Joint Committee on Statutory Instruments Fifteenth Report


Memorandum by HM Treasury


  1. Thank you for your letter of 24 March asking for a memorandum on the following point:

    Regulation 6(1) provides for the abatement of fees where the sum of the fees payable under regulations 4 and 5 by all the insurance companies within a group exceeds the specified figure. Explain the relevance of the reference to regulation 5, given that that regulation provides that the Regulations do not apply in the case of an EC company.

  2. The reference to regulation 5 is intended to inform insurance groups - which may have insurance company subsidiaries worldwide - that if one of their subsidiaries is an EC company, then for the purpose of determining the potential fee income, gross premium income of that EC company should be disregarded.

  3. In more detail: to determine whether or not abatement of the total liability to pay fees should take place, by virtue of Regulation 6(1), the fees payable in respect of gross premium income of each of the companies in the group will be totalled. The provision of regulation 4 is fees payable will be dependant on the premium income. The effect of regulation 5 is that, in respect of companies that are EC companies, the fees payable will be zero irrespective of premium income. Accordingly, when totalling the fees payable for the purposes of determining whether abatement should take place it is relevant to have regard to both regulation 4 and regulation 5. It is for that reason that reference to regulation 5 was made in regulation 6(1).

  4. Fees are payable when requirements to deposit documents are complied with. Although in general EC companies will not deposit documents under Section 22(1) of the Act (which triggers payment of fees) there is a particular circumstance in which EC companies could be liable to deposit documents. By Section 15 of the Act, Section 22 will apply to EC companies insofar as they are carrying on business through a branch in respect of which the requirements of Part I of Schedule 2F have not been complied with.

30 March 1999

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