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THE INSURANCE ACT, 1938<br/>Sections<br/><br/>Introduction<br/>PART I<br/>PRELIMINARY<br/>Short title, extent and commencement<br/>Definitions Interpretation of certain words and expressions Appointment of Controller of Insurance<br/>PART II<br/>PROVISIONS APPLICABLE TO INSURERS<br/>Prohibition of transaction of insurance business by certain persons<br/>Power of Central Government to apply provisions of this Act to Special Economic Zones Insurers to be subject to this Act while liabilities remain unsatisfied<br/>This Act not to apply to certain insurers, ceasing to enter into new contracts before conunencement of Act<br/>Registration<br/>Renewal of registration<br/>Certification of soundness of terms of life insurance business<br/>Minimum limits for annuities and other benefits secured by policies of life insurance<br/>Restriction on name of insurer<br/>Requirement as to capital Requirements as to capital structure and voting rights and maintenance of registers of beneficial owners of shares<br/>Manner of divesting excess shareholding by promoter in certain cases<br/>Provision for securing compliance with requirements relating to capital structure<br/>Conversion of company limited by shares into company limited by guarantee<br/>Deposits<br/>Reservation of deposits<br/>Refimd of deposit<br/>Separation of accounts and funds<br/>Accounts and balance-sheet i: ;<br/>Audit I <r<br/>Actuarial report and abstract Register of policies and register of claims<br/>Submission of returns<br/>Returns by insurers established outside India Exemption from certain provisions of the Indian Companies Act, 1913 This Act not to apply to preparation of accoimts, etc., for periods prior to this Act coming into force<br/><br/>18. Furnishing reports 19. Abstract of proceedings of general meetings 20. Custody and inspection of documents and supply of copies 21. Powers of Authority regarding returns<br/>22. Powers of Authority to order revaluation<br/>23. Evidence of documents<br/>24. [Repealed] 25. Returns to be published in statutory forms 26. Alterations in the particulars furnished with application for registration to be reported Investment, Loans and Management<br/>27. Investment of assets<br/>27A. Further provisions regarding investments<br/>27B. Further provisions regarding investments<br/>27C. Prohibition for investment of funds outside India<br/>27D. Manner and conditions of investment<br/>28. Statement of investment of assets 28A. Return of investments relating to controlled fund and changes therein 28B. Returns of investments relating to the assets and changes therein<br/>29. Prohibition of loans 30. Liability of directors, etc., for loss due to contravention of sections 27, 27A, 27B and 29<br/>31. Assets of insurer how to be kept<br/>31A. Provisions relating to managers, etc. 31B. Power to restrict payment of excessive remuneration 32. Limitation on employment of managing agents and on the remuneration payable to them 32A. Prohibition of common officers and requirement as to whole-time officers 32B. Insurance business in rural or social sector 32C. Obligations of insurer in respect of rural or unorganised sector and backward classes i Investigation<br/>33. Power of investigation and inspection by Authority Appointment of Staff<br/>33A. Power to appoint staff<br/>Power to issue directions<br/>34. Power of the Authority to issue directions Control over Management<br/>34A. Amendment of provisions relating to appointments of managing directors, etc., to be subject to previous approval of the Authority 34B. Power of Authority to remove managerial persons from office 34C. Power of Authority to appoint additional directors<br/>34D. Sections 34B and 34C to override other laws<br/>34 E. Further powers 34F. Power of Authority to issue directions regarding re-insurance treaties, etc. 34G. Power of Authority to order closure of foreign branches<br/>34H. Search and seizure<br/>Amalgamation and Transfer of Insurance Business 35. Amalgamation and transfer of insurance business 65 36. Sanction of amalgamation and transfer by Authority 66 37. Statements required after amalgamation and transfer 67 37A. Power of Authority to prepare Scheme of Amalgamation 68 Assignment or transfer of policies and nominations 38. Assignment and transfer of insurance policies . 71 39. Nomination by policy-holder . 73 Commission and Rebates and Licensing of Agents<br/>40. Prohibition of payment by way of commission or otherwise for procuring business • 74 40A. Limitation of expenditure on commission . 75 40B. Limitation of expenses of management in life irwiurance business . 77 40C. Limitation of expenses of management in general insurance business 78 41. Prohibition of rebates • 79 42. Licensing of insurance agents . 80 42A. Registration of principal agents, chief agents and special agents . 82 42B. Regulation of employment of principal agents . 83 42C. Regulation of employment of chief agents and special agents . 84 42D. Issue of licence to intermediary or insurance intermediary . 86 42E. Commission, brokerage or fee payable to intermediary or insurance intermediary 43. Register of insurance agents 44. Prohibition of cessation of payments of commission 44A. Power to call for information . 89 Special Provisions of Law<br/>45. Policy not to be called in question on ground of mis-statement after two years • 46. Application of the law in force in India to policies issued in India. 90 47. Payment of money into court . 90 47A. Claims on small life insurance policies . 91 48. Directors of insurers being comparues . 92 48A. Life insurance agents not to be directors of life insurance companies 93 48B. Further provision regarding directors . 93 48C. [Repealed] ■ 49. Restriction on dividends and bonus . 94 50. Notice of options available to the assured on the lapsing of a policy 95 51. Supply of copies of proposals and medical reports . 95 52. Prohibition of business on dividing principle ^ . 95 Management by Administrator<br/>52A. When Administrator for management of insurance business may be appointed ^ ' 96 52B. Powers and duties of the Administrator . 97 52BB. Powers of Administrator respecting property Uable to attachment under section 106 • 97<br/>52C. Cancellation of contracts and agreements . 99 52D. Termination of appointment of Administrator . 99<br/><br/>52E. Finality of decision appointing Administrator<br/>52F. Penalty for withlrolding documents of property from Admiiristrator<br/>52G. Protection of action taken imder sections 52A to 52D Acquisition of the Undertakings of Insurers in certain cases<br/>52H. Power of Central Government to acquire undertakings of insurers in certain cases<br/>52-1. Power of Central Government to make Scheme 52J. Compensation to be given to the acquired insurer<br/>52K. Constitution of the Tribunal<br/>52L. Tribunal to have powers of Civil Court<br/>52M. Procedure of the Tribunal 52N. Special provisions for the dissolution of acquired msurers Winding up<br/>53. Winding up by the court 53A. Unpaid-up share capital 54. Volimtary winding up<br/>55. Valuation of liabilities 56. Application of surplus assets of life insurance fund in liquidation or insolvency<br/>57. Winding up of secondary companies 58, Scheme for partial winding up of insurance companies<br/>59. Retiun of deposits<br/>60. Notice of policy values 61. Power of Tribunal to reduce contracts of insurance 61A. Appeal to National Company Law Appellate Tribunal Special Provisions relating to External Companies<br/>62. Power of Central Government to impose reciprocal disabilities on non-Indian companies<br/>63. Particulars to be filed by insurers established outside India 64. Books to be kept by insurers established outside India<br/>PART 11 A<br/>INSURANCE ASSOCIATION OF INDIA, COUNCILS OF THE ASSOCIATION AND COMMITTEES THEREOF 64A. Incorporation of tlie Insmance Association of India 64B. Entry of names of members in the register<br/>64C. Councils of the Insurance Association of India 64D. Autlrority of members of Association to act through agents<br/>64E. Authorities of the Life Insurance Council and the<br/>General Insurance Council<br/>64F. Executive Committees of the Life Insurance Council and the<br/>General Insurance Council<br/>64G. Resignation and filling up of casual vacancies<br/>64H. Duration and dissolution of Executive Committees<br/>64-1. Power of Executive Committee of Life Insurance Council to hold examinations for insurance agents 64J. Functions of Executive Conunittee of Life Insurance Council 64K. Executive Committee of Life Insurance Council may advise in controlling expenses<br/><br/>64L. Functions of the Executive Committee of General Insurance Council 64M. Executive Committee of General Insurance Council may advise in controlling expenses 64N. Powers of the Executive Committees to act together in certain cases 64-0. [Repealed]<br/>64P. [Repealed]<br/>64Q. [Repealed] 64R. General powers of Life Insurcmce Council and General<br/>Insurance Council<br/>64S. Power of Central Government to remove difficulties 64T. Power to exempt<br/>PART IIB<br/>TARIFF ADVISORY COMMITTEE AND CONTROL OF TARIFF RATES<br/>Establishment of Tariff Advisory Committee<br/>Composition of the Advisory Committee Power to make rules in respect of matters in this Part 64UC. Power of the Advisory Committee to regulate rates, advantages, etc. 64UD. Transitional provisions 64UE. Power of the Advisory Committee to require informaHon, etc.<br/>-64UF.- Assets and liabilities of the General Insurance Council to vest in the Advisory Committee 64UG. Contracts, etc., to be effective by or against the Advisory Committee 64UH. Employees, etc., to continue 64UI. Duty of person having custody or control of property to deliver such property to the Advisory Committee 64UJ. Power of the Advisory Committee to constitute Regional Committees 64UK. Levy of fees by the Advisory Committee<br/>64UL. Power to remove difficulties 64UM. Licensing of surveyors and loss assessors<br/>PART lie<br/>SOLVENCY MARGIN, ADVANCE PAYMENT OF PREMIUM AND RESTRICTIONS ON THE OPENING OF A NEW PLACE OF BUSINESS<br/>64V. Assets and liabilities how to be valued 64VA. Sufficiency of assets<br/>64VB. No risk to be assumed unless premium is received in advance 64VC. Restrictions on the opening of a new place of business . . ' .<br/>PART III<br/>PROVIDENT SOCIETIES<br/><br/>65. Definition of provident society<br/>134<br/>65A. Prohibition of transaction of msurance business by provident societies other than public companies or co-operative societies<br/>135 66. Restrictions on provident societies 135 67. Name . • 135 68. [Repealed] 136 69. Dividing business 136 70. Registration 136 70A. Renewal of registration . 139<br/>70B. Supplementary informafion and reports of alterations in 139particulars furnished with application for registration 71. Certain provisions of Part II to apply to provident sodeli^ 140 72. Working Capital 140 73. Deposits 140 73A. Restriction on name of provident society 140 74. Rules 141<br/>75. Amendment of rules 142 76. Supply of copy of rules 142 77. Registered office 142 78. Publication of authorised capital to contain also subscribed and paid-up capital 142 79. Registers and books 142 80. Revenue account, balance-sheet and annual statements 143 81. Actuarial report and abstract 143 82. Submission of returns to Authority 144<br/>83. Actuarial examination of schemes 145 84. Separation of accoimts and funds 146<br/>85. Investment fimds 146 86. Inspection of books 147 .87. Inquiry by or on behalf of Authority 147 87A. Amalgamation and transfer of insurance business 148 88. Winding up by court and voluntary winding up 150<br/>89. Reduction of Insurance contracts 151 90. Appointment of liquidator 151 90A. Application of Act to liquidators 151<br/>91. Powers of liquidator 151 92. Procedure at liquidation 152 93. Dissolution of provident society 154<br/>94. Nominations and assignments 154 PART IIIA<br/>INSURANCE CO-OPERATIVE SOCIETIES 94A. Insurance co-operative society to be an insurer 155<br/>PART IV<br/>MUTUAL INSURANCE COMPANIES AND CO-OPERATIVE LIFE INSURANCE SOQETIES 95. Definitions 155 96. Application of Act to Mutual Insurance Companies and 156Co-operative Life Insurance Societies 97. Working capital of Mutual Insurance Companies and 156Co-operative Life Insurance Societies 98. Deposits to be made by Mutual Insurance Companies and 156Co-operative Life Insurance Societies 98A. Prohibition of loans 157 99. Transferees and assignees of policies not to become members 157<br/>100. Publication of notices and documents of Mutual Insurance Companies and Co-operative Life Insurance Societies 157 101. Supply of documents to members 157<br/>PART IV A<br/>RE-INSURANCE lOlA. Re-insurance with Indian re-insurers 15g lOlB. Advisory Committee I59 lOlC. Examination of re-insurance treaties irq<br/>PART V<br/>MISCELLANEOUS 102. Penalty for default in complying with, or act in<br/>contravention of, this Act<br/>159<br/>103. Penalty for carrying on insurance business in contravention of sections 3, 7 and 98<br/>160 104. Penalty for false statement in document 160 105. Wrongfully obtaining or withholding property 160. 105A. Offences by companies 160 105B. Penalty for failure to comply with section 32B 161 105C. Penalty for failure to comply with section 32C 161 106. Power of court to order restoration of property of insurer or compensation in certain cases 161 106A. Notice to and hearing of Authority 163 107. Previous sanction of Advocate-General for institution of proceedings 164 'i07A; Chairman, etc. to be public servant 164 108. Power of court to grant relief 165 109. Cognizance of offences 165 110. Appeals 165 IIOA. Delegation of powers and duties of Chairperson of the Authority 165 HOB. Signature of documents 166 HOC. Power to call for information \ 166 HOD. Certain claims for compensation barred 166 IIOE. Sections 3A, 27B, 28B, 33, etc. 166 HOP. Provisions applicable to State Governments, etc. 166 HOG. Constitution of Consultative Committee 166 HOH. Appeals ^ 167 111. Service of notices ^ ^ Declaration of interim bonuses , 167 112. 167 113. Acquisition of surrender values by policy 167 114. Power of Central Government to make rules 169 114A. Power of Authority to make regulations 170 115. Alteration of forms 173 116. Power to exempt from certain requirements 173 n6A. Summary of returns to be published 173 117. Saving of provisions of Indian Companies Act, 1913 174 118. Exemptions 174 119. Inspection and supply of copies of published prospectus, etc. 175 120. Determination of market value of securities deposited under this A(^ 175 121. [Repented] 175 122. [Repealed] 175 123. [Repealed] 175 THE FIRST SCHEDULE.—{Omitted] 175 THE SECOND SCHEDULE.—[Omitted] 175<br/>\<br/>Rules<br/><br/>—[Omilted] Regulations for preparing statements of business in force and requirements applicable to such statements Terms deemed to be included in every contract between an insurer carrying on general insurance business and a principal agent —Rule as to the valuation of the liabilities of an insurer in insolvency or liquidation . -Principles of compensation<br/>THE INSURANCE RULES, 1939<br/>PRELIMINARY<br/>Short title<br/>Definitions<br/>ACTUARIES<br/>Qualifications of actuaries [Omitted]<br/>DEPOSITS WITH THE BANK Eleposits with the Bank , Changes in deposits Maturing of deposits Interest and dividends on deposits Withdrawals, etc., of deposits Information as regards deposits SECURITIES AND INVESTMENTS<br/>Pakistan securities<br/>Assets deemed to be approved investments Returns of investments and changes in investments Charging Assets PROSPECTUSES, TABLES AND PROPOSAL FORMS<br/>Prospectuses and tables Proposal Forms COMMITTEE OF THE INSURANCE COUNCILS<br/>List of insurers<br/>Constituencies of insurers<br/>Duties of Dissolved Executive Committees Joint Meetings of Executive Committees ELECTION OF DIRECTORS BY POLICY-HOLDERS Qualifications of elected directors of insurance companies<br/>Election of directors under section 48 Period of office of directors and filling of vacancies . •<br/>LICENCES AND CERTIFICATES<br/>Licence fee for insurance agents and collection thereof<br/>Issue of licences to insurance agents Bona fide insurance agents for the purposes of section 41 Fee for principal, chief and special agents<br/><br/>Issue of certificates to principal, chief and special agents Issue of duplicate licenses and certificates Description of stamp<br/>Allowance for unused stamps<br/>Cancellation of licences or certificates<br/>SHARES, OWNERSHIP AND DISPOSAL<br/>Declaration as to the nature of ownership of shares<br/>Declaration as to beneficial interest in shares<br/>Form for declaration Disposal of shares by Administrator-General<br/>LIMITATION OF EXPENSES OF MANAGEMENT<br/>Statement of tlie bases of premiums Limitation of expenses of management in life-insurance business . Limitation of expenses of management in general insurance business<br/>Head Office expenses Principal Office expenses Calculation of proper share of managerial expenses<br/>CONTRAVENTION OF LIMITATION OF EXPENSES<br/>AND TARIFF REGULATION<br/>Action against Extravagant Life Insurers Action against Extravagant General Insurers<br/>PROVIDENT SOCIETIES<br/>Transaction of bond investment business<br/>Rules of Provident Societies<br/>Forms of accounts and statements<br/>Actuarial reports Signatures of returns furnished by provident societies<br/>Notices under section 92(6) Seciurity from liquidator<br/>FEES I<br/>Fees imder the Act and the manner of collection Fees payable on referring disputed claims to Controller Fees payable to the Councils<br/>MISCELLANEOUS Additional particulars to be given by actuary<br/>Form of declaration under section 16(2)(d) Returns in respect of dividing insurance business<br/>Activities of insiurers<br/>Statement of emoluments Payment where nominee is a minor Surrunary of balance-sheet and revenue account<br/>REINSURANCE ADVISORY COMMITTEE<br/>Term of office<br/>Resignation and filling of casual vacancies<br/><br/>36. Secretary 207 37. Procedure for the conduct of business, etc, of the Committee 207 38. Allowances payable to members of the Advisory Committee 207<br/>39. Minimum information to be maintained and the checks and other verifications to be adopted 208<br/>40. Search and seizure 211<br/>TARIFF ADVISORY COMMITTEE<br/>41. Constitution 212<br/>42. [Omitted] 213 43. Election of Members 213 44. [Omitted] ' 213 45. [Omitted] 213<br/>46. [Omitted] 214 47. [Omitted] 214 48. [Omitted] 214 49. [Omitted] 214 50. [Omitted] 214 51. [Omitted] 214 51A. [Omitted] 214 52. [Omitted] 214 "53. The fees payable to the Tariff Advisory Committee 216 53A. Fund of the Tariff Advisory Committee and custody of its moneys . . 216 53B. Accounts, audit and annual report of the Tariff Advisory Committee . . 216 54. Apportionment of Provident Fund . . 216<br/>LICENSING OF SURVEYOR AND LOSS ASSESSORS 55. Licence fee for surveyor or loss assessors and collection thereof . . . 217 56. Issue of licences to surveyor or loss assessors . . . 217 56A. Additional technical qualifications for surveyors and loss assessors. . . 217<br/>SUFFICIENCY OF ASSETS 57. Marmer of bringing up the excess of the value of assets over the amoimt of the liabilities to the relevant amount . . . 218 58. Advance payment of premiums . . . 219<br/>59. Relaxation . . . 219<br/>CONSULTATIVE COMMITTEE<br/>60. Term of office . . . 222<br/>61. Resignation and filling of casual vacancies . . . 222<br/>62. Secretary , . . 222<br/>63. Procedure for the conduct of business of the Committee . . . 222<br/>64. Allowances payable to members of the Consultative Committee . . . 222<br/>65. Fees of members . , . . 223<br/>SCHEDULE 1 . . . 223<br/>SCHEDULE 2 [Omitted] . . , . 307<br/>THE REDRESSAL OF PUBLIC GRIEVANCES RULES, 1998<br/>1. Short title . . . 308<br/>2. Application . . . 308<br/>3- 308<br/>4. Definitions 308 5. Governing body of Insurance Council 309<br/>6. Ombudsman 309<br/>7. Term of office 309<br/>8. Removal from office 309<br/>9. Remuneration, etc. of Ombudsman , 309 10. Territorial jurisdiction of Ombudsman 310<br/>11. Staff 310<br/>12. Power of Ombudsman 310 13. Manner in which complaint is to be made 311 14. Ombudsman to act fairly and equitably 311. 15. Recommendations madd by the Ombudsman 311<br/>16. Award 312 17. Consequences of non-acceptance of award '512 18. Power to make ex-gratia payment 312<br/>Miscellaneous Provisions<br/>19. Advisory Committee 312 20. Armual Report 312<br/>21. Recommendation of the Insurance Council . . . 312<br/>THE GENERAL INSURANCE BUSINESS (NATIONALISATION) ACT, 1972<br/>Introduction 313<br/>CHAPTER I<br/>PRELIMINARY<br/>Sections<br/>1. Short title , 315 2. Declaration as to the policy of the State 315<br/>3. Definitions 315<br/>CHAPTER I!<br/>transfer to PUBLIC OWNERSHIP OF general insurance business<br/>4. Transfer of shares of Indian insurance companies 316 5. Transfer of undertakings of other existing insurers 317<br/>6. Effect of transfer of undertakings 317<br/>7. Transfer of service of existing employees in certain cases 318 8. Provident, superannuation, welfare and other funds 319<br/>CHAPTER III<br/>GENERAL INSURANCE CORPORATION OF INDIA .<br/>9. Formation of General Insurance Corporation of India . • 319 10. Transfer to Corporation of shares vested in Central Government . . • . 320 lOA. Transfer to Central Government of shares vested in Corporation . . 320<br/>CHAPTER IV<br/>AMOUNTS TO BE PAID FOR ACQUISITIONS 11. Amounts to be paid for transfer and vesting of shares or undertakings . . 320<br/>12. Disbursement of amounts by Corporation . . 320<br/><br/>Mode of payment Amount payable to shareholders may be paid to named persons<br/>instead in certain cases<br/>Payment into court in case of rival claims<br/>CHAPTER V<br/>SCHEME FOR REORGANISATION OF GENERAL<br/>INSURANCE BUSINESS<br/>Schemes for mergers of companies, etc. Laying of schemes and notifications before Parliament<br/>CHAPTER VA<br/>TERMS AND CONDITIONS OF SERVICE OF OFHCERS AND OTHER EMPLOYEES<br/>Power of Central Goverrunent to regulate the terms and conditions of service of officers and other employees<br/>CHAPTER VI FUNCTIONS OF CORPORATION AND ACQUIRING COMPANIES AND THEIR MANAGEMENT<br/>Functions of Corporation<br/>Functions of acquiring companies Balance of profit how to be utilised Interim provisiorrs for management of Indian insurance comparues. Power of Central Government to transfer employees<br/>Power of Central Government to issue directions<br/>CHAPTER VII<br/>MISCELLANEOUS Acquiring comparues to have the exclusive privilege of<br/><br/>carrying on general insurance business 326 24A. Exclusive privilege of Corporation and acquiring companies to cease 327 25. Properties in India not to be insured with foreign insurers except with permission of Central Government .i 327 26. Acquiring companies and income-tax 327<br/>27. Power to reduce amounts of insurance in certain cases 327 28. Right of acquiring company to seek relief in respect of certain transactions 327 29. Duty to deliver possession of property and documents relating thereto . 328 30. Penalty for withliolding property, etc. 328 31. Officers and employees of Corporation or of acquiring companies to be public servants 329 32. Indemnity 329 33. Dissolution of Corporation and acquiring companies 329 34. Reference to existing insurer in other laws 329 35. Application of Insxuance Act 329<br/>35A. [Omitted] 329<br/>36. Exemptions . ' . 329<br/>37. Vacancies, etc., not to invalidate proceedings •. 330 38. Protection of action taken in good faith 330<br/>39. Power to make rules 330<br/>40. [Repealed] 331 THE SCHEDULE.—[Amount to be paid for acquisitions—See Section 11] 331 |
