COMMONS AMENDMENT (Hansard, 27 July 1967)

§ LORD WALSTON

My Lords, with your Lordships' permission I should like to couple with this Amendment some other Amendments, but fortunately this time only two others: Amendments Nos. 151 and 231. As at present worded, Clause 51(5) entitles the Board of Trade to authorise an insurance company not having the requisite solvency margin or paid-up capital to carry on insurance business if the Board are satisfied: first, that the authorisation is required for the purpose only of carrying on a limited category of insurance business, or of insurance of a limited class of persons; and, secondly, that the company does not carry on or propose to carry on in Great Britain any other insurance business.

The restriction imposed by this second condition would prevent the concession being applied in the case of a small company which was already authorised to carry on one limited class of business, such as windscreen insurance (which falls within the definition of motor vehicles insurance business), and which might wish to extend its business in order to carry on another limited, and to some extent allied, category of business, such as plate glass insurance business, which at the present time falls within the definition of property insurance business. Amendment No. 138 removes this restriction. Amendment No. 231 effects an identical Amendment to Clause 79(1), and allows the Board in similar circumstances to grant the concessions described in that clause.

The new clause introduced by Amendment No. 151 will enable the Board to restrict an authorisation under Clause 50 to a specified limited category of business or to the insurance of a limited class of persons, in those cases where the Board are satisfied, in accordance with Clause 51(5), that the financial standards set by Clause 51 need not be met because of the limited business to be undertaken; in other words, where it is only a small amount of business that is proposed to be done, but not if it is a major extension. A company which secured an authorisation under these less onerous conditions would thus be bound to make new application if it subsequently decided to extend its business beyond the limits originally agreed. I beg to move.