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(1) These Regulations may be cited as the Personal Pension Schemes (Compensation) Regulations 1988 and shall come into force on 26th January 1989.
(2) In these Regulations—
 “the Act” means the Social Security Act 1986;
 “the Appropriate Schemes Regulations” means the Personal Pension Schemes (Appropriate Schemes) Regulations 1988;
 “the Banking Act” means the Banking Act 1987;
 “the Building Societies Act” means the Building Societies Act 1986;
 “the Financial Services Act” means the Financial Services Act 1986;
 “the Financial Services Compensation Rules” means the Financial Services (Compensation of Investors) Rules 1988 made by the Securities and Investments Board under section 54 of the Financial Services Act;
 “the Friendly Societies Protection Scheme” means the arrangement by that name made under section 141 of the Financial Services Act and approved for the time being by the Chief Registrar of Friendly Societies;
 “liable scheme” has the meaning assigned by regulation 2;
 “the Policyholders Protection Act” means the Policyholders Protection Act 1975; and
 “scheme” means personal pension scheme.
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These Regulations apply to any scheme except a scheme which takes the form—
(a) mentioned in regulation 2(1)(a) of the Appropriate Schemes Regulations (insurance policies and annuity contracts), being a scheme established by an authorised insurance company within the meaning of section 3(2) of the Policyholders Protection Act.
(b) mentioned in the said regulation 2(1)(a) being a scheme established by a friendly society to which apply either the provisions of the Friendly Societies Protection Scheme or the provisions of the Financial Services Compensation Rules;
(c) mentioned in regulation 2(1)(b) of those Regulations (unit trust schemes), being a scheme of which the trustee and operator are both subject to the provisions of the Financial Services Compensation Rules; and
(d) mentioned in regulation 2(1)(c) of those Regulations (interest-bearing accounts etc. with banks and building societies), being a scheme which is established by a body to which the provisions of section 58 of the Banking Act apply, or established by a building society in relation to which, in the event of its insolvency, the provisions of section 27 of the Building Societies Act would apply,and in these Regulations a scheme to which these Regulations apply is referred to as a“liable scheme”.
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(1) For the purposes of sub-paragraph (b) of paragraph 10 of Schedule 1 to the Act the prescribed circumstances are—
(a) that if the scheme is a liable scheme which takes the form mentioned in regulation 2(1)(a) of the Appropriate Schemes Regulations and if (in the case of a scheme established by an insurance company) the provisions of section 10 of the Policyholders Protection Act applied, or (in the case of a scheme established by a friendly society) the provisions of either the Friendly Societies Protection Scheme or the Financial Services Compensation Rules applied, those provisions would become operative;
(b) that if the scheme is a liable scheme which takes the form mentioned in regulation 2(1)(b) of the Appropriate Schemes Regulations and if the provisions of the Financial Services Compensation Rules applied, those provisions would become operative; and
(c) that if the scheme is a liable scheme which takes the form mentioned in regulation 2(1)(c) of the Appropriate Schemes Regulations, and if the provisions of either section 58 of the Banking Act (if the scheme is established by a body mentioned in regulation 3(3)(c) or (d) of those Regulations) or section 27 of the Building Societies Act (if the Scheme is established by a body mentioned in regulation 3(3)(a) or (b) of those Regulations) applied, those provisions would become operative.
(2) Subject to regulation 4, a liable scheme can be an appropriate scheme under Part I of the Act only if it secures that in the event that, by reason of the commission by any person of a criminal offence or in the circumstances specified in paragraph (1) (or both), the scheme is unable to meet from its own resources the whole or any part of its liability for protected rights under the scheme, that liability will, at least to the extent specified in paragraph (3), be met from some other source.
(3) The extent to which the liability specified in paragraph (2) must be met from some other source is—
(a) if the scheme takes the form mentioned in regulation 2(1)(a) of the Appropriate Schemes Regulations and is established by an insurance company, the extent to which it would be met under section 10 of the Policyholders Protection Act if that Act applied or, if it is established by a friendly society, the extent to which it would be met under the Friendly Societies Protection Scheme if that scheme applied;
(b) if the scheme takes the form mentioned in regulation 2(1)(b) of the Appropriate Schemes Regulations, the extent to which it would be met under the Financial Services Compensation Rules if those rules applied; and
(c) if the scheme takes the form mentioned in regulation 2(1)(c) of the Appropriate Schemes Regulations, the extent to which it would be met under section 58 of the Banking Act (if the scheme is established by a body mentioned in regulation 3(3)(c) or (d) of those Regulations) or section 27 of the Building Societies Act (if the scheme is established by a body mentioned in regulation 3(3)(a) or (b) of those Regulations) if those sections applied.
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If on the day when these Regulations come into force an appropriate scheme certificate is in force in relation to a liable scheme, the provisions of these Regulations shall not apply to that scheme until the expiration of the period of 3 months beginning with that day. Signed by authority of the Secretary of State for Social Security.
Signed by authority of the Secretary of State for Social Security
Peter Lloyd
Parliamentary Under-Secretary of State,
Department of Social Security
20th December 1988