Exclusions
(1) Nothing in this Schedule affects the operation of—
(a) Part 7 of the Companies Act 1989 (financial markets and insolvency);
(b) the Financial Markets and Insolvency Regulations 1996 ( S.I. 1996/1469 );
(c) the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 ( S.I. 1999/2979 );
(d) the Financial Collateral Arrangements (No.2) Regulations 2003 ( S.I. 2003/3226 ).
(2) Nothing in this Schedule affects any protected arrangements within the meaning of section 48P of the Banking Act 2009.
Disapplication of this Schedule by the court
(1) The court may order that this Schedule, or a specified provision of this Schedule—
(a) does not apply (insofar as it would otherwise) in relation to one or more contracts to which the insurer is a party, or
(b) applies with specified modifications in relation to one or more such contracts.
(2) An order under this paragraph—
(a) must specify the contracts to which it applies;
(b) may specify all of the contracts to which the insurer is a party (and to which one or more provisions of this Schedule would otherwise apply).
(3) For the purposes of an order under this paragraph—
“ contract ” includes a contract of insurance;
“ specified ” means specified or described in the order.
(4) The court may make an order under this paragraph only if satisfied that one or more of the following grounds is made out—
(a) not making the order would be likely to cause hardship to any person (other than the insurer);
(b) where the insurer is in financial difficulties by virtue of paragraph 2(1)(a) (write-down order), making the order is reasonably likely to lead to a better outcome for the insurer’s policyholders and other creditors (taken as a whole) than not making the order;
(c) where the insurer is in financial difficulties by virtue of paragraph 2(1)(b) (administration), making the order is reasonably likely to promote the purpose of administration.
(5) The “ purpose of administration ” means—
(a) where the insurer is in, or is awaiting, administration under Part 2 of the 1986 Act (as modified, in relation to insurers, by the Financial Services and Markets Act 2000 (Administration Orders Relating to Insurers) Order 2010 ( S.I. 2010/3023 )), an objective specified in paragraph 3 or 3A of Schedule B1 to the 1986 Act;
(b) where the insurer is in, or is awaiting, administration under Part 3 of the 1989 Order (as modified, in relation to insurers, by the Financial Services and Markets Act 2000 (Administration Orders Relating to Insurers) (Northern Ireland) Order 2007 ( S.I. 2007/846 )), an objective specified in paragraph 4 of Schedule B1 to the 1989 Order.
Procedure
(1) An order under paragraph 10 may be made on the court’s own motion or on an application by—
(a) where the insurer is in financial difficulties by virtue of paragraph 2(1)(a) (write-down order), a person mentioned in paragraph 1(4) of Schedule 19B;
(b) where the insurer is in financial difficulties by virtue of paragraph 2(1)(b) (administration), a person mentioned in sub-paragraph (2) ;
(c) where the insurer is in financial difficulties by virtue of paragraph 2(1)(c) (winding up), a person entitled to petition for the winding up of the insurer;
(d) a provisional liquidator of the insurer;
(e) the FCA.
(2) For the purposes of sub-paragraph (1)(b) , the persons are—
(a) where an administrator has been appointed, the administrator;
(b) where the insurer is in, or is awaiting, administration under Part 2 of the 1986 Act, a person mentioned in paragraph 12(1) of Schedule B1 to that Act;
(c) where the insurer is in, or is awaiting, administration under Part 3 of the 1989 Order, a person mentioned in paragraph 13(1) of Schedule B1 to that Order.
(3) Before making an application for an order under paragraph 10 —
(a) a person other than a person mentioned in sub-paragraph (4) must obtain the consent of the PRA;
(b) a person mentioned in sub-paragraph (4) must consult the PRA.
(4) The persons mentioned in this sub-paragraph are—
(a) the FCA;
(b) an administrator of the insurer;
(c) a provisional liquidator of the insurer;
(d) a person appointed to act as the manager of the write-down order by virtue of which the insurer is in financial difficulties for the purposes of this Schedule.
(5) Consent under sub-paragraph (3)(a) —
(a) must be in writing, and
(b) must be filed with the court with the relevant application.
(6) The PRA must consult the FCA before giving or refusing consent under sub-paragraph (3)(a) .
