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HMRC internal manual

General Insurance Manual

The UK insurance market: insurance companies

The oldest UK insurance companies were set up by Royal Charter or by private Acts of Parliament, the latter form of constitution being used particularly by the mutual societies. A few, including notably the Co-operative Insurance Society, have been set up under the Industrial and Provident Societies Act. Companies may be mutual or proprietary in form.

A mutual company is a company without shareholders which carries on business on a mutual basis, that is in such a way that the policy holders are entitled to the surplus arising from the business. However, some companies that are mutual in the sense of having no shareholders may carry on all or part of their business in a way that takes that business outside the legal concept of mutuality, for instance because the policyholders are not members. The topic of mutual insurance is covered in GIM9000+.

A proprietary company is a company owned by its shareholders in the same way as any other joint stock company.

Apart from UK companies, the other companies authorised by the FSA to carry on business in the UK are companies not incorporated in an EEA State operating through branches or agencies in the UK.