A.D. 1923.

Prohibition on issue of

illegal policies.

Name of collecting societies.

Deposits by collecting societies.

5.-(1) Any collecting society or industrial assurance company which issues policies of industrial assurance which are illegal or are not within the legal powers of the society or company shall be held to have made default in complying with the provisions of this Act, and 5 where any such policy has been issued the society or company shall, without prejudice to any other penalty, be liable to pay to the owner of the policy a sum equal to the surrender value of the policy (to be ascertained in manner hereinafter provided), or if the policy was 10 issued after the commencement of this Act a sum equal to the amount of the premiums paid, unless it is proved that owing to any false representation on the part of the proposer, the society or company did not know that the policy was illegal or beyond their legal powers.

(2) No collector of, or person employed by, a society or company shall knowingly assist in effecting a policy of industrial assurance which is illegal or not within the legal powers of the society or company.

Special Provisions as to Collecting Societies.

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6. In the case of any collecting society registered after the thirty-first day of December, eighteen hundred and ninety-five, or of a society which becomes a collecting society after the passing of this Act, the last words in the name of the society shall be "collecting society," and the 25 society shall use its registered name on all documents issued by it and no other name.

7.-(1) Every collecting society shall be under the like obligation to deposit and keep deposited the sum of twenty thousand pounds as an industrial assurance com- 30 pany, and section two of the Assurance Companies Act, 1909. as applied by this Act to industrial assurance companies, shall apply accordingly, subject in its application to collecting societies to the following modifications:(a) For references to the Board of Trade, there shall 35 be substituted references to the Commissioner:

(b) Subsection (3) shall not apply:

(c) In the case of a society registered and carrying
on industrial assurance business at the passing
of this Act the deposit shall be made before the 40
commencement of this Act; but if in any par-
ticular case the Commissioner considers that

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further time should be allowed to the society for A.D. 1923.
making the deposit, he may, if satisfied as to the
financial position of the society at the time of
the passing of this Act, postpone the time for
making the deposit to some time within five
years after the commencement of this Act:
(d) In the case of a society commencing to carry on
industrial assurance business after the passing
of this Act, the deposit shall be made before the
society commences to carry on such business:
(e) In the case of a society applying after the passing
of this Act for registry under the Friendly
Societies Act, 1896, or for the registry of
amendments of its rules, if the proposed rules
of the society or the proposed amendments are
such as will enable the society to carry on
industrial assurance business, the Commissioner
shall not issue to the society an acknowledgment
of registry of the society or of amendment of
rules, as the case may be, until the deposit has
been made:

(f) A collecting society shall not be required to make
a deposit in respect of any business other than
industrial assurance business, but subject as
aforesaid, subsection (4) of the said section shall
apply.

(2) If the Commissioner is satisfied that a collecting society has made default in complying with the provisions of this section, the Commissioner may award that the 30 society be dissolved and its affairs wound up.

(3) This section, so far as it relates to a society commencing to carry on industrial assurance business or applying for registration or for registration of an amendment of rules enabling it to carry on industrial 35 assurance business after the passing of this Act, shall come into operation on the passing of this Act.

(4) Where the rules of a collecting society (hereinafter in this subsection referred to as a subsidiary society), whether registered before or after the passing of this Act, 40 provide that the management of that society shall be vested in the committee of management of some other friendly society (hereinafter in this subsection referred to as the principal society) which was registered before the

A.D. 1923. fourth day of August, nineteen hundred and twenty-one,

Provisions to

then

(a) the principal society may make on behalf of the subsidiary society the deposit required to be made by this section and may apply any of its 5 funds for that purpose, and in that case the interest on the deposit, or the securities in which the deposit is for the time being invested, shall be paid to the principal society and not to the subsidiary society; or

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(b) the principal society may guarantee the liabilities
of the industrial assurance fund of the subsidiary
society to the extent of twenty thousand pounds
in such manner and subject to such amendment
of rules as the Commissioner may require, and 15
the principal society may amend its rules
accordingly; and if the Commissioner is satisfied
with such guarantee he may accept the guarantee
in lieu of the deposit required by this section.

Where the principal society is a society with branches, 20
the rules of the society may provide for the central body
of the society borrowing from the branches and the
branches lending to the central body funds required for
making such a deposit as aforesaid.

8. (1) The rules of a collecting society shall 25

be contained provide

in rules.

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(a) for a separate account being kept of all receipts
in respect of the industrial assurance business
transacted by the society, and for those receipts
being carried to and forming a separate fund 30
under the name of the industrial assurance
fund; but nothing in this provision shall be
construed as requiring the investments of the
industrial assurance fund to be kept separate
from the other investments of the society;
(b) for the industrial assurance fund being as
absolutely the security of the owners of the
industrial assurance policies as though it be-
longed to a society carrying on no business
other than industrial assurance business, and 40
not being liable for any contracts of the society
for which it would not have been liable had
the business of the society been only that of
industrial assurance, and not being applied
directly or indirectly for any purposes other 45

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than those of the industrial assurance business A.L. 1923.
of the society, so however as not to affect the
liability of that fund to the prejudice of persons
interested in contracts entered into by the society
before the commencement of this Act;

(c) for separate valuations being made of the industrial
assurance business of the society.

(2) Save as otherwise provided by the rules of a collecting society, being rules registered before the fourth 10 day of August, nineteen hundred and twenty-one

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(a) the rules of a collecting society shall contain the
tables in accordance with which policies of
industrial assurance are issued by the society;
and

(b) no policy shall be issued by a collecting society
otherwise than in accordance with the rules of
the society and with the tables for the time
being in force as set forth in those rules.

(3) Such of the provisions of this Act as are men20 tioned in the First Schedule to this Act shall be set forth in the rules of every collecting society.

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9. (1) A collecting society shall deliver free of Obligation charge to every person on his becoming a member of to deliver or insuring with the society a printed policy signed by policies and 25 two of the committee of management and by the secretary, rules. together with a copy of the rules of the society in force at the time :

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Provided that—

(a) in the case of a family enrolled in one book or
card, one family policy and one copy of the
rules shall be sufficient;

(b) if the rules of the society in force at the time
of the issue of the policy are printed in easily
legible type on the policy it shall not be
necessary to deliver a copy of the rules in
addition to the policy.

(2) A collecting society shall also supply to any such person at his request free of charge a copy of any subsequent amendment of the rules of the society.

40 (3) A collecting society shall also deliver to any member or other person on demand and on payment of a sum not exceeding one shilling, a copy of the rules of the society in force at the time.

copies of

A.D. 1923.

total and partial.!

10.-(1) The Commissioner may, on the application Exemptions, of a society registered or applying for registry, grant to the society a certificate of exemption from all or any of the provisions of this Act, in any case where he is satisfied that the society does not or will not carry on the 5 business of effecting assurances upon human life, premiums in respect of which are received by means of collectors at a greater distance than ten miles from the registered office of the society, and where he is of opinion that the society is not one to which those provisions ought to apply.

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(2) A certificate of exemption under this section shall be granted subject to the condition that the society will not employ collectors to receive premiums on policies issued by the society at a greater distance than ten miles from the registered office of the society, and if in the case 15 of any society to which a certificate of exemption has been so granted, the said condition is at any time not complied with, the society and any collector so employed shall be deemed to have contravened the provisions of this Act, and this Act shall be deemed as from the date of 20 such non-compliance to have applied to the society as if no such certificate of exemption had been granted to it.

(3) The certificate shall be subject to revocation by the Commissioner. but shall remain in force until so revoked. and until uotice of the revocation has been 25 advertised in the Gazette and in some newspaper in general circulation in the neighbourhood of the registered office of the society, and also transmitted by registered letter to the society.

(4) Where at the passing of this Act there is in force 30 a certificate of exemption issued under section eleven of the Collecting Societies and Industrial Assurance Companies Act, 1896, or the corresponding provision of any Act repealed by that Act, the certificate shall, after the passing of this Act, continue in force until revoked and 35 have effect as if it were a certificate issued under this section exempting the society from all the provisions of this Act:

Provided that so long as the Collecting Societies and Industrial Assurance Companies Act, 1896, continues in 40 force after the passing of this Act, any such certificate shall continue to operate as an exemption of the society to which it was granted from the provisions of that Act.