UK Offence Report

Penalties

regulation 61(1)(b) of The Friendly Societies (Long Term Insurance Business) Regulations 1987

The provision has been revoked and no saving provision preserving liability for earlier conduct was found.

What the provision says

b every officer of the society who is in default shall be guilty of an offence and liable:–

i on summary conviction to

a fine not exceeding £2,000; or

ii on conviction on indictment to imprisonment for

a term not exceeding two years or to

a fine or both.

Text as made, from legislation.gov.uk. © Crown copyright, reused under the Open Government Licence v3.0. This is the text as originally made; later amendments are not shown here.

Who it binds, and what has to be proved

Binds
an officer
Conduct
breaching the provision
Fault element
Strict liability
Burden of proof
No statutory defence — prosecution proves everything

The prosecution must prove that the conduct happened. This is a strict liability offence as drafted: the provision uses no word of intention, knowledge, recklessness or negligence, so there is no need to show that an officer meant to do it, knew about it, or was careless.

Intention, knowledge and carelessness are irrelevant to guilt. They may still matter a great deal to sentence.

The provision states no defence, so the prosecution bears the burden on every element of the offence.

Classifier’s reasoning: no word of intention, knowledge, recklessness or negligence in the offence or its provision.

What would breach regulation 61(1)(b)?

These are illustrations, not law. They are generated from the provision’s own words to show the shape of the offence. Whether any particular conduct is caught depends on the full text, on any amendment since, and on the facts.

  1. Doing what the provision prohibits, or failing to do what it requires under the Friendly Societies (Long Term Insurance Business) Regulations 1987.

Penalty

Mode of trial
Either way — magistrates’ court or Crown Court
Maximum fine
£2,000
Maximum prison (summary)
Not determined
Maximum prison (on indictment)
2 years

expressed as the statutory maximum (the prescribed sum): the same words mean £5,000 in England and Wales and £10,000 in Scotland.

Sentencing

Offences of this kind are usually sentenced under the guidelines below. This is a mapping by subject, not a finding about this provision, and the links go to a search of the Sentencing Council’s own site.

Prosecution figures

No published per-offence figure was found for this provision, and it could not be matched to a Ministry of Justice offence code. Offences created by statutory instrument very largely do not have one. Absence of a figure is not evidence that the offence is unused.

Status and lifecycle

Current status
Revoked
Revoked by
The Friendly Societies (Insurance Business No. 2) Regulations 1993
Revoked on
1 January 1994
Made
10 December 1987
In force from
1 January 1988
Extent
Not stated

How this was established: the instrument was revoked by a later instrument found in this corpus.

What the instrument is for

(This note is not part of the Regulations) — the explanatory note published with the instrument, © Crown copyright.

These Regulations implement for friendly societies the relevant provisions of the First Council Directive on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct life assurance (79/267/EEC), referred to in this Note as “the Life Directive”. The Life Directive affects both insurance companies and (simplifying for the sake of brevity) friendly societies with an annual contribution income from life insurance business of at least 500,000 ECUs, the sterling equivalent of which for 1988 is £345,308 (calculated as from 31 December each year according to the value of the ECU at the end of October in that year). The Life Directive was implemented for insurance companies by primary legislation, now the Insurance Companies Act 1982, and by subordinate legislation, now the Insurance Companies Regulations 1981 (S.I. 1981/1654) and the Insurance Companies (Accounts and Statements) Regulations 1983 (S.I. 1983/1811), as amended. The Regulations are divided into eight Parts: Part I contains the usual preliminary provisions as to citation, interpretation and application; Part II deals with the authorisation; Part III deals with the regulation of authorised societies—actuarial investigation, solvency margins, matching and localisation, partial transfers of engagements and investment; Part IV provides safeguard measures enabling the Chief Registrar to call for a restoration plan or a short term financial scheme if specified solvency requirements are not met; Part V deals with withdrawal of authorisation; Parts VI and VII set out the rules to be applied in valuing assets and determining liabilities; and Part VIII contains final provisions of a miscellaneous nature. Part I is largely self-explanatory. Regulation 3 contains the exemptions in the Life Directive which apply to the circumstances of friendly societies and which therefore require specific mention. Once a society has lost an exemption based on its annual contribution income, whether through fluctuation of the value of the ECU or otherwise, the exemption is lost permanently, and the society will remain within the scope of the Life Directive and implementing Regulations, even if its contribution income subsequently drops below the exemption limit. In Part II, regulation 4 contains the fundamental prohibition on the carrying on of long term business by a society to which the Life Directive applies, unless it is authorised to do so by the Chief Registrar. Regulation 5 provides for existing societies, to which the Regulations apply immediately on their coming into force on 1st January 1988, to be authorised on satisfying the Chief Registrar as to their contribution income and the classes of business that they carry on. This provision also applies to existing societies which cross the contribution income threshold at a later date, except that any class of long term business which was not commenced until after 1st January 1988 will require separate authorisation under regulation 9. The authorisation procedure for new societies is laid down in regulation 6 and Schedule 2. Regulations 7 to 10 contain supplementary provisions as to the scope of an authorisation, extensions of authorisation, the time within which the Chief Registrar must decide on application, and the requirement that he should give reasons when he refuses an authorisation. In Part III, regulation 11 requires authorised societies to have an annual actuarial investigation for solvency purposes. Regulation 11(6) and (7) allow a period of six months from the end of the year of account for the submission of annual returns and valuation reports. Regulation 12 defines the term “required margin of solvency”. Failure to maintain this margin will make it necessary for a society to submit a plan for the restoration of a sound financial position (see regulation 30). Regulations 13 to 16 set out the required margins for the various classes of long term business, supplementary business being dealt with separately in regulation 17 and Schedule 3. Regulation 18 provides for aggregation where the nature of a society’s business produces more than one solvency margin. Regulation 19 defines the guarantee fund as one-third of the required margin of solvency. The guarantee fund therefore cannot be quantified until that margin has been calculated. Regulation 19 goes on to provide that the guarantee fund shall not be less than the minimum arrived at in accordance with regulation 20. Failure to maintain the minimum guarantee fund makes it necessary for a society to submit a short term financial scheme (see regulation 31). Regulation 19(3) limits the extent to which implicit items may be taken into account in the composition of the guarantee fund and minimum guarantee fund. Implicit items are future surpluses, zillmerising and hidden reserves, and they are covered in regulations 21 to 24. Regulations 25 to 27 (matching and localisation of assets) are necessary to implement the Directive as regards the business some friendly societies do in the Republic of Ireland. Matching means holding assets in a currency appropriate to the society’s liabilities, and localisation means holding those assets in the country appropriate to them. Regulation 28 deals with partial transfers of engagements between societies. Regulation 29 removes the limitations on investment under section 46 of the Friendly Societies Act 1974, so far as authorised societies are concerned. In Part IV, regulation 30 provides for a plan for the restoration of a sound financial position where a society fails to maintain its margin of solvency required under regulation 12. Regulation 31 provides for a short term financial scheme where a society’s margin of solvency falls below the amount of its guarantee fund (which will be either one-third of its solvency margin, or the amount of its minimum guarantee fund, whichever is the larger). Part V of the Regulations deals with withdrawal of authorisation. It provides that the Chief Registrar may withdraw a society’s authorisation to do new business, either at the request of the society, or on one of the grounds specified in regulation 32(2). Regulation 33 lays down the procedure to be followed where withdrawal is contemplated otherwise than at the request of the society. Parts VI and VII are concerned with the valuation of assets and determination of liabilities and are essentially adaptations of Parts V and VI of the Insurance Companies Regulations 1981. Part VI is intended to ensure a satisfactory spread of assets by requiring that any asset, the valuation of which is not provided for in the Regulations, is to be left out of account altogether, and assets of a description specified in Schedule 4 may be taken into account only within the limits specified in that Schedule; this is consistent with similar provisions applying to insurance companies. Part VII contains, in regulation 51, provision for valuation of future premiums by the net premium method, subject to the exclusion of certain types of sickness insurance carried on by Holloway and other societies, to which the net premium method is not appropriate. Part VIII contains miscellaneous provisions. The Life Directive requires continuous monitoring of the insurance undertakings to which the Directive applies. Regulation 59 therefore contains the necessary powers for the Chief Registrar to obtain information. Regulation 60 extends the Chief Registrar’s powers under the 1974 Act, to enable him to prescribe the form and particulars of valuations and annual returns, required for the purposes of the Regulations and amends the 1974 Act to enable the Treasury to make regulations determining the fees payable for matters to be transacted or for the inspection of documents under these Regulations. Regulation 61 prescribes penalties in respect of contraventions of regulation 4 (restrictions on carrying on business) and offences in connection with the furnishing of information. Regulation 62 contains power for the Chief Registrar to modify the requirements of the Regulations as to annual actuarial valuation; valuation of assets and liabilities; and the solvency margin. These powers are exercisable only in the limited circumstances described in the Regulation. Regulation 63 enables societies to apply to the Chief Registrar for a direction that section 7 of the Industrial Assurance Act 1923 (deposits by collecting societies) should cease to apply to the applicant. Regulation 64 contains provision for the exercise of the Chief Registrar’s functions when he is absent from the country or otherwise unable to exercise them. As a transitional measure, regulation 65 contains a simplified procedure for amendment of the rules of friendly societies to achieve conformity with these Regulations.

Read the full note and every offence in this instrument

Other offences in the same instrument

How this was identified as an offence

Everything above rests on the judgement that this provision creates a criminal offence, rather than mentioning one. That judgement is made by rule, from the words of the provision, and this is the rule that made it — with a confidence of 0.92.

Basis
the provision says a person is “guilty of an offence”
Confidence
0.92 of 1.00

A provision that states a penalty for an offence created elsewhere can read very like one that creates an offence, and the rules can mistake the one for the other. If the text quoted above sets a penalty for something made an offence by another provision, treat the classification on this page with that in mind, and read the instrument.

Check the source