Citation and commencement

1.-(1) These Regulations may be cited as the Insurance Companies (Cancellation No. 2) Regulations 1993 and shall come into force on 20th May 1993.

(2) The Insurance Companies Regulations 1981(2) ("the principal Regulations") shall have effect subject to the following amendments.

Notice of long-term contract

2.-(1) Regulation 70 of the principal Regulations (notice of long-term contract) shall be amended as follows.

"(2) For paragraph (1) substitute-

(1) Subject to the following provisions of this regulation-

(a)a statutory notice in relation to a long-term contract which is not an investment agreement shall have the contents and be in the form set out in Schedule 10;

(b)a statutory notice in relation to a long-term contract which is an investment agreement shall have the contents and be in the form set out in Schedule 11; and

(c)the notice of cancellation annexed to a statutory notice shall have the contents and be in the form set out in Schedule 12. ".

(3) In paragraph (2), omit the words after "single sheet of paper".

(4) In paragraph (3), omit the words "of a colour which is readily distinguishable from the colour of the paper;".

(5) Omit paragraphs (4), (5) and (9).

(6) For paragraph (10) substitute-

"(10) For the purposes of this regulation and Schedules 10, 11 and 12-

"EC contract" means an EC contract within the meaning given in section 75(5B) of the Insurance Companies Act 1982;

"investment agreement" means an investment agreement within the meaning given in section 44(9) of the Financial Services Act 1986(3);

"long-term contract" means a contract for long-term business;

"non-EC contract" means a non-EC contract within the meaning given in section 75(5B) of the Insurance Companies Act 1982;

"notice of cancellation" means a notice of the kind mentioned in section 75(2)(b) of the Insurance Companies Act 1982;

"statutory notice" means a notice of the kind mentioned in section 75(2) of the Insurance Companies Act 1982; headed "Your right to withdraw from the transaction" the description or title of the person to whom the notice of cancellation should be sent may be substituted for or included with the name of that person. ".

Exemptions from regulation 70

3. For regulation 71 of the principal Regulations (exemptions from regulation 70) substitute-

"Exemptions from regulation 70

71. Section 75(1) of the Insurance Companies Act 1982 and regulation 70 above (which, in relation to EC contracts, when read with section 76 of that Act implement Article 15(1) of Council Directive 90/619/EEC(4) as amended by Article 30 of Council Directive 92/96/EEC(5)) shall not apply to-

(a)contracts where none of the proposers or policy holders is an individual;

(b)contracts of term assurance effected for periods of six months or less;

(c)contracts of reinsurance;

(d)contracts which insure a policy holder's obligations to make payments under a personal credit agreement of the kind mentioned in section 8(1) of the Consumer Credit Act 1974(6) or a consumer hire agreement of the kind mentioned in section 15(1) of that Act(7) where the terms of that personal credit agreement or consumer hire agreement have been entered into on the understanding that the long-term contract will remain in force. ".

Statutory notice

4. For Schedule 10 to the principal Regulations there shall be substituted Schedule 1 to these Regulations (statutory notice: non-investment contracts) and for Schedule 11 to the principal Regulations there shall be substituted Schedule 2 to these Regulations (statutory notice: investment contracts).

Regulation 4

SCHEDULE 1

Regulation 70

"SCHEDULE 10STATUTORY NOTICE: NON-INVESTMENT CONTRACTS

Regulation 4

SCHEDULE 2

Regulation 70

"SCHEDULE 11STATUTORY NOTICE: INVESTMENT CONTRACTS

Explanatory Note

(This note is not part of the Regulations)

These Regulations make amendments to the Insurance Companies Regulations 1981 ("the principal Regulations") and further implement Article 15 of Council Directive 90/619/EEC relating to life assurance (O.J. No. L330, 29.11.90, p. 50) as amended by Article 30 of Council Directive 92/96/EEC relating to life assurance (O.J. No. L360, 9.12.92, p. 1). Article 15 of Council Directive 90/619/EEC gives a policy holder who has purchased an individual life assurance contract on a cross border basis a period of between 14 and 30 days during which he may cancel that contract. Article 30 of Council Directive 92/96/EEC extends this right of cancellation to any policy holder who purchases an individual life assurance contract from an insurance undertaking with a head office in a member State. This right of cancellation may be removed where the policy holder does not require protection because of his status or because of the circumstances in which the contract is concluded. These Regulations set out the form of the statutory notice and the exemptions from the requirement to provide this right of cancellation.

The provisions to implement Article 15 of Council Directive 90/619/EEC as amended by Article 30 of Council Directive 92/96/EEC are contained in regulations 2, 3 and 4 and Schedules 1 and 2. These Articles are implemented in part by the Insurance Companies (Cancellation) Regulations 1993 S.I. 1993/1327.

Regulation 1makes provision for the citation and commencement of the Regulations.

Regulation 2amends the form of the statutory notice required by section 75 of the Insurance Companies Act 1982 by amending regulation 70 of the principal Regulations.

Regulation 3amends regulation 71 of the principal Regulations so that the following kinds of contract are exempt from the requirements of section 75 of the Insurance Companies Act 1982, namely contracts where none of the proposers or policy holders is an individual; contracts of reinsurance; contracts of term assurance effected for six months' duration or less; and some contracts which insure a policy holder's obligations to make payments under a personal credit agreement of the kind mentioned in section 8(1) of the Consumer Credit Act 1974 or a consumer hire agreement of the kind mentioned in section 15(1) of that Act.

Regulation 4 and Schedules 1 and 2alter the contents of the statutory notice by amending Schedules 10 and 11 of the principal Regulations.