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HMRC internal manual

General Insurance Manual

The UK insurance market: friendly societies

Unregistered friendly societies tend to undertake local activities like allotment holding and are not in general of interest in the context of insurance.

Registered friendly societies are unincorporated societies set up under the provisions of the Friendly Societies Act 1974 and earlier similar legislation, and carry on types of business within the objects of that legislation.

Friendly societies were first recognised by statute in 1793, where they were called societies of good fellowship, but are able to trace their origins back at least to the craft guilds of the Middle Ages. The Friendly Societies Act 1992 provided for a new breed of incorporated friendly society and gave registered societies the ability to convert into the new style incorporated society. Most ‘Directive’ societies, those large enough to be regulated under the EC Insurance Directives, have incorporated.

Friendly societies can write long term (mainly life and endowment), general, sickness (and other distressed circumstance) and funeral benefit business, and some of this may be discretionary.

General business written by such societies will normally be exempt by virtue of ICTA88/S461. The treatment of taxable life or endowment business written by registered or incorporated friendly societies can be found in the Life Assurance Manual.