Law commission consultation reviewing the Friendly Societies Act 1974 and 1992

Closes 11 Jun 2025

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Chapter 10: Limitations on business activities

Consultation Question 56: We provisionally propose to remove limitations on the groups for which friendly societies can write group business and to repeal the regulations made under section 11(7) of the 1992 Act. Do consultees agree?
Consultation Question 57:

We provisionally propose that friendly societies should be permitted to offer reinsurance without the condition that it be limited to transactions with other friendly societies. Do consultees agree?

Consultation Question 58: We provisionally propose that an incorporated friendly society should be permitted to invest its funds in any manner authorised by its rules. Do consultees agree?
Consultation Question 59:

We provisionally propose that there should not be a requirement for two guarantors for a loan to a member of a friendly society and that qualifying members need only to have been a member of the friendly society for three months. Friendly societies would be free to set their own terms for the loans, subject to all other legal and regulatory rules. Do consultees agree?

We provisionally propose that the limit on the amount, namely that the amount loaned to members may only be up to half of the value of their life policy, should be retained. Do consultees agree?

Consultation Question 60:

We seek consultees’ views on whether there are financial thresholds set out in the 1992 Act not discussed in this consultation paper that require revision and amendment.

We seek consultees’ views on whether there is an interest in loans to members out of a separate fund and whether the amounts as set out in the 1992 Act require revision and amendment.

Consultation Question 61: We invite consultees’ views on the circumstances in which the regulator(s) should be able to intervene in the business activities of a subsidiary.
Consultation Question 62: We provisionally conclude that it is possible to accommodate takaful products within the mutual framework of a friendly society and that the existing legislation does not appear to pose any specific challenges to Islamic finance. Do consultees agree?