The Individual Savings Account (Amendment No. 2) Regulations 2004

• Citation: S.I. 2004/2996
• Sections: 22

Section 1 Citation, commencement and effect

(1) These Regulations may be cited as the Individual Savings Account (Amendment No. 2) Regulations 2004 and shall come into force on 7th December 2004.

(2) These Regulations (except regulation 3(b)) shall have effect from 6th April 2005.

Section 2 Amendment of the Individual Savings Account Regulations 1998

The Individual Savings Account Regulations 1998 are amended as follows.

Section 3 Amendment of the Individual Savings Account Regulations 1998

In regulation 2(1)(a)—

(a) in the definition of “account investment”, for “, a cash” to the end substitute “or a cash component, as the case may be, within the meaning of regulation 7 or 8”;

(b) in the definition of “assurance undertaking”, for “8” to the end substitute “2 of the Council Directive of 5th November 2002 concerning life assurance (No. 2002/83)”;

(c) insert at the appropriate place the following definition—

“the Stakeholder Products Regulations ” means the Financial Services and Markets Act 2000 (Stakeholder Products) Regulations 2004 ;

Section 4 Amendment of the Individual Savings Account Regulations 1998

In regulation 2(2) omit the definition of “qualifying investments for an insurance component”.

Section 5 Amendment of the Individual Savings Account Regulations 1998

In regulation 4—

(a) in paragraph (1)(a) omit “and an insurance component”;

(b) in paragraph (2) omit “, and no more” to the end;

(c) in paragraph (3) omit sub-paragraph (b); and

(d) in paragraph (3)(c) for “£3,000” substitute “£4,000”.

Section 6 Amendment of the Individual Savings Account Regulations 1998

After regulation 4B insert—

Removal of insurance components at 6th April 2005

(4C)

(1) This regulation applies to accounts which include (or are made up of) an insurance component immediately before 6th April 2005 (“the transitional time”).

(2) Where all the policies of life insurance falling within regulation 9, held under the component at the transitional time, were issued in respect of an insurance made before 6th April 2004, the component—

(a) if the account is, or had been, designated as a maxi-account, shall be treated on and from 6th April 2005 as merged into the stocks and shares component for that account; and

(b) if the account is, or had been, designated as a mini-account, shall be treated on and from 6th April 2005 as a stocks and shares component of the same account.

(3) Where any of the policies of life insurance falling within regulation 9, held under the component at the transitional time, were issued in respect of an insurance made on or after 6th April 2004—

(a) the condition in regulation 7(15) shall be applied to those policies on 6th April 2005 (modified as if the date referred to in that condition were 6th April 2005);

(b) if all those policies satisfy that condition, paragraph (2)(a) or (b), as the case may be, shall apply to the component;

(c) if any of those policies does not satisfy that condition, the component—

(i) if the account is, or had been, designated as a maxi-account including a cash component, shall be treated on and from 6th April 2005 as merged into the cash component for that account; and

(ii) in any other case, shall be treated on and from 6th April 2005 as a cash component for the same account.

Section 7 Amendment of the Individual Savings Account Regulations 1998

In regulation 7(2) add at the end—

(m) units in a relevant collective investment scheme specified as a stakeholder product by regulation 5 of the Stakeholder Products Regulations, in circumstances where the units satisfy the condition in paragraph (15);

(n) policies of life insurance falling within regulation 9, issued in respect of an insurance made on or after 6th April 2005, in circumstances where the policy satisfies the condition in paragraph (15);

(o) policies of life insurance falling within regulation 9, issued in respect of an insurance made before—

(i) 6th April 2004, in a case where regulation 4C(2)(a) or (b) applies, or

(ii) 6th April 2005, in a case where regulation 4C(3)(b) applies.

Section 8 Amendment of the Individual Savings Account Regulations 1998

In regulation 7(10)(c)(i) omit “, or an insurance component,”.

Section 9 Amendment of the Individual Savings Account Regulations 1998

In regulation 7(15) for “were first” substitute “became”.

Section 10 Amendment of the Individual Savings Account Regulations 1998

In regulation 7(16)—

(a) in sub-paragraph (a) add at the end “, and in the case of a policy of life insurance, under whose terms some or all of the benefits are determined by reference to fluctuations in, or in an index of, the value of any property of any description (whether or not specified in the policy or contract), that property or that index”;

(b) in sub-paragraph (b) after “paid” insert—

or payable include premiums paid or payable under a policy of life insurance, and

(c) in sub-paragraph (c) add at the end “and, in the case of a policy of life insurance, omitting any benefits payable in the event of the death of the account investor”.

Section 11 Amendment of the Individual Savings Account Regulations 1998

After regulation 7(16) add—

(17) Where a policy of life insurance confers on the person to whom it is issued an option to have another policy issued for it or to have any of its terms changed, the condition in paragraph (15) shall only be satisfied if it would also be satisfied if each or any of the changes capable of being made in pursuance of such an option had been made.

Section 12 Amendment of the Individual Savings Account Regulations 1998

In regulation 8(2) add at the end—

(j) a deposit account specified as a stakeholder product by regulation 4 of the Stakeholder Products Regulations;

(k) units in a relevant collective investment scheme specified as a stakeholder product by regulation 5 of the Stakeholder Products Regulations, in circumstances where the units do not satisfy the condition in regulation 7(15);

(l) policies of life insurance, falling within regulation 9, issued in respect of an insurance made on or after 6th April 2005, in circumstances where the policy does not satisfy the condition in regulation 7(15);

(m) policies of life insurance, falling within regulation 9, issued in respect of an insurance made before 6th April 2005, in a case where regulation 4C(3)(c)(i) or (ii) applies.

Section 13 Amendment of the Individual Savings Account Regulations 1998

In regulation 9—

(a) for the heading substitute “Insurance policies”;

(b) for paragraphs (1) and (2) substitute—

(1) Policies referred to in regulation 7(2)(n) or (o) or 8(2)(l) or (m) must, subject to compliance with paragraphs (4) to (7), satisfy the conditions specified in paragraph (3).

(2) In paragraph (1) “policies” includes rights under a linked long-term contract specified as a stakeholder product by regulation 6 of the Stakeholder Products Regulations.

(c) in paragraph (3)(b)(i) omit “an insurance component of”;

(d) in paragraph (4) omit “which is a qualifying investment for an insurance component falling within paragraph (2)(a)”.

Section 14 Amendment of the Individual Savings Account Regulations 1998

In regulation 14—

(a) in paragraph (2)(b)—

(i) in paragraph (iii) omit the words from the beginning to “only,”;

(ii) in paragraph (iv) omit the words from the beginning to “only,”;

(iii) in paragraph (v) for the words from the beginning to “only, an” substitute “any”;

(b) in paragraph (3)(a)—

(i) in paragraph (ii) omit “any”;

(ii) omit paragraph (iii) and for the word “or” which precedes it substitute “and”.

Section 15 Amendment of the Individual Savings Account Regulations 1998

In regulation 22(1)—

(a) in sub-paragraph (a)(v) omit “held” to the end;

(b) in sub-paragraph (c) omit “held under an insurance component”.

Section 16 Amendment of the Individual Savings Account Regulations 1998

In both the heading to regulation 23 and paragraph (1) of that regulation, omit “or insurance component”.

Section 17 Amendment of the Individual Savings Account Regulations 1998

In regulation 25(5)—

(a) for “qualifying investments for an insurance component of any account” substitute “policies of life insurance falling within regulation 9”;

(b) for “the qualifying investments held under any such component” substitute “such policies”.

Section 18 Amendment of the Individual Savings Account Regulations 1998

In regulation 31—

(a) in paragraph (4) for “The” substitute “Subject to paragraph (5), the”;

(b) in paragraph (5)—

(i) for the words from the beginning to “applied” substitute “Paragraph (4) shall apply to policies of life insurance falling within regulation 9”; and

(ii) omit “, and of cash”.

Section 19 Amendment of the Individual Savings Account Regulations 1998

In regulation 31(7)(b) omit paragraph (iii) and the word “and” which precedes it.

Section 20 Amendment of the Individual Savings Account Regulations 1998

In regulation 35(6)(a) omit “held under an insurance component”.

Section 21 Amendment of the Individual Savings Account Regulations 1998

In regulation 35(8) omit “held under an insurance component”.

Section 22 Amendment of the Individual Savings Account Regulations 1998

In both regulation 36(8) and (9)(a) for “basic” substitute “lower”.