of section 48 of the 1992 Act (margins of solvency in relation to insurance business of certain societies), in paragraphs (a) and (b) the words “in the United Kingdom” shall cease to have effect. Adequacy of assets 9 After section 49 of the 1992 Act insert— Adequacy of assets and premiums Adequacy of assets. 49A 1 A friendly society to which section 37(2) or (3) above applies which has entered into contracts of insurance shall secure– a that its liabilities under those contracts, other than liabilities in respect of linked benefits, are covered by assets of appropriate safety, yield and marketability having regard to the classes of business carried on; and b without prejudice to the generality of paragraph (a) above, that its investments are appropriately diversified and adequately spread and that excessive reliance is not placed on investments of any particular category or description. 2 A friendly society to which section 37(2) above applies which has entered into a linked long term contract shall secure that, as far as practicable, its liabilities under the contract in respect of linked benefits are covered as follows– a if those benefits under the contract are linked to the value of units in an undertaking for collective investments in transfer– able securities or to the value of assets contained in an internal fund, by those units or assets; b if those benefits under the contract are linked to a share index or other reference value not mentioned in paragraph (a) above, by units which represent that reference value, or by assets of appropriate safety, yield and marketability which correspond, as nearly as may be, to the assets on which that reference value is based. 3 A friendly society to which section 37(2) above applies which has entered into a linked long term contract shall also secure that its liabilities under the contract in respect of linked benefits are covered by assets of a description prescribed by regulations under section 56 below. 4 In this section– “linked benefits”, in relation to a linked long term contract, means benefits payable under the contract which are determined by reference to the value of or the income from property of any description (whether or not specified in the contract) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified); “linked long term contract” means a contract the effecting of which constitutes the carrying on of insurance business falling within class III in head A in Schedule 2 to this Act. . Adequacy of premiums in respect of long term insurance 10 After section 49A of the 1992 Act insert— Adequacy of premiums in respect of long term insurance. 49B 1 Before entering into a contract the effecting of which constitutes the carrying on of long term business, a friendly society to which section 37(2) above applies shall satisfy itself that the aggregate of– a the premiums payable under the contract and the income which will be derived from them; and b any other resources of the society which are available for the purpose, will be sufficient, on reasonable actuarial assumptions, to meet all commitments arising under or in connection with the contract. 2 A friendly society to which section 37(2) above applies shall not rely on other resources for the purposes of subsection (1) above in such a way as to jeopardise the solvency of the society in the long term. . Criteria of prudent management Criteria of prudent management 11 1 For the eighth criterion in subsection (3) of section 50 of the 1992 Act (the criteria of prudent management) substitute– 8 In the case of a society to which section 37(2) or (3) applies, direction and management which, in addition to satisfying the other requirements as to direction and management, is such as to secure compliance with any obligation imposed on the society by any provision (whether of the law of any part of the United Kingdom or of the law of another EEA State) which– a gives effect to the general insurance or life Directives; or b is otherwise applicable to the insurance activities of the society. . 2 Regulation 2(2) of the Friendly Societies (Amendment) Regulations 1993 (which is superseded by paragraph (1) above) shall cease to have effect. Powers of Commission Application to court 12 In subsection (2) of section 52 of the 1992 Act (application to court), for paragraph (c) substitute– c that the society is failing to satisfy any obligation to which it is subject by virtue of any provision of the law of any EEA State other than the United Kingdom which– i gives effect to the general insurance or life Directives; or ii is otherwise applicable to the insurance activities of the society in that State; . Prohibition on disposal of assets 13 After section 52 of the 1992 Act insert— Prohibition on disposal of assets. 52A 1 Where the Commission has reason to believe that any of the conditions mentioned in subsection (2) below is satisfied in relation to a friendly society to which section 37(2) or (3) applies, it may apply to the court for an injunction restraining, or in Scotland an interdict prohibiting, the society from disposing of or otherwise dealing with any of its assets to the value of its EC liabilities. 2 The conditions referred to in subsection (1) above are– a that the Commission has given (and not revoked) a direction in respect of the society under section 40 above; or b that the society has failed to satisfy an obligation to which it is or was subject by virtue of section 48, 49, 49A above or Part III of the Friendly Societies (Insurance Business) Regulations 1994 ; or c that a submission by the society to the Commission of an account or statement specifies, as the amount of any liabilities of the society, an amount appearing to the Commission to have been determined otherwise than in accordance with– i valuation regulations; or ii where no such regulations are applicable, generally accepted accounting concepts, bases and policies or other generally accepted methods appropriate for friendly societies, and a court shall not make an order under this section unless it is satisfied that one or more of those conditions are satisfied. 3 Where a court makes an order under this section, it may by subsequent orders make provision for such incidental, consequential and supplementary matters as are necessary to enable the Commission to perform its functions under this Act. 4 The jurisdiction conferred by this section shall be exercisable by the High Court and the Court of Session. 5 In this section any reference to an EC liability is a reference to a liability of the business carried on by the society in the European Community. . Supervision of controllers 14 1 After section 55 of the 1992 Act insert— Supervision of controllers. 55A 1 Schedule 13A to this Act shall have effect for making provision for or in connection with the supervision by the Commission of controllers of friendly societies to which section 37(2) or (3) above applies. 2 In this Act– “controller”, in relation to a friendly society to which section 37(2) or (3) of this Act applies, means a person who, either alone or with any associate or associates– a is entitled to exercise or control the exercise of 10 per cent. or more of the voting power at any general meeting of the society; or b is able to exercise a significant influence over the management of the society by virtue of an entitlement to exercise, or to control the exercise of, the voting power at any general meeting of the society; “notifiable voting rights”, in relation to a friendly society to which section 37(2) or (3) above applies, means voting rights which, if acquired by any person, will result in his becoming a 10 per cent. controller, a 20 per cent. controller, a 33 per cent. controller, a 50 per cent. controller or a majority controller of the society. 3 In this section and Schedule 13A to this Act, in relation to a friendly society to which section 37(2) or (3) above applies– “10 per cent. controller” means a controller in whose case the percentage referred to in paragraph (a) of the definition of “controller” in subsection (2) above is 10 or more but less than 20; “20 per cent. controller” means a controller in whose case that percentage is 20 or more but less than 33; “33 per cent. controller” means a controller in whose case that percentage is 33 or more but less than 50; “50 per cent. controller” means a controller in whose case that percentage is 50; “majority controller” means a controller in whose case that percentage is more than 50. . 2 After Schedule 13 to the 1992 Act insert Schedule 1 to these Regulations (supervision of controllers of friendly societies to which section 37(2) or (3) applies), as Schedule 13A. Business etc. in other EEA States Recognition of societies in accordance with insurance Directives 15 1 For section 57 of the 1992 Act substitute— Recognition of societies in accordance with insurance Directives. 57 Schedule 13B to this Act shall have effect for making provision for or in connection with the recognition in other EEA States of friendly societies to which section 37(2) or (3) of this Act applies. . 2 After Schedule 13A to that Act insert Schedule 2 to these Regulations (recognition of friendly societies in other EEA States), as Schedule 13B. 3 If a friendly society to which section 37(2) or (3) of the 1992 Act applies was immediately before the commencement date lawfully carrying on direct insurance business of a class or part of a class in a member State other than the United Kingdom through an overseas branch in that State, it shall be treated for the purposes of that Act as if the requirements of paragraph 1 of Schedule 13B to that Act had been complied with in relation to insurance business of that class or part of a class. 4 If a friendly society to which section 37(2) or (3) of the 1992 Act applies was immediately before the commencement date lawfully providing insurance of a class or part of a class in a member State other than the United Kingdom through an establishment in another member State, it shall be treated for the purposes of that Act as if the requirements of paragraph 5 of Schedule 13B to that Act had been complied with in relation to insurance of that class or part of a class. 6 Regulation 4 of the Friendly Societies (Amendment) Regulations 1993 (which is superseded by this regulation) shall cease to have effect. Notification by Commission of measures taken by it 16 For section 57A of the 1992 Act substitute— Notification by Commis– sion of measures taken by it. 57A 1 This section applies where the Commission is considering taking or has taken any measures in relation to a friendly society to which section 37(2) or (3) above applies which– a carries on insurance business through an overseas branch in an EEA State other than the United Kingdom; or b provides insurance in an EEA State other than the United Kingdom through an establishment in another EEA State. 2 The Commission– a shall, if required by Article 24 of the first life Directive or Article 20 of the first general insurance Directive, or by any other provision of the life or general insurance Directives to do so, notify any supervisory authority of such a State of those measures or proposed measures; and b may, if it is satisfied that it is expedient to do so, request that authority to take similar measures in relation to the friendly society. 3 In this section “measure” includes imposing conditions which prohibit the disposals of assets and exercising any power conferred by this Part of the Act. . Information Powers to obtain information and documents etc. 17 1 In subsection (4)(a) of section 62 of the 1992 Act (powers to obtain information and documents etc.) after the word “society” insert the words “or, in the case of a society to which section 37(2) or (3) above applies, a controller or manager of the society”. 2 After subsection (5) of that section insert– 5A Any person authorised by the Commission may, on producing if required evidence of his authority, enter any premises occupied by– a any body which is a friendly society to which section 37(2) or (3) above applies, or is a subsidiary of, or body jointly controlled by, such a society, and on which a notice has been served under subsection (3) above; or b any person who is or has been a controller, manager, officer, employee or agent of such a society, or of a subsidiary of, or body jointly controlled by, such a society, and on whom a notice has been served under subsection (4) or (5) above, for the purpose of obtaining the information or documents required by the notice and exercising the powers conferred by subsection (3) above. . Exceptions from restrictions on disclosure 18 After subsection (7) of section 64 of the 1992 Act (exceptions from restrictions on disclosure) insert– 7A In the case of restricted information which relates to the business or other affairs of a friendly society to which section 37(2) or (3) above applies, no disclosure may be made by virtue of subsection (1), (3), (4) or (7) above unless the disclosure appears to be in accordance with– a Article 16 of the third general insurance Directive; or b Article 15 of the third life Directive. . Inspections etc. Investigations on behalf of Commission 19 1 After subsection (1) of section 65 of the 1992 Act (investigations on behalf of the Commission) insert– 1A Where a person has notified the Commission under paragraph 1 or 2 of Schedule 13A to this Act of his intention to become a controller of or to acquire notifiable voting rights in a friendly society to which section 37(2) or (3) above applies, the Commission may, if it appears to it desirable to do so, appoint one or more competent persons to investigate and report to it on whether, if that person became such a controller or acquired such voting rights, the criteria of prudent management would be fulfilled with respect to the society. . 2 In subsections (2) and (3) of that section, after the words “subsection (1)” insert the words “or (1A)”. 3 After subsection (3) of that section insert– 3A A person appointed under subsection (1) or (1A) above may enter any premises occupied by a friendly society to which section 37(2) or (3) above applies or any subsidiary of or body jointly controlled by such a society which is being investigated by him under this section; but he shall not do so without prior notice in writing unless he has reasonable cause to believe that if such a notice were given any documents whose production could be required would be removed, tampered with or destroyed. . 4 In subsection (5) of that section, after the words “subsection (1)” insert the words “or (1A)”. 5 After that subsection insert– 5A In relation to a friendly society to which section 37(2) or (3) above applies, any reference in subsection (3) or (5) above to a person who is or has been an officer shall be read as including a reference to a person who is or has been a controller or manager. . Inspections: supplementary provision 20 After subsection (10) of section 67 of the 1992 Act (inspections: supplementary provision) insert– 10A In relation to a friendly society to which section 37(2) or (3) above applies– a any reference in subsection (1), (2) or (4) above to officers shall be read as including a reference to controllers or managers; and b any reference in subsection (3) or (6) above to an officer shall be read as including a reference to a controller or manager. . PART V CONDUCT OF BUSINESS Information for members 21 1 After section 67 of the 1992 Act insert— Information for members. 67A Schedule 13C to this Act shall have effect for requiring friendly societies to which section 37(2) or (3) above applies to furnish members with the information there mentioned. . 2 After Schedule 13B to the 1992 Act insert Schedule 3 to these Regulations (information for members of friendly societies to which section 37(2) or (3) applies), as Schedule 13C. Statutory notice 22 After section 67A of the 1992 Act insert— Statutory notice. 67B 1 Subject to subsection (7) below, unless the requirements of subsection (2) below are fulfilled no friendly society to which section 37(2) above applies shall enter into a contract the effecting of which constitutes– a the carrying on of long term business in the United Kingdom; or b the provision there of long term insurance. 2 The requirements of this subsection are that– a the society sends by post to the other party to the contract, at or before the time when it is entered into, a statutory notice in relation to that contract; or b a respresentative of the society gives such notice to that party at that time. 3 Where a statutory notice is sent to the other party to the proposed contract before the time when it is entered into, the society shall, not later than 14 days after the contract has become binding, inform the party in writing that it has done so. 4 For the purposes of this section a statutory notice is a notice which– a contains such matters (and no others) and is in such form as may be prescribed by regulations made under section 2(2) of the European Communities Act 1972 and complies with such requirements (whether as to type, size, colour or disposition of lettering, quality or colour of paper, or otherwise) as may be so prescribed for securing that the notice is easily legible; and b has annexed to it a form of notice of cancellation of such description as may be so prescribed for use under section 67C below. 5 The Commission may, on the application of a friendly society, alter the requirements in relation to the notice referred to in subsection (4)(a) above so as to adapt those requirements to the circumstances of that society or to any particular kind of contract proposed to be entered into by that society. 6 Any society which contravenes this section shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale but, without prejudice to section 67C(2) below, no contract shall be invalidated by reason of the fact that the society has contravened this section in relation to that contract. 7 Subsection (1) above does not apply to– a a contract the effecting of which by the society constitutes the carrying on of investment business (within the meaning of the Financial Services Act 1986 ); b a contract the effecting of which by the society constitutes the carrying on of industrial assurance business; c a contract the other party to which is habitually resident in a member State other than the United Kingdom; d a contract the other party to which is not an individual; e a contract of term assurance effected for a period of six months or less; or f a contract of reinsurance. 8 In sections 67C and 67D below “statutory notice” has the same meaning as in this section. . Right to withdraw from transaction 23 After section 67B of the 1992 Act insert— Right to withdraw from transac– tion. 67C 1 A person who has received a statutory notice in relation to a contract may, before the expiration of the fourteenth day after that on which he is informed in writing that the contract has become binding, serve a notice of cancellation on the friendly society. 2 A person to whom a friendly society to which section 37(2) above applies ought to have, but has not, sent a statutory notice in relation to a contract may serve a notice of cancellation on the society; but if the society sends him a statutory notice in relation to the contract before he has served a notice of cancellation under this subsection, then without prejudice to his right to serve a notice of cancellation under subsection (1) above, his right to do so under this subsection shall cease. 3 A notice of cancellation may, but need not, be in the form annexed to the statutory notice and shall have effect if, however expressed, it indicates the intention of the person serving it to withdraw from the transaction in relation to which the statutory notice was or ought to have been sent. 4 Where a person serves a notice of cancellation, then– a if at the time when the notice is served the contract has been entered into, the notice shall operate so as to rescind the contract; b in any other case, the service of the notice shall operate as a withdrawal of any offer to enter into the contract which is contained in, or implied by, any proposal made to the society by the person serving the notice of cancellation and as notice to the society that any such offer is withdrawn. 5 Where a notice of cancellation operates to rescind a contract or as the withdrawal of an offer to enter into a contract– a any sum which the person serving the notice has paid in connection with the contract (whether by way of premium or otherwise and whether to the society or to a person who is the agent of the society for the purpose of receiving that sum) shall be recoverable from the society by the person serving the notice; b any sum which the society has paid under the contract shall be recoverable by him from the person serving the notice. 6 Any sum recoverable under subsection (5) above shall be recoverable in any court of competent jurisdiction. . Service of notice of cancellation 24 After section 67C of the 1992 Act insert— Service of notice of cancellation. 67D 1 For the purposes of section 67C above a notice of cancellation– a shall be deemed to be served on the society if it is sent by post addressed to any person specified in the statutory notice as a person to whom a notice of cancellation may be sent, and is addressed to that person at an address so specified; and b where paragraph (a) above applies, shall be deemed to be served on the society at the time when it is posted. 2 Subsection (1) above shall have effect without prejudice to the service of a notice of cancellation (whether by post or otherwise) in any way in which the notice could be served apart from that subsection, whether the notice is served on the society or on a person who is the agent of the society for the purpose of receiving such a notice. 3 A notice of cancellation which is sent by post to a person at his proper address, otherwise than in accordance with subsection (1) above, shall be deemed to be served on him at the time when it is posted. 4 So much of section 7 of the Interpretation Act 1978 as relates to the time when service is deemed to have been effected shall not apply to a notice of cancellation. . PART VI TRANSFERS OF ENGAGEMENTS Confirmation by Commission 25 1 In Schedule 15 to the 1992 Act (amalgamations, transfers of engagements and conversions: supplementary), Part II (confirmation by Commission) shall, subject to sub–paragraph (2) below, have effect subject to the amendments specified in Schedule 4 to these Regulations. 2 Where, in the case of any transfer of engagements by a friendly society to which section 37(2) or (3) of the 1992 Act applies, the contents of the statement required by paragraph 1 of Schedule 15 to that Act has been approved by the Commission under paragraph 2(2) of that Schedule before the commencement date, the amendments made by Schedule 4 to these Regulations shall not have effect in relation to that transfer. 3 Regulation 5 of the Friendly Societies (Amendment) Regulations 1993 (which is superseded by this regulation) shall cease to have effect. Actuary’s report as to margin of solvency 26 1 In subsection (2) of section 87 of the 1992 Act (actuary’s report as to margin of solvency), for paragraph (a) substitute– a the fulfilment of any of the engagements to be transferred will constitute– i in the case of a transferor to which subsection (2) or (3) of section 37 above applies, the carrying on of insurance business in one or more member States, or ii in the case of a transferor to which neither of those subsections applies, the carrying on of insurance business in the United Kingdom, and . 2 A person who– a is guilty of an offence under subsection (6) of that section; but b would not have been subject to the provisions of that subsection if this regulation had not been made, shall not be liable on summary conviction to imprisonment for a term exceeding three months. Actuary’s report on transfer of long term business 27 In subsection (1) of section 88 of the 1992 Act (actuary’s report on transfer of long term business), for paragraph (a) substitute– a a friendly society (“a transferor society”) proposes to transfer to any person engagements the fulfilment of which will constitute– i in the case of a society to which subsection (2) or (3) of section 37 above applies, the carrying on of long term business in one of more member States; or ii in the case of a society to which neither of those subsections applies, the carrying on of long term business in the United Kingdom; or . Issue of certificates by Commission 28 After section 90 of the 1992 Act insert— Issue of certificates by Commission. 90A 1 Where it is proposed to execute an instrument by which– a an EC company, or a non–EC company whose head office is in an EFTA State, is to transfer to a friendly society to which section 37(2) or (3) above applies all its rights and obligations under such long term or general policies, or long term or general policies of such descriptions, as may be specified in the instrument; or b a Swiss general insurance company is to transfer to such a friendly society all its rights and obligations under such general policies, or general policies of such descriptions, as may be so specified, the Commission may, if it is satisfied that the transferee possesses (after taking the proposed transfer into account) the margin of solvency required by section 48 above, issue a certificate to that effect. 2 In this section– “EC company”, “non–EC company” and “Swiss general insurance company” have the same meanings as in the Insurance Companies Act 1982; “general policy” means a policy evidencing a contract (other than a contract of reinsurance) the effecting of which by the transferor constituted the carrying on of general business of any class; “long term policy” means a policy evidencing a contract (other than a contract of reinsurance) the effecting of which by the transferor constituted the carrying on of long term business of any class. . PART VII SUPPLEMENTAL Insurance business etc. 29 1 In subsection (1) of section 117 to the 1992 Act (insurance business etc.), after the definition of “insurance business” insert– “direct insurance business” means insurance business other than reinsurance business and “direct insurance” shall be construed accordingly; 2 In subsection (6) of that section, for the words “member State”, in each place where they occur, substitute the words “member or EEA State”. 3 After subsection (7) of that section insert– 8 In this Act references, in relation to a friendly society to which section 37(2) or (3) above applies, to the provision of insurance in the United Kingdom or any other EEA State are references to either or both of the following– a the covering (otherwise than by way of reinsurance) of a risk situated there through an establishment in another EEA State (“the provision of general insurance”); and b the covering (otherwise than by way of reinsurance) of a commitment situated there through an establishment in another EEA State (“the provision of long term insurance”). 9 In this Act “establishment”, in relation to a friendly society to which section 37(2) or (3) above applies, means the registered office or an overseas branch of the society. Any permanent presence of such a society in an EEA State other than the United Kingdom shall be regarded for those purposes as a single overseas branch, whether that presence consists of a single office which, or two or more offices each of which– a is managed by the society’s own staff; b is an agency of the society; or c is managed by a person who is independent but has permanent authority to act for the society in the same way as an agency. . General interpretation 30 In subsection (1) of section 119 of the 1992 Act (general interpretation)– a after the definition of “contract of insurance” insert– “controller” has the meaning given by section 55A above; ; b after the definition of “the criteria of prudent management” insert– “EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 as adjusted by the Protocol signed at Brussels on 17th March 1993 ; “EEA State” means a State which is a Contracting Party to the EEA Agreement but, until the EEA Agreement comes into force in relation to Liechtenstein, does not include Liechtenstein; “EFTA State” means an EEA State which is not a member State; ; c for the definition of “the general insurance Directives” substitute– “the general insurance Directives” means the first general insurance Directive, the second general insurance Directive and the third general insurance Directive as amended, and such other Directives as make provision with respect to the business of direct insurance other than life assurance; ; d for the definition of “the life Directives” substitute– “the life Directives” means the first life Directive, the second life Directive and the third life Directive as amended, and such other Directives as make provision with respect to the business of direct life assurance; “manager”, in relation to a friendly society to which section 37(2) or (3) above applies, means any person (other than an employee of a society) appointed by the society to manage any part of its insurance business, or any employee of the society (other than a chief executive) who, under the immediate authority of a member of the committee of management or chief executive of the society– a exercises managerial functions, or is responsible for maintaining accounts or other records of the society; and b is not a person whose functions relate exclusively to business conducted from a place of business which is not in a member State; ; e after the definition of “notice” insert– “notifiable voting rights” has the meaning given by section 55A above; ; and f after the definition of “subsidiary” insert– “supervisory authority”, in relation to an EEA State other than the United Kingdom, means the authority responsible in that State for supervising insurance companies; “the third general insurance Directive” means Council Directive 92/49/ EEC of 18th June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC ; “the third life Directive” means Council Directive 92/96/EEC of 10th November 1992 on the coordination of laws, regulations and administrative provisions relating to direct life assurance and amending Directives 79/267/EEC and 90/619/EEC ; . Meaning of “associate” 31 After section 119 of the 1992 Act insert— Meaning of “associate”. 119A 1 In this Act “associate”, in relation to any person entitled to exercise or control the exercise of voting power in relation to a friendly society to which section 37(2) or (3) above applies, means– a the wife or husband or minor son or daughter of that person; b any company of which that person is a director; c any person who is an employee or partner of that person; d if that person is a company– i any director of that company; ii any subsidiary undertaking of that company; iii any director or employee of any such subsidiary under– taking; and e if that person has made an agreement or arrangement with any other person under which they undertake to act together in exercising their voting power in relation to the society, that other person. 2 In this section– “minor”, in relation to Scotland, means not having attained the age of sixteen; “son” includes stepson and “daughter” includes stepdaughter; “subsidiary undertaking” has the same meaning as in the Insurance Companies Act 1982 . . Meaning of “main agent” 32 After section 119A of the 1992 Act insert— Meaning of “main agent”. 119B 1 In this Act “main agent”, in relation to a society to which section 37(2) or (3) above applies, means a person appointed by the society to be its agent in respect of general business in a member State with authority to enter into contracts on behalf of the society in any financial year– a without limit on the aggregate amount of premiums; or b with a limit in excess of the 10 per cent. of the premium limit as determined in accordance with subsections (3) to (6) below. 2 A person shall not be regarded as falling within subsection (1)(a) above unless– a the society is of the opinion that the aggregate amount of premiums, on contracts entered into by him on behalf of the society in that year in respect of general business in the member State or States concerned, will be in excess of 10 per cent. of the premium limit as determined in accordance with subsections (3) to (6) below; or b the aggregate amount of premiums, on contracts so entered into, actually is in excess of 10 per cent. of that premium limit. 3 Subject to subsections (4) to (6) below, the premium limit for the purposes of subsections (1) and (2) above is the aggregate of the amounts of gross premiums shown in the annual accounts relating to the society’s business last sent to the Commission under section 78 above as receivable in respect of general business in the financial year to which the accounts relate. 4 If the accounts so sent relate to a financial year which is not a period of 12 months, the aggregate of the amounts of gross premiums shown in the accounts as receivable in that financial year shall be divided by the number of months in the financial year and multiplied by twelve. 5 If no accounts have been sent to the Commission under section 78 above the aggregate amount of gross premiums shall be the amount or, if more than one amount, the lower or lowest amount, shown in respect of gross premiums relating to the society’s business in the financial forecast last submitted by the society in accordance with regulations made for the purposes of paragraph 2(2) of Schedule 13 to this Act. 6 Any reference in subsection (3) or (5) above to the society’s business is a reference to its business in the member State or States in which the agent has authority to enter into contracts on its behalf. . In witness whereof the common seal of the Friendly Societies Commission is hereunto fixed, and is authenticated by me, a person authorised under paragraph 13 of Schedule 1 to the Friendly Societies Act 1992, on 21st July 1994. Michael Cook Secretary to the Commission