GENERAL INSURANCE (EMERGENCY PROVISIONS) ACT, 1971
(1) This Act may be called the General Insurance (Emergency Provisions) Act, 1971.
(2) It shall be deemed to have come into force on the 13th day of May 1971.
In this Act, unless the context otherwise requires, -
(a) "appointed day" means the 13th day of May, 1971;
(b) 'Custodian' means the person appointed under Section 4 to take Over the management of the undertaking of any insurer;
(c) "general insurance business" means fire, marine or miscellaneous insurance business, whether carried on singly or in combination with one or more of them, but does not include capital redemption business and annuity certain business;
(d) "Insurance Act" means the Insurance Act, 1938;
(e) "insurer" means an insurer, as defined in the Insurance Act, who carries on general insurance business in India, and includes an insurer whose registration under that Act has not remained whol
(1) On and from the appointed day, management of the undertakings of all insurers shall vest in the Central Government, and, pending the appointment of a Custodian for the undertaking of any insurer, the persons in charge of the management of such undertaking immediately before the appointed day shall, on and from the appointed day, be in charge of the management of the undertaking for and on behalf of the Central Government; and the management of the undertaking of the insurer shall be carried on by them subject to the provisions contained in sub-sections (3) and (5) and to such further directions, if any as the Central Government may give to them by notice addressed and sent to the principal officer of the insurer.
(2) Any contract, whether express or implied, providing for the management of the undertaking of an insurer, made before the appointed day between the insurer and any
(1) The Central Government may, as soon as it is convenient administratively so to do, appoint any person as Custodian for the purpose of taking over the management of the undertaking of an insurer and the person so appointed shall carry on the management of the Undertaking of the insurer for and on behalf of the Central Government.
(2) On the appointment of a Custodian under sub-section (1), the charge of management of the undertaking of the insurer shall vest in him and all persons in charge of the management of such undertaking immediately before such appointment shall cease to be in charge of such management and shall be bound to deliver to the Custodian all books of account, registers or other documents in their custody relating to the undertaking of the insurer.
(3) Nothing contained in sub-sections (3), (5) and (6) of section 3 sh
(1) Notwithstanding anything contained in the Companies Act, 1956, or in the memorandum or articles of association of any insurer or in any other instrument, no resolution passed at any meeting of the Board of directors or of the members of an insurer shall be given effect to unless approved by the Central Government.
(2) Subject to the other provisions contained in this Act and subject to such exceptions, restrictions and limitations, if any, as the Central Government may, by notification in the Official Gazette, specify in this behalf, the Companies Act, 1956 and the Insurance Act shall continue to apply to every insurer in the same manner as they applied to him before the appointed day.
(3) Every notification made by the Central Government under sub-section (2) shall be laid, as soon as may be after it is made, before each House of Pa
Subject to such directions and instructions as the Central Government may give under this Act, the Custodian, or, where no Custodian has been appointed in relation to the undertaking of any insurer, the person in charge, under section 3, of the management of the undertaking of the insurer, shall alone be entitled to exercise all the powers of management in connection with, or incidental to, the carrying on or otherwise of the general insurance business of the insurer, whether such powers are derived from the Companies Act, 1956-, or from the memorandum or articles of association of the insurer or from any other source.
The Custodian may, in relation to the undertaking of any insurer the charge of management of which has been taken over by him, exercise -
(a) all or any of the powers which the Controller of Insurance may exercise under section 106 or section 107 of the Insurance Act-;
(b) all or any of the powers under section 52B,section 52BB,section 52C or section 52D of the Insurance Act-which an Administrator appointed under section 52A of that Act could have exercised in relation to life insurance business of an insurer.
(1) Every insurer shall be given by the Central Government compensation for the vesting in it, under section 3, of the management of the undertaking of the insurer.
(2) For every month during which the management of the undertaking of the insurer remains vested in the Central Government, the amount of compensation referred to in sub-section (1) shall be-
(A) in the case of an insurer referred to in clause (b) of sub-section (9) of section 2 of the Insurance Act-,- .
(i) where the insurer has declared a1[dividend for at least one] of the three calendar years 1967, 1968 and 1969,-
(a) a sum equal to one-twelfth of the annual average (for the three years) of the amount distributed to shareholders as dividend; or
&
(1) The compensation referred to in section 6 shall be paid by the Central Government in cash to every insurer.
(2) The compensation received by an insurer under section 6 shall be dealt with by him in such manner as may be prescribed
If any person-
(a) fails to deliver to the Custodian any books of account registers or any other documents in his custody relating to the undertaking of an insurer in respect of the management of which the Custodian has been appointed, or
(b) retains any property of such insurer appertaining to the undertaking of the insurer, or
(c) fails to comply with the provisions contained in sub-section (3) or sub-section (5) or sub-section (6) of sections) or
(d) fails to comply with any directions issued under sub-section (1) or sub-section (7) of section 3,
he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
No proceeding for the winding up of an insurer the management of whose undertaking has vested in the Central Government under .this Act, or for the appointment of a Receiver in respect of such business, shall lie in any Court.
In computing the period of limitation prescribed by any law for the time being in force for any suit or application against any person by an insurer in respect of any matter arising out of his undertaking the time during which this Act is in force shall be excluded.
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.
The Central Government may, by notified order, direct that all or any of the powers exercisable by it under this Act may also be exercised by any such person as may be specified in the order.
(1) No suit, prosecution or other legal proceeding shall be against any Custodian or authorised person in respect of anything which is in good faith done or intended to be done under this Act.
(2) No suit or other legal proceeding shall be against the Central Government or any Custodian or authorised person for any damage caused or likely to be caused by anything which is in good faith done or intended to be done under this Act
[Omitted by Act 57 of 1972 w.e.f 20.09.1972.]
Nothing contained in this Act shall apply to-
(a) any insurer whose business is being voluntarily wound up or is being wound, up by a Court;
(b) any insurer to whom the Insurance Act does not apply by reason of the provisions contained in section 2Ethereof;
(c) the Calcutta Hospital and Nursing Home Benefit Association Limited;
(d) the Export Credit Guarantee Corporation;
(e) the Deposit Insurance Scheme;
(f) any scheme of insurance which might be exempted by the Central Government relating to -
(i) crop and cattle,
(ii) war risks,
&n
(1) The Central Government may, by notification in the Official Gazette, make rules to carry out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-
(a) the form and manner in which books of account appertaining to undertakings shall be maintained by insurers;
(b) the manner in which any compensation payable under this Act shall be dealt with by an insurer;
(c) the circumstances in which the remuneration payable to persons in charge of the management of the undertaking of an insurer under this Act or to Custodians shall be met by the Central Government, whether wholly or in part;
&
(1) The General Insurance (Emergency Provisions) Ordinance, 1971, is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken (including any direction given and orders and rules made) under the said Ordinance shall be deemed to have been done or taken under the corresponding provisions of this Act.
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