Clause 6 (Effect on property rights of variation order)

Executive Committee Business – in the Northern Ireland Assembly at 1:15 pm on 9 March 2009.

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Photo of William Hay William Hay Speaker 1:15, 9 March 2009

We now come to the second group of amendments for debate. With amendment No 3, it will be convenient to debate amendment Nos 4, 6 and 7. Those amendments deal with annuities and other periodical payments that are paid as a result of a declaration of presumed death, and they will reduce the requirement for insurance on the part of recipients of such payments. They further deal with amending the definition of “insurer”.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I beg to move amendment No 3: In page 4, line 12, after “declaration” insert

“(other than a capital sum which has been distributed by way of an annuity or other periodical payment)”.

The following amendments stood on the Marshalled List:

No 4: In clause 7, page 4, line 42, after “sum” insert

“(other than in respect of an annuity or other periodical payment)”. — [The Minister of Finance and Personnel (Mr Dodds).]

No 6: In clause 16, page 8, line 4, at end insert

“‘insurer’ means any person who provides for the payment of benefits on the death of any person;”. — [The Minister of Finance and Personnel (Mr Dodds).]

No 7: In clause 16, page 8, leave out lines 20 to 32. — [The Minister of Finance and Personnel (Mr Dodds).]

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

Amendment Nos 3 and 4 seek to modify the treatment of capital sums that are paid out by insurers in clauses 6 and 7 of the Bill. The purpose of the amendments is to make sure that this Bill treats payments to insurers in the same way as they are treated under the Presumption of Death (Scotland) Act 1977. Under the Scottish Act, payments of capital sums by way of annuity or other periodical payments are excluded from the scope of the obligation on the courts to take into account the need to return capital sums to insurers when making a property variation order on foot of an order that varies the original declaration of death. The payments are also excluded from the scope of the right of insurers to require the recipient of capital insurance sums to take out indemnity insurance.

Under clauses 6 and 7 of our Bill, no special provision is made in relation to capital sums that are paid out by way of annuity or other periodical payments. The practical effect of the amendments will be that in those cases in which life insurance is paid out in periodical payments, or by way of annuity, the insurer making the payment will not be able to require the recipient to take out reinsurance to cater for the possibility that the missing person may not, in fact, be dead.

Those two technical amendments have been raised with the insurance industry, which agrees that the Northern Ireland legislation should treat those payments and repayments in the same way as they are treated under the corresponding Scottish legislation.

Amendment Nos 6 and 7 are technical amendments to replace the definition of insurer at clause 16(2) and 16(3). The current definition of insurer is unnecessarily complex and is tied to the regulatory framework for the carrying out of insurance business as set out in the Financial Services and Markets Act 2000. Although legally correct, that cumbersome definition is not required for the purposes of the Bill.

Amendment No 6 would insert a new single definition of insurer:

“‘insurer’ means any person who provides for the payment of benefits on the death of any person;”.

That simpler definition is modelled on the definition of insurer in the Presumption of Death (Scotland) Act 1977. Indeed, it is also to be found in the current definition at clause 16(2)(c) as a catch-all provision to cover those persons providing for the payment of benefits on the death of a person who is not included in the regulatory framework of the Financial Services and Markets Act 2000.

To be clear, that simpler definition does not extend the scope of the Bill in any way. It is a technical, presentational amendment to make it easier for the general reader to understand the circumstances when insurance moneys or other death benefits may have to be repaid, should the missing person who has been presumed to be dead turn out to be alive.

Amendment No 7 is consequential to amendment No 6 and removes from the Bill the current definition of insurer in clause 16(2) and 16(3). I beg to move the amendments.

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

Go raibh maith agat, a Cheann Comhairle. The Minister set out this group of amend­ments in significant detail, so I will dwell on the Committee’s consideration of it.

I will deal first with amendment No 3, which would amend clause 6, and amendment No 4, which would amend clause 7. The Committee discussed concerns that were expressed by the Northern Ireland Human Rights Commission about the need for clarification from the insurance industry on the likely costs of payments associated with the requirement for certain persons, including trustees or the recipient of a missing person’s life insurance money, to take out insurance to cover the costs of returning insurance money should it be subsequently established that the missing person is still alive. At that time, the Department advised the Committee that the insurance industry was unable to provide specific information on likely premium rates to be paid in those cases in which either the legislation or an insurer imposes an obligation on a person to take out insurance to cover the possibility that a missing person may not be dead.

However, information on premiums that are payable in comparable circumstances, including in respect of missing beneficiary insurance, was provided to the Committee. In addition, the Department emphasised that the courts retain the power to disapply the requirement in certain circumstances. Therefore, it is not always the case that there will be a requirement for insurance.

I confirm that the Committee welcomes the proposed amendments, which will clarify the treatment of annuities and other periodical payments and which will reduce the number of instances when insurance may be required under the legislation.

I now turn to the Committee’s consideration of amendment Nos 6 and 7, which would amend clause 16. The Department advised of its plans to provide a simpler definition of insurer that is not tied into the regulatory framework. The Committee was content with that proposal and welcomes a more streamlined approach to dealing with insurance issues.

In summary, I support amendment No 3, which would amend clause 6, and the associated amendment No 4, which would amend clause 7. On behalf of the Committee, I also support amendment No 6, which would amend clause 16, along with the consequential amendment No 7.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

I am grateful to the Chairperson of the Committee for his comments, and I have nothing further to add to previous remarks.

Amendment No 3 agreed to.

Clause 6, as amended, ordered to stand part of the Bill.