Financial Services and Markets Bill - continued        House of Lords
PART XIX, LLOYD'S - continued
Power to apply Act to Lloyd's underwriting - continued

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Exercise of powers through Council.     311. - (1) The Authority may give a direction under this subsection to the Council or to the Society (acting through the Council) or to both.
 
      (2) A direction under subsection (1) is one given to the body concerned-
 
 
    (a) in relation to the exercise of its powers generally with a view to achieving, or in support of, a specified objective; or
 
    (b) in relation to the exercise of a specified power which it has, whether in a specified manner or with a view to achieving, or in support of, a specified objective.
      (3) "Specified" means specified in the direction.
 
      (4) A direction under subsection (1) may be given-
 
 
    (a) instead of giving a direction under section 309(1); or
 
    (b) if the Authority considers it necessary or expedient to do so, at the same time as, or following, the giving of such a direction.
      (5) A direction may also be given under subsection (1) in respect of underwriting agents as if they were among the persons mentioned in section 309(1).
 
      (6) A direction under this section-
 
 
    (a) does not, at any time, prevent the exercise by the Authority of any of its powers;
 
    (b) must be in writing.
      (7) A direction under subsection (1) must be published in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
 
      (8) The Authority may charge a reasonable fee for providing a person with a copy of the direction.
 
      (9) The Authority must, without delay, give the Treasury a copy of any direction which it gives under this section.
 
Consultation.     312. - (1) Before giving a direction under section 309 or 311, the Authority must publish a draft of the proposed direction.
 
      (2) The draft must be accompanied by-
 
 
    (a) a cost benefit analysis; and
 
    (b) notice that representations about the proposed direction may be made to the Authority within a specified time.
      (3) Before giving the proposed direction, the Authority must have regard to any representations made to it in accordance with subsection (2)(b).
 
      (4) If the Authority gives the proposed direction it must publish an account, in general terms, of-
 
 
    (a) the representations made to it in accordance with subsection (2)(b); and
 
    (b) its response to them.
      (5) If the direction differs from the draft published under subsection (1) in a way which is, in the opinion of the Authority, significant-
 
 
    (a) the Authority must (in addition to complying with subsection (4)) publish details of the difference; and
 
    (b) those details must be accompanied by a cost benefit analysis.
      (6) Subsections (1) to (5) do not apply if the Authority considers that the delay involved in complying with them would be prejudicial to the interests of consumers.
 
      (7) Neither subsection (2)(a) nor subsection (5)(b) applies if the Authority considers-
 
 
    (a) that, making the appropriate comparison, there will be no increase in costs; or
 
    (b) that, making that comparison, there will be an increase in costs but the increase will be of minimal significance.
      (8) The Authority may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).
 
      (9) When the Authority is required to publish a document under this section it must do so in the way appearing to it to be best calculated to bring it to the attention of the public.
 
      (10) "Cost benefit analysis" means an estimate of the costs together with an analysis of the benefits that will arise-
 
 
    (a) if the proposed direction is given; or
 
    (b) if subsection (5)(b) applies, from the direction that has been given.
      (11) "The appropriate comparison" means-
 
 
    (a) in relation to subsection (2)(a), a comparison between the overall position if the direction is given and the overall position if it is not given;
 
    (b) in relation to subsection (5)(b), a comparison between the overall position after the giving of the direction and the overall position before it was given.
 
Former underwriting members
Former underwriting members.     313. - (1) "A former underwriting member" means a person ceasing to be an underwriting member of the Society on, or at any time after, 24 December 1996.
 
      (2) A former underwriting member may carry out each contract of insurance that he has underwritten at Lloyd's whether or not he is an authorised person.
 
      (3) If he is an authorised person, any Part IV permission that he has does not extend to his activities in carrying out any of those contracts.
 
      (4) The Authority may impose on a former underwriting member such requirements as appear to it to be appropriate for the purpose of protecting policyholders against the risk that he may not be able to meet his liabilities.
 
      (5) A person on whom a requirement is imposed may refer the matter to the Tribunal.
 
Requirements imposed under section 313.     314. - (1) A requirement imposed under section 313 takes effect-
 
 
    (a) immediately, if the notice given under subsection (2) states that that is the case;
 
    (b) in any other case, on such date as may be specified in that notice.
      (2) If the Authority proposes to impose a requirement on a former underwriting member ("A") under section 313, or imposes such a requirement on him which takes effect immediately, it must give him written notice.
 
      (3) The notice must-
 
 
    (a) give details of the requirement;
 
    (b) state the Authority's reasons for imposing it;
 
    (c) inform A that he may make representations to the Authority within such period as may be specified in the notice (whether or not he has referred the matter to the Tribunal);
 
    (d) inform him of the date on which the requirement took effect or will take effect; and
 
    (e) inform him of his right to refer the matter to the Tribunal.
      (4) If, having considered any representations made by A, the Authority decides-
 
 
    (a) to impose the proposed requirement, or
 
    (b) if it has been imposed, not to revoke it,
  it must give him written notice.
 
      (5) If the Authority decides-
 
 
    (a) not to impose a proposed requirement, or
 
    (b) to revoke a requirement that has been imposed,
  it must give A written notice.
 
      (6) If the Authority proposes to refuse an application by A for the variation or revocation of a requirement it must give him a warning notice.
 
      (7) The Authority, having considered any representations made in response to the warning notice, must give A written notice of its decision on the application.
 
      (8) A notice given under-
 
 
    (a) subsection (4), or
 
    (b) subsection (7) in the case of a decision to refuse the application,
  must inform A of his right to refer the matter to the Tribunal.
 
 
Supplemental
Interpretation of this Part.     315. - (1) In this Part-
 
 
    "arranging deals", in relation to the investments to which this Part applies, has the same meaning as in paragraph 3 of Schedule 2; and
 
    "participation in Lloyd's syndicates", in relation to the secondary market activity, means the investment described in sub-paragraph (1) of paragraph 21 of Schedule 2.
      (2) A term used in this Part which is defined in Lloyd's Act 1982 has the same meaning as in that Act.
 
 
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