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(1) Where an interim manager reports in writing to the Council that in its opinion there is no reasonable prospects of restoring the defaulting scheme to sound financial conditions and the interim manager in consultation with the auditors of the defaulting scheme recommends the revocation of the registration of the scheme or the transfer of its business or activities to another scheme, the Council may act accordingly.

(2) For the purposes of sub-regulation (1) where transfer of the business or activities of a defaulting scheme is made, the transferee shall,

(a) in exchange for the assets of the defaulting scheme, take such liabilities of that scheme as the transferee and the transferor shall agree with the approval of the Council, including liabilities to health-care providers and members under claims which have been submitted and assessed but not yet paid as at a date (in this regulation called "the cut-off date") not earlier than three months before the date on which the Council approved the transfer, but not including,

(i) contingent liabilities in respect of members of the defaulting scheme which may accrue after the cut-off date; or

(ii) liabilities for which an officer of the defaulting scheme may be held personally liable because of fraudulent conduct or any other cause;

(b) undertake to admit every member of the defaulting scheme who is a duly enrolled member on the date of the transfer and is qualified to receive the minimum benefit under the defaulting scheme;

(c) waive any waiting period in relation to a member of the transferring scheme who qualifies to receive benefits under the transferring scheme and count any portion of the waiting period served by a member of the transferring scheme as part of the waiting period of the scheme to which the member is being transferred.

(3) Upon the conclusion of a transfer under this regulation, the Council shall issue a publication in the Gazette and the media of the transfer.