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Law Commission seeks views on the law relating to friendly societies 

Published:
a Graphic of 6 people holding hands, from an aerial point of view.

Today the Law Commission published a consultation paper on friendly societies as part of a review of the current law in this area.

The consultation paper and a summary are available on the friendly societies project page.

The current law governing friendly societies is fragmented, outdated, and in need of modernisation. The last major update was in 1992. Friendly society law has not kept pace with developments in related areas such as company law and financial services regulation. The Commission is seeking views from anyone with an interest in or awareness of this area. 

A friendly society is an organisation that provides insurance or other benefits to its members, primarily funded by its members. Friendly societies are registered under the Friendly Societies Act 1974 (“1974 Act”) or the Friendly Societies Act 1992 (“1992 Act”). The 1974 Act also governs other types of mutual societies and clubs. The consultation is part of a review of these Acts, to ensure that the legislation is fitting to the nature and needs of friendly societies.   

This project is intended to modernise, simplify, and update the law for friendly societies so that these institutions, with a long and illustrious history in the UK, can continue to serve their members and policyholders for years to come. We are seeking innovative ways to improve the legal framework within which friendly societies operate. A key consideration is improving efficiency, while maintaining the mutual ethos and structure of friendly societies as member-owned organisations. 
Senior Counsel for the Law Commission, David Hertzell

The consultation focuses on a variety of questions including;   

  • How the law can be modernised for friendly societies, including facilitating electronic communication with members, up-to-date rules, and simplified notice periods for meetings.  
  • How legacy assets should be protected and the demutualisation of friendly societies disincentivised. 
  • How transfers of business engagements could be made simpler, more efficient and more cost-effective. 
  • Whether and how the challenges associated with permitting friendly societies to raise capital in new ways could be addressed. 
  • Whether it would be appropriate to remove some of the restrictions on the types of business that friendly societies can undertake. 

As part of simplifying the law in this area, the consultation also asks whether there is sufficient justification for retaining and updating the 1974 Act, keeping in mind that societies registered under this Act could re-register with relative ease under the Co-operative and Community Benefit Society Act 2014, or, for registered friendly societies, incorporate under the Friendly Societies Act 1992.   

This Government is committed to doubling the size of the mutuals sector recognising the invaluable role of the sector in supporting the growth mission, which is the number one mission of this Government. This includes friendly societies who have a long history of improving financial inclusion and delivering value for their members. That is why in her first Mansion House speech, the Chancellor recommitted this Government to funding the Law Commission’s independent review of the Friendly Societies Acts 1974 and 1992.

I am delighted to support the launch of the Law Commission’s consultation as part of this review, which is exploring ways to update and modernise the law to better support our friendly societies. I would like to thank the Law Commission for their work and strongly encourage people respond to the consultation. I look forward to reviewing the findings closely in due course.
Economic Secretary to the Treasury, Emma Reynolds MP

The consultation is open until 11 June 2025. The full consultation paper and a summary of it, along with a factsheet for members that is also available in the Welsh language, can be found on the friendly societies project page.