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Special provision for insurers directed to cease insurance business

Insurance Act 1966

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—(1) Where the Authority gives an insurer a direction under section 102(2)(a)(v) by reason of the insolvency of the fund maintained by the insurer under this Act for either class of insurance business, the affairs of the insurer may be wound up by the Court under the Insolvency, Restructuring and Dissolution Act 2018 as if it had suspended its business for a whole year or, in the case of a winding up under Part 10 of that Act, as if it had ceased to carry on business.(2) Where the Authority gives an insurer a direction under section 102(2)(a)(v) but, on an application for the affairs of the insurer to be wound up by the Court, the Court is satisfied that the insurer will be able to pay its debts in full within 12 months or any longer period that the Court thinks reasonable, the Court may (if it thinks fit) order the affairs of the insurer to be wound up only as regards the insurance fund maintained for the class of insurance business to which the direction relates.(3) An order made under subsection (2) for a limited winding up is of the same effect as an order for the affairs of the insurer to be wound up generally, except insofar as this section otherwise provides.(4) Where such an order is made, the powers of the liquidator are exercisable only for the purpose of applying the assets of the relevant insurance fund in discharging the liabilities to which they are applicable, together with the costs, charges and expenses incurred in the winding up.(5) The insurer must, from time to time, as the Court may direct, make such additions to those assets as are required to secure that they are sufficient for the purpose or must, if the Court so directs, discharge any of those liabilities out of other assets.(6) In the winding up of the affairs of an insurer under such an order, the Insolvency, Restructuring and Dissolution Act 2018 has effect subject to the following modifications:(a)section 121 (or, as the case may be, section 247) of that Act and other sections so far as they relate to contributories do not apply;(b)section 129 applies after, as it applies before, the making of the winding up order, and section 133(1) of that Act does not apply; (c)sections 130, 194, 205, 206, 207, 224 to 233 of that Act do not apply.(7) Where such an order is made, the Court may, at any time, on the application of the liquidator or of any person who might apply for the affairs of the insurer to be wound up —(a)substitute an order for the affairs of the insurer to be wound up generally; and(b)give any directions that the Court thinks fit as to matters in progress under the previous order,and, subject to any such directions, the winding up is, for all purposes connected with the substituted order, deemed to have commenced at the time of the application for that order.(8) In this section, “Court” means the General Division of the High Court.[49FP

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