400Effect of transfer of policies

400 Effect of transfer of policies (1) If an MAI policy (the original policy) is transferred from an insurer (the old insurer) to a licensed insurer (the new insurer) under section 399— (a) the original policy is cancelled; and (b) the new insurer is taken to have issued an MAI policy— (i) on the day of the transfer; and

MAI insurer licences—transfer Part 7.8 (ii) on the same terms as the original policy; and (iii) for the balance of the period of the original policy; and (c) the old insurer must pay to the new insurer— (i) the same proportion of the MAI premium paid, or to be paid, for the original policy as the balance of the indemnity period of the policy bears to the whole indemnity period of the policy; and (ii) an additional amount decided by the MAI commission for the income from investment and the management fee for the MAI premium. (2) The new insurer may recover an amount payable under subsection (1) (c) as a debt from the old insurer. (3) Cancellation of an MAI policy under this section ends the indemnity period of the policy but, subject to this section, does not affect any right, obligation or liability acquired, accrued or incurred under the policy during the indemnity period.

Part 7.9 MAI insurer licences— supervision