INSURANCE ACT, 1938
(1) This Act may be called the Insurance Act, 1938.
1[(2) It extends to the whole of India 2[***].]
(3) It shall come into force on such date3 as the Central Government may, by notification in the Official Gazette, appoint in this behalf.
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1. Subs. by Act 47 of 1950, sec. 2, for sub-section (2) (w.e.f. 1-6-1950).
2. The words “except the State of Jammu and Kashmir” omitted by Act 62 of 1956, sec. 2 and Sch. (w.e.f. 1-11-1956).
3. Came into force on 1-7-1939, vide Notification No. 589-I(4)/38, dated 1st April, 1939, published in the Gazette of India, 1939, Pt. I, p. 631.
In this Act, unless there is anything repugnant in the subject or context,—
(1) “actuary” means an actuary possessing such 1[qualifications as may be specified by the regulations made by the Authority];
2[(1A) “Authority” means the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999;]
3[(2) “policy-holder” includes a person to whom the whole of the interest of the policy-holder in the policy is assigned once and for all, but does not include an assignee thereof whose interest in the policy is defeasible or is for the time being subject to any condition;]
4[(3) “approved securities” means—
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Words and expressions used and not defined in this Act but defined in the Life Insurance Corporation Act, 1956 (31 of 1956), the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and the Insurance Regulatory and Development Authority Act, 1999 shall have the meanings respectively assigned to them in those Acts.]
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1. Section 2A ins. by Act 47 of 1950, sec. 5 (w.e.f. 1-6-1950), rep. by the Adaptation of Laws (No.3) Order, 1956 and again ins. by Act 41 of 1999, sec. 30 and Sch. I (w.e.f. 19-4-2000).
2[(1) If at any time, the Authority is superseded under sub-section (1) of section 19 of the Insurance Regulatory and Development Authority Act, 1999, the Central Government may, by notification in the Official Gazette, appoint a person to be the Controller of Insurance till such time the Authority is reconstituted under sub-section (3) of section 19 of that Act.]
(2) In making any appointment under this section, the Central Government shall have due regard to the following considerations, namely, whether the person to be appointed has had experience in industrial, commercial or insurance matters and whether such person has actuarial qualification.]
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1. Ins. by Act 47 of 1950, sec. 5 (w.e.f. 1-6-1950).
The Central Government may, by notification, direct that any of the provisions of this Act,—
(a) shall not apply to insurer, being an Indian Insurance Company, insurance co-operative society or a body corporate referred to in clause (c) of sub-section (1) of section 2C, carrying on the business of insurance, in any Special Economic Zone as defined in clause (za) of section 2 of the Special Economic Zones Act, 2005; or
(b) shall apply to any insurer being an Indian Insurance Company, insurance co-operative society or a body corporate referred to in clause (c) of sub-section (1) of section 2C, carrying on the business of insurance, in any Special Economic Zone as defined in clause (za) of section 2 of the Special Economic Zones Act, 2005 only with such exceptions, modifications and adaptations as may be specified in t
(1) No 1[person] shall, after the commencement of this Act, begin to carry on any class of insurance business in 2[India] and no insurer carrying on any class of insurance business in 2[India] shall, after the expiry of three months from the commencement of this Act, continue to carry on any such business, unless he has obtained from the 3[Authority] a certificate of registration 4[for the particular class of insurance business]:
5[Provided that in case an insurer who was carrying on any class of insurance business in 2[India] at the commencement of this Act, failure to obtain a certificate of registration in accordance with the requirements of this sub-clause shall not operate to invalidate any contract of insurance entered into by him if before 6[such date7 as may be fixed in this behalf by the Central Government by notification in the Official Gazette] he has obtained that certi
(1) An insurer who has been granted a certificate of registration under section 3 shall have the registration renewed annually for each year after that ending on 2[the 31st day of March, after the commencement of the Insurance Regulatory and Development Authority Act, 1999].
(2) An application for the renewal of a registration for any year shall be made by the insurer to the 3[Authority] before the 31st day of December of the preceding year, and shall be accompanied as provided in sub-section (3) by evidence of payment of the 4[fee as determined by the regulations made by the Authority] 5[which may vary according to the total gross premium written direct in India, during the year preceding the year in which the application is required to be made under this section, by the insurer in the class of insurance business to which the registration relates but shall not—
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If, when considering an application for registration under section 3 or at any other time, it appears to the 2[Authority] that the assured rates, advantages, terms and conditions offered or to be offered in connection with life insurance business are in any respect not workable or sound, 3[it] may require that a statement thereof shall be submitted to an actuary appointed by the insurer for the purpose and approved by the 2[Authority], and may by order in writing further require the insurer to make within such time as may be specified in the order such modifications in the said rates, advantages, terms or conditions, as the case may be, as the said actuary may report to be necessary to enable him to certify that the said rates, advantages, terms and conditions are workable and sound.]
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1. Ins. by Act 6 of 1946, sec. 4 (w.e.f.
(1) 1[No insurer, not being a Co-operative Life Insurance Society to which Part IV of 2[this Act] applies, shall pay] or undertake to pay on any policy of life insurance issued after the 3[commencement of the Insurance (Amendment) Act, 1946 (6 of 1946),] an annuity of 4[less than one hundred rupees or a gross sum of less than one thousand rupees] exclusive of any profit or bonus provided that this shall not prevent an insurer from converting any policy into a paid-up policy of any value or payment of surrender value of any amount.
5[(2) Nothing contained in this section shall apply to any policy of the description known as a group policy, where the number of persons covered by the policy is not less than fifty or such smaller number as may be approved by the 6[Authority] and a standard form of the policy has been certified in writing by the 6[Authority] to be a policy of such descr
(1) An insurer shall not be registered by a name identical with that by which an insurer in existence is already registered, or so nearly resembling that name as to be calculated to deceive except when the insurer in existence is in the course of being dissolved and signifies his consent to the 1[Authortiy].
(2) If an insurer, through inadvertence or otherwise, is without such consent as aforesaid registered by a name identical with that by which an insurer already in existence whether previously registered or not is carrying on business or so nearly resembling it as to be calculated to deceive, the first-mentioned insurer shall, if called upon to do so by the 1[Authority] on the application of the second-mentioned insurer, change his name within a time to be fixed by the 1[Authority]:
Provided that nothing in this section shall apply to
No insurer carrying on the business of life insurance, general insurance or re-insurance in India on or after the commencement of the Insurance Regulatory and Development Authority Act, 1999, shall be registered unless he has,—
(i) a paid-up equity capital of rupees one hundred crore, in case of a person carrying on the business of life insurance or general insurance; or
(ii) a paid-up equity capital of rupees two hundred crore, in case of a person carrying on exclusively the business as a re-insurer:
Provided that in determining the paid-up equity capital specified under clause (i) or clause (ii), the deposit to be made under section 7 and any preliminary expenses incurred in the formation and registration of the company shall be excluded:
(1) No public company limited by shares having its registered office in 2[India] shall carry no life insurance business, unless it satisfies all the following conditions, namely:—
(i) that the capital of the company consists only of ordinary shares each of which has a single face value;
(ii) that, except during any period not exceeding one year allowed by the company for payment of calls on shares, the paid-up amount is the same for all shares, whether existing or new:
Provided that the conditions specified in this sub-section shall not apply to a public company which has, before the commencement of the Insurance (Amendment) Act, 1950, issued any shares other than ordinary shares each of which has a single face value or any shares the paid-up amount whereof is not the same for a
(1) No promoter shall at any time hold more than twenty-six per cent. or such other percentage as may be prescribed, of the paid-up equity capital in an Indian insurance company:
Provided that in a case where an Indian insurance company begins the business of life insurance, general insurance or re-insurance in which the promoters hold more than twenty-six per cent. of the paid-up equity capital or such other excess percentage as may be prescribed, the promoters shall divest in a phased manner the share capital in excess of the twenty-six per cent. of the paid-up equity capital or such excess paid-up equity capital as may be prescribed, after a period of ten years from the date of the commencement of the said business by such Indian insurance company or within such period as may be prescribed by the Central Government.
Explanation.—For t
(1) For the purpose of enabling any public company carrying on life insurance business to bring its capital structure into conformity with the requirements of section 6A, an officer appointed on this behalf by the Central Government may, notwithstanding anything contained in the Indian Companies Act, 1913 (7 of 1913)2,—
(a) examine any scheme proposed for the purpose aforesaid by the directors of the company:
Provided that—
(i) the scheme has been placed before a meeting of the shareholders for their opinion and has been forwarded to the officer together with the opinion of the shareholders thereon, and
(ii) the scheme does not involve any diminution of the liability of the shareholders in respect of unpaid-
.
(1) Every insurer 1[***] shall, in respect of the insurance business carried on by him in 2[India], deposit and keep deposited with the Reserve Bank of India in one of the offices in India of the Bank for and on behalf of the Central Government 3[the amount hereafter specified, either in cash or in approved securities estimated at the market value of the securities on the day of deposit, or partly in cash and partly in approved securities so estimated]:—
4[5[(a) in the case of life insurance business, a sum equivalent to one per cent. of his total gross premium written in India in any financial year commencing after the 31st day of March, 2000, not exceeding rupees ten crores;
(b) in the case of general insurance business, a sum equivalent to three per cent. of his total gross premium written in India, in any financial year comme
(1) Any deposit made under section 7 1[or section 98] shall be deemed to be part of the assets of the insurer but shall not be susceptible of any assignment or charge; nor shall it be available for the discharge of any liability of the insurer other than liabilities arising out of policies of insurance issued by the insurer so long as any such liabilities remain undischarged; nor shall it be liable to attachment in execution of any decree except a decree obtained by a policy-holder of the insurer in respect of a debt due upon a policy which debt the policy-holder has failed to realise in any other way.
(2) Where a deposit is made in respect of life insurance business the deposit made in respect thereof shall not be available for the discharge of any liability of the insurer other than liabilities arising out of policies of life insurance issued by the insurer.
Where an insurer has ceased to carry on in India all classes of insurance business and his liabilities in India in respect of all classes of insurance business have been satisfied or are otherwise provided for, the Court may, on the application of the insurer, order the return to the insurer of the deposit made by him under this Act.]
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1. Subs. by Act 62 of 1968, sec. 7, for section 9 (w.e.f. 1-6-1969).
(1) Where the insurer carries on business of more than one of the 1[following classes, namely, life insurance, fire insurance, marine insurance or miscellaneous insurance], he shall keep a separate account of all receipts and payments in respect of each such class of insurance business 2[and where the insurer carries on business of 1[miscellaneous insurance] whether alone or in conjunction with business of another class, he shall, unless the 3[Authority] waives this requirement in writing, keep a separate account of all receipts and payments in respect of 1[each of such sub-classes of miscellaneous insurance business] as may be prescribed in this behalf:
Provided that no sub-class of 1[miscellaneous insurance business] shall be prescribed under this sub-section if the insurance business comprised in the sub-class consist of insurance contracts which are terminable by the insurer at
(1) Every insurer, in the case of an insurer specified in sub-clause (a)(ii) or sub-clause (b) of clause (9) of section 2 in respect of all insurance business transacted by him, and in the case of any other insurer in respect of the insurance business transacted by him in India shall at the expiration of each 1[financial year] prepare with reference to that year,—
(a) in accordance with the regulations contained in Part I of the First Schedule, a balance-sheet in the form set forth in Part II of that Schedule;
(b) in accordance with the regulations contained in Part I of the Second Schedule, a profit and loss account in the forms set forth in Part II of that Schedule, except where the insurer carries on business of one class only of 2[the following classes, namely, life insurance, fire insurance or marine insurance] and no other busine
The balance-sheet, profit and loss account, revenue account and profit and loss appropriation account of every insurer, in the case of an insurer specified in sub-clause (a)(ii) or sub-clause (b) of clause (9) of section 2 in respect of all insurance business transacted by him, and in the case of any other insurer in respect of the insurance business transacted by him in India, shall, unless they are subject to audit under the Indian Companies Act, 1913 (7 of 1913) be audited annually by an auditor, and the auditor shall in the audit of all such accounts have the powers of, exercise the functions vested in, and discharge the duties and be subject to the liabilities and penalties imposed on, auditors of companies by section 145 of the Indian Companies Act, 1913 (7 of 1913).
1 [13. Actuarial report and abstract
(1) Every insurer carrying on life insurance business shall, in respect of the life insurance transacted by him in India, and also in the case of an insurer specified in sub-clause (a)(ii) or sub-clause (b) of clause (9) of section 2 in respect of all life insurance business transacted by him, once at least 2 [every year] cause an investigation to be made by an actuary into the financial condition of the life insurance business carried on by him, including a valuation of his liabilities in respect thereto and shall cause an abstract of the report of such actuary to be made in accordance with the regulations contained in Part I of the Fourth Schedule and in conformity with the requirements of Part II of that Schedule:
3 [Provided that the 4 [Authority] may, having regard to the circumstances of any par
Every insurer in the case of insurer specified in sub-clause (a)(ii) or sub-clause (b) of clause (9) of section 2 in respect of all business transacted by him, and in the case of any other insurer in respect of the insurance business transacted by him in India, shall maintain—
(a) a register or record of policies, in which shall be entered, in respect of every policy issued by the insurer, the name and address of the policy-holder, the date when the policy was effected and a record of any transfer, assignment or nomination of which the insurer has notice, and
(b) a register of record of claims, in which shall be entered every claim made together with the date of the claim, the name and address of the claimant and the date on which the claim was discharged, or, in the case of a claim which is rejected, the date of rejection
(1) The audited accounts and statements referred to in section 11 1[or sub-section (5) of section 13] and the abstract and statement referred to in section 13 shall be printed, and four copies thereof shall be furnished as returns 2[to the Authority within six months from the end of the period to which they refer] 3[***]:
Provided that the said period of six months shall in the case of insurers having their principal place of business or domicile outside India and in the case of insurers constituted, incorporated or domiciled in 4[India] but also carrying on business outside India be extended by three months, and provided further that the Central Government may in any case extend the time allowed by this sub-section for the furnishing of such returns by a further period not exceeding three months.
(2) Of the four copies so furnished one
(1) Where, by the law of the country in which an insurer, not being an insurer specified in sub-clause (a)(ii) or sub-clause (b) of clause (9) of section 2, is constituted, incorporated or domiciled, the insurer is required to prepare and to furnish to a public authority of that country documents of substantially the same nature as the documents required to be furnished as returns in accordance with the provisions of section 15, the provisions of sub-section (2) of this section shall apply to such insurer in lieu of the provisions of sections 11, 12, 13 and 15.
(2) The insurer shall, within the time specified in sub-section (1) of section 15, furnish to the 1[Authority] four certified copies in the English language of every balance-sheet, account, abstract, report and statement supplied to the public authority referred in sub-section (1) of this section, and in addition thereto, 2[
Where an insurer, being a company incorporated under the Indian Companies Act, 1913 (7 of 1913), 1[or under the Indian Companies Act, 1882 (6 of 1882) or under the Indian Companies Act, 1866 (10 of 1866) or under any Act repealed thereby,] in any year furnishes 2[his balance-sheet and accounts] in accordance with the provisions of section 15, he may at the same time send to the Registrar of Companies 3[copies of such balance-sheet and accounts]; and 4[where such copies are so sent] it shall not be necessary for the company 5[to file copies of the balance-sheet and account] with the Registrar as required by sub-section (1) of section 134 of 6[the first mentioned Act] and 7[such copies so sent] 8[shall be chargeable with the same fees and] shall be dealt with in all respects as if they were filed in accordance with that section.
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Every insurer shall furnish to the 1[Authority] a certified copy of every report on the affairs of the concern which is submitted to the members or policy-holders of the insurer immediately after its submission to the members or policy-holders, as the case may be.
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1. Subs. by Act 47 of 1950, sec. 4, for “Superintendent of Insurance” (w.e.f. 1-6-1950) and again subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
Every insurer, being a company orbody incorporated under any law for the time being in force in 1 [India], shallfurnish to the 2[Authority] 3 [a certified copyof the minutes of the proceedings of every general meeting, asentered in the Minutes Book of the insurer] within thirty days from the holding ofthemeetingto which it relates.
(1) Every return furnished to the 1[Authority] or certified copy thereof shall be kept by the 2[Authority] and shall be open to inspection; and any person may procure a copy of any such return, or of any part thereof, on payment of a fee of six annas for every hundred words or fractional part thereof required to be copied, any five figures being deemed equivalent to one word.
(2) A printed or certified copy of the accounts, statements and abstract furnished in accordance with the provisions of section 15 or section 16 shall, on the application of any shareholder or policy-holder made at any time within two years from the date on which the documents was so furnished, be supplied to him by the insurer within fourteen days when the insurer is constituted, incorporated or domiciled in 3[India] and in any other case within one month of such application.
(1) If it appears to the 1[Authority] that any return furnished to 2[it] under the provisions of this Act is inaccurate or defective in any respect, 3[it] may—
(a) require from the insurer such further information, certified if he so directs by an auditor or actuary, as he may consider necessary to correct or supplement such return;
(b) call upon the insurer to submit for 4[its] examination at the principal place of business of the insurer in 5[India] any book of account, register or other document or to supply any statement which 2[it] may specify in a notice served on the insurer for the purpose;
(c) examine any office of the insurer on oath in relation to the return;
(d) decline to accept any such return unless the ina
2[(1)] If it appears to the 3[Authority] that an investigation or valuation to which section 13 refers 4[or an abstract of a valuation report furnished under clause (c) of sub-section (2) of section 16] does not properly indicate the condition of the affairs of the insurer by reason of the faulty basis adopted in the valuation, 5[it] may, after giving notice to the insurer and giving him an opportunity to be heard, cause an investigation and valuation [as at such date as the 2[Authority] may specify] to be made at the expense of the insurer by an actuary appointed by the insurer for this purpose and approved by the 2[Authority] and 6[and the insurer shall place at the disposal of the actuary so appointed and approved all the material required by the actuary for the purposes of the investigation and valuation within such period, not being less than three months, as the 2[Authority] may specify].
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(1) Every return furnished to the 1[Authority] which has been certified by the 2[Authority] to be a return so furnished, shall be deemed to be a return so furnished.
(2) Every document, purporting to be certified by the 1[Authority] to be a copy of a return so furnished, shall be deemed to be a copy of that return and shall be received in evidence as if it were the original return, unless some variation between it and the original return is proved.
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1. Subs. by Act 47 of 1950, sec. 4 for “Superintendent of Insurance” (w.e.f. 1-6-1950) and again subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
2. Subs. by Act 47 of 1950, sec. 4 for “Superintendent” (w.e.f. 1-6-1950
[ Rep. by the Insurance ( Amendment ) Act, 1941 ( 13 of 1941 ), sec. 16. ]
No insurer shall publish in 1[India] any return in a form other than that in which it has been furnished to the 2[Authority]:
Provided that nothing contained in this section shall prevent an insurer from publishing a true and accurate abstract from such returns for the purposes of publicity.
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1. Subs. by Act 62 of 1956, sec. 2 and Sch., for “the States” (w.e.f. 1-11-1956).
2. Subs. by Act 47 of 1950, sec. 4 for “Superintendent of Insurance” (w.e.f. 1-6-1950) and again subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
Whenever any alteration occurs or is made which affects any of the matters which are required under the provisions of sub-section (2) of section 3 to accompany an application by an insurer for registration, the insurer shall forthwith furnish to the 1[Authority] full particulars of such alteration. 2 [All such particulars shall be authenticated in the manner required by that sub-section for the authentication of the matters therein referred to, and, where the alteration affects the assured rates, advantages, terms and conditions offered in connection with life insurance policies the actuarial certificate referred to in clause (f) of the said sub-section shall accompany the particulars of the alteration.]
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1. Subs. by Act 47 of 1950, sec. 4, for “Superintendent of Insurance” (w.e.f. 1-6
(1) Every insurer shall invest and at all times keep invested assets equivalent to not less than the sum of—
(a) the amount of his liabilities to holders of life insurance policies in India on account of matured claims, and
(b) the amount required to meet the liability on policies of life insurance maturing for payment in India,
less—
(i) the amount of premiums which have fallen due to the insurer on such policies but have not been paid and the days of grace for payment of which have not expired, and
(ii) any amount due to the insurer for loans granted on and within the surrender values of policies of life insurance maturing for payment in India issued by him or by an insurer
(1) No insurer shall invest or keep invested any part of his controlled fund otherwise than in any of the following approved investments, namely:—
(a) approved securities;
(b) securities of, or guaranteed as to principal and interest by the Government of the United Kingdom;
(c) debentures or other securities for money issued with the permission of the State Government by any municipality in a State;
(d) debentures or other securities for money issued by any authority constituted under any housing or building scheme approved by the 2[Authority] or a State Government or by any authority or body constituted by any Central Act or Act of a State Legislature;
(e) first mortgag
(1) No insurer carrying on general insurance business shall, after the commencement of the Insurance (Amendment) Act, 1968, invest or keep invested any part his assets otherwise than in any of the following approved investments, namely:—
(a) the investments specified in clauses (a) to (e), (n), (q) and (r) of sub-section (1) of section 27A;
(b) debentures secured by a first charge on any immovable property, plant or equipment of any company which has paid interest in full for the three years immediately preceding or for at least three out of the four or five years immediately preceding on such or similar debentures issued by it;
(c) debentures secured by a first charge on any immovable property, plant or equipment of any company where either the book value or the market va
No insurer shall directly or indirectly invest outside India the funds of the policy-holders.]
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1. Ins. by Act 41 of 1999, sec. 30 and Sch. I (w.e.f. 19-4-2000).
(1) Without prejudice to anything contained in sections 27, 27A and 27B, the Authority may, in the interests of the policy-holders, specify by the regulations made by it, the time, manner and other conditions of investment of assets to be held by an insurer for the purposes of this Act.
(2) The Authority may give specific directions for the time, manner and other conditions subject to which the funds of policy-holders shall be invested in the infrastructure and social sector as may be specified by regulations made by the Authority and such regulations shall apply uniformly to all the insurers carrying on the business of life insurance, general insurance, or re-insurance in India on or after the commencement of the Insurance Regulatory and Development Authority Act, 1999.
(3) The Authority may, after taking into account the nature of busi
1[(1) Every insurer 2[***] carrying on the business of life insurance shall every year, within thirty-one days from the beginning of the year, submit to the 3[Authority] a 4[return] showing as at the 31st day of December of the preceding year the assets held invested in accordance with section 27, and all other particulars necessary to establish that the requirements of that section have been complied with, and such 1[return] shall be certified by a principal officer of the insurer.
(2) Every such insurer shall also furnish, within fifteen days from the last day of March, June and September, a 5[return] certified as aforesaid showing as at the end of each of said months the assets held invested in accordance with section 27.]
6[(2A) In respect of the Government securities and other approved securities invested and kept invested in accord
(1) Every insurer carrying on life insurance business, shall every year within thirty-one days from the beginning of the year submit to the 2[Authority] a return 3[in the form specified by the regulations made by the Authority] showing as at the 4[31st day of March] of the preceding year, the investments made out of the controlled fund referred to in section 27A, and every such return shall be certified by a principal officer of the insurer.
(2) Every insurer referred to in sub-section (1) shall also submit to the 2[Authority] a return 3[in the form specified by the regulations made by the Authority] showing all the changes that occurred in the investments aforesaid during each of the quarters ending on the last day of March, June, September and December within thirty-one days from the close of the quarter to which it relates, and every such return shall be certified by a principal
(1) Every insurer carrying on general insurance business, shall, every year, within thirty-one days from the beginning of the year, submit to the 2[Authority] a return 3[, in the form specified by the regulations made by the Authority,] showing as at the 4[31st day of March] of the preceding year the investments made out of his assets referred to in section 27B, and every such return shall be certified by a principal officer of the insurer.
(2) Every insurer referred to in sub-section (1) shall also submit to the 2[Authority] a return 3[, in the form specified by the regulations made by the Authority,] showing all the changes that occurred in the investments aforesaid during each of the quarters ending on the last day of March, June, September and December within thirty-one days from the close of the quarter to which it relates, and every such return shall be certified by a princip
1[(1)] No insurer shall grant loans or temporary advances either on hypothecation of property or on personal security or otherwise, except loans on life policies issued by him within their surrender value, to any director, manager, managing agent, actuary, auditor or officer of the insurer if a company, or where the insurer is a firm, to any partner therein, or to any other company or firm in which any such director, manager, managing agent, actuary, officer or partner holds the position of a director, manager, managing agent, actuary, officer or partner:
Provided that 2[nothing contained in this sub-section] shall apply to loans made by an insurer to a banking company:
3[***]
Provided further that nothing in this section shall prohibit a company from granting such loans or advances to a subsi
If by reason of a contravention of any of the provisions of section 27, 1[section 27A], 2[section 27B] or section 29, any loss is sustained by the insurer or by the policy-holders, every director, manager, managing agent, officer or partner who is knowingly a party to such contravention shall, without prejudice to any other penalty to which he may be liable under this Act, be jointly and severally liable to make good the amount of such loss.
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1. Ins. by Act 47 of 1950, sec. 21 (w.e.f. 1-6-1950).
2. Ins. by Act 62 of 1968, sec. 13 (w.e.f. 1-6-1969).
1[(1)] None of the assets in 2[India] of any insurer shall, except in the case of deposits made with the Reserve Bank of India under section 7 3[or section 98] or in so far as assets are required to be vested in trustees by sub-section (4) of section 27, be kept otherwise than 2[in the name of a public officer approved by the 4[Authority], or] in the corporate name of the undertaking, if a company, or in the name of the partners, if a firm, or in the name of the proprietor, if an individual.
5[(2) Nothing contained in this section shall be deemed to prohibit the endorsement in favour of a banking company of any security or other document solely for the purpose of collection or for realisation of interest, bonus or dividend.]
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1. Section 31
(1) No insurer shall, after the commencement of this Act, appoint a managing agent for the conduct of his business.
(2) Where any insurer engaged in the business of insurance before the commencement of this Act employs a managing agent for the conduct of his business, then, notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (7 of 1913), and notwithstanding anything to the contrary contained in the articles of the insurer, if a company, or in any agreement entered into by the insurer, such managing agent shall cease to hold office on the expiry of three years from the commencement of this Act and no compensation shall be payable to him by the insurer by reason only of the premature termination of his employment as managing agent.
(3) After the commencement of this Act, notwithstanding anything contained i
(1) A managing director or other officer of an insurer specified in sub-clause (b) of clause (9) of section 2 and carrying on life insurance business shall not be a managing director or other officer of any other insurer carrying on life insurance business or of a banking company or of an investment company:
Provided that the 2[Authority] may permit such managing director or other officer to be a managing director or other officer of any other insurer carrying on life insurance business for the purpose of amalgamating the business of the two insurers or transferring the business of one insurer to the other.
(2) Where an insurer specified in sub-clause (b) of clause (9) of section 2 has a life insurance fund of more than twenty-five lakhs of rupees or insurance funds totalling more than fifty lakhs of rupees, the manager, managing directo
Every insurer shall, after the commencement of the Insurance Regulatory and Development Authority Act, 1999, undertake such percentages of life insurance business and general insurance business in the rural or social sector, as may by specified, in the Official Gazette by the Authority, in this behalf.]
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1. Ins. by Act 41 of 1999, sec. 30 and Sch. I (w.e.f. 19-4-2000).
Every insurer shall, after the commencement of the Insurance Regulatory and Development Authority Act, 1999, discharge the obligations specified under section 32B to provide life insurance or general insurance policies to the persons residing in the rural sector, workers in the unorganised or informal sector or for economically vulnerable or backward classes of the society and other categories of persons as may specified by regulations made by the Authority and such insurance policies shall include insurance for crops.]
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1. Ins. by Act 41 of 1999, sec. 30 and Sch. I (w.e.f. 19-4-2000).
(1) The Authority may, at any time, by order in writing, direct any person (hereafter in this section referred to as “Investigating Authority”) specified in the order to investigate the affairs of any insurer and to report to the Authority on any investigation made by such Investigating Authority:
Provided that the Investigating Authority may, wherever necessary, employ any auditor or actuary or both for the purpose of assisting him in any investigation under this section.
(2) Notwithstanding anything to the contrary contained in section 235 of the Companies Act, 1956 (1 of 1956), the Investigating Authority may, at any time, and shall, on being directed so to do by the Authority, cause an inspection to be made by one or more of his officers of any insurer and his books of account; and the Investigating Authority shall supply to the insu
The 1[***] 2[Authority] may appoint such staff, and at such places at it or he may consider necessary, for the scrutiny of the returns, statements and information furnished by insurers under this Act and generally to ensure the efficient performance of the functions of the 2[Authority] under this Act.]
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1. The words “Central Government or the” omitted by Act 41 of 1999, sec. 30 and Sch. I (w.e.f. 19-4-2000).
2. Subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
(1) Where the 1[Authority] is satisfied that—
(a) in the public interest; or
(b) to prevent the affairs of any insurer being conducted in a manner detrimental to the interests of the policy-holders or in a manner prejudicial to the interests of the insurer; or
(c) generally to secure the proper management of any insurer,
it is necessary to issue directions to insurers generally or to any insurer in particular, he may, from time to time, issue such directions as 2[it] deems fit, and the insurers or the insurer, as the case may be, shall be bound to comply with such directions:
Provided that no such direction shall be issued to any insurer in particular unless such insurer has been give
(1) In the case of an insurer,—
(a) no amendment made after the commencement of the Insurance (Amendment) Act, 1968, of any provision relating to the appointment, reappointment, termination of appointment or remuneration of a managing or whole-time director, or of a manager or a chief executive officer, by whatever name called, whether that provision be contained in the insurer’s memorandum or articles of association, or in an agreement entered into by him, or in any resolution passed by the insurer in general meeting or by his Board of directors shall have effect unless approved by the 1[Authority];
(b) no appointment, re-appointment or termination of appointment, made after the commencement of the Insurance (Amendment) Act, 1968, of a managing or whole-time director, or a manager or a chief executive officer, by whatever
(1) Where the 2[Authority] is satisfied that in the public interest or for preventing the affairs of an insurer being conducted in a manner detrimental to the interests of the policy-holders or for securing the proper management of any insurer it is necessary so to do, 3[it] may, for reasons to be recorded in writing, by order, remove from office, with effect from such date as may be specified in the order, any director or the chief executive officer, by whatever name called, of the insurer.
(2) No order under sub-section (1) shall be made unless the director or chief executive officer concerned has been given a reasonable opportunity of making a representation to the 2[Authority] against the proposed order:
Provided that if, in the opinion of the 2[Authority], any delay would be detrimental to the interests of the insurer or his policyh
(1) If the 2[Authority] is of opinion that in the public interest or in the interest of an insurer, or his policy-holders it is necessary so to do, 3[it] may, from time to time, by order in writing, appoint, with effect from such date as may be specified in the order, one or more persons to hold office as additional directors of the insurer:
Provided that the number of additional directors so appointed shall not, at any time, exceed five or one-third of the maximum strength fixed for the Board by the articles of association of the insurer, whichever is less.
(2) Any person appointed as additional director in pursuance of this section,—
(a) shall hold office during the pleasure of the 2[Authority], and subject thereto for a period not exceeding three years or such further periods not exc
Any appointment or removal of a director or chief executive officer in pursuance of section 34B or section 34C shall have effect notwithstanding anything to the contrary contained in the Companies Act, 1956 (1 of 1956), or any other law for the time being in force or in any contract or any other instrument.]
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1. Ins. by Act 62 of 1968, sec. 16 (w.e.f. 1-6-1969).
The 2[Authority] may,—
(a) caution or prohibit insurers, generally or any insurer in particular against entering into any particular transaction or class of transactions, and generally give advice to any insurer;
(b) at any time, if he is satisfied that in the public interest or in the interests of the insurer or for preventing the affairs of the insurer being conducted in a manner detrimental to the interests of the insurer or his policy-holders, it is necessary so to do, by order in writing and on such terms and conditions as may be specified therein,—
(i) require the insurer to call a meeting of his directors for the purpose of considering any matter relating to or arising out of the affairs of the insurer;
(i
(1) Without prejudice to the generality of the powers conferred by sub-section (1) of section 34, the 2[Authority] may, if 3[it] is of opinion that the terms or conditions of any re-insurance treaty or other re-insurance contract entered into by an insurer are not favourable to the insurer or are detrimental to the public interest, 3[it] may, by order, require the insurer to make, at the time when the renewal of such treaty or contract becomes next due, such modifications in the terms and conditions of such treaty or contract as 3[it] may specify in the order or not to renew such treaty or contract, and, if the insurer fails to comply with such order, he shall be deemed to have failed to comply with the provisions of this Act.
(2) The 2[Authority] may, if 3[it] has reason to believe that an insurer is entering into or is likely to enter into re-insurance treaties or other re-insura
Without prejudice to the generality of the powers conferred by sub-section (1) of section 34, the 2[Authority] may, if 3[it] has reason to believe that the working of any branch outside India of an insurer being an insurer specified in sub-clause (b) of clause (9) of section 2, is generally resulting in a loss or that the affairs of that branch are being conducted in a manner prejudicial to the interests of the policy-holders or the public interest, 3[it] may, after giving an opportunity to the insurer of being heard, direct that the insurer shall cease, within such period, not being less than one year, as may be specified in the order, to carry on insurance business in the country in which such branch is situated and if the insurer fails to comply with such order he shall be deemed to have failed to comply with the provisions of this Act.]
(1) Where the 2[Chairperson of the Authority], in consequence of information in his possession, has reason to believe that—
(a) Any person who has been required under sub-section (2) of section 33 to produce, or cause to be produced, any books, accounts or other documents in his custody or power has omitted or failed to produce, or cause to be produced, such books, accounts or other documents, or
(b) Any person to whom a requisition to produce any books, accounts or other documents as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books, accounts or other documents which will be useful for, or relevant to, an investigation under sub-section (1) of section 33 or an inspection under sub-section (1A) of that section, or
(c)
(1) No life insurance business of an insurer specified in sub-clause (a)(ii) or sub-clause (b) of clause (9) of section 2 shall be transferred to 1[any person or transferred to] or amalgamated with the life insurance business of any other insurer except in accordance with a scheme prepared under this section and 2[approved by the Authority].
(2) Any scheme prepared under this section shall set out the agreement under which the transfer or amalgamation is proposed to be effected, and shall contain such further provisions as may be necessary for giving effect to the scheme.
(3) Before an application is made to the 3[Authority] 4[to approve any such scheme] notices of the intention to make the application together with a statement of the nature of the amalgamation or transfer, as the case may be, and of the reason therefor shall, at least t
2[(1)] When any application such as is referred to in sub-section (3) of section 35 is made to the 1[Authority], the 1[Authority] shall cause, if for special reasons it so directs, notice of the application to be sent to every person resident in 3[India] 4[***] who is the holder of a life policy of any insurer concerned and shall cause a statement of the nature and terms of the amalgamation or transfer, as the case may be, to be published in such manner and for such period as it may direct, and, after hearing the directors and such policy-holders as apply to be heard and any other persons whom it considers entitled to be heard, 5[may approve the arrangement], it is satisfied that no sufficient objection to the arrangement has been established 6[and shall make such consequential orders as are necessary to give effect to the arrangement, including orders as to the disposal of any deposit made under section 7 or section 98]:
Where an amalgamation takes place between any two or more insurers, or 1[where any business of an insurer is transferred], whether in accordance with a scheme confirmed by the 2[Authority] or otherwise, the insurer carrying on the amalgamated business or 3[the person to whom the business is transferred], as the case may be, shall, within three months from the date of the completion of the amalgamation or transfer, 4[furnish in duplicate to the 5[Authority]]—
(a) a certified copy of the scheme, agreement or deed under which the amalgamation or transfer has been effected, and
(b) 6[a declaration signed by every party concerned] or in the case of a company by the chairman and the principal officer that to the best of their belief every payment made or to be made to any person whatsoever on account of the amalgamation or transf
(1) If the 2[Authority] is satisfied that—
(i) in the public interest; or
(ii) in the interests of the policy-holders; or
(iii) in order to secure the proper management of an insurer; or
(iv) in the interest of insurance business of the country as a whole,
it is necessary so to do, 3[it] may prepare a scheme for the amalgamation of that insurer with any other insurer (hereinafter referred to in this section as the transferee insurer):
Provided that no such scheme shall be prepared unless the other insurer has given his written consent to the proposal for such amalgamation.
(2) The scheme af
(1) A transfer or assignment of a policy of life insurance, whether with or without consideration may be made only by an endorsement upon the policy itself or by a separate instrument, signed in either case by the transferor or by the assignor, his duly authorised agent and attested by at least one witness, specifically setting forth the fact of transfer or assignment.
(2) The transfer or assignment shall be complete and effectual upon the execution of such endorsement or instrument duly attested but 1[except where the transfer or assignment is in favour of the insurer] shall not be operative as against an insurer and shall not confer upon the transferee or assignee, or his legal representative, and right to sue for the amount of such policy or the moneys secured thereby until a notice in writing of the transfer or assignment 2[3[and] either the said endorsement or instrument itsel
(1) The holder of a policy of life insurance 1[on his own life 2[***]] may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death:
3[Provided that, where any nominee is a minor, it shall be lawful for the policy-holder to appoint in the prescribed manner any person to receive the money secured by the policy in the event of his death during the minority of the nominee.]
(2) Any such nomination in order to be effectual shall, unless it is incorporated in the text of the policy itself, be made by an endorsement on the policy communicated to the insurer and registered by him in the records relating to the policy and any such nomination may at any time before the policy matures for payment be cancelled or
(1) No person shall, after the expiry of six months from the commencement of this Act, pay or contract to pay any remuneration or reward whether by way of commission or otherwise for soliciting or procuring insurance business in India to any person 1[except an insurance agent or an intermediary or insurance intermediary].
2[(1A) In this section and sections 3[40A], 41 and 43, reference to an insurance agent shall be construed as including reference to an individual soliciting or procuring insurance business exclusively in 4[the territories which, immediately before the 1st November, 1956, were comprised in a Part B State] notified in this behalf by the Central Government in the Official Gazette and holding a valid licence as insurance agent under the law of 5[that Part B State].]
(2) No insurance agent 6[***] shall be paid or contract to
(1) No person shall pay or contract to pay to an insurance agent, and no insurance agent shall receive or contract to receive by way of commission or remuneration in any form in respect of any policy of life insurance issued in India by an insurer after the 31st day of December, 1950, and effected through an insurance agent, an amount exceeding—
(a) where the policy grants an immediate annuity or a deferred annuity in consideration of a single premium, or where only one premium is payable on the policy, two per cent. of that premium,
(b) where the policy grants a deferred annuity in consideration of more than one premium, seven and a half per cent. of the first year’s premium, and two per cent. of each renewal premium, payable on the policy, and
(c) in any other case, thir
(1) Every insurer transacting life insurance business in India shall furnish to the 2[Authority], within such time as may be prescribed, statements in the prescribed form certified by an actuary on the basis of premiums currently used by him in regard to new business in respect of mortality, rate of interest, expenses and bonus loading.
(2) After the 31st day of December, 1950, no insurer shall, in respect of life insurance business transacted by him in India, spend as expenses of management in any calendar year an amount in excess of the prescribed limits and in prescribing any such limits regard shall be had to the size and age of the insurer and the provision generally made for expenses of management in the premium rates of insurers:
Provided that where an insurer has spent such expenses in any year an amount in excess of the amount p
(1) After the 31st day of December, 1949, no insurer shall, in respect of any class of general insurance business transacted by him in India, spend in any calendar year as expenses of management including commission of remuneration for procuring business an amount in excess of the prescribed limits and in prescribing any such limits regard shall be had to the size and age of the insurer:
Provided that where an insurer has spent as such expenses in any year an amount in excess of the amount permissible under this sub-section, he shall not be deemed to have contravened the provisions of this section, if the excess amount so spent is within such limits as may be fixed in respect of the year by the 2[Authority] after consultation with Executive Committee of the General Insurance Council constituted under section 64F, by which the actual expenses incurred may exceed the expenses permiss
(1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to 1[take out or renew or continue] an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing 2[or continuing] a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer:
2[Provided that acceptance by an insurance agent of commission in connection with a policy of life insurance taken out by himself on his own life shall not be deemed to be acceptance of a rebate of premium within the meaning of this sub-section if at the time of such acceptance the insurance agent satisfies the prescribed conditions establishing that he is a
1[(1) The Authority or an officer authorised by it in this behalf shall, in the manner determined by the regulations made by it and on payment of the fee determined by the regulations, which shall not be more than two hundred and fifty rupees, issue to any person making an application in the manner determined by the regulations, a licence to act as an insurance agent for the purpose of soliciting or procuring insurance business:
Provided that,—
(i) in the case of an individual, he does not suffer from any of the disqualifications mentioned in sub-section (4); and
(ii) in the case of a company or firm, any of its directors or partners does not suffer from any of the said disqualifications:
Provided further that any licence issued immed
(1) The 2[Authority or an officer authorised by it] in this behalf shall in the prescribed manner and on payment of the prescribed fee which shall not be more than twenty-five rupees for a principal agent or a chief agent and ten rupees for a special agent, register any person who makes 3[an application to it] in the prescribed manner if—
(a) in the case of an individual, he does not suffer from any of the disqualifications mentioned in sub-section (4) of section 42, or
(b) in the case of a company or firm, any of its directors or partners does not suffer from any of the said disqualifications,
and a certificate to act as a principal agent, chief agent or special agent, as the case may be, for the purpose of procuring insurance business shall be issued to him.
&nbs
(1) No insurer shall, after the expiration of seven years from the commencement of the Insurance (Amendment) Act, 1950 (47 of 1950), appoint, or transact any insurance business in India, through a principal agent.
(2) Every contract between an insurer and a principal agent shall be in writing and the terms contained in Part A of the Sixth Schedule shall be deemed to be incorporated in, and form part of, every such contract.
(3) No insurer shall, after the commencement of the Insurance (Amendment) Act, 1950 (47 of 1950), appoint any person as a principal agent except in a presidency town unless the appointment is by way of renewal of any contract subsisting at such commencement.
(4) Within sixty days of the commencement of the Insurance (Amendment) Act, 1950 (47 of 1950), every principal agent
(1) Every contract between an insurer carrying on life insurance business and a chief agent shall be in writing, and shall specify the area (not being less in extent than a district or the equivalent thereof) for which the chief agent is appointed, and the terms contained in Part B of the Sixth Schedule shall be deemed to be incorporated in, and form part of every such contract.
(2) No chief agent shall, either directly or through insurance agents or special agents employed by or through him procure life insurance business for the insurer in any area outside the area for which he has been appointed or in any area for which another chief agent has been appointed or in any area in which the head office or any branch office of the insurer is operating, and neither the head office nor any branch office of the insurer shall operate in any area for which a chief agent has been appointed:
(1) The Authority or an officer authorised by it in this behalf shall, in the manner determined by the regulations made by the Authority and on payment of the fees determined by the regulations made by the Authority, issue to any person making an application in the manner determined by the regulations, and not suffering from any of the disqualifications herein mentioned, a licence to act as an intermediary or an insurance intermediary under this Act:
Provided that—
(a) in the case of an individual, he does not suffer from any of the disqualifications mentioned in sub-section (4) of section 42, or
(b) in the case of a company, or firm, any of its directors of partners does not suffer from any of the said disqualifications.
(2) A licence
(1) No intermediary or insurance intermediary shall be paid or contract to be paid by way of commission, fee or as remuneration in any form, an amount exceeding thirty per cent. of the premium payable as may be specified by the regulations made by the Authority, in respect of any policy or policies effected through him:
Provided that the Authority may specify different amounts payable by way of commission, fee or as remuneration to an intermediary or insurance intermediary or different classes of business of insurance.
(2) Without prejudice to the provisions contained in this Act, the Authority may, by the regulations made in this behalf, specify the requirements of capital, form of business and other conditions to act as an intermediary or insurance intermediary.]
Every insurer and every person who acting on behalf of an insurer employs 1[***] insurance agents shall maintain a register showing the name and address of every 1[***] insurance agent appointed by him and the date on which his appointment began and the date, if any, on which his appointment ceased.
2[***]
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1. The word “licensed” omitted by Act 13 of 1941, sec. 29 (w.e.f. 8-4-1941).
2. Sub-sections (2) and (3) omitted by Act 35 of 1957, sec. 4 (w.e.f. 1-9-1957).
(1) Notwithstanding anything to the contrary contained in any contract between any person and an insurance agent providing for the forfeiture or stoppage of payment of renewal commission to such insurance agent, no such person shall, in respect of life insurance business transacted in India, refuse payment to an insurance agent of commission due to him on renewal premium under the agreement by reason only of the termination of his agreement, except for fraud:
Provided that—
(a) such agent ceases to act for the insurer concerned after the Central Government has notified in the Official Gazette that it is satisfied that the circumstances in which the said insurer is placed are such as to justify the agent’s ceasing to act for him; or
(b) such agent has served the insurer continuall
For the purposes of ensuring compliance with the provisions of sections 40A, 40B, 40C, 42B and 42C the 2[Authority] may by notice—
(a) require from an insurer, principal agent, chief agent or special agent such information, certified if so required by an auditor or actuary, as he may consider necessary;
(b) require an insurer, principal agent, chief agent or special agent to submit for his examination at the principal place of business of the insurer in 3[India], any book of account, register or other document, or to supply any statement which may be specified in the notice;
(c) examine any officer of an insurer or a principal agent, chief agent or special agent on oath, in relation to any such information, book, register, document or statement and administer the oath acco
No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement 1[was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made] by the policy-holder and that the policy-holder knew at the time of making it that the statement was false 2[or that it suppressed facts which it was material to disclose]:
Section 45 of the Insurance Act, 1938, is a vital provision that limits the circumstances under which an insurance policy can be called into question after a specified period. It aims to balance the rights of insurers and insureds, promoting certainty and good faith in insurance contracts.
Section 45 stipulates that no life insurance policy shall be called into question on any ground whatsoever after the expiry of three years from the date of the policy, except in cases where the policyholder has fraudulently suppressed material facts or made misrepresentations. The section emphasizes that after this period, the insurer cannot deny liability based on facts that could have been discovered within the statutory period.
While Section 45 itself does not prescribe a direct punishment, contravention of its provisions can lead to penalties under the Act, including fines and imprisonment for insurers acting in contravention of the law, especially in cases of fraudulent suppression or misrepresentation.
In conclusion, Section 45 of the Insurance Act, 1938, provides a statutory safeguard for policyholders against indefinite challenges to their policies, emphasizing the importance of good faith, material disclosure, and the burden of proof on the insurer. Courts have consistently interpreted this section to promote certainty while allowing exceptions in cases of fraud or suppression of material facts.
The holder of a policy of insurance issued by an insurer in respect of insurance business transacted in 1[India] after the commencement of this Act shall have the right, notwithstanding anything to the contrary contained in the policy or in any agreement relating thereto, to receive payment in 1[India], of any sum secured thereby and to sue for any relief in respect of the policy in any court of competent jurisdiction in 1[India]; and if the suit is brought in 1[India] any question of law arising in connection with any such policy shall be determined according to the law in force in 1[India]:
2[Provided that nothing in this section shall apply to a policy of marine insurance.]
1. Subs. by Act 62 of 1956, sec. 2 and Sch., for “the States” (w.e.f. 1-11-1956).
2. Ins. by Act 7 of 1944, sec. 2
(1) Where in respect of any policy of life insurance maturing for payment an insurer is of opinion that by reason of conflicting claims to or insufficiency of proof of title to the amount secured thereby or for any other adequate reason it is impossible otherwise for the insurer to obtain a satisfactory discharge for the payment of such amount, 1[the insurer may], 2[***] apply to pay the amount into the court within the jurisdiction of which is situated the place at which such amount is payable under the terms of the policy or otherwise.
(2) A receipt granted by the court for any such payment shall be a satisfactory discharge to the insurer for the payment of such amount.
(3) An application for permission to make a payment into court under this section shall be made by a petition verified by an affidavit signed by a principal officer of
(1) In the event of any dispute relating to the settlement of a claim on a policy of life insurance assuring a sum not exceeding two thousand rupees (exclusive of any profit or bonus not being a guaranteed profit or bonus) issued by an insurer in respect of insurance business transacted in India, arising between a claimant under the policy and the insurer who issued the policy or has otherwise assumed liability in respect thereof, the dispute may at the option of the claimant be referred to the 2[Authority] for decision, and the 2[Authority] may after giving an opportunity to the parties to be heard and after making such further inquiries as 3[it] may think fit, decide the matter.
(2) The decision of the 2[Authority] under this sub-section shall be final and shall not be called in question in any court, and may be executed by the court which would have been competent to decide the
(1) Where the insurer is a company incorporated under the Indian Companies Act, 1913 (7 of 1913), 1[or under the Indian Companies Act, 1882 (6 of 1882), or under the Indian Companies Act, 1866 (10 of 1866), or under any Act repealed thereby,] and carries on the business of life insurance, not less than one-fourth of the whole number of the directors of the company 2[the number to be elected not being less than two in any case] 3[shall, notwithstanding anything to the contrary in the Articles of Association of the company, be elected in the prescribed manner by the holders of policies of life insurance issued by the company].
4[(2) Only and all persons holding otherwise than as assignees policies of life insurance issued by the company of such minimum amount and having been in force for such minimum period as may be prescribed shall 5[unless disqualified under sub-section (2A)] be e
No insurance agent who solicits or procures life insurance business, and 2[no chief agent or special agent], shall be eligible to be or remain a director of any insurance company carrying on life insurance business:
Provided that any director holding office at the commencement of the Insurance (Amendment) Act, 1946, shall not become ineligible to remain a director by reason of this section until the expiry of six months from the commencement of that Act.]
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1. Ins. by Act 6 of 1946, sec. 24 (w.e.f. 20-3-1946).
2. Subs. by Act 47 of 1950, sec. 39, for “certain words” (w.e.f. 1-6-1950).
(1) An insurer specified in sub-clause (b) of clause (9) of section 2 and carrying on life insurance business shall not have a common director with another such insurer.
(2) The 2[Authority] may, for such period, to such extent and subject to such conditions as it may specify, exempt from the operation of the section—
(a) any insurer, who is a subsidiary company of another insurer, or
(b) two or more insurers, for the purpose of facilitating their amalgamation or the transfer of business of one insurer to the other.]
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1. Ins. by Act 47 of 1950, sec. 40 (w.e.f. 1-6-1950).
2. Subs. by Act 41 of
[Rep. by the Insurance (Amendment) Act, 1968 (62 of 1968), sec. 21 (w.e.f. 1-6-1969)].]
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1.Ins. by Act 47 of 1950, sec. 40 (w.e.f. 1-6-1950).
2[(1)] No insurer, being an insurer specified in sub-clause (a)(ii) or sub-clause (b) of clause (9) of section 2, who carries on the business of life insurance or any other class or sub-class of insurance business to which section 13 applies, shall, for the purpose of declaring or paying any dividend to shareholders or any bonus to policy-holders or of making any payment in service of any debentures, utilize directly or indirectly any portion of the life insurance fund or of the fund of such other class or sub-class of insurance business, as the case may be, except a surplus shown in the valuation 3[balance-sheet in such form as may be specified by the regulations made by the Authority] submitted to the 4[Authority] as part of the abstract referred to in section 15 as a result of an actuarial valuation of the assets and liabilities of the insurer; nor shall he increase such surplus by contributions out of any reserve fund or
An insurer shall, 1[before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable but not paid,] give notice to the policy-holder informing him of the options available to him 2[unless these are set forth in the policy].
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1. Subs. by Act 11 of 1939, sec. 20, for “within three months of the lapsing of policy of life insurance”.
2. Added by Act 13 of 1941, sec. 35 (w.e.f. 8-4-1941).
Every insurer shall, on application by a policy-holder and on payment of a fee not exceeding one rupee, supply to the policy-holder certified copies of the question put to him and his answers thereto contained in his proposal for insurance and in the medical report supplied in connection therewith.
1[(1)] No insurer shall after the commencement of this Act begin, or after three years from that date continue to carry on, any business upon the dividing principle, that is to say, on the principle that the benefit secured by a policy is not fixed but depends either wholly or partly on the results of a distribution of certain sums amongst policies becoming claims within certain time-limits, or on the principle that the premiums payable by a policy-holder depend wholly or partly on the number of policies becoming claims within certain time-limits:
Provided that nothing in this section shall be deemed to prevent an insurer from allocating bonuses to holders of policies of life insurance as a result of a periodical actuarial valuation either as reversionary additions to the sums insured or as immediate cash bonuses or otherwise:
Provided f
(1) If at any time the 2[Authority] has reason to believe that an insurer carrying on life insurance business is acting in a manner likely to be prejudicial to the interests of holders of life insurance policies, 3[it] may, after giving such opportunity to the insurer to be heard as 3[it] thinks fit, make a report thereon to the Central Government.
(2) The Central Government, if it is of opinion after considering the report that it is necessary or proper to do so, may appoint an Administrator to manage the affairs of the insurer under the direction and control of the 4[Authority].
(3) The Administrator shall receive such remuneration as the Central Government may direct and the Central Government may at any time cancel the appointment and appoint some other person as Administrator.
(4) The man
(1) The Administrator shall conduct the management of the business of the insurer with the greatest economy compatible with efficiency and shall, as soon as may be possible, file with the 2[Authority] a report stating which of the following courses is in the circumstances most advantageous to the general interests of the holders of life insurance policies, namely:—
(a) the transfer of the business of the insurer to some other insurer;
(b) the carrying on of its business by the insurer (whether with the policies of the business continued for the original sum insured with the addition of bonuses that attach to the policies or for reduced amounts);
(c) the winding up of the insurer; and
(d) such other course as he deems advi
(1) If the Administrator is satisfied that any person has rendered himself liable to be proceeded against under section 106, he may, pending the institution of proceedings against such person under that section, by order in writing, prohibit him or any other person from transferring or otherwise disposing of any property which, in the opinion of the Administrator, would be liable to attachment in proceedings under that section.
(2) Any person aggrieved by an order made by the Administrator under sub-section (1) may, within fourteen days from the date on which the order is served on him, appeal against such order to the Central Government and the Central Government may pass such order thereon as it thinks fit.
(3) An order made by the Administrator under sub-section (1) shall, subject to any other order made by the Central Government on a
If at any time, on a report made by the 2[Authority] in this behalf, it appears to the Central Government that the purpose of the order appointing the Administrator has been fulfilled or that for any reason it is undesirable that the order of appointment should remain in force, the Central Government may cancel the order and thereupon the Administrator shall be divested of the management of the insurance business which shall, unless otherwise directed by the Central Government, again vest in the person in whom it was vested immediately prior to the date of appointment of the Administrator.]
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1. Ins. by Act 47 of 1950, sec. 42 (w.e.f. 1-6-1950).
2. Subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
Any order or decision of the Central Government made in pursuance of section 52A or section 52D shall be final and shall not be called in question in any Court.]
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1. Ins. by Act 47 of 1950, sec. 42 (w.e.f. 1-6-1950).
If any director or officer of the insurer or any other person fails to deliver to the Administrator any books of account, registers or any other documents, in his custody relating to the business of the insurer the management of which has vested in the Administrator, or retains any property of such insurer he shall be punishable with imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, or with both.]
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1. Ins. by Act 47 of 1950, sec. 42 (w.e.f. 1-6-1950).
(1) If, upon receipt of a report from the 2[Authority] the Central Government is satisfied that an insurer,—
(a) has persistently failed to comply with—
(i) any direction given to him under section 34, section 34F or section 34G, or
(ii) any order made under section 34E; or
(b) is being managed in a manner detrimental to the public interest or to the interests of his policy-holders, or share-holders, and that—
(i) in the public interest, or
(ii) in the interests of the policy-holders or share-holders of such insurer,
it is necessary to acquire the undertak
(1) The Central Government may make a scheme for carrying out the purposes of sections 52H and 52J to 52M (both inclusive) in relation to the acquired insurer.
(2) In particular, and without prejudice to the generality of the foregoing power, the said scheme may provide for all or any of the following matters, namely:—
(a) transfer of the undertaking, including the property, assets and liabilities of the acquired insurer to an acquiring insurer, and the capital, constitution, name and office of the acquiring insurer;
(b) the constitution of the first board of management (by whatever name called) of the acquiring insurer and all such matters in connection therewith or incidental thereto as the Central Government may consider to be necessary or expedient;
(1) The acquired insurer shall be given by the Central Government or the acquiring insurer, as the case may be, such compensation in respect of the transfer of the undertaking of the acquired insurer as is determined in accordance with the principles contained in the Eighth Schedule.
(2) The amount of compensation to be given in accordance with the principles contained in the Eighth Schedule shall be determined, in the first instance, by the Central Government or the acquiring insurer, as the case may be, in consultation with the 2[Authority], and shall be offered by it to the acquired insurer, in full satisfaction thereof.
(3) If the amount of compensation offered in terms of sub-section (2) is not acceptable to the acquired insurer, he may, before such date as may be notified by the Central Government in the Official Gazette, request t
(1) The Central Government may, for the purposes of sections 52H to 52J, constitute a Tribunal which shall consist of a chairman and two other members.
(2) The chairman shall be a person who is, or has been, a Judge of a High Court or of the Supreme Court and of the two other members, one shall be a person who, in the opinion of the Central Government, has had experience of matters, connected with general insurance, and the other shall be a person who is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949).
(3) If, for any reason, a vacancy occurs in the office of the chairman or any other member of the Tribunal, the Central Government may fill the vacancy by appointing another person thereto in accordance with the provisions of sub-section (2), and any proceeding may be continued before the Tribu
(1) The Tribunal shall have the powers of a Civil Court, while trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses or documents.
(2) Notwithstanding anything contained in sub-section (1) or in any other law for the time being in force, the Tribunal shall not compel the Central Government or the 2[Authority]—
(a) to produce any books o
(1) The Tribunal shall have power to regulate its own procedure.
(2) The Tribunal may hold the whole or any part of its inquiry in camera.
(3) Any clerical or arithmetical error in any order of the Tribunal or any error arising therein from any accidental slip or omission may, at any time, be corrected by the Tribunal either of its own motion or on the application of any of the parties.]
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1. Ins. by Act 62 of 1968, sec. 22 (w.e.f. 1-6-1969).
Where any acquired insurer, being a company, has in accordance with the provisions of this Act, collected, and distributed any monies paid to him by the Central Government or the acquiring insurer, as the case may be, by way of compensation or otherwise, and has also complied with any directions given to him by the Central Government or the acquiring insurer, as the case may be, for the purpose of securing that the ownership of any property or any right is effectively transferred to the Central Government or the acquiring insurer, as the case may be, the Central Government may, on application being made to it in this behalf by such insurer, grant a certificate to the insurer that there is no reason for the continued existence of the insurer, and upon the publication of such certificate, the insurer shall be dissolved.]
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&
1 [52C. Cancellation of contracts and agreements
The Administrator may, at any time during the continuance of his appointment with respect to an insurer and after giving an opportunity to the persons concerned to be heard, cancel or vary (either unconditionally or subject to such conditions as he thinks fit to impose) any contract or agreement (other than a policy) between the insurer and any other person which the Administrator is satisfied is prejudicial to the interest of holders of life insurance policies.]
____________________________
1. Inserted by Act 47 of 1950, section 42 (w.e.f. 1-6-1950).
1[(1) The Tribunal may order the winding up in accordance with the Companies Act, 1956 (1 of 1956) of any insurance company and the provisions of that Act shall, subject to the provisions of this Act, apply accordingly.]
(2) In addition to the grounds on which such an order may be based, the 2[Tribunal] may order the winding up of an insurance company—
(a) if with the sanction of the 2[Tribunal] previously obtained a petition in this behalf is presented by shareholders not less in number than one tenth of the whole body of shareholders and holding not less than one-tenth of the whole share capital or by not less than fifty policy-holders holding policies of life insurance that have been in force for not less than three years and are of the total value of not less than fifty thousand rupees; or
&nbs
Notwithstanding anything contained in any other law, in ascertaining for any purpose of this Act the solvency or otherwise of an insurer no account shall be taken of any assets of the insurer consisting of unpaid-up share capital.]
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1.Ins. by Act 6 of 1946, sec. 23 (w.e.f. 20-3-1946).
Notwithstanding anything contained in the 1[Companies Act, 1956 (1 of 1956)], an insurance company shall not be wound up voluntarily except for the purpose of affecting an amalgamation or a re-construction of the company, or on the ground that by reason of its liabilities it cannot continue its business.
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1. Subs. by Act 11 of 2003, sec. 133 and Sch., for “Indian Companies Act, 1913 (7 of 1913)“.
(1) In the winding up of an insurance company or in the insolvency of any other insurer the value of the assets and the liabilities of the insurer shall be ascertained in such manner and upon such basis as the liquidator or receiver in insolvency thinks fit, subject, so far as applicable, to the rule contained in the 1[Seventh Schedule] and to any directions which may be given by the court.
(2) For the purposes of any reduction by the 2[Tribunal] of the amount of the contracts of any insurance company the value of the assets and liabilities of the company and all claims in respect of policies issued by it shall be ascertained in such manner and upon such basis as the 2[Tribunal] thinks proper having regard to the aforesaid.
(3) The rule in the 1[Seventh Schedule] shall be of the same force and may be repealed, altered or amended as if it
(1) In the winding up of an insurance company and in the insolvency of any other insurer the value of the assets and the liabilities of the insurer in respect of life insurance business shall be ascertained separately from the value of any other assets or any other liabilities of the insurer and no such assets shall be applied to the discharge of any liabilities other than those in respect of life insurance business except in so far as those assets exceed the liabilities in respect of life insurance business.
(2) In the winding up of an insurance company carrying on the business of life insurance or in the insolvency of any other insurer carrying on such business where any proportion of the profits of the insurer was before the commencement of the winding up or insolvency allocated to policy-holders if, when the assets and liabilities of the insurer have been ascertained, there is
(1) Where the insurance business or any part of the insurance business of an insurance company has been transferred to another insurance company under an arrangement in pursuance of which the first mentioned company (in this section referred to as the secondary company) or the creditors thereof has or have claims against the company to which such transfer was made (in this section referred to as the principal company) then, if the principal company is being wound up by 1[***], the 2[Tribunal] shall (subject as hereinafter mentioned) order the secondary company to be wound up in conjunction with the principal company and may by the same or any subsequent order appoint the same person to be liquidator for the two companies and make provision for such other matters as may seem to the 2[Tribunal] necessary with a view to the companies being wound up as if they were one company.
(2) The
(1) If at any time it appears expedient that the affairs of an insurance company in respect of any class of business comprised in the undertaking of the company should be wound up but that any other class of business comprised the undertaking should continue to be carried on by the company or be transferred to another insurer, a scheme for such purposes may be prepared and submitted for confirmation of the 1[Tribunal] in accordance with the provisions of this Act.
(2) Any scheme prepared under this section shall provide for the allocation and distribution of the assets and liabilities of the company between any classes of business affected (including the allocation of any surplus assets which may arise on the proposed winding up), for any future rights of every class of policy-holders in respect of their policies and for the manner of winding up any of the affairs of the company wh
In the winding up of an insurance company 1[(otherwise than in a case to which section 58 applies)] and in the insolvency of any other insurer the liquidator or assignee as the case may be shall apply to the 2[Tribunal] for an order for the return of the 3[deposit made by the company or the insurer, as the case may be, under section 7 or section 98] and the 2[Tribunal] shall on such application order a return of the deposit subject to such terms and conditions as it shall direct.
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1. Ins. by Act 6 of 1946, sec. 26 (w.e.f. 20-3-1946).
2. Subs. by Act 11 of 2003, sec. 133 and Sch., for “Court”.
3. Subs. by Act 11 of 1939, sec. 22, for “deposit made by the company under section 7”.
&
In the winding up of an insurance company for the purposes of a cash distribution of the assets and in the insolvency of any other insurer the liquidator or assignee as the case may be in the case of all persons appearing by the books of the company or other insurer to be entitled to or interested in the policies granted by the company or other insurer shall ascertain the value of the liability of the company or other insurer to each such person and shall give notice of such value to those persons in such manner as the 1[Tribunal] may direct and any person to whom notice is so given shall be bound by the value so ascertained unless he gives notice of his intention to dispute such value in such manner and within such time as may be specified by a rule or order of the 1[Tribunal].
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1. Su
61. Power of 1 [Tribunal] to reduce contracts of insurance
(1) Where an insurance company is in liquidation or any other insurer is insolvent the 1 [Tribunal] may make an order reducing the amount of the insurance contracts of the company or other insurer upon such terms and subject to such conditions as the 1 [Tribunal] thinks just.
(2) Where a company carrying on the business of life insurance has been proved to be insolvent, the 1 [Tribunal] may if it thinks fit in place of making a winding up order reduce the amount of the insurance contracts of the company upon such terms and subject to such conditions as the 1 [Tribunal] thinks fit.
(3) Application for an order under this section may be made either by the liquidator or by or on behalf of the company or by a policy-holder, or by the 2 [Au
(1) Any person aggrieved by an order or decision of the Tribunal may prefer an appeal to the National Company Law Appellate Tribunal.
(2) No appeal shall lie to the National Company Law Appellate Tribunal from an order made by the Tribunal with the consent of parties.
(3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order or decision made by the Tribunal is received by the appellant and it shall be in such form and accompanied by such fee as may be prescribed:
Provided that the National Company Law Appellate Tribunal may entertain an appeal after the expiry of said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.
&
Where, by the law or practice of any country outside India in which an insurer carrying on insurance business in 1[lndia] is constituted, incorporated or domiciled, insurance companies incorporated in 1[India] are required as a condition of carrying on insurance business in that country to comply with any special requirement whether as to the keeping of deposits or assets in that country or otherwise which is not imposed upon insurers of that country under this Act, the Central Government shall, if satisfied of the existence of such special requirement, by notification in the Official Gazette, direct that the same requirement, or requirements as similar thereto as may be, shall be imposed upon insurers of that country as a condition of carrying on the business of insurance in 1[India].
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Every insurer, having his principal place of business or domicile outside 1[lndia], who establishes a place of business within 1[India] or appoints a 2[representative] in 1[India] with the object of obtaining insurance business, shall, within three months from the establishment of such place of business or the appointment of such 2[representative], file with the 3[Authority]—
(a) a certified copy of the charter, statutes, deed of settlement or memorandum and articles or other instrument constituting or defining the constitution of the insurer, and, if the instrument is not written in the English language, a certified translation thereof,
(b) a list of the directors, if the insurer is a company,
(c) the name and address of some or more persons resident in 4[lndia] authorise
Every insurer having his principal place of business or domicile outside 1[India] shall keep at his principal office in 1[India] such books of account, registers and documents as will enable the accounts, statements and abstracts which he is required under this Act to furnish to the 2[Authority] in respect of the insurance business transacted by him, in India to be compiled and, if necessary, checked by the 2[Authority] 3[and shall furnish to the 4[Authority] on or before the last day of January in every calendar year a certificate from an auditor to the effect that the said books of account, register and documents are being kept as required at the principal office of the insurer in India].
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1. Subs. by Act 62 of 1956 sec. 2, and Sch., for “the States” (w.e.f. 1-11-1956).
&nbs
(1) All insurers carrying on insurance business in 1[India] at the commencement of the Insurance (Amendment) Act, 1950, all insurers who may after such commencement begin to carry on insurance business in 1[India], and, if the Central Government by notification in the Official Gazette, so declares all provident societies carrying on insurance business in 1[India] on the date of such notification and all provident societies which may begin to carry on insurance business in 1[India] after such date are hereby constituted a body corporate by the name of the Insurance Association of India.
(2) All insurers and provident societies incorporated or domiciled in 1[India] shall be known as members of the Insurance Association of India, and all insurers and provident societies incorporated or domiciled elsewhere than in 1[India] shall be known as associate members of that Association.
&nb
(1) The 1[Authority] shall take or cause to be taken through such agency as he thinks fit such steps as may be necessary to have the names of all insurers and provident societies, who or which are entitled to have their names entered in the register of members and associate members of the Insurance Association of India maintained for this purpose entered therein.
(2) Where any insurer or provident society has ceased to carry on business as such, the 1[Authority] shall cause such steps to be taken as may be necessary to have the name of such insurer or provident society, as the case may be, removed from the register.
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1. Subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
&n
There shall be two Councils of the Insurance Association of India, namely:—
(a) the Life Insurance Council consisting of all the members and associate members of the Association who carry on life insurance business in 1[India], and
(b) the General Insurance Council consisting of all the members and associate members of the Association who carry on general insurance business in 1[India].
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1. Subs. by Act 62 of 1956, sec. 2 and Sch., for “the States” (w.e.f. 1-11-1956).
The authorities of the Life Insurance Council and the General Insurance Council shall be the Executive Committee 1[***] constituted in the manner provided in this Part.
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1. The words “the Tariff Committee and other Committee thereof” omitted by Act 62 of 1968, sec. 25 (w.e.f. 1-6-1969).
(1) The Executive Committee of the Life Insurance Council shall consist of the following persons, namely:—
(a) two officials nominated by the 1[Authority], one as the chairman and the other as a member;
(b) eight representatives of members of the Insurance Association of India carrying on life insurance business elected in their individual capacity by the said members in such manner, from such groups of members and from such areas as may be specified by the 1[Authority];
(c) one non-official not connected with any insurance business, nominated by the 1[Authority]; and
(d) five persons connected with life insurance business, nominated by the 1[Authority] for the purpose of representing such groups of insurers carrying on life insurance business o
(1) Any member of the Executive Committee of the Life Insurance Council or of the General Insurance Council may resign his membership of the Committee by notice in writing addressed to the chairman of the Committee to that effect.
(2) Casual vacancies in the Executive Committee of the Life Insurance Council or of the General Insurance Council, whether caused by resignation, death or otherwise, shall be filled by nomination by the 1[Authority], and any person so nominated to fill the vacancy shall hold office until the dissolution of the Committee to which he has been nominated.
(3) No act of the Executive Committee of the Life Insurance Council or of the General Insurance Council shall be called in question on the ground merely of the existence of any vacancy in, or defect in the constitution of, the Committee concerned.
&
(1) The duration of the Executive Committee of the Life Insurance Council or the General Insurance Council shall be three years from the date of its first meeting on the expiry of which it shall stand dissolved and a new Executive Committee constituted.
(2) Notwithstanding the dissolution of the Executive Committee of the Life Insurance Council or the General Insurance Council, the outgoing members thereof shall continue to hold office and discharge such administrative and other duties as may be prescribed until such time as a new Executive Committee of the Life Insurance Council or the General Council, as the case may be, shall have been constituted.
The Life Insurance Council may, with the approval of the 1[Authority], authorise its Executive Committee to hold examinations for individuals wishing to qualify themselves as insurance agents for the purpose of procuring life insurance business, and, if the 1[Authority], by notification in the Official Gazette, so declares then, notwithstanding anything contained in section 42, only individuals who have passed any such examination shall be eligible to apply for a licence under section 42:
Provided that nothing in this sub-section shall affect the right of any individual, who has been licensed to act as an insurance agent under section 42 before the date of such notification, to act as such, or to have his licence renewed from time to time.
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1
(1) The functions of the Executive Committee of the Life Insurance Council shall be—
(a) to aid, advise and assist insurers carrying on life insurance business in the matter of setting up standards of conduct and sound practice and in the matter of rendering efficient service to holders of life insurance policies;
(b) to render advice to the 1[Authority] in the matter of controlling the expenses of insurers in respect of their life insurance business in India;
(c) to bring to the notice of the 1[Authority] the case of any insurer acting in a manner prejudicial to the interests of holders of life insurance policies;
(d) to act in any matter incidental or ancillary to any of the matters specified in clauses (a) to (c) as, w
(1) It shall be the duty of the Executive Committee of the Life Insurance Council to meet at least once before the 31st day of March every year to advise the 1[Authority] in fixing under the proviso to sub-section (2) of section 40B the limits by which the actual expenses incurred by an insurer carrying on life insurance business in respect of such business in the preceding year may exceed the limits prescribed under that sub-section, and in fixing any such limits the 1[Authority] shall have due regard to the conditions obtaining in life insurance business generally during that year, and he may fix different groups of insurers.
(2) Where an insurer is guilty of contravening the provisions of section 40B with respect to the expenses of management, the 1[Authority] may, after giving the insurer an opportunity of being heard, administer a warning to the insurer.
&
(1) The functions of the Executive Committee of the General Insurance Council shall be—
(a) to aid and advise insurers, carrying on general insurance business, in the matter of setting up standards of conduct and sound practice and in the matter of rendering efficient service to holders of policies of general insurance;
(b) to render advice to the 1[Authority] in the matter of controlling the expenses of such insurers carrying on business in India in the matter of commission and other expenses;
(c) to bring to the notice of the 1[Authority] the case of any such insurer acting in a matter prejudicial to the interests of holders of general insurance policies;
(d) to act in any matter incidental or ancillary to any of the ma
(1) It shall be the duty of the Executive Committee of the General Insurance Council to meet at least once before the 31st day of March every year to advise the 1[Authority] in fixing under the proviso to sub-section (1) of section 40C the limits by which the actual expenses of management incurred by an insurer carrying on general insurance business in respect of such business in the preceding year may exceed the limits prescribed under that sub-section, and in fixing any such limits the 1[Authority] shall have due regard to the conditions obtaining in general insurance business in the preceding year, and 2[it] may fix different limits for different groups of insurers.
(2) Where an insurer is guilty of contravening the provisions of section 40C with respect to the expenses of management the 1[Authority] may, after giving the insurer an opportunity of being heard, administer a warni
[Rep. by the Insurance (Amendment) Act, 1968 (62 of 1968), sec. 27 (w.e.f. 1-6-1969).]
[Rep. by the Insurance (Amendment) Act, 1968 (62 of 1968), sec. 27 (w.e.f. 1-6-1969).]
[Rep. by the Insurance (Amendment) Act, 1968 (62 of 1968), sec. 27 (w.e.f. 1-6-1969).]
(1) For the efficient performance of its duties, the Life Insurance Council or the General Insurance Council as the case may be, may—
(a) appoint such officers and servants as may be necessary and fix the conditions of their service;
(b) determine the manner in which any prescribed fee may be collected;
(c) keep and maintain up to date a copy of the list of all insurers who are members or associate members of the Insurance Association of India;
(d) with the previous approval of the 1[Authority], make regulations for—
(i) the holding of elections other than the first elections;
(ii) the summoning and holding of
The Central Government may exercise such powers as may be necessary for bringing the Life Insurance Council, the General Insurance Council or the Executive Committee of any of the said Councils, as the case may be, into effective existence for the purposes of this Part, and any such powers shall include—
(a) the power to hold, in such manner as may be directed by the Central Government, the first elections to the Executive Committees of the Life Insurance Council and the Central Insurance Council;
(b) where a notification under sub-section (1) of section 64A has been issued declaring provident societies to be members of the Insurance Association of India, the powers to associate provident societies effectively in the exercise of all powers and the discharge of all functions of the Life Insurance Council and the Executive Co
The Central Government may, subject to such conditions and restrictions as it may think fit to impose, exempt any insurer specified in sub-clause (c) of clause (9) of section 2 from the operation of all or any of the provisions of this Part.
(1) With effect from the commencement of the Insurance (Amendment) Act, 1968, there shall be established a Committee, to be called the Tariff Advisory Committee (hereafter in this Part referred to as the Advisory Committee) to control and regulate the rates, advantages, terms and conditions that may be offered by insurers in respect or general insurance business.
(2) The Advisory Committee shall be a body corporate having perpetual succession and a common seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract, and may, by the said name, sue and be sued.
(1) The Advisory Committee shall consist of the following members, namely:—
(a) the 1[Chairperson of the Authority], ex officio, who shall be the Chairman;
(b) a senior officer of the office of the 2[Authority] nominated by the 2[Authority], who shall be the Vice-Chairman;
(c) not more than ten representatives of Indian insurers, elected (in their individual capacities) by such insurers in such manner, from such areas and from among such insurers or groups of insurers as may be prescribed;
(d) not more than four representatives of insurers incorporated or domiciled elsewhere than in India but registered in India, elected (in their individual capacities) by such insurers in such manner, and from among such insurers or grou
1[(1) The Authority may, by notification in the Official Gazette, make regulations to carryout the purposes of this Part.]
(2) In particular, and without prejudice to the generality of the foregoing power, such 2[regulations] may provide for all or any of the following matters, namely:—
(a) the functions to be discharged by the Advisory Committee;
(b) the term of office of the members of the Advisory Committee, the procedure for their election and the manner of filling casual vacancies in the Advisory Committee;
(c) the travelling and other allowances payable to the members of the Advisory Committee;
(d) the procedure for holding the meetings of the Advisory Committee and for t
(1) Notwithstanding anything contained in this Part, until the names of the members of the Advisory Committee elected for the first time after the commencement of the Insurance (Amendment) Act, 1968, are notified, the Tariff Committee of the General Insurance Council appointed under regulations made under sub-section (2) of section 64-O as it was in force immediately before the commencement of the Insurance (Amendment) Act, 1968, and in existence on each commencement (hereafter in this Part referred to as the Tariff Committee) shall continue to function and shall be deemed to be the Advisory Committee duly elected under this Part and the Controller of Insurance shall become the Chairman of that Committee with effect from the commencement of the Insurance (Amendment) Act, 1968, and function as such, and any Chairman of the Tariff Committee holding office immediately before such commencement shall cease to be the Chairman there
(1) The Advisory Committee may require, by notice in writing, any insurer to supply to it such information or statements, periodical or ad hoc, as it may consider necessary, to enable it to discharge its functions under this Part and every insurer shall comply with such requirements within such period as may be specified by the Advisory Committee in this behalf, failing which the insurer shall be deemed to have contravened the provisions of this Act.
(2) Any information supplied under this section shall be certified by a principal officer of the insurer or where the Advisory Committee has agreed in advance, by such other officer or officers of the insurer as the principal officer of the insurer may nominate for the purpose and if the notice so requires, also by an auditor.
(3) The 1[Authority] may, at any time, in writing, depute any sub
(1) On the commencement of the Insurance (Amendment) Act, 1968, all the assets and liabilities of the General Insurance Council appertaining to its Tariff Committee and to its Regional Councils and their Sectional Committees existing on that day shall be transferred to, and vest in, the Advisory Committee.
(2) The assets appertaining to the Tariff Committee, the Regional Councils, and their Sectional Committees shall be deemed to include all rights and powers and all property, whether movable or immovable including, in particular, cash balances, reserve funds, investments, deposits and all other interests and rights in, or arising out of, such property as may be in the possession of the Tariff Committee, Regional Councils and their Sectional Committees and all books of account or documents thereof; and liabilities shall be deemed to include all debts, liabilities and obligations of
(1) Unless otherwise expressly provided by or under this Act, all contracts, agreements and other instruments of whatever nature subsisting or having effect immediately before the commencement of the Insurance (Amendment) Act, 1968, and to which the Tariff Committee, or any Regional Council is a party or which is in favour of that Committee or that Council, shall be of as full force and effect against or in favour of the Advisory Committee and may be enforced or acted upon as fully and effectually as if, instead of the Tariff Committee, or the Regional Council, the Advisory Committee had been a party thereto or as if they had been entered into or issued in favour of the Advisory Committee.
(2) If, at the commencement of the Insurance (Amendment) Act, 1968, any suit, appeal or other legal proceeding of whatever nature is pending by or against the Tariff Committee, or any Regional Council then it shall not abate, be disconti
(1) Every whole-time employee of the Tariff Committee, or the Regional Councils who was employed by that Committee or those Councils wholly or mainly in connection with its or their statutory duties immediately before the commencement of the Insurance (Amendment) Act, 1968, shall, on and from such commencement, become an employee of the Advisory Committee and shall hold his office in it by the same tenure, at the same remuneration, and upon the same terms and conditions and with the same rates and privileges as to pension, gratuity and other matters as he would have held on such commencement if this Part had not been enacted, and shall continue to do so until his employment under the Advisory Committee is terminated or until his remuneration, terms and conditions, are duly altered by the Advisory Committee:
Provided that nothing contained in this sub-section shall apply to any empl
(1) Where any property of the Tariff Committee, or the Regional Councils (appertaining to its or their statutory duties) has been transferred to, and vested in, the Advisory Committee, then,—
(a) every person in whose possession, custody or control any such property may be, shall deliver the property to the Advisory Committee forthwith;
(b) any person, who, on the commencement of the Insurance (Amendment) Act, 1968, has in his possession, custody or control any books, documents and other papers relating to the Tariff Committee, or the Regional Councils, shall be liable to account for the said books, documents and papers to the Advisory Committee and shall deliver them to such person as the Committee may direct.
(2) Without prejudice to the provisions contained in this section, it
(1) The Advisory Committee may constitute such Regional Committees as and when it deems fit for one or more of the prescribed regions.
(2) Each Regional Committee shall consist of not more than seven persons of which not more than five shall be elected by such groups of insurers carrying on general insurance business in the region as may be prescribed and not more than two shall be nominated by the 1[Authority].
(3) For the purpose of enabling it effectively to discharge its duties, any Regional Committee may constitute such sub-committees as it may think fit, whether consisting of members of the Regional Committee or not.
(4) It shall be the duty of every Regional Committee to advise the Advisory Committee on any question connected with the fixation of rates, advantages, terms and conditions
(1) Every insurer shall annually before the prescribed date make payment to the Advisory Committee in the prescribed manner of such fees, not exceeding for any year, in the case of an insurer doing only re-insurance business in India, one per cent. of his total premiums in respect of-facultative re-insurance accepted by him in India in the preceding year and in the case of any other insurer, one per cent. of the total gross premium written direct by him in India in the preceding year, as may be specified by the Advisory Committee for the purpose of this Part.
(2) The Advisory Committee may collect, in addition to the fees mentioned in sub-section (1), reasonable fees and charges from any person to cover the cost of any specific services rendered by it.
(3) If an insurer fails to make payment within the prescribed date of any fee required
If any difficulty arises in giving effect to the provisions of this Part, the Central Government may, by order, make such provisions or give such directions not inconsistent with the provisions of this Act as may appear to it to be necessary or expedient for the removal of the difficulty:
Provided that no such power shall be exercised after the expiry of a period of four years from the commencement of this Part.
(1) (A) Save as otherwise provided in this section, no person shall act as a surveyor or loss assessor in respect of general insurance business after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, unless he holds a valid licence issued to him by the 1[Authority].
(B) Every person who intends to act as a surveyor, or loss assessor after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968 2[but before the commencement of the Insurance Regulatory and Development Authority Act, 1999], shall make an application to the 1[Authority] within such time, in such form, in such manner and on payment of such fee, not exceeding rupees two hundred and fifty, as may be prescribed.
2[(BA) Every person who intends to act as a surveyor or loss assessor after the ex
(1) The Advisory Committee may, from time to time and to the extent it deems expedient, control and regulate the rates, advantages, terms and conditions that may be offered by insurers in respect of any risk or of any class or category of risks, the rates, advantages, terms and conditions of which, in its opinion, it is proper to control and regulate, and any such rates, advantages, terms and conditions shall be binding on all insurers:
Provided that 1[the Authority], may, permit any insurer to offer, during such period (being not more than two years but which may be extended by periods of not more than two years at a time) and subject to such conditions as may be specified by 2[it], rates, advantages, terms or conditions different from those fixed by the Advisory Committee in respect of any particular category of risks, if 3[it] is satisfied that such insurer generally issues poli
(1) For the purpose of ascertaining compliance with the provisions of section 64VA,—
(i) assets shall be valued at values not exceeding their market or realisable value and the assets hereafter mentioned shall be excluded to the extent indicated, namely:—
(a) agents’ balances and outstanding premiums in India, to the extent they are not realised within a period of thirty days;
(b) agents’ balances and outstanding premium outside India, to the extent they are not realisable;
(c) sundry debts, to the extent they are not realisable;
(d) advances of an unrealisable character;
(e) furniture, fixtures, de
—(1) An insurer shall, 1[at all times before the commencement of the Insurance Regulatory and Development Authority Act, 1999], maintain an excess of the value of his assets over the amount of his liabilities of not less than the amount arrived at as follows (hereafter in this section referred to as the “relevant amount”), namely:—
(i) in the case of an insurer whose total premium income less re-insurances in respect of general insurance business (hereafter in this sub-section referred to as the “said income”) in the preceding twelve months did not exceed five crores of rupees, one-fifth of the said income subject to a minimum of—
(a) five lakhs of rupees in the case of an insurer who is a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or any other law for the time being in forc
(1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner.
(2) For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer.
Explanation.—Where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be.
(1) No insurer shall, after the commencement of the Insurance (Amendment) Act, 1968, open a new place of business in India or change otherwise than within the same city, town or village, the location of an existing place of business situated in India without obtaining the prior permission of the 2[Authority].
(2) The 2[Authority] may grant permission under sub-section (1) subject to such conditions as 3[it] may think fit to impose either generally or with reference to any particular case.
(3) Where, in the opinion of the 2[Authority], an insurer has, at any time, failed to comply with any of the conditions imposed on him under this section, the 2[Authority] may, by order in writing and after affording reasonable opportunity to the insurer for showing cause against the action proposed to be taken against him, revoke any permission granted
(1) In this Part “provident society” means, a person who, or a body of persons (whether corporate or unincorporate) which, not being an insurer registered for the time being under Part II of this Act, carries on the business of insuring the payment, on the happening of any of the contingencies mentioned in sub-section (2), of—
(a) an annuity of or equivalent to 2[one hundred] rupees or less payable for an uncertain period, or
(b) a gross sum of 3[one thousand] rupees or less, whether paid or payable in a lump sum or in two or more instalments over a certain period,
exclusively in both cases (a) and (b) of any profit or bonus not being a guaranteed profit or bonus.
Explanation.—For the purposes of this sub-section, a period is “certain”
No provident society shall undertake any form of insurance not falling within the limits fixed by sub-section (1) of section 65, nor shall any provident society be eligible to be registered under section 3.]
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1. Subs. by Act 20 of 1940, sec. 10, for section 66 (with retrospective effect).
No provident society established after the commencement of this Act shall adopt as its name, and no provident society established before the commencement of this Act shall continue after the expiry of six months from the commencement thereof to use as its name, any combination of words which fails to include the word “provident” or which includes the word “life”.
[Rep. by the Insurance (Amendment) Act, 1950 (47 of 1950), sec. 48 (w.e.f. 1-6-1950).]
(1) No provident society shall carry on any business upon the dividing principle, that is to say, on the principle that the benefit secured by a policy is not fixed but depends either wholly or partly on 1[the results of a distribution of certain sums amongst policies becoming claims within certain time-limits, or on the principle that the premiums payable by a policy-holder depend wholly or partly on the number of policies becoming claims within certain time-limits].
(2) The 2[Authority] shall, as soon as possible, take steps to have any provident society which carries on business on dividing principle wound up:
Provided that, where any such provident society in existence at the commencement of this Act applies within three months of such commencement to the 2[Authority] for permission to continue carrying on its business with a view me
(1) No provident society except a provident society registered under the provisions of the Provident Insurance Societies Act, 1912 (5 of 1912), shall receive any premium or contribution until it has obtained from 1[the Authority, before the date of commencement of the Insurance Regulatory and Development Authority Act, 1999, a certificate of registration].
(2) Every application for registration shall be accompanied by—
(a) a certified copy of the rules of the society, and when the society is a company incorporated under the Indian Companies Act, 1913 (7 of 1913) 2[or under the Indian Companies Act, 1882 (6 of 1882) or under the Indian Companies Act, 1866 (10 of 1866) or under any Act repealed thereby,] a certified copy of the Memorandum and Articles of Association or where the society is not such a company a certified copy of the
(1) Every provident society registered under this Act, or under the Provident Insurance Societies Act, 1912 (5 of 1912), shall have its registration renewed annually for each period of twelve months after that ending on the 30th day of June, 1942.
(2) An application for the renewal of a registration shall be made by the society to the 2[Authority] before the 30th day of June preceding the period for which renewal is sought, and shall be accompanied as provided in sub-section (3) by evidence of payment of the prescribed fee which shall not exceed two hundred rupees but may vary according to the volume of insurance business done by the society.
(3) The prescribed fee for the renewal of a registration for any year shall be paid into the Reserve Bank of India, or, where there is no office of that Bank, into the Imperial Bank of India3 acting
(1) Every provident society registered under section 70 before the commencement of the Insurance (Amendment) Act, 1941 shall, before the expiration of three months from the commencement of the Insurance (Amendment) Act, 1941 furnish to the 2[Authority] such particulars in addition to those already supplied for the purpose of obtaining registration as are required by sub-section (2) of section 70 of this Act as amended by the Insurance (Amendment) Act, 1941.
(2) Every provident society registered under the provisions of the Provident Insurance Societies Act, 1912 (5 of 1912), shall, before the expiration of three months from the commencement of the Insurance (Amendment) Act, 1941 furnish to the 2[Authority] so far as it has not already done so the documents and information required by clauses (a) and (b) of sub-section (2) of section 70 to accompany an application by a provident soc
The provisions of 2[sub-sections (2) and (3) of section 10, section 20, sub-section (1) of section 27, sections 27A, 28, 29, 31A, 31B, 32, 46 and 53A] shall apply to provident societies as they apply to insurers, and in such application references to shareholders of an insurer shall be construed as references to members of a provident society 3[and references to section 7 or section 98 shall be construed as references to section 73]:
Provided that a provident society may charge a fee not exceeding one rupee for supplying a copy of any document referred to in sub-section (2) of section 20.]
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1. Subs. by Act 6 of 1946, sec. 30, for section 71 (w.e.f. 20-3-1946).
2. Subs. by Act 47 of 1950, sec. 50,
No provident society 1[***] shall be registered unless it has a paid-up capital sufficient to provide as working capital a net sum of not less than five thousand rupees exclusive of deposits made under this Act and exclusive in the case of a company of any expenses incurred in connection with the formation of the company.
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1. The words “established after the commencement of this Act” omitted by Act 13 of 1941, sec. 41 (w.e.f. 8-4-1941).
(1) Every provident society shall, if established before the commencement of this Act within one year from such commencement, or, if established after the commencement of this Act before the society applies for registration under section 70, deposit and keep deposited with the Reserve Bank of India in one of the offices in India of the Bank, for and on behalf of the Central Government, cash or approved securities amounting at the market value of the securities on the date of deposit to five thousand rupees, and shall thereafter 1[make in each calendar year] a further deposit amounting to not less than one-fifth of the 2[premium income for the preceding calendar year as shown in the revenue account of the society] (including admission fees and other fees received by the society) until the total amount so deposited and kept is fifty thousand rupees.
(2) The provisions of sub-sections
(1) A provident society shall not be registered by a name identical with that by which an insurer or another provident society in existence is already registered, or so nearly resembling that name as to be calculated to deceive, except when the provident society in existence is in the course of being dissolved and signifies its consent, or the insurer in existence signifies his consent, to the 2[Authority].
(2) If a provident society, through inadvertence or otherwise, is without such consent as aforesaid registered by a name identical with that by which an insurer or another provident society already in existence is registered, or so nearly resembling it as to be calculated to deceive, the first-mentioned society shall, if called upon to do so by the 3[Authority] on the application of the insurer or the second-mentioned society, change its name within a time to be fixed by the 3[A
(1) Every provident society 1[***] shall in its rules set forth—
(a) the name, the object and the location of the registered office of the society;
(b) the contingencies or classes of contingency on the happening of which money is to be paid;
(c) the conditions to be complied with before, and the payments to be made on, admission to society;
(d) the rates of premium or contribution, and the periods for which or the times at which premiums or contributions are payable;
(e) the maximum amount payable to a subscriber or policy-holder;
(f) the nature and amounts of the benefits provided for by the society;
&n
(1) No amendment of any rule of a provident society shall be valid until it has been sent to the 1[Authority] and has been registered by 2[it].
(2) The 1[Authority] on being satisfied that the proposed amendment is not contrary to the provisions of this Act shall, unless 3[it] is of opinion that the amendment unfairly affects the rights of existing members or policy-holders of the society, issue to the society an acknowledgement of the registration of the amended rule.
—————
1. Subs. by Act 47 of 1950, sec. 4, for “Superintendent of Insurance” (w.e.f. 1-6-1950) and again subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
2. Subs. by Act 41 of 1999, sec. 30 and Sch. I, fo
Every provident society shall on demand deliver free of cost to any member of the society a copy of the rules of the society and to any person other than a member a copy of such rules on the payment of a sum not exceeding one rupee.
Every provident society 1[shall have in 2[India] a principal office] (on the outside of which it shall keep displayed its name in a conspicuous position in legible characters) to which all communications and notices may be addressed, and shall give notice to the 3[Authority] of any change in the location thereof within twenty-eight days of its occurrence.
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1. Subs. by Act 13 of 1941, sec. 43, for “shall have an office” (w.e.f. 8-4-1941).
2. Subs. by Act 62 of 1956, sec. 2 and Sch., for “the States” (w.e.f. 1-11-1956).
3. Subs. by Act 47 of 1950, sec. 4, for “Superintendent of Insurance” (w.e.f. 1-6-1950) and again subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).<
Where any notice, advertisement or other official publication of a provident society contains a statement of the amount of the authorised capital of the society, the publication also contains a statement of the amount of the capital which has been subscribed and the amount paid-up.
Every provident society 1[shall keep at its principal office in 2[India]]—
3[(a) such registers in such form as may be prescribed;]
4[(b)] a cash-book in which shall be entered separately for each class of contingency separately specified in section 65 all sums received and expended by the society and the matters in respect of which the receipt or expenditure takes place;
5[(c)] a ledger;
5[(d)] a journal.
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1. Subs. by Act 13 of 1941, sec. 44, for “shall keep at its registered office” (w.e.f. 8-4-1941).
2. Subs. by Act 62 of 1956, sec. 2 and Sch.,
(1) Every provident society shall at the expiry of the calendar year prepare a revenue account and balance-sheet in the prescribed form verified in the prescribed manner, together with a report on the general state of the society’s affairs and shall cause the revenue account and balance-sheet to be audited by an auditor, and the auditor shall so far as may be in the audit of a provident society have the powers of, exercise the functions vested in, and discharge the duties and be subject to the liabilities imposed on, an auditor of companies by section 145 of the Indian Companies Act, 1913 (7 of 1913).
(2) Every provident society shall at the expiry of the calendar year prepare with respect to that year—
(a) a statement showing separately for each class of contingency separately specified in section 65—
&
( 1 ) Every provident society shall once in every five years or at such shorter intervals as may be laid down by the rules of the society cause an investigation to be made1[as at the last day of a calendar year] into its financial condition including the valuation of its liabilities and assets by an actuary.
( 2 ) The report of the actuary shall contain an abstract in which shall be stated-
(a) the general principles adopted in the valuation, including the me thod by which the valuation age of lives was ascertained,
(b) the rate at each age of the mortality and any other factor assumed and the annuity values used in valuation,
(c) the reserve values held against policies effected,
(d) the rate of interest
(1) The revenue account and balance-sheet with the auditor’s report thereon and the report on the general state of the society’s affairs referred to in sub-section (1) of section 80 2[shall be printed and four copies of these and of the statements referred to] in sub-section (2) of section 80, shall be furnished as returns to the 1[Authority] 3[within six months] from the end of the period to which they relate 4[***].
(2) All the material necessary for the proper valuation of the liabilities of the society under the provisions of section 81 shall be placed at the disposal of the actuary within three months from the end of the period to which such material relates, and the report and abstract referred to in section 81 shall be furnished as a return to the 1[Authority] within a further period of three months:
5[Provided that the Central Go
(1) Every provident society, 1 [registered] after the commencement of this Act, shall cause every scheme of insurance which it proposes to put into operation, and every provident society registered before the commencement of this Act under the provisions of the Provident Insurance Societies Act, 1912 (5 of 1912), 2 [shall cause any scheme which it proposes to put into operation for the first time], after such commencement to be examined by an actuary, and shall not receive any premium or contribution in connection with the scheme until the actuary has certified 3 [that the rates, advantages, terms and conditions of the scheme are workable and sound] and such certificate has been forwarded to the 4 [Authority].
(2) The provisions of sub-section (1) shall apply to any alteration of a scheme already in operation, but the 4 [Authority] may, if 5 [it] is of opinion that the alteration u
Where a provident society effects policies of insurance in connection with more than one of the classes of contingency separately specified in 1[sub-section (2) of] section 65, the receipts and payments in respect of each such class shall be recorded in a separate account in the cash-book kept in accordance with section 79.
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1. Ins. by Act 20 of 1940, sec. 12 (w.e.f. 10-4-1940).
1[***]
(2) No funds or investments of a provident society except a deposit made under section 73 2[or under the law of any state or country relating to insurance] shall be kept otherwise than in the name of the society 3[or in the name of a public officer approved by the Central Government].
(3) No loan shall be made out of the assets of a provident society to 4[any director, manager, managing agent, auditor, actuary, officer or partner of the society], except on the security of a policy of insurance held in the society and within its surrender value and no such loans shall be made to any concern of which 5[a director, manager, managing agent, actuary, officer or partner of the society is a director, manager, managing agent, actuary, officer or partner]:
2[Provided that nothing in this sub-sec
The books of every provident society shall at all reasonable times be open to inspection by the 1[Authority] or any person appointed by 2[it] in this behalf by any member or policy-holder of the society who 3[has, on application in this behalf, been permitted by the 1[Authority] subject to such condition, if any, as 4[it] may impose, to make such inspection].
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1. Subs. by Act 47 of 1950, sec. 4, for “Superintendent of Insurance” (w.e.f. 1-6-1950) and again subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
2. Subs. by Act 41 of 1999, sec. 30 and Sch. I, for “him” (w.e.f. 19-4-2000).
3. Subs. by Act 6 of 1946, sec. 36, for “has made an application in this behalf to
(1) The 1[Authority] shall at least once in two years and may, if 2[it] thinks fit, at any time visit personally or depute a suitable person to visit the principal office of a provident society 3[or the principal office in 4[India] of a society having its principal place of business or domicile outside 4[India]] and inquire into the 5[affairs of the society], or may, after giving notice to the society and giving it an opportunity to be heard, direct such an inquiry to be made by an auditor or actuary appointed by it 3[or by both an auditor and an actuary appointed simultaneously, or first by an auditor only or an actuary only and afterwards by an actuary or auditor].
(2) For the purposes of any such inquiry 1[Authority] or the auditor or actuary, as the case may be, shall be entitled to examine all books and documents of the society and may demand from the society or any officer of
(1) The insurance business of a provident society may be transferred to any person or transferred to or amalgamated with the insurance business of any other provident society in accordance with a scheme prepared under this section and sanctioned by the 2[Authority].
(2) Any scheme prepared under this section shall set out the agreement under which the transfer or amalgamation is proposed to be effected, and shall contain such further provisions as may be necessary for giving effect to the scheme.
(3) Before an application is made to the 2[Authority] to sanction any such scheme, notice of the intention to make the application together with a statement of the nature of the amalgamation or transfer, as the case may be, and of the reason therefor, shall at least two months before the application is made, be sent to the 2[Authority] and certi
(1) The court may order the winding up of a provident society being a company incorporated under the Indian Companies Act, 1913 (7 of 1913), 1[or under the Indian Companies Act, 1882 (6 of 1882) or under the Indian Companies Act, 1866 (10 of 1866) or under any Act repealed thereby] and the provisions of 2[the Indian Companies Act, 1913 (7 of 1913)], shall subject to the provisions of this Part, apply accordingly.
3[(2) In addition to the grounds on which such an order may be based, the court may order the winding up of a provident society if the 4[Authority], who is hereby authorised to do so, applies in this behalf to the court on any of the following grounds, namely:—
(a) that the registration of the society has been cancelled under sub-section (4) of section 70;
(b) that it ap
The Court may make an order reducing the amount of the insurance contracts of a provident society upon such terms and subject to such conditions as the court thinks just--
(a) if the 1 [Authority] as an alternative to cancelling the registration of a society under sub-section (4) of section 70applies to the court in this behalf;
(b) if while a society is in liquidation the court thinks fit;
(c) if when a society has been proved to be insolvent, the court thinks fit to do so in place of making an order for the winding up of the society; or
(d) if the court is satisfied on an application made in this behalf by the society supported by the report of an actuary, and after giving the policy-holders an opportunity to be heard that it is desirable to do so
(1) Where a provident society is to be wound up whether under the Indian Companies Act, 1913 (7 of 1913) or under this Act, the society shall, within seven days from the date of the order of the court ordering the winding up or the passing of the resolution authorising the winding up, as the case may be give notice thereof to the 1[Authority], and, except where the winding up is done by an order of the Court, the 1[Authority] shall appoint the liquidator and shall determine the remuneration to be paid to him:
2 [Provided that if the 1[Authority] is not satisfied that the assets of the society are sufficient to meet the costs of liquidation including the remuneration of the liquidator, 3 [it] may decline to make such appointment, and in such a case the society shall itself appoint a liquidator who shall carry out the liquidation as if the winding up was being done by an order of the
(1) A liquidator appointed to wind up a society shall have power—
(a) to institute or defend any legal proceedings on behalf of the society by his name of office;
(b) to determine the contribution to be made by members of the society respectively to the assets of the society;
(c) to investigate all claims against the society and to decide questions of priority arising between claimants;
(d) to determine by what persons and in what proportion the costs of the liquidation 1[including the remuneration of the liquidator and any expenses incurred under clause (g) of this sub-section] are to be borne;
(e) to give such directions in regard to the collection and distribution of
(1) As soon as a liquidator is appointed to wind up a society he shall take charge of all property movable or immovable of the society and of all its books and documents.
(2) If any proprietor or officer of the society or any other person retains any portion of the assets of the society or fails to deliver to the liquidator any book or document when so required by the liquidator, he shall be punishable with imprisonment which may extend to six months, or with fine which may extend to five hundred rupees, or with both, and the court may order the delivery of the assets or book or document to the liquidator.
(3) The liquidator shall within fifteen days of his appointment send notice by post to all persons who appear to him to be creditors of the society that a meeting of the creditors of society will be held on a date not being less than t
(1) As soon as the affairs of a provident society are fully wound up the liquidator shall prepare an account of the winding up showing how the winding up has been conducted and the property of the society has been disposed of and shall call a meeting of the members, creditors and contributories for the purpose of laying before it the account and giving any explanation thereof.
(2) Notice of the meeting shall be sent to each person individually and shall be advertised in the local Official Gazette and in at least two newspapers circulating in the State in which the society is situated.
(3) Within one week after the meeting the liquidator shall send to the 1[Authority] a copy of the account and shall report to 2[it] the holding of the meeting and its date and shall forward to 2[it] a copy of the proceedings of the meeting.
&
(1) The provisions of section 38 and section 39 relating to assignment, transfer and nomination in the case of life insurance policies shall, subject to the provisions of this section, apply to policies of insurance issued by any provident society covering any of the contingencies specified in clause (a) 1[of sub-section (2)] of section 65
2[***]
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1. Ins. by Act 6 of 1946, sec. 42 (w.e.f. 20-3-1946).
2. Sub-section (2) omitted by Act 47 of 1950, sec. 55 (w.e.f. 1-6-1950).
(1) Every insurance co-operative society shall be deemed to be an insurer for the purposes of this Act.
(2) Save as otherwise provided in this Act, all the provisions applicable to an insurer being an Indian insurance company shall, so far as may be, apply to an insurance co-operative society:
Provided that the Authority may, by notification, direct that any of the provisions of this Act,—
(a) shall not apply to any insurance co-operative society; or
(b) shall apply to any insurance co-operative society only with such exceptions, modifications and adaptations as may be specified in the notification.
(3) A copy of every notification proposed to be issued under proviso to sub-section (2), shal
(1) 1[In this Part, before the date of commencement of the Insurance Regulatory and Development Authority Act, 1999, —]
(a) “Mutual Insurance Company” means an insurer, being a company 2[incorporated under the Indian Companies Act, 1913 (7 of 1913) or under the Indian Companies Act, 1882 (6 of 1882), or under the Indian Companies Act, 1866 (10 of 1866), or under any Act, repealed thereby,] which has no share capital and of which by its constitution only and all policy-holders are members; and
(b) “Co-operative Life Insurance Society” means an insurer being a society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under an Act of a 3[State] Legislature governing the registration of co-operative societies which carries on the business of life insurance and which has no share capital on which dividend or
The provisions of sections 6 and 7 and of sub-section ( 2 ) of section 20 , so far as those provisions are inconsistent with the provisions of this Part, shall not apply, and the provisions of this Part shall apply, to1[ *** ] Co-operative Life Insurance Societies.
1. The words "Mutual Insurance Companies and" omitted by Act 62 of 1968, section 30 (w.e.f. 1-6-1969).
1[No co-operative life insurance society registered after the 26th day of January 1937] under the Co-operative Societies Act, 1912 (2 of 1912), or under an Act of a State Legislature governing the registration of co-operative societies shall be registered under this Act, unless it has as working capital a sum of fifteen thousand rupees, exclusive of the deposit to be made before or at the time of application for registration in accordance with sub-section (2) of section 98 of this Act and of the preliminary expenses, if any, incurred in the formation of the company or society.
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1. Subs. by Act 62 of 1968, sec. 31, for certain words (w.e.f. 1-6-1969).
(1) Every 1[***] Co-operative Life Insurance Society shall, in respect of the life insurance business carried on by it in the States deposit and keep deposited with one of the offices in India of the Reserve Bank of India, for and on behalf of the Central Government, a sum of two hundred thousand rupees in cash or in approved securities estimated at the market value of the securities on the day of deposit.
(2) The deposit referred to in sub-section (1), may be made in instalments, of which the first shall be a payment, made before or at the time the application for registration under this Act is made 2[of not less than twenty-five thousand rupees] or such sum as with any deposit previously made by the insurer under the provisions of the Indian Life Insurance Companies Act, 1912 (6 of 1912), brings the amount deposited up 1[to not less than twenty-five thousand rupees] and the subse
The provisions of section 29 shall apply to Co-operative Life Insurance Societies as they apply to other insurers, 2[***].]
—————
1. Ins. by Act 6 of 1946, sec. 44 (w.e.f. 20-3-1946).
2. Certain words omitted by Act 47 of 1950, sec. 56 (w.e.f. 1-6-1950).
No transferee or assignee of a policy issued by an insurer to whom this Part applies shall become a member of a Mutual Insurance Company or Co-operative Life Insurance Society merely by reason of any such transfer or assignment.
Notwithstanding the provisions of section 79 and section 131 of the Indian Companies Act, 1913 (7 of 1913), a Mutual Insurance Company or a Co-operative Life Insurance Society may, instead of sending the notices and the copies of the balance-sheet, revenue account and other documents which they are required to send to the members under those sections, 1[publish such notice together with a summary in the prescribed form of the balance-sheet and revenue account] once in a newspaper published in the English language and in newspaper published in an Indian language circulating in the place where the principal office of the company is situated:
Provided that, where any members of the company are domiciled in a State other than that in which the principal office of the company is situated, publication of the 2[***] notice of the meetings shall be made in a newspaper or newspapers publish
Every Mutual Insurance Company and every Co-operative Life Insurance Society shall, on the application of any member made within two years from the date on which any such document is furnished to the Registrar of Companies under the provisions of section 134 of the Indian Companies Act, 1913 (7 of 1913), or to the Registrar of Co-operative Societies of the State in which the Co-operative Life Insurance Society is registered, furnish a copy of the document free of cost to the member within fourteen days of the application.
(1) Every insurer shall re-insure with Indian re-insurers such percentage of the sum assured on each policy as may be specified by the 1[the Authority with the previous approval of the Central Government] under sub-section (2).
(2) For the purposes of sub-section (1), 1[the Authority] may, by notification in the Official Gazette,—
(a) specify the percentage of the sum assured on each policy to be re-insured and different percentages may be specified for different classes of insurance:
Provided that no percentage so specified shall exceed thirty per cent. of the sum assured on such policy; and
(b) also specify the proportions in which the said percentage shall be allocated among the Indian re-insurers.
&nbs
(1) 1[The Authority with the previous approval of the Central Government] shall, for the purposes of section 101A, constitute an Advisory Committee consisting of not more than five persons having special knowledge and experience of the business of insurance.
(2) The term of office of, and the allowances payable to, members of the Advisory Committee, the procedure to be followed by, and the quorum necessary for the transaction of business of, the Committee and the manner of filling casual vacancies therein shall be such as may be 2[determined by the regulations made by the Authority].]
—————
1. Subs. by Act 41 of 1999, sec. 30 and Sch. I, for “The Central Government” (w.e.f. 19-4-2000).
2. Subs. by A
The 2[Authority] may, at any time,—
(a) call upon an insurer to submit for 3[its] examination at the principal
place of business of the insurer in India all re-insurance treaties and other re-insurance contracts entered into by the insurer;
(b) examine any officer of the insurer on oath in relation to any such document as is referred to in clause (a) above; or
(c) by notice in writing, require any insurer to supply 4[it] with copies of any of the documents referred to in clause (a), certified by a principal officer of the insurer.]
----------
1. Ins. by Act 62 of 1968, sec. 33 (w.e.f. 1-6-1969).
2.Subs. by Act
1[ 102 . Penalty for default in complying with, or act in contravention of, this Act
If any person, who is required under this Act, or rules or regulations made thereunder,--
(a) to furnish any document, statement, account, return or report to the Authority, fails to furnish the same; or
(b) to comply with the directions, fails to comply with such directions;
(c) to maintain solvency margin, fails to maintain such solvency margin;
(d) to comply with the directions on the insurance treaties, fails to comply with such directions on the insurance treaties,
he shall be liable to a penalty not exceeding five lakh rupees for each such failure and punishable with fine
If a person makes a statement, or furnishes any document, statement, account, return or report which is false and which he either knows or believes to be false or does not believe to be true,—
(a) he shall be liable to a penalty not exceeding five lakh rupees for each such failure, and
(b) he shall be punishable with imprisonment which may extend to three years or with fine for each such failure.
If a person fails to comply with the provisions of section 27 or section 27A or section 27B or section 27C or section 27D, he shall be liable to a penalty not exceeding five lakh rupees for each such failure.
If any director, managing director, manager or other officer or employee of an insurer wrongfully obtains possession of any property or wrongfully applies to any purpose of the Act, he shall be liable to a penalty not exceeding two lakh rupees for each such failure.
Section 105 of the Insurance Act, 1938, addresses the wrongful obtaining or withholding of property by officers or employees of an insurer. It establishes penalties for such misconduct, aiming to safeguard the property of insurers and ensure integrity within insurance operations.
Section 105 stipulates that any director, managing director, manager, or officer/employee of an insurer who wrongfully obtains possession of or withholds property of the insurer shall be liable to a penalty not exceeding one crore rupees. It criminalizes acts of wrongful possession or application of insurer’s property.
This concise legal commentary synthesizes the relevant provisions, judicial interpretations, and regulatory aspects related to Section 105 of the Insurance Act, 1938.
(1) Where any offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attrib
If an insurer fails to comply with the provisions of section 32B, he shall be liable to a penalty not exceeding five lakh rupees for each such failure and shall be punishable with imprisonment which may extend to three years or with fine for each such failure.
If an insurer fails to comply with the provisions of section 32C, he shall be liable to a penalty not exceeding twenty-five lakh rupees for each such failure and in the case of subsequent and continuing failure, the registration granted to such insurer under section 3 shall be cancelled by the Authority.
(1) If, on the application of the 2[Authority] or an Administrator appointed under section 52A or an insurer or any policy-holder or any member of an insurance company or the liquidator of an insurance company (in the event of the insurance company being in liquidation), the court is satisfied—
(a) that any insurer (including in any case where the insurer is an insurance company any person who has taken part in the promotion or formation of the insurance company or any past or present director, managing agent, manager, secretary or liquidator) or any officer, employee or agent of the insurer,—
(i) has misapplied or retained or become liable or become accountable for any money or property of the insurer; or
(ii) has been guilty of any misfeasance or breach of trus
(1) When application is made to the court for the making of any order to which this section applies, the court shall, unless the 2[Authority] has 3[itself] made the application or has been made a party thereto, send a copy of the application together with intimation of the date fixed for the hearing thereof to the 4[Authority], and shall give 5[it] an opportunity of being heard.
(2) The orders to which this section applies are the following, namely:—
(a) an order for the attachment in execution of a decree of any deposit made under section 7 or section 98;
(b) an order under section 9 or section 59 for the return of any such deposit;
(c) an order under section 36 sanctioning any arrangement for the transfer or amalgamation of li
1[(1)] Except where proceedings are instituted by the 2[Authority] 3[or an Administrator appointed under section 52A] no proceedings under this Act against an insurer or 4[any director, managing agent, manager, secretary or other officer of an insurer or any liquidator or any employee or agent of an insurer or any person who is liable under sub-section (2) of section 41 or any other person] shall be instituted by any person unless he has previous thereto obtained the sanction of the Advocate General of the State where the principal place of business in 5[India] of such insurer is situate to the institution of such proceedings:
6[Provided that where the principal place of business of such insurer is situated in a 7[Union territory] references in this section to the Advocate General of the Province shall be construed as references to the Attorney-General for India.]
&n
Every whole-time chairman, whole-time director, auditor, liquidator, manager and any other employee of insurer shall be deemed to be a public servant for the purposes of Chapter IX of the Indian Penal Code (45 of 1860).]
—————
1. Ins. by Act 62 of 1968, sec. 35 (w.e.f. 1-6-1969).
If any proceedings, civil or criminal, it appears to the court hearing the case that a person is or may be liable in respect of negligence, default, breach of duty or breach of trust but that he has acted honestly and reasonably and that having regard to all the circumstances of the case he ought fairly to be excused for the negligence, default, breach of duty or breach of trust, the court may relieve him either wholly or partly from his liability on such terms as it may think fit.
1[(1)] No court inferior to that of a Presidency Magistrate or Magistrate of the first class shall try any offence under this Act.
2[(2) No court shall take cognizance of any offence punishable under sub-section (4) of section 34B or sub-section (1A) of section 102 except upon complaint in writing made by an officer of the Central Government generally or specially authorised in writing, in this behalf by the Authority and no Court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any such offence.]
—————
1. Section 109 re-numbered as sub-section (1) thereof by Act 62 of 1968, sec. 36 (w.e.f. 1-6-1969).
2. Ins. by Act 62 of 1968, sec. 36 (w.e.f. 1-6-1969).
(1) An appeal shall lie to the court having jurisdiction from any of the following orders, namely:—
(a) an order under section 3 1[***] cancelling the registration of an insurer;
(b) an order under section 5 directing the insurer to change his name;
(c) an order under section 42 cancelling the licence issued to an agent;
(d) an order under section 75 refusing to register an amendment of rules;
2[(e) an order under section 87 or section 87A;]
(f) an order made in the course of the winding up or insolvency of 3[***] a provident society.
(2) The court having jurisdiction for the
The 2[Chairperson of the Authority] may by general or special order delegate any of his powers or duties under this Act to any person subordinate to him. The exercise or discharge of any of the powers or duties so delegated shall be subject to such restrictions, limitations and conditions, if any, as the 2[Chairperson of the Authority] may impose, and shall be subject to his control and revision.
—————
1. Ins. by Act 20 of 1940, sec. 15 (w.e.f. 10-4-1940).
2. Subs. by Act 47 of 1950, sec. 4, for “Superintendent of Insurance” (w.e.f. 1-6-1950) and again subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
Every document which is required by this Act or by any rule made thereunder to be signed by the 1[Chairperson of the Authority] or by any person subordinate to him or by any officer authorised by him under sub-section (1) of section 42 shall be deemed to be properly signed, if it bears a facsimile of the signature of such 1[Chairperson of the Authority], person or officer printed, engraved, lithographed or impressed by any other mechanical process approved by the Central Government.]
—————
1. Subs. by Act 47 of 1950, sec. 4, for “Superintendent of Insurance” (w.e.f. 1-6-1950) and again subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
(1) The 2[Chairperson of the Authority] may, by notice in writing, require any insurer to supply him with any information relating to his insurance business, and the insurer shall comply with such requirement within such period after receipt of the notice as may be specified therein.
(2) Any information supplied under this section shall be certified by a principal officer of the insurer and if the notice so requires also by an auditor.]
—————
1. Ins. by Act 47 of 1950, sec. 59 (w.e.f. 1-6-1950).
2. Subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
No person shall have any right, whether in contract or otherwise, to any compensation for any loss incurred by reason of the operation of any of the provisions contained in section 34 or section 34A or section 34E or section 37A or by reason of the compliance by an insurer with any order or direction given to him under this Act.
—————
1. Ins. by Act 62 of 1968, sec. 37 (w.e.f. 1-6-1969).
Notwithstanding anything contained in the Life Insurance Corporation Act, 1956 (31 of 1956), the provision of sections 3A, 27B, 28B, 33, 34 clause (a) of sections 34E, 34F, 40C, 44A, 64U to 64UM (both inclusive), 64V, 64VA, 64VB, 64VC, 101A, 101C, 110D, 110G, and 110H, shall also apply so far as may be, to and in relation to the general insurance business carried on by the Life Insurance Corporation of India and the provisions of section 37A shall also apply to that Corporation if it become an acquiring insurer.
The provisions of sections 3, 3A, 27B, 28B, 33, 34 clause (a) of sections 34E, 34F, 40C, 44A, 64U to 64UM (both inclusive), 64V, 64VA, 64VB, 64VC, and 101A, 101C, 110D, 110G and 110H shall notwithstanding any exemption granted under section 118, also apply, so far as may be, to and in relation to the general insurance business carried on by a State Government or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956).
(1) The Central Government shall constitute a Consultative Committee consisting of the 1[Chairperson of the Authority] (who shall be the Chairman thereof) and not more than four other members having special knowledge and experience of the business of insurance.
(2) The term of office of, and the allowances payable to the members of the Consultative Committee, the procedure to be followed by, and the quorum necessary for the transaction of business of, the Consultative Committee and the manner of filling casual vacancies therein shall be such as may be prescribed.
(3) Before making any order under sections 34, 34A, 34B, 34C, 34E, 34F, 34G, sub-sections (4) and (7) of section 64UM and section 64VC, the 2[Chairperson of the Authority] shall consult the Consultative Committee constituted under sub-section (1).
&nbs
(1) Any person aggrieved by any order made by the 1[Authority] 2[under sections 27D,] 34, 34A, 34B, 34C, 34E, 34F, 34G, sub-sections (1), (4) and (7) of section 64UM or section 64VC may, within a period of thirty days from the date of such order prefer an appeal against such order to the Central Government and that Government may, by order, confirm, modify or reverse the order made by the 1[Authority] and the order so made by the Government shall be final.
(2) No claim for compensation shall lie in favour of any person for anything done in pursuance of an order of the Controller so long as such order was effective.
(3) The Central Government may, on the application of an appellant, stay, until the decision of the appeal, the operation of any order made under section 34 or sub-section (5) of section 34B or sub-clause (v) of clause (b) of
(1) Any process or notice required to be served on an insurer or provident society shall be sufficiently served if addressed to any person registered with the 1[Authority] as a person authorised to accept notices on behalf of the insurer or provident society and left at, or sent by registered post to the address of such person as registered with the 1[Authority].
(2) Any notice or other document which is by this Act required to be sent to any policy-holder may be addressed and sent to the person to whom notices respecting such policy are usually sent and any notice so addressed and sent shall be deemed to be notice to the holder of such policy:
Provided that, where any person claiming to be interested in a policy as transferee, assignee or nominee has given to an insurer or to a provident society notice in writing of his interest, any no
Notwithstanding anything to the contrary contained in this Act, an insurer carrying on the business of life insurance shall be at liberty to declare an interim bonus or bonuses to policy-holders whose policies mature for payment by reason of death or otherwise during the intervaluation period on the recommendation of the investigating of actuary made at the last preceding valuation.
1[(1) A policy of life insurance under which the whole of the benefits become payable either on the occurrence, or at a fixed interval or fixed intervals after the occurrence, of a contingency which is bound to happen, shall, if all premiums have been paid for at least three consecutive years in the case of a policy issued by an insurer, or five years in the case of a policy issued by a provident society as defined in Part III, acquire a guaranteed surrender value, to which shall be added the surrender value of any subsisting bonus already attached to the policy, and every such policy issued by an insurer shall show the guaranteed surrender value of the policy at the close of each year after the second year of its currency or at the close of each period of three years throughout the currency of the policy:
Provided that the requirements of this sub-section as to the addition of the
(1) The Central Government may, subject to the condition of previous publication by notification in the Official Gazette, make rules to carry out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such rules may prescribe—
1[***]
2[(aa) such other percentage of paid-up equity capital in excess of twenty-six per cent. of the paid-up equity capital and the period within which such excess paid-up equity capital shall be divested under sub-section (1) of section 6AA;]
3[(b) the manner in which it shall be determined which of the transactions of an insurer are to be deemed for the purposes of this Act to be insurance business transacted 4[***] in 5[ India] 6[***];]
&nb
(1) The Authority may, by notification in the Official Gazette, make regulations consistent with this Act and the rules made thereunder, to carry out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:—
2[(a) the qualifications to be possessed by actuaries;
(aa) the matters including fee relating to the registration of insurers under section 3;]
(b) the manner of suspension or cancellation of registration under sub-section (5E) of section 3;
(c) such fee, not exceeding five thousand rupees, as may be determined by the regulations for issue of a dupli
The 1[Authority] may, on the application or with the consent of an insurer, not being a company, alter the forms contained in the Schedules as respect that insurer, for the purpose of adapting them to the circumstances of that insurer:
Provided that nothing done under this section shall exempt the insurer from supplying all information required under this Act so far as it is possible for the insurer to do so.
—————
1. Subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Central Government” (w.e.f. 19-4-2000).
1[(1)] The Central Government may, by notification in the Official Gazette, exempt any insurer constituted, incorporated or domiciled in 2[any country or State outside 3[India]] 4[from any of the provisions of this Act which may be specified in the notification] either absolutely or subject to such conditions or modification as may be specified in the notification.
5[***]
6[(2) This section shall apply in respect of provident societies as defined in Part III as it applies in respect of insurers.]
—————
1. Section 116 re-numbered as sub-section (1) of that section by Act 13 of 1941, sec. 63 (w.e.f. 8-4-1941).
2. Subs. by Act 47 of 1950, sec. 60, for “a P
The 2[Central Government, before the date of commencement of the Insurance Regulatory and Development Authority Act, 1999] shall every year cause to be published, in such manner as it may direct, a summary of the accounts, balance-sheet, statements, abstracts and other returns under this Act or purporting to be under this Act which have been furnished in pursuance of the provisions of this Act to the 3[Authority] during the year preceding the year of publication, and may append to such summary any note of the 3[Authority] or of the 4[Central Government, before the date of commencement of the Insurance Regulatory and Development Authority Act, 1999] and any correspondence:
Provided that nothing in this section shall require the publication of the 5[statement referred to in sub-section (2) of section 10 of the returns] referred to in sub-section (1) of section 28 6[or 7[section 28A o
Nothing in this Act shall affect the liability of an insurer being a company1[or a provident society as defined in Part III being a company] to comply with the provisions of the Indian Companies Act, 1913 ( 7 of 1913 ), in matters not otherwise specifically provided for by this Act.
________________________
1. Inserted by Act 13 of 1941, section 65 (w.e.f. 8-4-1941).
Nothing in this Act shall apply—
(a) to any trade union registered under the Indian Trade Unions Act, 1926 (16 of 1926); or
(b) to any provident fund to which the provisions of the Provident Funds Act, 1925 (19 of 1925), apply; or
(c) if the Central Government so orders in any case, and to such extent or subject to such conditions or modifications as may be specified in the order, to any insurance business carried on by the Central Government or a State Government or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); or
(d) if the 2[Authority] so orders in any case, and to such extent or subject to such conditions or modifications as may be specified in the order, to—
&nb
Any person may on payment of a fee of five rupees inspect the documents filed by an insurer with the 2[Authority] under clause (f) of sub-section (2) of section 3, and may obtain a copy of any such document or part thereof on payment in advance at the prescribed rate for the making of the copy.]
—————
1. Subs. by Act 13 of 1941, sec. 67, for section 119 (w.e.f. 8-4-1941).
2. Subs. by Act 47 of 1950, sec. 4, for “Superintendent of Insurance” (w.e.f. 1-6-1950) and again subs. by Act 41 of 1999, sec. 30 and Sch. I, for “Controller” (w.e.f. 19-4-2000).
The market value on the day of deposit of securities deposited in pursuance of any of the provisions of this Act with the Reserve Bank of India shall be determined by the Reserve Bank of India whose decision shall be final.
[Repealed by the Repealing and Amending Act, 1957 (36 of 1957), section 2 and Schedule I (w.e.f. 17-9-1957).]
[Repealed by the Repealing and Amending Act, 1957 (36 of 1957), section 2 and Schedule I (w.e.f. 17-9-1957).
[Rep. by the Repealing and Amending Act, 1957 (36 of 1957), sec. 2 and Sch. I (w.e.f. 17-9-1957).]
1[***]
—————
1. The First Schedule omitted by Act 42 of 2002, sec. 18 (w.e.f. 23-9-2002).
1[***]
—————
1. The Second Schedule omitted by Act 42 of 2002, sec. 18 (w.e.f. 23-9-2002).
1[***]
—————
1. The Third Schedule omitted by Act 42 of 2002, sec. 18 (w.e.f. 23-9-2002).
1[***]
—————
1. The Fourth Schedule omitted by Act 42 of 2002, sec. 18 (w.e.f. 23-9-2002).
THE FIFTH SCHEDULE
(See section 13)
PART I
REGULATIONS
1. Statements prepared under this Schedule must be prepared, so far as practicable, in tabular form and must be identified by numbers and letters corresponding with those of the paragraphs of Part II of this Schedule.
2. Except with respect to rates of premium or contribution, items in statements prepared under this Schedule are to be shown to the nearest rupee.
3. Extra premium shown in the Forms of Summary and Valuation prepared under the Fourth Schedule to this Act must not be included in statements prepared under this Schedule.
4. Every statement prepared und
1 [THE SIXTH SCHEDULE
PART A
[See section 42B(1)]
1. All payments of commission to insurance agent shall be made by the principal agent on behalf of the insurer.
2. The principal agent shall procure or cause to be procured through insurance agents such an amount of general insurance business of any class for the procurement of which he has been appointed, as will yield a gross premium income of not less than twenty thousand rupees in each calendar year.
3. In the event of the principal agent failing in any calendar year to comply with the requirements of clause 2, he shall forfeit to the insurer—
(i) one-quarter of the total remuneration payable to hi
1[THE SEVENTH SCHEDULE]
(See section 55)
The liabilities of an insurer in respect of current contracts effected in the course of life insurance business including annuity business, shall be calculated by the method and upon the basis to be determined by an actuary approved by the court, and the actuary so approved shall, in determining as aforesaid, take into account—
(a) the purpose for which such valuation is to be made,
(b) the rate of interest and the rates of mortality and sickness to be used in valuation, and
(c) any special directions which may be given by the court.
The liabilities of an insurer in respect of current policies
1[THE EIGHTH SCHEDULE
(See section 52J)
The compensation to be given under section 52J shall be an amount equal to the value of the assets of the acquired insurer as on the day immediately before the appointed day, computed in accordance with the provisions of Part I of this Schedule less the total amount of liabilities thereof as on that day, computed in accordance with the provisions of Part II of this Schedule.
PART I
ASSETS
For the purposes of this Part, “value of asset” means the total of the following:—
(a) the market value of any land or buildings;
(b) the market value of any securities, shar
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