§ 74 Page 25, line 25, at end insert:
§ '(4A) This section, so far as it relates to a body or subsidiary mentioned in subsection (2) (c) or (d) above, is without prejudice to section 16 of the Insurance Companies Act 1982 (restriction of insurance companies to insurance business).'.
§ Lord Fraser of CarmyllieMy Lords, I beg to move that the House do agree with the Commons in their Amendment No. 74.
The essential purpose of Amendment No. 74 is to put beyond doubt that Clause 18, which provides for recognised financial institutions to offer executry services, does not alter the statutory restriction on the activities of insurance companies contained in Section 16 of the Insurance Companies Act 1982.
I understand that the insurance industry is concerned lest the reference to a subsidiary creates uncertainty over the application of Section 16 of the Insurance Companies Act to subsidiaries of insurance companies. I do not believe that this concern is justified. Generally, subsidiaries of insurance companies do not come within Section 16; that is, they can carry on non-insurance business. This amendment refers to subsidiaries simply out of a cautionary approach. For example, it is at least possible to conceive of circumstances where a court might treat the activities of a subsidiary as those of its parent and the reference to a subsidiary could have effect in these circumstances. But it does not affect the position of the generality of subsidiaries who are not caught by Sectior 16.
Moved, that the House do agree with the Commons in their Amendment No. 74.—(Lord Fraser of Carmyllie.)
§ On Question, Motion agreed to.