Digital Satellite Warranty Cover Ltd v The Financial Services Authority

Digital Satellite Warranty Cover Ltd v The Financial Services Authority

The extended warranty contracts provided by the appellants, which cover repair or replacement of equipment in the event of breakdown or malfunction (including accidental damage), constitute contracts of insurance falling within class 16(b) of Schedule 1 to the RAO as they protect against financial loss attributable to incurring unforeseen expense. The regulation of benefits in kind insurance is not limited to class 18, and the RAO can extend to such contracts. The appellants carried on regulated activities without authorisation, justifying the winding-up orders.

Parties
Appellant: Digital Satellite Warranty Cover Limited; Appellant: Bernard Freeman and Michael Anthony John Sullivan trading as Satellite Services; Respondent: Financial Services Authority
Jurisdiction
England and Wales
Judgment Date
29 November 2011
Procedural Posture
Civil Appeal / Appeal From High Court (winding Up Orders)
Outcome
Appeal dismissed
Legal Topics
Contracts of Insurance, Regulated Activities, Benefits in Kind, Winding Up Orders, Interpretation of Directives
Financial Services Regulation Insolvency Law Insurance Law Contracts of Insurance Regulated Activities Benefits in Kind Winding Up Orders Interpretation of Directives

Case Brief

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Parties

Digital Satellite Warranty Cover Limited

Appellant

Bernard Freeman and Michael Anthony John Sullivan trading as Satellite Services

Appellant

Financial Services Authority

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court (winding Up Orders)

Legal Issues

  1. 1 Whether the extended warranty contracts provided by the appellants constitute contracts of general insurance within the meaning of Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO)
  2. 2 Whether such contracts fall within class 16 of Schedule 1 to the RAO (miscellaneous financial loss)
  3. 3 Whether the regulation of benefits in kind insurance is limited to class 18 of the RAO/Annex to the Directive

Ratio Decidendi

The extended warranty contracts provided by the appellants, which cover repair or replacement of equipment in the event of breakdown or malfunction (including accidental damage), constitute contracts of insurance falling within class 16(b) of Schedule 1 to the RAO as they protect against financial loss attributable to incurring unforeseen expense. The regulation of benefits in kind insurance is not limited to class 18, and the RAO can extend to such contracts. The appellants carried on regulated activities without authorisation, justifying the winding-up orders.

Court Disposition

Appeal dismissed

Orders

  • Winding-up orders against Digital Satellite Warranty Cover Limited and Bernard Freeman and Michael Anthony John Sullivan trading as Satellite Services are upheld.