The Association of Financial Mutuals (AFM) has welcomed an announcement that the Law Commission will carry out a review of the Friendly Societies Act 1992 in the coming months.

This follows several years of campaigning by the AFM for a comprehensive reform of friendly societies legislation.

According to the association, the announcement of the review is an “important first step” in modernising the legal and regulatory framework for friendly societies, so that they can compete on more equal terms with other insurance companies and continue to serve the interests of their members.

The Government had previously committed to asking the Law Commission to review the Friendly Societies Act during parliamentary debates about the Co-operatives, Mutuals and Friendly Societies Bill, a private members bill introduced by Labour MP, Mark Hendrick, last year.

The bill has highlighted the “strong commitment from parliamentarians across all parties” for the mutual and cooperative sector, the AFM said, and was given a third reading as it completed its progress through the House of Lords last week on 16 June.

AFM chief executive, Andrew Whyte, commented: “The Law Commission review of the Friendly Societies Act is long-overdue. The world has changed beyond recognition since the Act was introduced more than 30 years ago, and this has contributed to a sharp decline in the number of active societies.

“Taken together with the successful passage of the Co-operatives, Mutuals and Friendly Societies Bill through the House of Lords this represents a key moment in our longstanding campaign for reform.

“But it is only a start, and we look forward to working with the Law Commission to develop a modern, relevant and proportionate legal and regulatory framework which will enable friendly societies to continue to thrive and grow.”

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