§ Mr. Eyre
I beg to move amendment No. 13, in page 11, line 40 at end add—`() For the purposes of subsection (1) above any activities of an insurance company that are excluded from the definition of insurance business by section 34(c)(ii) below shall be treated as carried on in connection with its insurance business.'
§ Mr. Eyre
The amendment to clause 15 paves the way for the amendments to clause 34(c). In Committee I moved an amendment to clause 34 to enable an insurance company to enter into a contract to manage the investments of a pension fund for its own employees without needing an authorisation for class VII business. I acknowledged that that amendment might not deal with `group' pension funds—those covering employees not only of the insurance company itself but of other companies in the same group, and I agreed to consider the matter further.
I believe that the reasons that I outlined in Committee in favour of that amendment apply equally to these amendments. Any non-insurance company is free to manage the investments of a pension fund without an authorisation for class VII business, but the general rule is that an insurance company must be authorised and maintain, where appropriate, a solvency margin in respect of such business. I have no quarrel with the general rule, but it is not necessary or appropriate to apply it to the management of funds for the benefit of the company's own employees, even when that fund covers other employees within the group. The amendments have the simple objective of broadening the scope of the exceptions to that general rule to cover such "mixed" pension funds. The insertion of the words "officers or" will avoid a difficulty where such a fund includes directors who are not employees of the company.
I should explain briefly why the amendment to clause 34 necessitates a change to clause 15. Once the management of such pension funds by an insurance company is no longer insurance business it is doubtful whether such an activity would bein connection with or for the purposes of its insurance businessas would be required by clause 15 unamended. The amendment to the clause ensures that there is no conflict between the two clauses.
§ Mr. Clinton Davis
I am grateful to the Minister for having enabled his officials to confer further with the industry. The result of that is the group of amendments, which are helpful.
§ Mr. Eyre
I ought to add that if anyone concerned were to propose a way not already suggested for making a widening amendment that did not conflict with the directive I should be prepared for officials to consider it. However, any such provision seems bound to be in conflict with the directive and I hold out little hope of being able to go further in this area. I am grateful to the hon. Gentleman for acknowledging the progress that has been made.
§ Amendment agreed to.