Insurance Act, 1936

Industrial assurance valuations.

55.—The following provisions shall have effect in relation to every valuation (in this Part of this Act referred to as an industrial assurance valuation) made by an industrial assurance company of its industrial assurance business at any time after the expiration of twelve months after the commencement of this Part of this Act, that is to say:—

(a) such valuation shall be made by an actuary;

(b) the basis of such valuation shall be such as to place a proper value upon the liabilities of such company, regard being had to the mortality experienced among the persons whose lives have been assured in such company, to the average rate of interest from investments, and to the expenses of management (including moneys paid by way of commission), and shall be such as to secure that no policy effected by such company shall be treated as an asset;

(c) subject to the provisions of the next following paragraph of this section, where the balance sheet of an industrial assurance company includes in the assets thereof any sums representing expenses of organisation, or of extension of the business of such company, or the purchase of the business or goodwill of any other such company, and the amount of such assets exclusive of such sums (after deducting debts due by such first mentioned company other than debentures and loans), is less than the amount (as the case may be) of the industrial assurance fund or of both the life assurance fund and the industrial assurance fund as shown in such balance sheet, the amount of the industrial assurance fund shown in the valuation balance sheet shall be reduced by whichever of the following amounts or sums is applicable in any particular case, that is to say, by the amount of the deficiency, or by a sum bearing such proportion to that deficiency as the amount of the industrial assurance fund shown in such first mentioned balance sheet bears to the aggregate amount of both the life assurance fund and the industrial assurance fund;

(d) the provisions of the next preceding paragraph of this section shall, in the cases and during the periods mentioned in this paragraph, apply to industrial assurance companies with such relaxations thereof as the Minister thinks fit to allow, that is to say:—

(i) in the case of an industrial assurance company in the balance sheet of which last issued before the commencement of this Part of this Act any of the sums mentioned in the said next preceding paragraph were included, during a period of seven years next after such commencement, and

(ii) in the case of an industrial assurance company which, after the date as at which the balance sheet of such company last issued before the commencement of this Part of this Act was made up, has, by reason of amalgamation with or transfer of business from any other industrial assurance company, become liable for the contracts and obligations or any of the contracts and obligations of such other company and has, in consideration of such liability, either accepted assets which include any of the sums mentioned in the said next preceding paragraph, or incurred expenditure by way of the purchase of the business or goodwill so mentioned, during a period of seven years after the 31st day of December next following the date of such amalgamation or transfer (as the case may be);

(e) where debentures have been issued or loans have been raised and such debentures or loans (as the case may be) are charged on any of the assets of an industrial assurance company in which the industrial assurance fund is invested, there shall be inserted in the valuation balance sheet a note giving the particulars of such charge and stating that the result shown by the valuation is subject to the liability under such charge.