The Meaning Of 'Insurance Business' Within The Finance Services And Markets Act 2000

The recent case of Re Digital Satellite Warranty Cover Ltd [2011] EWHC 122 (Ch) considered the meaning of 'insurance business' within of the Finance Services and Markets Act 200 ('FSMA').

Section 19 of FSMA imposes authorisation requirements on persons who carry on regulated activities (including general insurance business) within the United Kingdom. A variety of criminal and civil sanctions follow for failing to obtain such authorisation including the right for the Financial Services Authority ('FSA') to petition for a winding up order. In the present case, the FSA presented three winding up petitions in respect of companies who offered extended warranty cover to people who had purchased satellite television equipment on the basis that they were carrying out and effecting insurance business without authorisation. The defendant companies said that the warranties were not insurance contracts as they provided repair or replacement of the...