CONTENTS THS INSURANCE ACT, 1938 Arrangement of Sections PART I PRELIMINARY 1. 2. 2A.

2B Short title, extent and commencement Definitions Interpretation of certain words and expressions Appointment of Authority of Insurance PART II PROVISIONS APPLICABIJE TO INSURERS 2C. 2D. 2#. Prohi ition of transaction of insurance usiness y certain persons Insurers to e su !ect to this Act while lia ilities "ain unsatisfied $his Act not to apply to certain insurers, ceasin% to enter into new Contracts efore commencement of Act &. 'e%istration &A. 'enewal of re%istration &B. Certification of soundness of terms of life insurance usiness (. "inimum limits for annuities and other enefits secured y policies of life insurance ). 'estriction on name of insurer *. 'e+uirement as to capital *A. 'e+uirements as to capital structure and ,otin% ri%hts and maintenance of re%isters of eneficial owners of shares *AA. "anner of di,estin% excess shareholdin% y promoter in certain cases *B. Pro,ision for securin% compliance with re+uirements relatin% to Capital structure *C. Con,ersion of company limited y shares into company limited y %uarantee -. Deposits .. 'eser,ation of deposits /. 'efund of deposit 10. Separation of accounts and funds 11 Accounts and alance sheet 12. Audit 1& Actuarial report and a stract 1(. 'e%ister of policies and re%ister of claims 1). Su mission of returns 1*. 'eturns y insurers esta lished outside India 1-. #xemption from certain pro,isions of the Indian Companies Act, 1/1& 1-A. $his Act not to apply to preparation of accounts, etc., for periods prior to this Act comin% into force 1.. 1urnishin% reports 1/. A stract of proceedin%s of %eneral meetin%s 20. Custody and inspection of documents and supply of copies 21. Powers of Authority re%ardin% returns 22. Powers of Authority to order re,aluation 2&. #,idence of documents 2(. 2Repealed3 2). 'eturns to e pu lished in statutory forms 2*. Alterations in the particulars furnished with application for re%istration to e reported 3.18 3.19 3.19 3.19 3.24 3.25 3.25 3.26 3.27 3.27 3.30 3.31 3.32 3.32 3.37 3.38 3.38 3.39 3.40 3.40 3.42 3.43 3.43 3.44 3.44 3.45 3.45 3.45 3.45 3.46 3.46 3.46 3.46 3.47 3.13 3.13 3.18 3.18

Investment, Loans and Management 2-. 2-A. 2-B. 2-C. 2-D. 2.. 2.A. 2.B. 2/. &0. &1. &1A. &IB. &2. &2A. &2B. &2C. In,estment of assets 1urther pro,isions re%ardin% in,estments 1urther pro,isions re%ardin% in,estments Prohi ition for in,estment of funds outside India "anner and conditions of in,estment Statement of in,estments of assets 'eturn of in,estments relatin% to controlled fund and chan%es therein 'eturns of in,estments relatin% to the assets and chan%es therein Prohi ition of loans 4ia ility of directors, etc., for loss due to contra,ention of sections 2-, 2-A and 2/ Assets of insurer how to e 5ept Pro,isions relation to mana%ers, etc. Power to restrict payment of excessi,e remuneration 4imitation on employment of mana%in% a%ents and on the remuneration paya le to them Prohi ition of common officers and re+uirement as to whole time officers Insurance usiness in rural or social sector 6 li%ations of insurer in respect of rural or unor%ani7ed sector and ac5ward classes Investigation &&. Power of in,esti%ation and inspection y authority Appointment o !ta &&A Power to appoint staff &(. Power of the Authority to issue directions "ont#ol ove# Management &(A. Amendment of pro,isions relatin% to appointments of mana%in% directors, etc., to e su !ect to pre,ious appro,al of the Authority &(B. Power of Authority to remo,e mana%erial persons from office &(C. Power of Controller to appoint additional directors &(D. Sections &(B and &(C to o,erride other laws &(#. 1urther powers &(1. Power of Authority to issue directions re%ardin% re8insurance treaties, etc. &(9. Power of Authority to order closure of forei%n ranches &(:. Search and sei7ure Amalgamation and $#ans e# o Ins%#an&e '%siness &). &*. &-. &-A. Amal%amation and transfer of insurance usiness Sanction of amal%amation and transfer y Authority Statements re+uired after amal%amation and transfer Power of Authority to prepare scheme of amal%amation Assignment o# $#ans e# o (oli&ies and )ominations &.. &/. Assi%nment and transfer of insurance policies ;omination y policy holder "ommission and Re*ates and Li&ensing o Agents (0. Prohi ition of payment y way of commission or otherwise for procurin% usiness 3.82 3.80 3.81 3.74 3.75 3.76 3.77 3.68 3.69 3.70 3.70 3.71 3.71 3.72 3.72 3.68 3.68 3.65 3.47 3.49 3.53 3.57 3.57 3.57 3.59 3.59 3.59 3.61 3.61 3.61 3.63 3.64 3.64 3.65 3.65

(0A. (0B. (6C. (1. (2. (2A. (2B. (2C. (2D. (2#.

4imitation of expenditure on commission 4imitation of expenses of mana%ement in life insurance usiness 4imitation of expenses of mana%ement in %eneral insurance usiness Prohi ition re ates 4icensin% of insurance a%ents 'e%istration of principal a%ents, chief a%ents and special a%ents 'e%ulation of employment of principal a%ents 'e%ulation of employment of chief a%ents and special a%ents Issue of license to intermediary or insurance intermediary "ommission, *#o+e#age o# ee pa,a*le to inte#media#, o# ins%#an&e inte#media#, (&. 'e%ister of insurance a%ents ((. Prohi ition of cessation of payments of commission ((A. Power to call far information !pe&ial (#ovisions o La(). (*. (-. (-A. (.. (.A. (.B. (.C. (/. )0. )1. )2. Policy not to e called in +uestion on %round of mis8statement after two years Application of the law in force in India to policies issued in India Payment of money into court Claims on small life insurance Policies Directors of insurers ein% companies 4ife insurance a%ents not to e directors of life insurance companies 1urther pro,ision re%ardin% directors .Repealed/ 'estriction on di,idends and onus ;otice of options a,aila le to the assured on the lapsin% o a policy Supply of copies of proposals and medical reports Prohi ition of usiness on di,idin% principle Management *, Administ#ato# )2A. <hen Administrator for mana%ement of insurance usiness may e appointed )2B. Powers and duties of the Administrator )2BB. Powers of Administrator respectin% property lia le to attachment under section 10* )2C. Cancellation of contracts and a%reements )2D. $ermination of appointment of Administrator )2#. 1inality of decision appointin% Administrator )21. Penalty for withholdin% documents of property from Administrator )29. Protection of action ta5en under sections )2A to )2D

3.83 3.85 3.86 3.87 3.88 3.91 3.92 3.93 3.95 3.97 3.97 &./3.98

3.98 3.99 3.99 3.100 3.100 3.101 3.101 3.102 3.102 3.103 3.103 3.103

3.104 3.104 3.105 3.106 3.107 3.107 3.107 3.107

A&0%isition o t1e 2nde#ta+ings o Ins%#e#s in &e#tain &ases )2:. Power of Central 9o,ernment to ac+uire underta5in%s of insurers in certain cases )2I. Power of Central 9o,ernment to ma5e scheme )2=. Compensation to e %i,en to the ac+uired insurer )2>. Constitution of the $ri unal )24. $ri unal to ha,e powers of Ci,il Court )2". Procedure of the $ri unal )2;. Special pro,isions for the dissolution of ac+uired insurers )&. )&A. )(. )). )*. 3inding %p <indin% up y the court ?npaid8up share capital @oluntary windin% up @aluation of lia ilities Application of surplus assets of life insurance fund in li+uidation or insol,ency 3.107 3.109 3.110 3.111 3.111 3.112 3.112 3.112 3.113 3.113 3.113 3.113

)-. ).. )/. *0. *1.

<indin% up of secondary companies Scheme for partial windin% up of insurance companies 'eturn of deposits ;otice of policy ,alues Power of Court to reduce contracts of insurance !pe&ial (#ovisions #elating to 45te#nal "ompanies

3.114 3.115 3.116 3.116 3.116

*2. *&. *(.

Power of Central 9o,ernment to impose reciprocal disa ilities on ;on8 Indian companies Particulars to e filled y insurers esta lished outside India Boo5s to e 5ept y insurers esta lished outside India PART II A

3.116 3.117 3.117

INSURANCE ASSOCIATION OF INDIA, COUNCIL OF THE ASSOCIATION AND COMMI1lEES THEREOF *(A. *(B. *(C. *(D. *(#. *(1. *(9. *(:. *(8I. *(=. *(>. *(4. *(". *(;. *(6. *(P. *(A. *('. *(S. *($. Incorporation of the Insurance Association of India #ntry of names of mem ers in the re%ister Councils of the Insurance Association of India Authority of mem ers of association to act throu%h a%ents Authorities of the 4ife Insurance Council and the 9eneral Insurance Council #xecuti,e Committees of the 4ife Insurance Council and the 9eneral Insurance Council 'esi%nation and fillin% up of casual ,acancies Duration and dissolution of #xecuti,e Committees Power of #xecuti,e Committee of 4ife Insurance Council to hold examinations for insurance a%ents 1unctions of executi,e committee of 4ife Insurance Council #xecuti,e Committee of 4ife Insurance Council may ad,ise in controllin% expenses 1unctions of the executi,e committee of 9eneral Insurance Council #xecuti,e Committee of 9eneral Insurance Council may ad,ise in controllin% expenses Powers of the #xecuti,e Committees to act to%ether in certain cases 2Repealed3 2Repealed3 2Repealed3 9eneral powers of 4ife Insurance Council and 9eneral Insurance Council Power of Central 9o,ernment to remo,e difficulties Power to exempt PART IIB 3.118 3.118 3.118 3.118 3.119 3.119 3.120 3.120 3.121 3.121 3.121 3.122 3.123 3.123 3.123 3.123 3.123 3.124 3.124 3.125

TARIFF ADVISORY COMMITTEE AND CONTROL OF TARIFF RATES *(?. #sta lishment of $ariff Ad,isory Committee *(?A.Composition of the Ad,isory Committee *(?B.Power to ma5e rules in respect of matters in this Part *(?C.Power of the Ad,isory Committee to re%ulate rates, ad,anta%es, etc. *(?D.$ransitional pro,isions *(?#. Power of the Ad,isory Committee to re+uire information, etc. *(?1. Assets and lia ilities of the 9eneral Insurance Council to ,est in the Ad,isory Committee *(?9.Contracts, etc., to e effecti,e y or a%ainst the Ad,isory Committee *(?:.#mployees, etc., to continue *(?I. Duty of person ha,in% custody or control of property to deli,er such property to the Ad,isory Committee *(?=. Power of the Ad,isory Committee to constitute 'e%ional Committees 3.125 3.125 3.125 3.126 3.128 3.128 3.129 3.130 3.130 3.132 3.132

*(?>.4e,y of fees y the Ad,isory Committee *(?4. Power to rename difficulties *(?". 4icensin% of sur,eyors and loss assessors PART IIC SOLVENCY MARGIN, ADVANCE PAYMENT OF PREMIUM AND RESTRICTIONS ON THE OPENING OF A NEW PLACE OF BUSINESS *(@. Assets and lia ilities how to e ,alued *(@A.Sufficiency of assets *(@B.;o ris5 to e assumed unless premium is recei,ed in ad,ance *(@C.'estrictions on the openin% of a new place of usiness PART III PROVIDENT SOCIETIES *). Definition of Bpro,ident societyB *)A. Prohi ition of transaction of insurance usiness y pro,ident societies other than pu lic companies or co8operati,e societies **. 'estrictions on pro,ident societies *-. ;ame *.. 2Repealed3 */. Di,idin% usiness -0. 'e%istration -0A. 'enewal of re%istration -0B. Supplementary information and reports of alterations in particulars furnished with application for re%istration -1. Certain pro,isions of Part II to apply to pro,ident societies -2. <or5in% capital -&. Deposits -&A. 'estriction on name of pro,ident society -(. 'ules -). Amendment of rules -*. Supply of copy of rules --. 'e%istered office -.. Pu lication of authorised capital to contain also su scri ed and paid8 up capital -/. 'e%isters and oo5s .0. 'e,enue account, alance sheet and annual statements .1. Actuarial report and a stract .2. Su mission of returns to Authority .&. Actuarial examination of schemes .(. Separation of accounts and funds .). In,estment funds .*. Inspection of oo5s .-. In+uiry y or on ehalf of Authority .-A. Amal%amation and transfer of insurance usiness ... <indin% up y court and ,oluntary windin% up ./. 'eduction of insurance contracts /0. Appointment of li+uidator /0A. Application of Act to li+uidators /1. Powers of li+uidator /2. Procedure at li+uidation /&. Dissolution of pro,ident society /(. ;ominations and assi%nments

3.133 3.133 3.133

3.137 3.138 3.143 3.143

3.144 3.145 3.145 3.145 3.145 3.145 3.146 3.148 3.148 3.149 3.149 3.149 3.150 3.150 3.151 3.151 3.151 3.151 3.151 3.152 3.152 3.153 3.153 3.154 3.155 3.155 3.156 3.156 3.158 3.159 3.159 3.159 3.159 3.160 3.161 3.162

PART IIIA INSURANCE CO-OPERATIVE SOCIETIES /(A. Ins%#an&e &o6ope#ative so&iet, to *e an ins%#e# PART IV MUTUAL INSURANCE COMPANIES AND CO-OPERATTVE LIFE INSURANCE SOCIETIES /). /*. Definitions Application of Act to "utual Insurance Companies and Co8operati,e 4ife Insurance Societies /-. <or5in% capital of "utual Insurance Companies and Co8operati,e 4ife Insurance Societies /.. Deposits to e made y "utual Insurance Companies and Co8operati,e 4ife Insurance Societies /.A. Prohi ition of loans //. $ransferees and assi%nees of policies not to ecome mem ers 100. Pu lication of notices and documents of "utual Insurance Companies and Co8operati,e 4ife Insurance Societies 101. Supply of documents to mem ers PART IVA RE-INSURANCE 101A. 'e8insurance with Indian re8insurers 101B. Ad,isory Committee 101C. #xamination of re8insurance treaties PART V MISCELLANEOUS 102. Penalty for default in complyin% with, or act in contra,ention of, this Act 10&. Penalty for carryin% on insurance usiness in contra,ention of sections &, - and /. 10(. Penalty for false statement in document 10). <ron%fully o tainin% or withholdin% property 10)A. 6ffences y companies 10)B. Penalty for failure to comply with section &2B 10)C. Penalty for failure to comply with section &2C 10*. Power of court to order restoration of property of insurer or compensation in certain cases 10*A. ;otice to and hearin% of Authority 10-. Pre,ious sanction of Ad,ocate89eneral for institution of proceedin%s 10-A. Chairman, etc. to e pu lic ser,ants 10.. Power of court to %rant relief 10/. Co%ni7ance of offences 110. Appeals 110A. Dele%ation of powers and duties of Chairperson of the Authority 110B. Si%nature of documents 110C. Power to call for information 110D. Certain claims for compensation arred 110#. Sections &A, 2-B, 2.B, &&, etc., to apply to %eneral insurance usiness of the 4ife Insurance Corporation of India 1101. Pro,isions applica le to State 9o,ernments, etc. 1109. Constitution of Consultati,e Committee 3.167 3.169 3.169 3.169 &.1*/ 3.170 3.170 3.170 3.173 3.173 3.174 3.174 3.174 3.174 3.175 3.175 3.175 3.175 3.175 3.176 3.176 3.165 3.167 3.163.163 3.164 3.164 3.164 3.164 3.165 3.165 3.165 3.1 !

110:. Appeals 111. Ser,ice of notices 112. Declaration of interim onuses 11&. Ac+uisition of surrender ,alues y policy 11(. Power of Central 9o,ernment to ma5e rules 11(A. Power of authority to ma5e re%ulation 11). Alteration of forms 11*. Power to exempt from certain re+uirements 11*A. Summary of returns to e pu lished 11-. Sa,in% of pro,isions of Indian Companies Act, 1/1& 11.. #xemptions 11/. Inspection and supply of copies of pu lished prospectus, etc. 120. Determination of mar5et ,alue of securities deposited under this Act

3.176 3.176 3.177 3.177 3.178 3.179 3.182 3.182 3.183 3.183 3.183 3.184 3.184

THE INSURANCE ACT, 19381 "AS AMENDED BY INSURANCE #AMENDMENT$ ACT, !%%!&
2( of 1/&.3 An A&t to &onsolidate and amend t1e la- #elating to t1e *%siness o ins%#an&e <hereas it is expedient to consolidate and amend the law relatin% to the usiness of insuranceC it is here y enacted as followsD 8 PART I P'(l)*)+,'S./'0 0)0l(, (10(+0 ,+2 3/**(+3(*(+0. 1. E1FF $his Act may e called Insurance Act, 1/&.2. E2F It extends to the whole of India. E&F It shall come into force on such date & as the Central 9o,ernment may, y ;otification in the 6fficial 9a7ette, appoint in this ehalf. D(4)+)0)/+5. !. In this Act, unless there is anythin% repu%nant in the su !ect or context, 8 718 GactuaryH means an actuary possessin% such #eg%lations made *, t1e A%t1o#it,3C
( &a

20%ali i&ations as ma, *e spe&i ied *, t1e

2E1AF GAuthorityH means the Insurance 'e%ulatory and De,elopment Authority esta lished under su 8 728 Gpolicy8holderH includes a person to whom the whole of the interest of the policy8holder in the policy is assi%ned once and for all, ut does not include an assi%nee thereof whose interest in the policy is defeasi le or is for the time ein% su !ect to any conditionC 738 Gappro,ed securities,H means8 EiF 9o,ernment securities and other securities char%ed on the re,enue of the Central 9o,ernment or of the 9o,ernment of a State or %uaranteed fully as re%ards principal and interest y the Central 9o,ernment or the 9o,ernment of any StateC EiiF de entures or other securities for money issued under the authority of any Central Act or Act of a State 4e%islature y or on ehalf of a port trust or municipal corporation or city impro,ement trust in any Presidency8townC

section E1F of section & of the Insurance 'e%ulatory and De,elopment Authority Act, 1///C3

EiiiF shares of a corporation esta lished y law and %uaranteed fully y the Central 9o,ernment or the 9o,ernment of a State as to the repayment of the principal and the payment of the di,idedC Ei,F securities issued or %uaranteed fully as re%ards principal and interest y the 9o,ernment of any Part B State and specified as appro,ed securities for the purposes of this Act y the Central 9o,ernment y notification in the 6fficial 9a7etteC and 748 BAuditorB means a person +ualified under the Chartered Accountants Act, 1/(/ E&. of 1/(/F, to act as an auditor of companies C

E4AF B an5in% companyB and BcompanyB shall ha,e the meanin%s respecti,ely assi%ned in them in clauses EcF and EdF of su 8section E1F of Section ) of the Ban5in% Companies Act, 1/(/ E10 of 1/(/FC E5F BcertifiedB in relation to any copy or translation of a document re+uired to e furnished y or on ehalf of an insurer or a pro,ident society as defined in Part III means certified y a principal officer of *#such insurer or pro,ident society to e a true copy or a correct translation, as the case may eC E5AF Bchief a%entB means a person who, not ein% a salaried employee of an insurer, in consideration of any commission8 EiF performs any administrati,e and or%anisin% functions for the insurer, and EiiF procures life insurance usiness for the insurer y employin% or causin% to e employed insurance a%ents on ehalf of the insurerC 2E56'F BController of InsuranceB means the officer appointed y the Central 9o,ernment under section 2B to exercise all the powers, dischar%e the functions and performs the duties of the Authority under this Act or the 4ife Insurance Corporation Act, 1/)* E&1 of 1/)*F or the 9eneral Insurance Business E;ationalisationF Act, 1/-2 E)- of 1/-2F or the Insurance 'e%ulatory and De,elopment Authority Act, 1///C3 E*F BCourtB means the principal Ci,il Court of ori%inal !urisdiction in a district and includes the :i%h Court in exercise of its ordinary ori%inal ci,il !urisdictionC E6AF Bfire insurance usinessB means the usiness of effectin%, otherwise than incidentally to some other class of insurance usiness, contracts of insurance a%ainst loss y or incidental to fire or other occurrence customarily included amon% the ris5s insured a%ainst in fire insurance PoliciesC E6'F B%eneral insurance usinessB means fire, marine or miscellaneous insurance usiness, whether carried on sin%ly or in com ination with one or more of themC E7F B9o,ernment securityB means a 9o,ernment security as defined in the Pu lic De t Act, 1/(( E1. of 1/((FC
2

2E7AF

GIndian insurance companyH means any insurer ein% a company8 EaF which is formed and re%istered under the Companies Act, 1/)* E1 of 1/)*FC E F in which the a%%re%ate holdin%s of e+uity shares y a forei%n company, either y itself or throu%h its su sidiary companies or its nominees, do not exceed twenty8six percent paid8up e+uity capital of such Indian insurance companyC EcF whose sole purpose is to carry on life insurance usiness or %eneral insurance usiness or re8insurance usiness.

45planation6 1or the purpose of this clause, the expression Gforei%n companyH shall ha,e the meanin% assi%ned to it under clause E2&AF of section 2 of the Income8tax Act, 1/*1 E(& of 1/*1FC3 E8F Binsurance companyB means any insurer ein% a company, association or partnership which may e wound up under the Indian Companies Act, 1/1& E- of 1/1&F, or to which the Indian Partnership Act, 1/&2 E/ of 1/&2F, appliesC 78A8 Gins%#an&e &o6ope#ative so&iet,9 means an, ins%#e# *eing a &o6ope#ative so&iet,,6 7a8 -1i&1 is #egiste#ed on o# a te# t1e &ommen&ement o t1e Ins%#an&e 7Amendment8 A&t, 2002, as a &o6ope#ative so&iet, %nde# t1e "o6 ope#ative !o&ieties A&t, 1912 72 o 19128 o# %nde# an, ot1e# la- o# t1e time *eing in o#&e in an, !tate #elating to "o6ope#ative !o&ieties o# %nde# t1e M%lti6!tate "o6ope#ative !o&ieties A&t, 1984 751 o# 19848: 7*8 1aving a minim%m paid6%p &apital, 7e5&l%ding t1e deposits #e0%i#ed to *e made %nde# se&tion 78, o #%pees one 1%nd#ed &#o#es: 7&8in -1i&1 no *od, &o#po#ate, -1et1e# in&o#po#ated o# not, o#med o# #egiste#ed o%tside India, eit1e# *, itsel o# t1#o%g1 its s%*sidia#ies o# nominees, at an, time, 1olds mo#e t1an t-ent,6si5 pe# &ent o t1e &apital o s%&1 "o6ope#ative !o&iet,: 7d8 -1ose sole p%#pose is to &a##, on li e ins%#an&e *%siness o# gene#al ins%#an&e *%siness in India; E9F BInsurerB means8

EaF any indi,idual or unincorporated ody of indi,iduals or ody corporate incorporated under the law o any country other than India, carryin% on insurance usiness not ein% a person specified in su 8clause EcF of this clause which8 EiF carries on that usiness in India, or EiiF has his or its principal place of usiness or is domiciled in India, or EiiiF with the o !ect of o tainin% insurance usiness, employs a representati,e, or maintains a place of usiness, in IndiaC E F any ody corporate 2not ein% a person specified in su 8clause EcF of this clause3 carryin% on the usiness of insurance, which is a ody corporate incorporated under any law for the time ein% in force in IndiaC or stands to any such ody corporate in the relation of a su sidiary company within the meanin% of the Indian Companies Act, 1/1& E- of 1/1&F, as defined y su 8section E2F of section 2 of that Act, and EcF any person who in India has a standin% contract with underwriters who are mem ers of the Society of 4loydIs where y such person is authorised within the terms of such contract to issue protection notes, co,er notes, or other documents %rantin% insurance co,er to others on ehalf of the underwriters. ut does not include a principal a%entI chief a%ent, special a%entI or an insurance a%ent or a pro,ident society as defined in Part IIIC E10F Binsurance a%entB means an insurance a%ent licensed under Sec. (2 who recei,es a%rees to recei,e payment y way of commission or other remuneration in consideration of his solicitin% or procurin% insurance usiness includin% usiness relatin% to the continuance, renewal or re,i,al of policies of insuranceC

E10AFBin,estment companyB means a company whose principal usiness is the ac+uisition of shares, stoc5s de entures or other securitiesC E10'F Ginte#media#, o# ins%#an&e inte#media#,9 s1all 1ave t1e meaning assigned to it in &la%se 7 8 o s%*6 se&tion 2 o t1e Ins%#an&e Reg%la#ot, and <evelopment A%t1o#it, A&t, 1999 741 o 19998 E11F Glife insurance usinessB means the usiness of effectin% contracts of insurance upon human life, includin% any contract where y the payment of money is assured on death Eexcept death y accident onlyF or the happenin% of any E12F B"ana%erB and BofficerB ha,e the meanin%s assi%ned to those expressions in clauses E/F and E11F, respecti,ely of Section 2 of the Indian Companies Act, 1/1& E- of 1/1&FC E13F B"ana%in% a%entB means a person, firm or company entitled to the mana%ement of the whole affairs of a company y ,irtue of an a%reement with the company, and under the control and direction of the directors except to the extent, if any, otherwise pro,ided for in the a%reement, and includes any person, firm or company occupyin% such position y whate,er name called. 45planation.=If a person occupyin% the position of mana%in% a%ent calls himself mana%er or mana%in% director, he shall ne,ertheless e re%arded as mana%in% a%ent for the purposes of Sec. &2 of this ActC E13AFBmarine insurance usinessB means the usiness of effectin% contracts of insurance upon ,essels of any description, includin% car%oes, frei%hts and other interests which may e le%ally insured, in or in relation to such ,essels, car%oes and frei%hts, %oods, wares, merchandise and property of whate,er description insured for any transit, y land or water, or oth, and whether or not includin% warehouse ris5s or similar ris5s in addition or as incidental to such transit, and includes any other ris5s customarily included amon% the ris5s insured a%ainst in marine insurance policiesC E13'FBmiscellaneous insurance usinessB means the usiness of effectin% contracts of insurance which is not principally or wholly of any 5ind or 5inds included in clause E 6AF, E11F and E13AFC

E14F Bprescri edB means prescri ed y rules made under this ActC and E15F Bprincipal a%entB means a person who, not ein% a salaried employee of an insurer, in consideration of any commission,J EiF performs any administrati,e and or%anisin% functions for the insurerC and EiiiF procures %eneral insurance usiness whether wholly or in part y employin% or causin% to e employed insurance a%ents on ehalf of the E1*F Bpri,ate companyB and Bpu lic companyB ha,e the meanin%s respecti,ely assi%ned to them in Clauses E1&F and E1&8AF of Sec. 2 of the Indian Companies Act, 1/1& E- of 1/1&FC E1-F Bspecial a%entB means a person who, not ein% a salaried employee of an insurer, in consideration of any commission, procures life insurance usiness for the insurer whether wholly or in part y employin% or causin% to e employed insurance a%ents on ehalf of the insurer, ut does not include a chief a%ent. I+0('6'(0,0)/+ /4 3('0,)+ 7/'25 ,+2 (16'(55)/+5 !A. <ords and expression used and not defined in this Act ut defined in the 4ife Insurance Corporation Act, 1/)* E&1 of 1/)*F, the 9eneral Insurance Business E;ationalisationF Act, 1/-2 E)- or 1/-2F, and the Insurance 'e%ulatory and De,elopment Authority Act, 1/// shall ha,e the meanin%s respecti,ely assi%ned to them in those Acts.

A66/)+0*(+0 /4 A80./')0- /4 I+58',+3(. !B. 2E1F If at any time, the Authority is superseded under su 8section E1F of section1/ of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, the Central 9o,ernment may, y notification in the 6fficial 9a7ette, appoint a person to e the Controller of Insurance till such time the Authority is reconstituted under su 8section E&F of section 1/ of that Act E2F In ma5in% any appointment under this section, the Central 9o,ernment shall ha,e due re%ard to the followin% considerations, namely, whether the person to e appointed has had experience in industrial, commercial or insurance matter and whether such person has actuarial +ualifications. PART II PROVISIONS APPLICABLE TO INSURERS P'/.)9)0)/+ /4 0',+5,30)/+ /4 )+58',+3( 985)+(55 9- 3('0,)+ 6('5/+5. !C. E1F Sa,e as hereinafter pro,ided, no person shall, after the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, e%in to carry on any class of insurance usiness in India and no insurer carryin% on any class of insurance usiness in India shall after the expiry of one year from such commencement, continue to carry on any such usiness unless he is8 7a8 a pu lic company, or E*F a society re%istered under the Co8operati,e Societies Act, 1/12 E2 of 1/12F, or under any other law for the time ein% in force in any State relatin% to co8operati,e societies, or EcF a ody corporate incorporated under the law of any country outside India not ein% of the nature of a pri,ate companyD P'/:)2(2 that the Central 9o,ernment may, y notification in the official 9a7ette, exempt from the operation of this section to such extent for such period and su !ect to such conditions as it may specify, any person or insurer for the purpose of carryin% on the usiness of %rantin% superannuation allowances and annuities of the nature specified in su 8clause E &8 of clause E11F of Section 2 or for the purpose of carryin% on any %eneral insurance usinessD

P'/:)2(2 48'0.(' that in the case of an insurer carryin% on any %eneral insurance notification shall e issued ha,in% effect for more than three years at any one timeD

usiness no such

P'/:)2(2 ,l5/ that no insurer other than an Indian insurance company shall e%in to carry on any class of insurance usiness in India under this Act on or after the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///. E2F #,ery notification issued under su section E1F shall e laid efore Parliament as soon as may e after it is issued. E3F )ot-it1standing an,t1ing &ontained in s%*6se&tion 718, an ins%#an&e &o6ope#ative so&iet, ma, &a##, on an, &lass o ins%#an&e *%siness in India %nde# t1is A&t on o# a te# t1e &ommen&ement o t1e Ins%#an&e 7Amendment8 A&t, 2002 I+58'('5 0/ 9( 589;(30 0/ 0.)5 A30 7.)l( l),9)l)0)(5 '(*,)+ 8+5,0)54)(2 !D. #,ery insurer shall e su !ect to all the pro,isions of this Act in relation to any class of insurance usiness so lon% as his lia ilities in &2India3 in respect of usiness of that class remain unsatisfied or not otherwise pro,ided for. T.)5 A30 +/0 0/ ,66l- 0/ 3('0,)+ )+58'('5 3(,5)+< 0/ (+0(' )+0/ +(7 3/+0',305 9(4/'( 3/**(+3(*(+0 /4 A30 !E. $he pro,isions of this Act shall not apply to an insurer as defined in para%raphs EiF or 7iii8 of su 8clause EaF of clause E/F of Section 2 in relation to any class of his insurance usiness whether such insurer hits ceased, efore the commencement of this Act, to enter into any new contracts of that class of usiness. R(<)50',0)/+ 3. E1F ;o person shall, after commencement of this Act, ein% to carry on any class of insurance usiness in India and no insurer carryin% on any class of insurance usiness in India shall, after the expiry of three months from the commencement of this Act, continue to carry on any such usiness, unless he has o tained from the Authority a certificate of re%istration for the particular class of insurance usinessD P'/:)2(2 that in case of an insurer who was carryin% on any class of insurance usiness in India at the commencement of this Act, failure to o tain a certificate of re%istration in accordance with the re+uirements of this su 8clause shall not operate to in,alidate any contract of insurance entered into y him if efore such date as may e fixed in this ehalf y the Central 9o,ernment y notification in the official 9a7ette, he has o tained that certificateD P'/:)2(2 48'0.(' that a person or insurer, as the case may e, carryin% on any class of insurance usiness in India, on or efore the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, for which no re%istration certificate was necessary prior to such commencement, may continue to do so for a period of three months from such commencement or, if he had made an application for such re%istration within the said period of three months, till the disposal of such applicationD P'/:)2(2 ,l5/ that any certificate of re%istration, o tained immediately efore the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, shall e deemed to ha,e een o tained from the Authority in accordance with the pro,isions of this Act E2F #,ery application for re%istration shall e made in such manner as may e determined y the re%ulations made y the Authority and shall e accompanied y8 7a8 a certified copy of the memorandum and articles of association, where the applicant is a company and incorporated under the Indian Companies Act, 1/1& E- of 1/1&F, or under the Indian Companies Act, 1..2 E* of 1..2F, or under the Indian Companies Act, 1.** E10 of 1.**FC or under any Act repealed there y,3 or, in the case of any other insurer specified in su 8clause EaF 7ii8 or su 8clause E*F of clause E9F of section 2, a certified copy of the deed of partnership or of the deed of constitution of the company, as the case may e, or, in the case of an insurer ha,in% his principal place of usiness or domicile outside India, the document specified in Clause EaF of Section *&C E F the name, address and the occupation, if any, of the directors where insurer is a company incorporated under the Indian Companies Act, 1/1& E- of 1/1&F, or under the Indian Companies Act, 1..2 E* of

1..2F, or under the Indian Companies Act, 1.** E10 of 1.**F, or under any Act repealed there y, and in the case of an insurer specified in su 8clause EaF EiiF of clause E/F of section 2 the names and addresses of the proprietors and of the mana%er in India, and in any other case the full address of the principal office of the insurer in India, and the names of the directors and the mana%er at such office and the name and address of someone or more persons resident in India, authorised to accept any notice re+uired to e ser,ed on the insurerC EcF a statement of the class or classes of insurance usiness done or to e done, and a statement that the amount re+uired to e deposited y section - or section /. efore application for re%istration is made has een deposited to%ether with a certificate from the 'eser,e Ban5 of India showin% the amount depositedC EdF where the pro,isions of section * or section /- apply, a declaration ,erified y an affida,it made y the principal officer of the insurer authorised in that ehalf that the pro,isions of those sections as to paid8 up e+uity capital or wor5in% capital ha,e een complied withC EeF in the case of an insurer ha,in% his principal place of usiness or domicile outside India, a statement ,erified y an affida,it made y the principal officer of the insurer settin% forth the re+uirements Eif anyF not applica le to nationals of the country in which such insurer is constituted, incorporated or domiciled which are imposed y the laws or practice of that country upon Indian nationals as a condition of carryin% on insurance usiness in that countryC EfF a certified copy of the pu lished prospectus, if any, and of the standard policy forms of the insurer and statements of the assured rates, ad,anta%es, terms and conditions to e offered in connection with insurance policies to%ether with a certificate in connection with life insurance usiness y an actuary that such rates, ad,anta%es, terms and conditions are wor5a le and soundD P'/:)2(2 that in the case of marine accident and miscellaneous insurance usiness other than wor5menIs compensation and motor car insurance the a o,e re+uirements re%ardin% prospectus, forms and statements shall e complied with only insofar as the prospectus, forms and statements may e a,aila leC and E%F the receipt showin% payment of fee as may e determined y the re%ulations which shall not exceed fifty thousand rupees for each class of usiness as may e specified y the re%ulations made y the AuthorityC EhF such other documents as may e specified y the re%ulations made y the Authority. E2AF If, on receipt of an application for re%istration and after ma5in% such in+uiry as he deems fit, the Controller is satisfied thatJ EaF the financial condition and the %eneral character of mana%ement of the applicant are soundC E*F the ,olume of usiness li5ely to e a,aila le to, and the capital structure and earnin% prospects of, the applicant will e ade+uateC E&F the interest of the %eneral pu lic will e ser,ed if the certificate of re%istration is %ranted to the applicant in respect of the class or classes of insurance usiness specified in the applicationC and EdF the applicant has complied with the pro,isions of Sections 28C, ), &1A and &2 and has fulfilled all the re+uirements of this section applica le to him, the Authority may re%ister the applicant as an insurer and %rant him a certificate of re%istration. E2AAF $he Authority shall %i,e preference to re%ister the applicant and %rant him a certificate of re%istration if such applicant a%rees, in the form and manner as may e specified y the re%ulations made y the Authority, to carry on the life insurance usiness or %eneral insurance usiness for pro,idin% health co,er to indi,iduals or %roup of indi,iduals. E2BF <here the Authority refuses re%istrationC he shall record the reasons for such decision and shall furnish a copy thereof to the applicant. E2CF Any person a%%rie,ed y the decision of the Authority refusin% re%istration may, within thirty days from the date on which a copy of the decision is recei,ed y him, appeal to the Central 9o,ernment.

E2DF $he decision of the Central 9o,ernment on such appeal shall e final and shall not e +uestioned efore any Court. E&F ;otwithstandin% anythin% contained in su 8section E2AF, in the case of any insurer ha,in% his principal place of usiness or domicile outside India, the Authority, shall withhold re%istration or shall cancel a re%istration already made, if he is satisfied that in the country in which such insurer has his principal place of usiness or domicile Indian nationals are de arred y the law or practice of the country relatin% to, or applied to insurance from carryin% on the usiness of insurance, or that any re+uirement imposed on such insurer under the pro,isions of section *2 is not satisfied. E(F $he Authority shall cancel the re%istration of an insurer either wholly or in so far as it relates to a particular class of insurance usiness, as the case may e, 8 EaF if the insurer fails to comply with the pro,isions of section - or section /. as to deposits, or 7aa8 if the insurer fails, at any time, to comply the pro,isions of Sec. *(@A as to the excess of the ,alue of his assets o,er the amount of his lia ilitiesC or E*F if the insurer is in li+uidation or is ad!ud%ed an insol,ent, or E&F if the usiness or a class of the usiness of the insurer has een transferred to any person or has een transferred to or amal%amated with the usiness of any other insurer, or EdF if the whole of the deposit made in respect of insurance usiness has een returned to the insurer under Sec. /, or EeF if, in the case of an insurer specified in su 8clause E&Fof clause E9F of section 2, the standin% contract referred to in that su 8clause is cancelled or is suspended and continues to e suspended for a period of six months, or 7ee8 if the Central 9o,ernment so directs under su 8 section E(F of Sec. &&3 and the Authority may cancel the re%istration of an insurer8 E F if the insurer ma5es default in complyin% with, or acts in contra,ention of any re+uirement of this Act or of any rule or any re%ulation or order made or, any direction issued there under, or EgF if the Authority has reason to elie,e that any claim upon the insurer arisin% in India under any policy of insurance remains unpaid for three months after final !ud%ment in re%ular course of law, or E1F if the insurer carries on any usiness other than insurance usiness or any prescri ed usiness , or EiF if the insurer ma5es a default in complyin% with any direction issued or order made, as the case may e, y the Authority under the Insurance 'e%ulatory and De,elopment Authority Act, 1///, or E>F if the insurer ma5es a default in complyin% with, or acts in contra,ention of, any re+uirement of the Companies Act, 1/)* E1 of 1/)*F, or the 4ife Insurance Corporation Act, 1/)* E&1 of 1/)*F, or the 9eneral Insurance Business E;ationalisationF Act, 1/-2 E)- of 1/-2F, or the 1orei%n #xchan%e 'e%ulation Act, 1/-& E(* of 1/-&F. E)F <hen the Authority withholds or cancels any re%istration under su 8section E&F or clause EaF, clause 7aa8, clause EeF, clause 7ee8, clause E F, clause EgF or clause E1F of su 8section E(F, he shall %i,e notice in writin% to the insurer of his decision, and the decision shall ta5e affect on such date as he may specify in that ehalf in the notice, such date not ein% less than one month nor more than two months from the date of the receipt of the notice in the ordinary course of transmission. E)AF <hen the Authority cancels any re%istration under clause 7*F, clause 7&8 or clause EdF of su 8section E(F the cancellation shall ta5e effect on the date on which notice of the order of cancellation is ser,ed on the insurer. E)BF <hen a re%istration is cancelled the insurer shall not, after the cancellation has ta5en effect, enter into any new contracts of insurance, ut all ri%hts and lia ilities in respect of contracts of insurance entered into y him efore such cancellation ta5es effect shall, su !ect to the pro,isions of su 8section E)DF, continue as if the cancellation had not ta5en place. E)CF <here a re%istration is cancelled under clause 7a8, &la%se 7aa8, &la%se 7e8, clause E F, clause E%F or clause E1F or clause EiF or clause E>8 of su 8section E(F, the Authority may at his discretion re,i,e the re%istration, if the insurer within six months from the date on which the cancellation too5 effect ma5es the deposits re+uired y section - or Section /., or complies with the pro,isions of Section *(@A as to the excess of the ,alue of his assets o,er the amount of his lia ilities or has his standin% contract restored or has

had an application under su 8section E(F of section &A accepted, or satisfies the Authority that no claim upon him such as is referred to in clause E%F of su 8section E(F remains unpaid or that he has complied with any re+uirement of this Act or the Insurance 'e%ulatory and De,elopment Authority Act, 1/// or of any rule or any re%ulation, or order made there under or any direction issued under those Acts that he has ceased to carry on any usiness other than insurance usiness or any prescri ed usiness, as the case may e, and complies with any directions which may e %i,en to him y the Authority. E)DF <here lithe re%istration of an insurance company is cancelled under su 8section E(F, the Authority may, after expiry of six months from the date on which the cancellation too5 effect, apply to the Court for an order to wind up the insurance company, or to wind up the affairs of the company in respect of a class of insurance usiness, unless the re%istration of the insurance company has een re,i,ed under su 8section E)CF or an application for windin% up the company has een already presented to the Court. $he Court may proceed as if an application under this su 8section were an application under su 8section E2F of section )&, or su 8section E1F of Sec. )., as the case may e. E)#F $he Authority may, y order, suspend or cancel any re%istration in such manner as may e determined y the re%ulations made y itD P'/:)2(2 that no order under this su 8section shall e made unless the person concerned has een %i,en a reasona le opportunity of ein% heard. E*F 2KKK3 E-F $he Authority may, on payment of the prescri ed fee, not exceedin% fi,e rupees, issue a duplicate certificate of re%istration to replace a certificate lost, destroyed or mutilated, or in any other case where he is of opinion that the issue of a duplicate certificate is necessary. R(+(7,l /4 '(<)50',0)/+ 3A. E1F An insurer who has een %ranted a certificate of re%istration under section & shall ha,e the re%istration renewed annually for each year after that endin% on the (2&1st day of "arch, after the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///. E2F An application for the renewal of a re%istration for any year shall e made y the insurer to the Authority efore the &1st day of Decem er of the precedin% year, and shall e accompanied as pro,ided in su 8section E&F y e,idence of payment of the fee as determined y the re%ulations made y the Authority which may ,ary accordin% to the total %ross premium written direct in India, durin% the year precedin% the year in which the application is re+uired to e made under this section, y the insurer in the class of insurance usiness to which the re%istration relates ut shall notJ EiF exceed one8fourth of one per cent. of such premium income or rupees fi,e crores, whiche,er is lessC 7ii8 e less, in any case, than fi,e hundred rupees for each class of insurance usinessD P'/:)2(2 that in the case of an insurer carryin% on solely re8insurance usiness, the pro,isions of this su 8section shall apply with the modification that instead of the total %ross premium written direct in India, the total premiums in respect of facultati,e re8insurances accepted y him in India shall e8ta5en into account. E&F $he fee as determined y the re%ulations made y the Authority for the renewal of a re%istration for any year shall, e paid into the 'eser,e Ban5 of India, or where there is no office of that Ban5, into the Imperial Ban5 of India actin% as the a%ent of that Ban5, or into any 9o,ernment treasury, and the receipt shall e sent alon% with the application for renewal of the re%istration. E(F If an insurer fails to apply for renewal of re%istration efore the date specified in su 8section E2F the Authority may, so lon% as an application to the Court under su 8section E)8DF of section & has not een made, accept an application for renewal of the re%istration on receipt from the insurer of the fee paya le with the application and such penalty, not exceedin% the fee as determined y the re%ulations made y the Authority, and paya le y him, as the Authority may re+uireD P'/:)2(2 that an appeal shall lie to the Central 9o,ernment from an order passed y the Authority imposin%

a penalty on the insurer E)F $he Authority shall, on fulfillment y the insurer of the re+uirements of this section, renew the re%istration and %rant him a certificate of renewal of re%istration. C('0)4)3,0)/+ /4 5/8+2+(55 /4 0('*5 /4 l)4( )+58',+3( 985)+(55 #3B$ If, when considerin% an application for re%istration under section & or at any other time, it appears to the Authority that the Assured rates, ad,anta%es, terms and conditions offered or to e offered in connection with life insurance usiness are in any respect not wor5a le or sound, he may re+uire that a statement thereof shall e su mitted to an actuary appointed y the insurer for the purpose and appro,ed y the Authority, and may y order in writin% further re+uire the insurer to ma5e within such time as may e specified in the order such modifications in the said rates, ad,anta%es, terms, or conditions, as the case may e, as the said actuary may report to e necessary to ena le him to certify that the said rates, ad,anta%es, terms and conditions are wor5a le and sound. M)+)*8* l)*)05 4/' ,++8)0)(5 ,+2 /0.(' 9(+(4)05 5(38'(2 9- 6/l)3)(5 /4 l)4( I+58',+3( (. EIF ;o insurer, not ein% a Co8operati,e 4ife Insurance Society to which Part I@ of this Act applies, shall pay or underta5e to pay on any policy of life insurance issued after the commencement of the Insurance EAmendmentF Act, 1/(* E* of 1/(*F, an annuity of less than one hundred rupees or a %ross sum of less than one thousand rupees, exclusi,e of any profit or onus pro,ided that this shall not pre,ent an insurer from con,ertin% any policy into a paid8up policy of any ,alue or payment of surrender ,alue of any amount. E2F ;othin% contained in this section shall apply to any policy of the description 5nown as a %roup policy, where the num er of persons co,ered y the policy is not less than fifty or such smaller num er as may e appro,ed y the Authority and a standard form of the policy has ean certified in writin% y the Authority to e a policy of such description or to any policy underta5in% to pay a %ross sum of more than fi,e hundred rupees or an annuity of more than fifty rupee, issued8 EaF y an insurer to any person in his permanent employed respect of the life of that person, or E F under any scheme, appro,ed y the Authority and complyin% with such conditions, if any, as he may thin5 fit to impose, where y premiums due from persons employed under any employer are collected y or under the super,ision of the employer, or to any policy issued y a "utual insurance Company to which Part l@ applies and which the Authority may y order in writin% exempt from the pro,isions of this section, for so lon% as the company complies with such conditions, if any, as may e prescri ed. R(50')30)/+ /+ +,*( /4 )+58'(' =. ElF An insurer shall not e re%istered y a name identical with that y which an insurer in existence is already re%istered, or so nearly resem lin% that name as to e calculated to decei,e except when the insurer in existence is in the course of ein% dissol,ed and si%nifies his consent to the Authority. E2F If an insurer, throu%h inad,ertence or otherwise is without such consent as aforesaid re%istered y a name identical with that y which an insurer already in existence whether pre,iously re%istered or not is carryin% on usiness or so nearly resem lin% it as to e calculated to decei,e, the first mentioned insurer shall, if called upon to do so y the Authority on the application of the second8mentioned insurer, chan%e his name within a time to e fixed y the AuthorityD P'/:)2(2 that nothin% in this section shall apply to any insurer carryin% on usiness efore the 2-th8 day of =anuary, 1/&-, under the Indian 4ife Assurance Companies Act, 1/12 E* of 1/12FD P'/:)2(2 further that in the application of this section to any insurer who e%ins to carry on insurance usiness after the commencement of the Insurance EAmendmentF Act, 1/(* E* of 1/(*F, the references to an insurer in existence in su 8section E1F and this su 8section shall e construed as includin% references to a pro,ident society Eas defined in Part III in existence, whether or not the society is in course of ein% dissol,ed. E&F ;o insurer other than a pro,ident society as defined in Part III, who e%ins to carry on insurance usiness

after the commencement of this Act, shall adopt as its name and no such insurer carryin% on usiness efore the commencement of this Act shall continue after the expiry of six months from the commencement thereof to use as its name any com ination of words which includes the word Bpro,identB. R(>8)'(*(+05 ,5 0/ 3,6)0,l . ;o insurer carryin% on the usiness of life insurance, %eneral insurance or re8insurance in India on or after the commencement of the Insurance 'e%ulatory and De,elopment authority Act, 1//, shall e re%istered unless he has,8 7i8 a paid8up e+uity capital of rupees one hundred crores, in case of a person carryin% on the usiness of life insurance or %eneral insuranceC or 7ii8 a paid8up e+uity capital of rupees two hundred crores, in case of a person carryin% on exclusi,ely the usiness as a reinsurer D P'/:)2(2 that in determinin% the paid8up e+uity capital specified under clause E iF or clause EiiF, the deposit to e made under section - and any preliminary expenses incurred in the formation and re%istration of the company shall e excludedD P'/:)2(2 48'0.(' that an insurer carryin% on usiness of life insurance, %eneral insurance or re8insurance in India efore the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1/// and who is re+uired to e re%istered under this Act, shall ha,e a paid8up e+uity capital in accordance with clause E iF and clause EiiF, as the case may e, within sex months of the commencement of that Act. R(>8)'(*(+05 ,5 0/ 3,6)0,l 50'8308'( ,+2 :/0)+< ')<.05 ,+2 *,)+0(+,+3( /4 '(<)50('5 /4 9(+(4)3),l /7+('5 /4 5.,'(5 A. E1F ;o pu lic company limited y shares ha,in% its re%istered office in India, shall carry no life insurance usiness, unless it satisfies all the followin% conditions, namelyD E iF 7ii8 that the capital of the company consists only of ordinary shares each of which ha,e a sin%le face ,alueC that, except durin% any period not exceedin% one year allowed y the company for payment of calls on shares, the paid8up amount is the same for all shares, whether existin% or newD

P'/:)2(2 that the conditions specified in this su 8section shall not apply to a pu lic company which has, efore the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, issued any shares other than ordinary shares each of which has a sin%le face ,alue or any shares paid 8up amount whereof is not the same for all of them for a period of three years from such commencement. E2F ;otwithstandin% anythin% to the contrary contained in any law for the time ein% in force or in the memorandum or articles of association ut su !ect to the other pro,isions contained in this section the ,otin% ri%ht of e,ery shareholder of any pu lic company as aforesaid shall in all cases e strictly proportionate to the paid8up amount of the shares held y him. E&F ;o pu lic company as aforesaid which carries on life insurance usiness shall, after the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, issue any shares other than ordinary shares of the nature specified in su 8section ElF. E(F A pu lic company as aforesaid which carries on life insurance usiness8 EaF shall maintain, in addition to the re%ister of mem ers to e maintained under the Indian Companies Act, 1/1& E- of 1/1&L& a re%ister of shares in which shall e entered the name, occupation and address of the eneficial owner of each share, and shall incorporate therein any chan%e of eneficial owner declared to it within fourteen days from the receipt of such declarationC E*F shall not re%ister any transfer of its shares EiF unless, in addition to compliance ein% made with the pro,isions of section &( of the Indian Companies Act, 1/1& E- of 1/1&F, the transferee furnishes a declaration in the prescri ed form as to whether he proposes to hold the shares for his own enefit or as a nominee, whether !ointly or se,erally, on ehalf of others and in the latter case %i,in% the name, occupation and address of the eneficial owner or owners, and the extent of the eneficial interest of eachC EiiF where, after the transfer, the total paid8up holdin% of the transferee in the shares of the company

EiiiF

is li5ely to exceed fi,e per cent. of its paid8up capital or where the transferee is a an5in% or an in,estment company, is li5ely to exceed two and a half per cent of such paid 8up capital, unless the pre,ious 22appro,al of the Authority3 has een o tained to the transferC where, the nominal ,alue of the shares intended to e transferred y any indi,idual, firm, %roup, constituents of a %roup, or ody corporate under the same mana%ement, !ointly or se,erally exceeds one per cent of the paid8up e+uity capital of the insurer, unless the pre,ious appro,al of the Authority has een o tained for the transfer. 45planation.6 1or the purposes of this su 8clause, the expressions G%roupH and Gsame mana%ementH shall ha,e the same meanin%s respecti,ely assi%ned to them in the "onopolies and 'estricti,e $rade Practices Act, 1/*/ E)( of 1/*/FC

E)F #,ery person who has any interest in any share of a company referred to in su 8section E(F which stands in the name of another person in the re%ister of mem ers of the company, shall, within thirty days from the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of l/)0F, or from the date on which he ac+uires such interest, whiche,er is later, ma5e a declaration in the prescri ed form Ewhich shall e countersi%ned y the person in whose name the share is re%isteredF to the company declarin% his interest in such share, and notwithstandin% anythin% contained in any other law or in any contract to the contrary, a person who fails to ma5e a declaration as aforesaid in respect of any share shall e deemed to ha,e no ri%ht or title whatsoe,er in that shareD P'/:)2(2 that nothin% in this su 8section shall affect the ri%ht of a person who has an interest in any such share to esta lish in a court his ri%ht thereto, if the person, in whose name the share is re%istered, refuses to countersi%n the declaration as re+uired y this su 8sectionD P'/:)2(2 48'0.(' that where any share, elon%in% to an indi,idual who has made any such declaration as is referred to in this su 8section, is held y a company in its name in pursuance of any trust or for the purpose of safe custody or collection or reali7ation of di,idend, such indi,idual shall, notwithstandin% anythin% contained in the Indian Companies Act, 1/1& E- of 1/1&F, or in the memorandum or articles of association of the company which has issued the share, e deemed to e the holder of the said share for the purpose of exercisin% any ,otin% ri%hts under this section to the exclusion of any other person. E*F If the total paid8up holdin% of any person in the shares of a company referred to in su 8section E1F on the commencement of the Insurance EAmendmentF Act 1/)0 E(- of 1/)0F, exceeds two and a half per cent of its paid8up capital where that person is a an5in% company or an in,estment company, or fi,e per cent of its paid8up capital in any other case, he shall not e entitled to any ,ote as a shareholder of the company in respect of such excess holdin% of shares. E-F <here the total paid8up holdin% of any person in the shares of a company referred to su 8section E1F on the date of the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, exceeds fi,e per cent of its paid8up capital where that person is a an5in% company or an in,estment company, or ten per cent of its paid8up capital in any other case, he shall dispose of the excess holdin% of shares within three years from such commencement or such further period not exceedin% two years as may e allowed to him y the Central 9o,ernment. E.F If, after the expiry of three years or of such further period as may e allowed to any person under su 8section E-F, the total paid up holdin% of any such person has not een reduced to the limits specified in that su 8section, any shares in excess of the limits specified in that su 8section shall ,est in the Administrator89eneral of the State in which the re%istered office of the company concerned is situate and the Administrator89eneral shall ta5e such steps as may e necessary for ta5in% char%e of any property which has so ,ested in him and shall dispose of the said shares and the proceeds thereof in such manner as may e prescri ed. E/F Su !ect to the other pro,isions contained in this section, ut notwithstandin% anythin% contained in the Indian Companies Act, 1/1& E- of 1/1&F, or in the memorandum or articles of association of any such company as is referred to in su 8section E1F, no such company shall refuse to re%ister the transfer of any shares where the transfer is for the purpose of securin% compliance with the pro,isions of su 8sections E-F and E.F. E10F $he Central 9o,ernment may, su !ect to such restrictions as it may thin5 fit to impose, exempt from the operation of su 8sections E*F, E-F and E.F any insurance company, in any case where the total paid8up holdin% of such insurance company in the shares of any other insurance company exceeds the limits

specified in the said su 8sections, if the other insurance company is or is to e made a su sidiary company of the insurance company. E11F $he pro,isions of this section, except those of su 8sections E-F, E.F and E/F, shall, on and from the commencement of the Insurance EAmendmentF Act, 1/*., also apply to insurers carryin% on %eneral insurance usiness su !ect to the followin% notifications, namelyD8 E iF that references in su 8sections E1F, E&F, E)F and E*F to the Insurance EAmendmentF Act, 1/)0, E(- of 1/)0F, shall e construed as reference to the Insurance EAmendmentF Act, 1/*.C and 7ii8 references in su 8section E10F to su 8sections E-F and E.F shall e omitted. 45planation 81or the purposes of this section, the holdin% of a person in the shares of a company shall e deemed to include8 EiF the total paid8up holdin% in such shares held y such person in the name of othersC and EiiF if any shares of the company are held 8 EaF y a pu lic limited company, of which such person is a mem er holdin% more than ten per cent. of the paid8up capital, or E*F y a pri,ate limited company, of which such person is a mem er, or E&F y a company, of which such person is a mana%in% director, mana%er, mana%in% a%ent or in which he has a controllin% interest, or EdF y a firm in which such person is a partner, or EeF y such person !ointly with others, such part of the total paid8up holdin% of the company or firm or of the total !oint holdin% in those shares, as is proportionate to the contri ution made y such person to the paid 8up capital of the company, the paid8up capital of the firm or the !oint holdin%, as the case may e. M,++(' /4 2):(50)+< (13(55 5.,'(./l2)+< 9- 6'/*/0(' )+ 3('0,)+ 3,5(5 AA. E1F ;o promoter shall at any time hold more than twenty8six per cent or such other percenta%e as may e prescri ed, of the paid8up e+uity capital in an Indian insurance companyD P'/:)2(2 that in a case where an Indian insurance company e%ins the usiness of life insurance, %eneral insurance or re8insurance in which the promoters hold more than twenty8six per cent of the paid8up e+uity capital or such other excess percenta%e as may e prescri ed, the promoters shall di,est in a phased manner the share capital in excess of the twenty8six per cent of the paid8up e+uity capital or such excess paid8up e+uity capital as may e prescri ed, after a period of ten years from the date of the commencement of the said usiness y such Indian insurance company or with such period as may e prescri ed y the Central 9o,ernment. 45planation.6 1or the remo,al of dou ts, it is here y declared that nothin% contained in the pro,iso shall apply to the promoters ein% forei%n company, referred to in su 8clause E*F of clause E7AF of section 2. E2F $he manner and procedure for di,estin% the excess share capital under su 8section E1F shall e specified y the re%ulations made y the Authority.

P'/:)5)/+ 4/' 5(38')+< 3/*6l),+3( 7)0. '(>8)'(*(+05 '(l,0)+< 0/ 3,6)0,l 50'8308'( B.E1F 1or the purpose of ena lin% any pu lic company carryin% on life insurance usiness to rin% its capital structure into conformity with the re+uirements of section *A, an officer appointed in this ehalf y the Central 9o,ernment may, notwithstandin% anythin% contained in the Indian Companies Act, 1/1& E- of 1/1&F,J EaF examine any scheme proposed for the purpose aforesaid y the directors of the companyD P'/:)2(2 0.,0?

EiF

the scheme has een placed efore a meetin% of the shareholders for their opinion and has een forwarded to the officer to%ether with the opinion of the shareholders thereon, and EiiF the scheme does not in,ol,e any diminution of the lia ility of the shareholders in respect of unpaid8up share capitalC E F in,ite o !ections and su%%estions in respect of the scheme so proposedC and EcF after considerin% such o !ections and su%%estions to the scheme so proposed, sanction it with such modifications as he may consider necessary or desira le. E2F Any shareholder or other person a%%rie,ed y the decision of the officer sanctionin% a scheme under su 8section E1F may, within ninety days of the date of the order sanctionin% the scheme, prefer an appeal to the :i%h Court within whose !urisdiction the re%istered office of the insurer is situate for the purpose of modifyin% or correctin% any such scheme for the purpose specified in su 8section E1F. E&F $he decision of the :i%h Court where an appeal has een preferred to it under su 8section E2F, or of the officer aforesaid where no such appeal has een preferred, shall e final and indin% on all the shareholders and other persons concerned. E(F $he pro,isions of this section shall, on and from the commencement of the Insurance EAmendmentF Act, 1/*., also apply to insurers carryin% on %eneral insurance usiness. C/+:('5)/+ /4 3/*6,+- l)*)0(2 9- 5.,'(5 )+0/ 3/*6,+- l)*)0(2 9- <8,',+0(( C. E1F <here a pu lic company limited y shares carryin% on insurance usiness has passed a special resolution for con,ertin% itself into a pu lic company limited y %uarantee, it may apply to the Central 9o,ernment with a scheme for puttin% the special resolution into effect, includin% any pro,ision for the alteration of the memorandum or articles of association insofar as it may e necessary for this purpose. E2F If the Central 9o,ernment, after %i,in% such notice to any person concerned as it thin5s fit, is satisfied8 EaF that the scheme ma5es suita le pro,ision with respect to the repayment, con,ersion or li+uidation of the paid8up capital of the company, E F that the consent of the creditors to the con,ersion of the company limited y shares into a company limited y %uarantee has een o tained, or that suita le pro,isions ha,e een made for dischar%in%, determinin% or securin% the de ts or claims of such creditors, and EcF that the scheme is otherwise reasona le, it may sanction the scheme and thereupon the scheme shall ecome indin% on the company and on all the persons concerned. #&F A%ainst the decision of the Central 9o,ernment, sanctionin% a scheme under su 8section E2F, any person a%%rie,ed there y may, within ninety days of the date of the order sanctionin% the scheme, prefer an appeal to the :i%h Court within whose !urisdiction the re%istered office of the insurer is situate. E(F $he decision of the :i%h Court where an appeal has een preferred to it under su 8section E&F or of the Central 9o,ernment where no such appeal has een preferred, shall e final and indin% on all the persons concerned. E)F <here a scheme has een sanctioned under this section, the company shall file with the 'e%istrar of Companies a certified copy of the scheme as sanctioned, and thereupon the pro,isions of the Indian Companies Act, 1/1& E- of 1/1&F, relatin% to companies limited y %uarantee shall ecome applica le to the company. D(6/5)05 @. E1F #,ery insurer shall, in respect of the insurance usiness carried on y him in India, deposit and 5eep deposited with the 'eser,e Ban5 of India in one of the offices in India of the Ban5 for and on ehalf of the Central 9o,ernment the amount hereafter specified, either in cash or in appro,ed securities estimated at the mar5et ,alue of the securities on the day of deposit, or partly in cash and partly in appro,ed securities so estimatedD8

EaF in the case of life insurance usiness, a sum e+ui,alent to one per cent of his total %ross premium written direct in India in any financial year commencin% after the &1 st day of "arch, 2000, not exceedin% rupees ten croresC E*F in the case of %eneral insurance usiness, a sum e+ui,alent to three per cent of his total %ross premium written in India, in any financial year commencin% after the &1 st day of "arch, 2000, not exceedin% rupees ten croresC E&F in the case of re8insurance usiness, a sum of rupees twenty crores P'/:)2(2 that, where the usiness done or to e done is marine insurance only and relates exclusi,ely to country craft or its car%o or oth, the amount to e deposited under this su 8section shall e one hundred thousand rupees onlyD P'/:)2(2 48'0.(' that in respect of an insurer not ha,in% a share capital and carryin% on only such insurance usiness as in the opinion of the Central 9o,ernment is not carried on ordinarily y insurers under separate policies, the Central 9o,ernment may, y notification under 6fficial 9a7ette, order that the pro,isions of this su 8section shall apply to such insurer with the modification that instead of sum of rupees twenty la5hs or rupees ten la5hs, as the case may e, the deposit to e made y such insurer shall e such amount, ein% not less than one hundred and fifty thousand rupees, as may e specified in the said order. E2F <here the insurer is an insurer specified in su 8clause E&F of clause E9F of Section 2, he shall e deemed to ha,e complied with the pro,isions of this section as to deposits, if in respect of insurance usiness carried on y him in India under a standin% contract of the nature referred to in su 8clause E &F of clause E9F of section 2 a deposit of an amount one8and8a8half times that specified in su 8section E1F has een made in the 'eser,e Ban5 of India in one of the offices in India of the Ban5 for and on ehalf of the Central 9o,ernment in cash or appro,ed securities estimated at the mar5et ,alue of the securities on the day of deposit y or on ehalf of the underwriters who are mem ers of the Society of 4loydIs with whom he has his standin% contract. E&F <here the deposit to e made y an insurer not carryin% on insurance usiness in India immediately efore the commencement of the Insurance EAmendmentF Act, 1/*., a deposit of rupees ten la5hs shall e made efore the application for re%istration is made, and the pro,ision of clause E iiF of su 8section E1AF shall apply to such insurer after his re%istration as they apply to an insurer specified in clause EaF of su 8section E1F. E(F An insurer shall not e re%istered for any class of insurance usiness in addition to the class or classes for which is already re%istered until the full deposit re+uired under su 8section E1F has een made. E)F <here an insurer who intends to ecome a mem er of a %roup, does not carry on all the classes of insurance usiness carried on y the other insurers in such %roup, or, where out of the se,eral insurers who desire to form themsel,es into a %roup, any insurer does not carry on all the classes of insurance usiness carried on y the other insurers who desire to form themsel,es into the %roup, such insurer may e re%istered for that class or those classes of insurance usiness which is or are carried on y the other insurers of the %roup or the proposed %roup, as the case may e, and where any application for re%istration is made y any such insurer, the Authority may, notwithstandin% anythin% contained in su 8section E2AF of Section & or su 8section E(F, re%ister such insurer for one or more additional classes of insurance, if the followin% conditions are fulfilled, namelyD8 EaF the Authority is satisfied that re%istration for the proposed one or more additional classes of insurance8 usiness would +ualify the insurer to ecome num er of a %roupC E*F a%reements ha,e een executed y all the insurers in the %roup or proposed %roup, as the case may e, and such a%reements in the opinion of the Authority, satisfy the re+uirements of the 45planation to su 8 section E1BFC and EcF the insurer has, after the commencement of the Insurance EAmendmentF Act, 1/*., made deposit of a

sum not less than the total of all the instalments of deposit which he would ha,e een re+uired to ma5e after such commencement till the date of his ecomin% a mem er of the %roup, had he een a mem er of the %roup from such commencement. E*F $he Authority shall cancel the re%istration made in pursuance of the pro,isions of su 8section E)F, if the insurer referred to therein fails to ecome, within a period of three months from the date of such re%istrationI a mem er of the %roup or proposed %roup, as the case may e, and, where such re%istration has een cancelled, the pro,isions of this Act shall apply to the insurer as if he had not een re%istered for the class or classes of insurance usiness in relation to which his re%istration has een cancelled. E-F Securities already deposited with the Controller of Currency in compliance with the Indian 4ife Assurance Companies Act, 1/12 E* of 1/12F, shall e transferred y him to the 'eser,e Ban5 of India and shall, to the extent of their mar5et ,alue as at the date of the commencement of this Act, e deemed to e deposited under this Act, as the instalment or as part of this instalment to e made under the fore%oin% pro,isions of this section efore the application for re%istration is made whether any such application is or is not in fact made. E.F A deposit made in cash shall e held y the 'eser,e Ban5 of India to the credit of the insurer and shall except to the extent, if any, to which the cash has een in,ested in securities under su 8section E/AF, e returna le to the insurer in cash in any case in which under the pro,isions of this Act a deposit is to e returnedC and any interest accruin% due and collected on securities deposited under su 8section E1F or su 8section E2F shall e paid to the insurer, su !ect only to deduction of the normal commission char%ea le for the reali7ation of interest. E/F $he insurer may at any time replace any securities deposited y him under this section with the 'eser,e Ban5 of India either y cash or y other appro,ed securities or partly y cash and partly y other appro,ed securities, pro,ided that such cash, or the ,alue of such other appro,ed securities estimated at the mar5et rates pre,ailin% at the time of replacement, or such cash to%ether with such ,alue, as the case may e, is not less than the ,alue of the securities replaced estimated at the mar5et rates pre,ailin% when they were deposited. E/AF $he 'eser,e Ban5 of India shall, if so re+uested y the insurer,J EaF sell any securities deposited y him with the Ban5 under this section and hold the cash reali7ed y such sale as deposit, or E*F in,est in appro,ed securities specified y the insurer the whole or any part of a deposit held y it in cash or the whole or any part of cash recei,ed y it on the sale of or on the maturin% of securities deposited y the insurer, and hold the securities in which in,estment is so made as deposit. and may char%e the normal commission on such sale or on such in,estment. E/BF where su 8section E/AF applies 8 EaF if the cash reali7ed y the sale of or on the maturin% of the securities Eexcludin% in the former case the interest accruedF falls short of the mar5et ,alue of the securities at the date on which they were deposited with the Ban5, the insurer shall ma5e %ood the deficiency y a further deposit either in cash or in appro,ed securities estimated at the mar5et ,alue of the securities, on the day on which they are deposited, or partly in cash and partly in appro,ed securities so estimated, within a period of two months from the date on which the securities matured or were sold or where the securities matured or were sold efore the 21st day of "arch, 1/(0, within a period of four months from the commencement of the Insurance EAmendmentF Act, 1/(0 E20 of 1/(0FC and unless he does so the insurer shall e deemed to ha,e failed to comply with the re+uirements of this section as to depositsC and E*F if the cash reali7ed y the sale of or on the maturin% of the securities Eexcludin% in the former case the interest accruedF exceeds the mar5et ,alue of the securities at the date on which they were deposited with the Ban5, the Central 9o,ernment may, if satisfied that the full amount re+uired to e deposited under su 8section E1F is in deposit, direct the 'eser,e Ban5 to return the excess. E10F If any part of a deposit made under this section is used in the dischar%e of any lia ility of the insurer, the insurer shall deposit such additional sum in cash or appro,ed securities estimated at the mar5et ,alue of the securities on the day of deposit, or partly in cash and partly in such securities, as will ma5e up the

amount so used. $he insurer shall e deemed to ha,e failed to comply with the re+uirements of su 8section E1F, unless the deficiency is supplied within a period of two months from the date when the deposit or any part thereof is so used for dischar%e of lia ilities. R(5(':,0)/+ /4 2(6/5)05 .. E1F Any deposit made under section - or section /. shall e deemed to e part of the assets of the insurer ut shall not e suscepti le of any assi%nment or char%eC nor shall it e a,aila le for the dischar%e of any lia ility of the insurer other than lia ilities arisin% out of policies of insurance issued y the insurer so lon% as any such lia ilities remain undischar%edC nor shall it e lia le to attachment in execution of any decree except a decree o tained y a policy8holder of the insurer in respect of a de t due upon a policy which de t the policy8holder has failed to realise in any other way. E2F <here a deposit is made in respect of life insurance usiness the deposit made in respect thereof shall not e a,aila le for dischar%e of any lia ility of the insurer other than lia ilities arisin% out of policies of life insurance issued y the insurer. R(48+2 /4 2(6/5)0 9. <here an insurer has ceased to carry on in India all classes of insurance usiness, and his lia ilities in India in respect of all classes of insurance usiness ha,e een satisfied or are otherwise pro,ided for, the court may, on the application of the insurer, order the return to the insurer of the deposit made y him under this Act. S(6,',0)/+ /4 ,33/8+05 ,+2 48+25 1%. E1F <here the insurer carries on usiness of more than one of the followin% classes, namely, life insurance, fire insurance, marine insurance or miscellaneous insurance, he shall 5eep a separate account of all receipts and payments in respect of each such class of insurances usiness and where the insurer carries on usiness of miscellaneous insurance whether alone or in con!unction with usiness of another class, he shall, unless the Authority wai,es this re+uirement in writin%, 5eep a separate account of all receipts and payments in respect of each of such su 8classes of miscellaneous insurance usiness as may e prescri ed in this ehalfD P'/:)2(2 that no su 8class of miscellaneous insurance usiness shall e prescri ed under this su 8section if the insurance usiness comprised in the su 8clause consist of insurance contracts which are termina le y the insurer at inter,als not exceedin% twel,e months and under which, if a claim arises, the insurerIs lia ility to pay enefit ceases within one year of the date on which the claim arose. E2F <here the insurer carries on the usiness of life insurance all receipts due in respect of such usiness, shall e carried to and shall form a separate tuna to e called the life insurance fund the assets of which shall, after the expiry of six months from the commencement of the Insurance EAmendmentF Act, 1/(* E* of 1/(*F, e 5ept distinct and separate from all other assets of the insurer and the deposit made y the insurer in respect of life insurance usiness shall e deemed to e part of the assets of such fundC and e,ery insurer shall, within the time limited in su 8section E1F of section 1) in re%ard to the furnishin% of the statements and accounts referred to in section 11, furnish to the Authority a statement showin% in detail such assets as at the close of e,ery calendar year duly certified y an auditor or y a person +ualified to audit under the law of the insurerIs countryD P'/:)2(2 that such statement shall, in the case of an insurer to whom section 11 applies, e set out as a part of the alance8sheet mentioned in clause EaF of su 8section E1F of that sectionD P'/:)2(2 48'0.(' that an insurer may show in such statement all the assets held in his life department, ut at the same time showin% any deductions on account of %eneral reser,es and other lia ilities of that departmentD P'/:)2(2 ,l5/ that the Authority may call for a statement similarly certified of such assets as at any other date specified y him to e furnished within a period of three months from the date with reference to which the statement is called for E2AF ;o insurer carryin% on life insurance usiness shall e entitled to e re%istered for any class of insurance usiness in addition to the class or classes for which he has een already re%istered unless the

Authority is satisfied that the assets of the life insurance fund of the insurer are ade+uate to meet all his lia ilities on policies of life insurance maturin% for payment. E&F $he life insurance fund shall e as a solutely the security of the life policy8holders as thou%h it elon%ed to an insurer carryin% on no other usiness than life insurance usiness and shall not e lia le for any contracts of the insurer for which it would not ha,e een lia le had the usiness of the insurer een only that of life insurance and shall not e applied directly or indirectly for any purposes other than those of the life insurance usiness of the insurer. A33/8+05 ,+2 9,l,+3(-5.((0 11. E1F #,ery insurer, in the case of an insurer specified in su 8clause EaF EiiF or su 8clause E*F of clause E9F of section 2 in respect of all insurance usiness transacted y him, and in the case of any other insurer in respect of the insurance usiness transacted y him in India, shall at the expiration of each financial year prepare with reference to that year,J EaF in accordance with re%ulations contained in part I of the 1irst Schedule, a alance8sheet in the form set forth in Part II of that ScheduleC E*F in accordance with the re%ulations 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 usiness of one class only of the followin% classes, namely, life insurance, fire insurance or marine insurance and no other usinessC EcF in respect of each class or su 8class of insurance E1F of section 10 to 5eep a separate account accordance with the 'e%ulations, and in the applica le to that class or su 8class of insurance usiness for which he is re+uired under su 8section of receipts and payments, a re,enue account in form or forms, set forth in the $hird Schedule usiness.

E1AF ;otwithstandin% anythin% contained in su 8section E1F, e,ery insurer, on or after the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, in respect of insurance usiness transacted y him and in respect of his shareholdersM funds, shall, at the expiration of each financial year, prepare with reference to that year, a alance8sheet, a profit and loss account, a separate account of receipts and payments, a re,enue account in accordance with the re%ulations made y the Authority. E1BF #,ery insurer shall 5eep separate accounts relatin% to funds of shareholders and policy8holders. E2F ?nless the insurer is a company, as defined in clause E2F of su 8section E1F of Section 2 of the Indian Companies Act, 1/1& E- of 1/1&F, the accounts and statements referred to in su 8section E1F shall e si%ned y the insurer, or in the case of a company y the chairman, if any, and two directors and the principal officer of the company, or in the case of a firm y two partners of the firm, and shall e accompanied y a statement containin% the names, descriptions and occupations of, and the directorships held y, the persons in char%e of the mana%ement of usiness durin% the period to which such accounts and statements refer and y a report on the affairs of the usiness durin% that period. E&F <here an insurer carryin% on the usiness of insurance at the commencement of this Act has prepared the alance8sheet and accounts re+uired y the Indian 4ife Assurance Companies Act, 1/12 E* of 1/12F, or has ased his accounts upon the financial and not the calendar year, the pro,isions of this section shall, if the Central 9o,ernment so directs in any case, apply until the &1st day of Decem er, 1/&/, as if in su 8section E1F references to the calendar year were references to the financial year. A82)0 12. $he alance8sheet, profit and loss account, re,enue account and profit and loss appropriation account of e,ery insurer, in the case of an insurer specified in su 8clause 7a87ii8 or su 8clause 7*8 of clause 798 of section 2 in respect of all insurance usiness transacted y him, and in the case of any other insurer in respect of the insurance usiness transacted y him in India, shall, unless they are su !ect to audit under the Indian Companies Act, 1/1& E- of 1/1&F, e audited annually y an auditor, and the auditor shall in the audit of all such accounts ha,e the powers of, exercise the functions ,ested in, and dischar%e the duties and e su !ect to the lia ilities and penalties imposed on, auditors of companies y section 1() of the Indian Companies Act, 1/1&.

A308,'),l '(6/'0 ,+2 ,950',30 1&.E1F #,ery insurer carryin% on life insurance usiness shall, in respect of the life8insurance usiness transacted y him in India, and also in the case of an insurer specified in su 8clause EaF EiiF or su 8clause E*F of clause E9F of section 2 in respect of all life insurance usiness transacted y him, e,ery year cause an in,esti%ation to e made y an actuary into the financial condition of the life insurance usiness carried on y him, includin% a ,aluation of his lia ilities in respect thereto and shall cause an a stract of the report of such actuary to e made in accordance with the re%ulations contained in Part I of the 1ourth Schedule and in conformity with the re+uirements of Part II of that ScheduleD P'/:)2(2 that the Authority may, ha,in% re%ard to the circumstances any particular insurer, allow him to ha,e the in,esti%ation made as at a date not later than two years from the date as at which the pre,ious in,esti%ation was madeD P'/:)2(2 48'0.(' that for an insurer carryin% on life insurance usiness in India at the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, the last date as at which the first in,esti%ation after such commencement should e caused to e made y an actuary shall e8 EaF the &1st day of Decem er, 1/)0, or the date of expiration of fi,e years from the date at which the last in,esti%ation was made y an actuary efore such commencement, whiche,er is earlier, where the said last in,esti%ation was at a date8 E iF efore the &1st day of Decem er, 1/(*, commencement, or ut not more man fi,e years efore such

EiiF after the &0th day of Decem er, 1/(*, ut efore the &1st day of Decem er, 1/(-, and had disclosed a deficit in the life insurance fundC E F the &1st day of Decem er, 1/)1, where the last in,esti%ation commencement was at a date8 y an actuary efore such

EiF after the &0th day of Decem er, 1/(*, ut efore the &1st day of Decem er, 1/(-, and did not disclose a deficit in the life insurance fundC or 7ii8 after the &0th day of Decem er, 1/(-, ut efore the &1st day of Decem er, 1/(.C E&F the &1st day of Decem er, 1/)2, where the last in,esti%ation y an actuary efore such commencement was as at any date after the &0th day of Decem er, 1/(., ut efore the 1st day of =anuary, 1/)0D P'/:)2(2 ,l5/ that for an insurer carryin% on life insurance usiness in India immediately efore the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, the last date as at which the first in,esti%ation after such commencement should e caused y an actuary, shall e the &1 st day of "arch, 2001D P'/:)2(2 ,l5/ that, in the case of an insurer who has not caused an in,esti%ation to e made y an actuary as at any date prior to such commencement, the date of commencement of life insurance usiness in India shall, for the purpose of the precedin% pro,iso, e deemed to e the date as at which the last in,esti%ation was made y an actuary efore such commencement and such in,esti%ation shall e deemed to ha,e disclosed no deficit in the life insurance fundD P'/:)2(2 ,l5/ that e,ery insurer on or after the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, shall cause an a stract of the report of the actuary to e made in the manner specified y the re%ulations made y the Authority. E2F $he pro,isions of su 8section E1F re%ardin% the ma5in% of an a stract shall apply whene,er at any other time an in,esti%ation into the financial condition of the insurer is made with a ,iew to the distri ution of profits or an in,esti%ation is made of which the results are made pu lic.

E&F $here shall e appended to e,ery such a stract as is referred to in su 8section E1F or su 8section E2F a certificate si%ned y the principal officer of the insurer that full and accurate particulars of e,ery policy under which there is a lia ility either actual or contin%ent ha,e een furnished to the actuary for the purpose of the in,esti%ation. E(F $here shall e appended to e,ery such a stract a statement, in conformity with their re+uirements of a Part II of the 1ifth Schedule and prepared in accordance with the re%ulations contained in Part I of that Schedule, of the life insurance usiness in force at the date to which the accounts of the insurer are made up for the purposes of such a stractD P'/:)2(2 that, if the in,esti%ation referred to in su 8sections E1F and E2F is made annually y any insurer, the statement need not e appended e,ery year ut shall e appended at least once in e,ery three yearsD P'/:)2(2 48'0.(' that the statement referred to in su 8section E(F shall e appended in the form and in the manner specified y the re%ulations made y the Authority E)F <here an in,esti%ation into the financial conditions of an insurer is made as at a date other than the expiration of the year of account, the accounts for the period since the expiration of the last year of account and the alance sheet as at the date at which the in,esti%ation is made shall e prepared and audited in the manner pro,ided y this Act. E*F $he pro,isions of this section relatin% to the life insurance usiness shall apply also to any such su 8class of insurance usiness included in the class B"iscellaneous InsuranceB as may e prescri ed under su 8 section E1F of section 10C and the Authority may authori7e such modifications and ,ariations of the re%ulations contained in Part I of the 1ourth and 1ifth Schedules and of the re+uirements of Part II of those Schedules as may e necessary to facilitate their application to any such su 8class of insurance usinessD P'/:)2(2 that, if the Authority is satisfied that the num er and amount of the transactions carried out y an insurer in any such su 8class of insurance usiness is so small as to render periodic in,esti%ation and ,aluation unnecessary, he may exempt that insurer from the operation of this su 8section in respect of that su 8class of insurance usiness. R(<)50(' /4 6/l)3)(5 ,+2 '(<)50(' /4 3l,)*5 1A. #,ery insurer, in the case of an insurer specified in su 8clause EaF7ii8 or su 8clause E*F of clause E9F of section 2 in respect of all usiness transacted y him, and in the case of any other insurer in respect of the insurance usiness transacted y him in India, shall maintain8 EaF a re%ister or record of policies, in which shall e entered, in respect of e,ery policy issued y the insurer, the name and address of the policy8holder, the date when the policy was effected and a record of any transfer, assi%nment or nomination of which the insurer has notice, and E F a re%ister or record of claims, in which shall e entered e,ery claim made to%ether with the date of the claim, the name and address of the claimant and the date on which the claim was dischar%ed, or, in the case of a claim which is re!ected, the date of re!ection and the %rounds there for.

S89*)55)/+ /4 '(08+(5 1=. E1F $he audited accounts and statements referred to in section 11 or su 8section E)F of section 1& and the a stract and statement referred to in section 1& shall e printed, and four copies thereof shall e furnished as returns to the Authority within six months from the end of the period to which they referD P'/:)2(2 that the said period of six months shall in the case of insurers ha,in% their principal place of usiness or domicile outside India and in the case of insurers constituted, incorporated or domiciled in India ut also carryin% on usiness outside India e extended y three months, and pro,ided further that the Central 9o,ernment may in any case extend the time allowed y this su 8section for the furnishin% of such returns y a further period not exceedin% three months. E2F 6f the four copies so furnished one shall e si%ned in the case of a company y the chairman and two directors and y the principle officers of the company and, if the company has a mana%in% director or mana%in% a%ent, y that director or mana%in% a%ent, in the case of a firm, y two partners of the firm, and, in the case of an insurer ein% an indi,idual, y the Insurer himself and one shall e si%ned y the auditor who made the audit or the actuary who made the ,aluation, as the case may e.

E&F <here the insurerIs principal place of usiness or domicile is outside India, he shall forward to the Authority, alon% with the documents referred to in section 11, the alance8sheet, profit and loss account and re,enue account and the ,aluation reports and ,aluation statements, if any, which the insurer is re+uired to file with the pu lic authority of the country in which the insurer is constituted, incorporated or domiciled, or, where such documents are not re+uired to e filed, a certified statement showin% the total assets and lia ilities of the insurer at the close of the period co,ered y the said documents and his total income and expenditure durin% that period. R(08'+5 9- )+58'('5 (50,9l)5.(2 /805)2( I+2),. 1 . E1F <here, y the law of the country in which an insurer, not ein% an insurer specified in su 8clause EaF EiiF or su 8clause E*F of clause E9F of section 2, is constituted, incorporated or domiciled, the insurer is re+uired to prepare and to furnish to a pu lic authority of that country documents of su stantially the same nature as the documents re+uired to e furnished as returns in accordance with pro,isions of section 1), the pro,isions of su 8section E2F of this section shall apply to such insurer in lieu of the pro,isions of sections 11, 12, 1& and 1). E2F $he insurer shall, within the time specified in su 8section E1F of Section 1), furnish to the Authority four certified copies in the #n%lish lan%ua%e of e,ery alance8sheet, account, a stract, report and statement supplied to the pu lic authority referred to in su 8section E1F of this section, and in addition thereto, four certified copies in the #n%lish lan%ua%e of each of the followin% statements, namelyD8 EaF E*F a statement audited y an auditor or y a person duly +ualified under the law of the insurerMs country showin% the assets held y insurer in India as at the date of any alance8sheet so furnishedC for each class or su 8class of insurance usiness for which he is re+uired under su 8section E1F of section 10 to 5eep a separate account of receipts and payments, a re,enue account for the period co,ered y any account so furnished, prepared in accordance with the re%ulations, and in the form or forms, set forth in the $hird Schedule applica le to that class or su class of insurance usiness and similarly audited, showin% separately with respect to usiness transacted y the insurer in India the details re+uired to e supplied in a re,enue account furnished under this clause of this su sectionC a separate a stract of the ,aluation report in respect of all usiness transacted in India in each class or su 8class of insurance usiness to which section 1& refers, prepared in the manner re+uired y that sectionC and

E&F

EdF a declaration in the prescri ed form statin% that all amounts recei,ed y the insurer directly or indirectly whether from his head office or from any other source outside India ha,e een shown in the re,enue account except such sums as properly appertain to the capital account. E1(*60)/+ 4'/* 3('0,)+ 6'/:)5)/+5 /4 0.( I+2),+ C/*6,+)(5 A30, 1913 1@. <here an insurer, ein% a company incorporated under the Indian Companies Act, 1/1& E- of 1/1&F, or under the Indian Companies Act, 1..2 E* of 1..2F, or under the Indian Companies Acts, 1.** E10 of 1.**F, or under any Act repealed there y, in any year furnishes his alance8sheet and accounts, in accordance with the pro,isions of section 1), he may at the same time send to the 'e%istrar of Companies copies of such alance8sheet and accountsC and where such copies are so sent it shall not e necessary for the Company to file copies of the alance8sheet and accounts with the 'e%istrar as re+uired y su 8section E1F of section 1&( of the first mentioned Act and such copies so sent shall e char%ea le with the same fees and shall e dealt within all respects as if they were filed in accordance with that section. T.)5 A30 +/0 0/ ,66l- 0/ 6'(6,',0)/+ /4 ,33/8+0, (03., 4/' 6(')/25 6')/' 0/ 0.)5 A30 3/*)+< )+0/ 4/'3(. 1@ A. ;othin% in this Act shall apply to the preparation of accounts y an insurer and the audit and su mission thereof in respect of any accountin% year which has expired prior to the commencement of this Act, and notwithstandin% the other pro,isions of this Act, such accounts shall e prepared, audited and su mitted in accordance with the law in force immediately efore the commencement of this Act. F8'+)5.)+< '(6/'05

18. #,ery insurer shall furnish to the Authority a certified copy of e,ery report on the affairs of the concern which is su mitted to the mem ers or policy8holders of the insurer immediately after its su mission to the mem ers or policy8holders, as the case may e. A950',30 /4 6'/3((2)+<5 /4 <(+(',l *((0)+<5 19. #,ery insurer, ein% a company or ody incorporated under any law for the time ein% in force in India, shall furnish to the Authority a certified copy of the minutes of the proceedin%s of e,ery %eneral meetin%, as entered in the "inutes Boo5 of the insurer within thirty days from the holdin% of the meetin% to which it relates. C850/2- ,+2 )+56(30)/+ /4 2/38*(+05 ,+2 5866l- /4 3/6)(5 !%. E1F #,ery return furnished to the Authority or certified copy thereof shall e 5ept y the Authority and shall e open to inspectionC 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 e,ery hundred words or fractional part thereof re+uired to e copied, any fi,e fi%ures ein% deemed e+ui,alent to one word. E2F A printed or certified copy of the accounts, statements and a stract furnished in accordance with the pro,isions of section 1) or section 1* shall, on the application of any shareholder or policy 8holder made at any time within two years from the date on which the document was so furnished, e supplied to him y the insurer within fourteen days when the insurer is constituted, incorporated or domiciled in India and in any other case within one month of such application. E&F A copy of the memorandum and articles of association of the insurer, if a company shall on the application of any policy8holder, e supplied to him y the Insurer on payment of one rupee. P/7('5 /4 C/+0'/ll(' '(<,'2)+< '(08'+5 !1. E1F If it appears to the Authority that any return furnished to him under the pro,isions of this Act is inaccurate or defecti,e in any respect, he mayJ EaF E F re+uire from the insurer such further information, certified if he so directs y an auditor or actuary, as he may consider necessary to correct or supplement such returnC call upon the insurer to su mit for his examination at the principal place of usiness of the insurer in India any oo5 of account, re%ister or other document or to supply any statement which he may specify in a notice ser,ed on the insurer for the purposeC examine any officer of the insurer on oath in relation to the returnC decline to accept any such return unless the inaccuracy has een corrected or the deficiency has een supplied efore the expiry of one month from the date on which the re+uisition as5in% for correction of the inaccuracy or supply of the deficiency was deli,ered to the insurer or of such further time as the Authority may specify in the re+uisition and if he declines to accept any such return, the insurer shall e deemed to ha,e failed to comply with the pro,isions of section 1) or section 1* or section 2. or section 2.A or section 2.B or section *(@ relatin% to the furnishin% of returns.

EcF EdF

E2F $he Court may on the application of an insurer and after hearin% the Authority cancel any order made y the Authority under clause ENaF, E*F orE&F of su 8section E1F or may direct the acceptance of any return which the Authority has declined to accept, if the insurer satisfies the Court that action of the Authority was in the circumstances unreasona leD P'/:)2(2 that no application under this su section shall e entertained unless it is made efore the expiration of four months from the time when the Authority made the order or declined to accept the return.

P/7('5 /4 A80./')0- 0/ /'2(' '(:,l8,0)/+

!!. E1F If it appears to the Authority that an in,esti%ation or ,aluation to which section 1& refers or an a stract of a ,aluation report furnished under clause E &F of su 8section E2F of section 1* does not properly indicate the condition of the affairs of the insurer y reason of the faulty asis adopted in the ,aluation, he may, after %i,in% notice to the insurer and %i,in% him an opportunity to e heard, cause an in,esti%ation and ,aluation alas at such date as the Authority may specify to e made at the expense of the insurer y an actuary appointed y the insurer for this purpose and appro,ed y the Authority and the insurer shall place at the disposal of the Actuary so appointed and appro,ed all the material re+uired y the Actuary for the purposes of the in,esti%ation and ,aluation within such period, not ein% less than three months, as the Authority may specify. E2F $he pro,isions of su sections E1F and E(F of section 1&, and of su 8sections E1F and E2F of section 1) or, as the case may e, of su 8section E2F of section 1*, shall apply in relation to an in,esti%ation and ,aluation under this sectionD P'/:)2(2 that the a stract and statement prepared as the result of such in,esti%ation and ,aluation shall e furnished y such date as the Authority may specify. E:)2(+3( /4 2/38*(+05 !3. E1F #,ery return furnished to the Authority which has een certified y the Authority to e a return so furnished, shall e deemed to e a return so furnished. E2F #,ery document, purportin% to e certified y the Authority to e a copy of a return so furnished, shall e deemed to e a copy of that return and shall e recei,ed in e,idence as if it were the ori%inal return, unless some ,ariation etween it and the ori%inal return is pro,ed. S8**,'- /4 '(08'+5 0/ 9( 689l)5.(2 !A. 2Repealed *, t1e Ins%#an&e 7Amendment8 Act, 1/(1 3 R(08'+5 0/ 9( 689l)5.(2 )+ 50,080/'- 4/'*5 !=. ;o insurer shall pu lish in India any return in a form other than that in which it has een furnished to the Authority. P'/:)2(2 that nothin% contained in this section shall pre,ent an insurer from pu lishin% a true and accurate a stract from such returns for the purposes of pu licity. Al0(',0)/+5 )+ 0.( 6,'0)38l,'5 48'+)5.(2 7)0. ,66l)3,0)/+ 4/' '(<)50',0)/+ 0/ 9( '(6/'0(2. ! . <hene,er any alteration occurs or is made which affects any of the matters which are re+uired under the pro,isions of su 8section E2F of section & to accompany an application y an insurer for re%istration, the insurer shall forthwith furnish to the Authority full particulars of such alteration. All such particulars shall e authenticated in the manner re+uired y that su 8section for the authentication of the matters therein referred to, and where the alteration affects the assured rates, ad,anta%es, terms and conditions offered in connection with life insurance policies, the actuarial certificate referred to in clause E F of the said su 8section shall accompany the particulars of the alteration. Investment, Loans and Management I+:(50*(+0 /4 ,55(05 !@. E1F #,ery insurer shall in,est and at all times 5eep in,ested assets e+ui,alent to not less than the sum of8 EaF E F less8 EiF the amount of premiums which ha,e fallen due to the insurer on such policies ut ha,e not een the amount of his lia ilities to holders of life insurance policies in India on account of matured claims, and the amount re+uired to meet the lia ility on policies of life insurance maturin% India, for payment in

paid and the days of %race for payment of which ha,e not expired, and EiiF any amount due to the insurer for loans %ranted on and within the surrender ,alues of policies of life insurance maturin% for payment in India issued y him or y an insurer whose usiness he has ac+uired and in respect of which he has assumed lia ility, in the manner followin%, namely, twenty8fi,e per cent of the said sum in 9o,ernment securities, a further sum e+ual to not less than twenty8fi,e per cent of the said sum in 9o,ernment securities or other appro,ed securities and the alance in any of the appro,ed in,estments specified in su 8section E1F of section 2-A or, su !ect to the limitations, conditions and restrictions specified in su 8section E2F of that section, in any o,er in,estment. E2F 1or the purposes of su section E1F,J EaF the amount of any deposit made under section - or section /. y the insurer in respect of his life insurance usiness shall e deemed to e assets in,ested or 5ept in,ested 9o,ernment securitiesC E F the securities of, or %uaranteed as to principal and interest y, the 9o,ernment of the ?nited >in%dom shall e re%arded as appro,ed securities other than 9o,ernment securities for a period of four years from the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, in the manner and to the extent hereinafter specified, namelyDJ EiF durin% the first year, to the extent of twenty8fi,e per cent in ,alue of the sum referred to in su 8 section E1FC 7ii8 durin% the second year, to the extent of ei%hteen and three fourths per cent in ,alue of the said sumC 7iii8 durin% the third year, to the extent of twel,e and a half per cent in ,alue of the said sumC and EivF durin% the fourth year, to the extent of six and a +uarter per cent in ,alue of the said sumD P'/:)2(2 that, if the Authority so directs in any case, the securities specified in clause E *F shall e re%arded as appro,ed securities other than 9o,ernment securities for a lon%er period than four years, ut not exceedin% six years in all and the manner in which and the extent to which the securities shall e so re%arded shall e as specified in the directionC EcF any prescri ed assets shall, su !ect to such conditions, if any, as may e prescri ed, e deemed to e assets in,ested or 5ept in,ested in appro,ed in,estments specified in su 8section E1F of section 2-A. E&F In computin% the assets referred to in su section E1F,J EaF any in,estment made with reference to any currency other than the Indian rupee which is in excess of the amount re+uired to meet the lia ilities of the insurer in India with reference to that currency, to the extent of such excessC and E*F any in,estment made in the purchase of any immo,ea le property outside India or on the security of any such property, shall not e ta5en into accountD P'/:)2(2 that nothin% contained in this su 8section shall affect the operation of su 8section E2FD P'/:)2(2 further that the Authority may, either %enerally or in any particular case, direct that any in,estment, whether made efore or after the commencement of the Insurance EAmendmentF Act, 1/)0 E(of 1/)0F, and whether made in or outside India, shall, su !ect to such conditions as may e imposed, e ta5en into account, in such manner as may e specified in computin% the assets referred to in su 8section E1F and where any direction has een issued under this pro,iso copies thereof shall e laid efore Parliament as soon as may e after it is issued. E(F <here an insurer has accepted reassurance in respect of any policies of life insurance issued y another insurer and maturin% for payment in India or has ceded reassurance to another insurer in respect of any such policies issued y himself, the sum referred to in su section E1F shall e increased y the amount of the lia ility in,ol,ed in such acceptance and decreased y the amount of the lia ility in,ol,ed in such cession. E)F $he 9o,ernment securities and other appro,ed securities in which assets are under su 8section E1F to e in,ested and 5ept in,ested shall e held y the insurer free of any encum rance, char%e, hypothecation or

lien. E*F $he assets re+uired y this section to e held in,ested y an insurer incorporated or domiciled outside India shall, except to the extent of any part thereof which consists of forei%n assets held outside India, e held in India and all such assets shall e held in trust for the dischar%e of the lia ilities of the nature referred to in su 8section E1F and shall e ,ested in trustees resident in India and appro,ed y the Authority, and the instrument of trust under this su 8section shall e executed y the insurer with the appro,al of the Authority and shall define the manner in which alone the su !ect8matter of the trust shall e dealt with. 45planation.=$his su 8section shall apply to an insurer incorporated India whose share capital to the extent of one8third is owned y, or the mem ers of whose %o,ernin% ody to the extent of one8third consists of, mem ers domiciled elsewhere than in India. F8'0.(' 6'/:)5)/+5 '(<,'2)+< )+:(50*(+05 !@A. E1F ;o insurer shall in,est or 5eep in,ested any part of his controlled fund otherwise than in any of the followin% appro,ed in,estments, namelyD EaF appro,ed securitiesC E*F securities of, or %uaranteed as to principal and interest y, the 9o,ernment of the ?nited >in%domC E&F de entures or other securities for money issued with the permission of the State 9o,ernment y any municipality in a StateC EdF de entures or other securities for money issued y any authority constituted under any housin% or uildin% scheme appro,ed y the Central or a State 9o,ernment, or y any authority or ody constituted y any Central Act or Act of a State 4e%islatureC EeF first mort%a%es on immo,ea le property situated in India under any housin% or uildin% scheme of the insurer appro,ed y the Authority or a State 9o,ernmentC E F de entures secured y a first char%e on any immo,ea le property plant or e+uipment of any company which has paid interest in full for the fi,e years immediately precedin% or for at least fi,e out of the six or se,en years immediately precedin% on such or similar de entures issued y itC EgF de entures secured y a first char%e on any immo,a le property, plant or e+uipment of any company where either the oo5 ,alue or the mar5et ,alue, whiche,er is less, of such property, plant or e+uipment is more than three times the ,alue of such de enturesC E1F first de entures secured y a floatin% char%e on all its assets of any company which has paid di,idends on its ordinary shares for the fi,e years immediately precedin% or for at least fi,e out of the six or se,en years immediately precedin%C EiF preference shares of any company which has paid di,idends on its ordinary shares for the fi,e years immediately precedin% or for at least fi,e out of the six or se,en years immediately precedin%C E>F preference shares of any company on which di,idends ha,e een paid for the fi,e years immediately precedin% or for at least fi,e out of the six or se,en years immediately precedin% and which ha,e priority in payment o,er all the ordinary shares of the company in windin% upC E+F shares of any company which ha,e een %uaranteed y another company, such other company ha,in% paid di,idends on its ordinary shares for the fi,e years immediately precedin% or for at least fi,e out of the six or se,en years immediately precedin%D P'/:)2(2 that the total amount of shares of all the companies under %uarantee y the %uaranteein% company is not in excess of fifty per cent of the paid up amount of preference and ordinary shares of the %uaranteein% companyC ElF shares of any company on which di,idends of not less than four per cent includin% onus ha,e een paid for the se,en years immediately precedin% or for at least se,en out of the ei%ht or nine years immediately precedin%C

EmF first mort%a%es on immo,a le property situated in India or in any other country where the insurer is carryin% on insurance usiness P'/:)2(2 that the property mort%a%ed is not leasehold property with an outstandin% term of less than thirty years and the ,alue of the property exceedin% y one8third, or if it consists of uildin%s, exceeds y one8half, the mort%a%e moneyC EnF immo,a le property situated in India or in any other country where the insurer is carryin% on insurance usinessD P'/:)2(2 that the property is free of all encum rancesC EoF loans on life interests, or on policies of life insurance within their surrender ,alues issued y him or y an insurer whose usiness he has ac+uired and in respect of which usiness he has assumed lia ilityC EpF life interestsC E0F fixed deposits with an5s included for the time ein% in the Second Schedule to the 'eser,e Ban5 of India Act, 1/&( E2 of 1/&(F or with co8operati,e societies re%istered under the Indian Co8 operati,e Societies Act, 1/12 E* of 1/12F, or under any other law for the time ein% in force, the primary o !ect of which is to finance other co8operati,e societies similarly re%isteredC E#F de entures of, or shares in co8operati,e societies re%istered under the Indian Co8operati,e Societies Act, 1/12 E2 of 1/12F, or under any other law for the time ein% in forceC EsF such other in,estments as the Authority may, y notification in the 6fficial 9a7ette, declare to e appro,ed in,estments for the purposes of this section. E2F ;otwithstandin% anythin% contained in su 8section E1F, an insurer ein% a company or a co8operati,e life insurance society as defined in clause E*F of su 8section E1F of section /), may, su !ect to the pro,isions contained in the next succeedin% su 8sections, in,est or 5eep in,ested any part of his controlled fund otherwise than in an appro,ed in,estment, if8 EiF after such in,estment, the total amounts of all such in,estments of the insurer do not exceed fifteen per cent of the sum referred to in su 8section E1F of section 2-, EiiF the in,estment is made, or, in the case of any in,estment already made, the continuance of such in,estment is with the consent of all the directors present at a meetin% and eli%i le to ,ote, special notice of which has een %i,en to all the directors then in India, and all such in,estments, includin% in,estments in which any director is interested, are reported without delay to the Authority with full details of the in,estments and the extent of the directorMs interest in any such in,estment. E&F An insurer shall not out of his controlled fund in,est or 5eep in,ested in the shares of any one an5in% company or in,estment company more thanJ EaF two and a +uarter per cent of the sum referred to in su 8section E1F of section 2-, or E*F two per cent of the su scri ed share capital and de entures of the an5in% company or in,estment company concerned, whiche,er is less. E(F An insurer shall not out of the controlled fund in,est or 5eep in,ested in the shares or de entures of any one company other than a an5in% company or in,estment company more than8 EaF two and a +uarter per cent of the sum referred to in su 8section E1F of section 2-, or E*F ten per cent. of the su scri ed share capital and de entures of the company, <hiche,er is lessD P'/:)2(2 that nothin% in this su 8section shall apply to any in,estment made with the pre,ious consent of the Authority y an insurer, ein% a company with a ,iew to formin% a su sidiary company carryin% on

insurance usiness. E)F An insurer shall not out of his controlled fund in,est or 5eep in,est any sum in the shares or de entures of any pri,ate limited company. E*F <here an in,estment is in partly paid8up shares, the uncalled lia ility on such shares shall e added to the amount in,ested for the purpose of computin% the percenta%es referred to in clause E aF of su section E&F and clause EaF of su !ection E(F. E-F ;otwithstandin% anythin% contained in su sections E&F and E(F, where new shares are issued to the existin% shareholders y a company the existin% shares of which are co,ered y Clause EiF or CIause E5F or Clause ElF of su !ection E1F and of which an insurer is already a shareholder, the insurer may su scri e to such new sharesD P'/:)2(2 that the proportion of new shares su scri ed y him does not exceed the proportion which the paid8up amount on the shares held y him immediately efore such su scription ears to the total paid 8up capital of the company at the time of such su scription E.F If, on an application su mitted throu%h the Controller the Central 9o,ernment is satisfied that special %rounds exist warrantin% such exemption, the Central 9o,ernment may for such period, to such extent and in relation to such particular in,estments and su !ect to such conditions as may e specified y it in this ehalf, exempt an insurer from all or any of the pro,isions of su 8sections E&F, E(F and E-F. E/F An insurer shall not 5eep more than three per cent. of the controlled fund in fixed deposit or current deposit, or partly in fixed deposit and partly in current deposit, with any one an5in% company or with any one comparati,e society re%istered under the Insurance Cooperati,e Societies Act, 1/12 E2 of 1/12F, or under any other law for the time ein% us force and doin% an5in% usinessD P'/:)2(2 that in applyin% this su 8section to the amount in deposit with an5in% on any day all the premiums collected y that company on ehalf of the insurer durin% the precedin% thirty days shall e excludedD P'/:)2(2 further that the Authority may permit a co8operati,e life insurance society as defined in C1ause E F of su 8section E1F of Section /) to 5eep more than three per cent. of its controlled fund in fixed deposit with any cooperati,e society referred to in this su section, if the fixed deposit is secured y a first mort%a%e on any immo,ea le property. E10F All assets formin% the controlled fund, not ein% 9o,ernment securities or other appro,ed securities in which assets are to e in,ested or held in,ested in accordance with Section 2-, shall Eexcept for a part thereof not exceedin% one8tenth of the controlled fund in ,alue which may, su !ect to such conditions and restrictions as may e prescri ed, e offered as security for any loan ta5en for purposes of any in,estmentF, e held free of any encum rance, char%e, hypothecation or lien. E11F If at any time the Authority considers any one or more of the in,estments constitutin% an insurerIs controlled fund to e unsuita le or undesira le, the Authority may, after %i,in% the insurer an opportunity of ein% heard, direct him to realise the in,estment or in,estments, and the insurer shall comply with the direction within such time as may e specified y the Authority. E12F #,ery insurer in existence at the Bcommencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, whose in,estments or any part thereof at such commencement contra,ene or contra,enes any of the pro,isions of this section, shall, within ninety days from such commencement, su mit to the Authority a report specifyin% in all such in,estments, and if the Authority is satisfied that it will not e in the interests of the insurer or any class of insurers %enerally to realise any such in,estments, it may, y order direct that the pro,isions of this section 2other than the pro,isions contained in su 8section E11F shall not apply in relation to any such in,estments or to any class of in,estments %enerally for such period or periods as may e specified in the order. E1&F <ithout pre!udice to the powers %i,en to the Authority y su section E11F, nothin% contained in this section shall e deemed to re+uire any insurer to realise any in,estment made in conformity with the pro,isions of su section E1F after the commencement of this Act which after the ma5in% thereof, has ceased to e an appro,ed in,estment within the meanin% of this section.

E1(F ;othin% contained in this section shall e deemed to affect in any way the manner in which any moneys relatin% to the pro,ident fund of any employee or to any security ta5en from any employee or o,er moneys of a li5e nature are re+uired 8to e held y or under any Central Act, or Act of a State 4e%islature. 45planation.6 In this section Bcontrolled fundB means8 EaF in the case of any insurer specified in su 8clause E aF EiiF o# su 6clause 7*8 of Clause E/F of section 2 and carryin% on life insurance usiness8 EiF all his funds, if he carries on no other class of insurance usinessC EiiF all the funds appertainin% to his life insurance usiness if he carries on some other class of insurance usiness alsoC and E F in the case of any other insurer carryin% on life insurance usiness,8 EiF all his funds in India, if he carries on no other class of insurance usinessC 7ii8 all the funds in India appertainin% to his life insurance usiness if he carries on some other class of insurance usiness alsoC ut does not include any fund or portion thereof in respect of which the Authority is satisfied that such fund or portion thereof, as the case may e, is re%ulated y the law of any country outside India or in respect of which the Authority is satisfied that it would not e in the interest of the insurer to apply the pro,isions of this section. F8'0.(' 6'/:)5)/+5 '(<,'2)+< )+:(50*(+05. !@-B. E1F ;o insurer carryin% on %eneral insurance usiness shall, after the commencement of the Insurance EAmendmentF Act, 1/*. E*2 of 1/*.F, in,est or 5eep in,ested any part of his asset otherwise than in any of the followin% appro,ed in,estments, namelyD EaF the in,estment specified in clauses EaF to EeF, EnF, E0F and E#F of su 8section E1F of Sec. 2-AC E F de entures secured y a first char%e on any immo,ea le property, plant or e+uipment of any company which has paid interest in full for the three years immediately precedin% or for at least three out of the four or fi,e years immediately precedin% on such or similar de entures issued y itC EcF de entures secured y a first char%e on any immo,ea le property, plant or e+uipment of any company where either the oo5 ,alue or the mar5et ,alue, whiche,er is less, of such property, plant or e+uipment is more than twice the ,alue of such de enturesC EdF first de entures secured y a floatin% char%e on all its assets or y a fixed char%e on fixed assets and floatin% char%e on all other assets of any company which has paid di,idends on its e+uity shares for the three years immediately precedin% or for at least three out of the four or fi,e years immediately precedin% the date of the in,estmentC EeF preference shares of any company which has paid di,idends on its e+uity shares for the three years immediately precedin% or for at least three out of the four or fi,e years immediately precedin%C EfF preference shares of any company on which di,idends ha,e een paid for the three years immediately precedin% or for at least three out of the four or fi,e years immediately precedin% and which ha,e priority in payment o,er all the e+uity shares of the company in windin% upC E%F shares of any company which ha,e een %uaranteed y another company, such other company ha,in% paid di,idends on its e+uity shares for the three years immediately precedin% or for at least three out of the four or fi,e years immediately precedin%D P'/:)2(2 that the total amount of shares of all the companies under 8 that %uarantee y the %uaranteein% company is not in excess of fifty percent. of the paid8up amount of preference and e+uity shares of the %uaranteein% companyC EhF shares of any company on which di,idends of not less than four per cent includin% onus ha,e een paid for the three years immediately precedin% or for at least three out of the four or fi,e years immediately precedin%C EiF first mort%a%es on immo,ea le proper situated in India or in any other country where the insurer

is carryin% on insurance usinessD P'/:)2(2 that the property mort%a%ed is not lease8hold property with an outstandin% term of less than fifteen years and the ,alue of the property exceeds y one8third, or if it consists of uildin%s, exceeds y on8half, the mort%a%e moneyC E!F such other in,estments as the Authority may, y notification in the 6fficial 9a7ette, declare to e appro,ed in,estments for the purposes of this section. E2F Any prescri ed assets shall, su !ect to such conditions, if any, as may y prescri ed e deemed to e assets in,ested or 5ept in,ested in appro,ed in,estments specified in su 8section E1F. E&F ;otwithstandin% anythin% contained in su 8section E1F, an insurer may, su !ect to the pro,isions contained in the next succeedin% su 8sections, in,est or 5eep in,ested any part of his assets otherwise than in an appro,ed in,estment specified in su section E1F, if8 EiF after such in,estment, the fatal amounts of all such in,estments of the insurer do not exceed twenty8fi,e per cent of his assets, and EiiF the in,estment is made or in the case of any in,estment already made, the continuance of such in,estment is with the consent of all the directors, other than the directors appointed under Section &( 8C, present at a meetin% and eli%i le to ,ote, special notice of which has een %i,en to 8all the directors then in India, and all such in,estments, includin% in,estments in which any director is interested, are reported without delay to the Authority with full details of in,estments and the extent of the directorIs interest in any such in,estmentD P'/:)2(2 that the ma5in%, or the continuance, of such in,estment is not o !ected to y any director appointed under Section &(8C E(F An insurer shall not in,est or 5eep in,ested any part of his assets in the shares of any one an5in% company or in,estment company more than8 EaF ten per cent of his assets, or E*F two per cent of the su scri ed share capital and Dentures of the an5in% company or in,estment company concerned, whiche,er is less. E)F An insurer shall not in,est or 5eep in,ested any part of his assets in the shares or de entures of any one company other than a an5in% company or in,estment company more than EaF ten per cent of his assets, or E*F ten per cent of the su scri ed share capital and de entures of the company, whiche,er is lessD P'/:)2(2 that nothin% in this su 8section shall apply to any in,estment made y an insurer in the shares of any other insurer if such other insurer is a company within the meanin% of Section & of the Companies Act, 1/)* E1 of 1/)*F and carries on insurance or re8insurance usiness in India. E*F An insurer shall not in,est or 5eep in,ested any part of his assets in the shares or de entures of any pri,ate company. E-F <here an in,estment is in partly paid8up shares, the uncalled lia ility on such shares shall e added to the amount in,ested for the purpose of computin% the percenta%es referred to in Clause EaF of su 8section E(F and Clause EaF of su 8section E)F. E.F ;otwithstandin% anythin% contained in su 8sections E(F and E)F where new shares are issued to the existin% shareholders y a company, the existin% shares of which are co,ered y Clause EeF or clause E g8 or Clause EhF of su 8section E1F and of which an insurer is already a share8holder, the insurer may su scri e to

such new sharesD P'/:)2(2 that the proportion of new snares su scri ed y him does not exceed the proportion which the paid8up amount on the shares held y him immediately efore such su scription ears to the total paid 8up capital of the company at the time of such su scription E/F If, on an application su mitted to the Authority, he has satisfied that special %rounds exist warrantin% such exemption, he may, for such period, to such extent and in relation to such particular in,estments and su !ect to such conditions as may e specified y him in this ehalf, exempt an insurer from all or any of the pro,isions of su 8sections E(F, E)F and E.F. E10F An insurer shall not 5eep more than ten per cent. of his assets in fixed deposit or current deposit, or partly in fixed deposit and partly in current deposit, with any one an5in% company or with any co 8operati,e society re%istered under the Co8operati,e Societies Act, 1/12 E 2 of 1/12F, or under any other law for the time ein% in force and doin% an5in% usinessD P'/:)2(2 that in applyin% this su 8section to the amount in deposit with a an5in% company on any day, all the premiums credited durin% the precedin% sixty days, to the account of the insurer with such an5in% company and the amounts deposited, durin% the precedin% thirty days, y such insurer with that an5in% company for payment of claims or out of re8insurance reco,eries, shall e excluded. E11F All assets shall Eexcept for a part thereof not exceedin% one8tenth of the total assets in ,alue which may, su !ect to such conditions and restriction as may e prescri ed, e offered as security for any loan ta5en for purposes of any in,estment or for payment of claims, or which may e 5ept as security deposit with the an5s for acceptance of policiesF e held free of any encum rance, char%e, hypothecation or lien. E12F If at any time the Authority considers any one or more of the in,estments constitutin% an insurerIs assets to e unsuita le or undesira le, he may, after %i,in% the insurer an opportunity of ein% heard, direct the insurer to reali7e the in,estment or in,estments, and the insurer shall comply with the direction within such time as may e specified in this ehalf y the Authority. E1&F #,ery insurer in existence at the commencement of the insurance EAmendmentF Act, 1/*., whose in,estments or any part thereof at such commencement do or does not fulfill the re+uirements of this section, shall, within ninety days from such commencement, su mit to the Authority a report specifyin% all such in,estments, and, if the Authority is satisfied that it will not e in the interest of the insurer or any class of insurers %enerally to realise any such in,estments, he may, y order direct that the pro,isions of this section, other than the pro,isions contained in su 8section E12F, shall not apply in relation to any such in,estments or to any class of in,estments %enerally for such period or periods as may e specified in the order. E1(F <ithout pre!udice to the powers conferred on the Authority y su section E12F, nothin% contained in this section shall e deemed to re+uire any insurer to realise any in,estment made in conformity with the pro,isions of su 8section E1F after the commencement of the Insurance EAmendmentF Act, 1/*.E*2 of 1/*.F, which, after the ma5in% thereof, has ceased to e an appro,ed in,estment within the meanin% of this section. E1)F ;othin% contained in this section shall e deemed to affect in any way the manner in which any moneys relatin% to the pro,ident fund of any employee or to any security ta5en from any employee or other moneys of a li5e nature are re+uired to e held y or under any Central, Pro,incial or State Act. E1*F In this section, unless the context otherwise re+uires, BassetsB means8 EaF in the case of an insurer carryin% on life insurance usiness in India, all his assets re+uired to e shown under the column B6ther Classes of BusinessB in the alance8sheet in 1orm A, in Part II of the 1irst Schedule, ut excludin% any items a%ainst the head B6ther Accounts Eto e specifiedFBC 7*8 in the case of an insurer specified in su 8clause E aF EiiF or su 8clause 7*8 of C1ause E/F of Sec. 2, who is not carryin% on life insurance usiness in India, all his assets re+uired to e shown in the alance8sheet in 1orm A in Part II of the 1irst Schedule ut excludin% any items a%ainst the head B6ther Accounts Eto e specifiedFBC and EcF in the case of any other insurer, the assets re+uired to e shown in the statement in 1orm AA, in Part II of the 1irst Schedule, ut excludin% office furniture,

ut does not include any assets specifically held a%ainst any fund or portion thereof in respect of which the Authority is satisfied that such funds or portion thereof, as the case may e, is re%ulated y the law of any country outside India or in respect of enrich the Authority is satisfied that it would not e in the interest of the insurer to apply the pro,isions of this section. P'/.)9)0)/+ /4 )+:(50*(+0 /4 48+25 /805)2( I+2), !@C. E1F <ithout pre!udice to anythin% contained in sections 2-, 2-A and 2-B, the Authority may, in the interests of the policy8holders, specify y the re%ulations made y it, the time, manner and other conditions of in,estment of assets to e held y an insurer for the purposes of this Act. E2F $he Authority may %i,e specific directions for the time, manner and other conditions su !ect to which the funds of policy8holders shall e in,ested in the infrastructure and social sector as may e specified y re%ulations made y the Authority and such re%ulations shall apply uniformly to all the insurers carryin% on the usiness of life insurance, %eneral insurance, or re8insurance in India on or after the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///. E&F $he Authority may, after ta5in% into account the nature of usiness and to protect the interests of the policy8holders, issue to an insurer the directions relatin% to the time, manner and other conditions of in,estment of assets to e held y himD P'/:)2(2 that no direction under this su 8section shall e issued unless the insurer concerned has een %i,en a reasona le opportunity of ein% heard S0,0(*(+0 /4 )+:(50*(+0 /4 ,55(05 2.. E1F #,ery insurer carryin% on the usiness of life insurance shall e,ery year, within thirty8one days from the e%innin% of the year su mit to the Authority a return showin% as at the &1st day of Decem er of the precedin% year the assets held in,ested in accordance with Section 2- and all other particulars necessary to esta lish that the re+uirements of that section ha,e een complied with, and such return shall e certified y a principal officer of the insurer. E2F #,ery such insurer shall also furnish, within fifteen days from the last day of "arch, =une, and Septem er, a return certified as aforesaid showin% as at the end of each of the said months the assets held in,ested in accordance with Sec. 2-. E2AF In respect of the 9o,ernment securities and other appro,ed securities in,ested and 5ept in,ested in accordance with su 8section E1F of Section 2- an insurer shall su mit alon% with the returns referred to in su 8sections E1F and E2F a certificate, where such assets are in the custody of a an5in% company, from that company, and in any other case from the chairman, two directors and a principal officer, if the insurer is a company, or otherwise from a principal officer of the insurer to the effect that the securities are held free of any encum rance, char%e, hypothecation, or lien, and e,ery such certificate after the first shall also state that since the date of the certificate immediately precedin% all the securities ha,e een so held. E2BF In respect of the assets formin% the controlled fund within the meanin% of Section 2-A, and which do not form part of the 9o,ernment securities and appro,ed securities in,ested and 5ept in,ested in accordance with Section 2-, an insurer shall su mit, alon% with the returns referred to in su 8sections E1F and E2F, a statement, where such assets are in the custody of a an5in% company, from that company, and, in any other case, from the chairman, two directors and a principal officer if the insurer is a company, or from a principal officer of the insurer if the insurer is not a company, specifyin% the assets, which are su !ected to any char%e and certifyin% that the assets, which are held free of any encum rance, char%e, hypothecation, or lien, and e,ery such statement after the first shall also specify the char%es created in respect of any of those assets since the date of the statement immediately precedin%, and, if any such char%es ha,e een li+uidated, the date on which they were so li+uidated. E&F $he Authority may, at his discretion re+uire any insurer to whom su 8section E1F applies to su mit efore the 1st day of Au%ust in each or any year a return of the nature referred to in su section E1F, certified as re+uired y mat su 8section and prepared as at the &0th day of =une. E(F In the case of an insurer ha,in% his principal place of usiness or domicile outside India, the Authority may, on application made y the insurer, extend the periods of fifteen and thirty8one days mentioned in the fore%oin% su 8sections to thirty days and sixty days, respecti,ely.

E)F $he Authority shall e entitled at any time to ta5e such steps as he may consider necessary for the inspection or ,erification of the assets in,ested in compliance with Section 2- or for the purpose of securin% the particulars necessary to esta lish that the re+uirements of that section ha,e een complied withC the insurer shall comply with any re+uisition made in this ehalf y the Authority, and if he fails to do so within two months from the receipt of the re+uisition he shall e deemed to ha,e made default in complyin% with the re+uirements of this section. R(08'+ /4 )+:(50*(+05 '(l,0)+< 0/ 3/+0'/ll(2 48+2 ,+2 3.,+<(5 0.('()+. !8A. E1F #,ery insurer carryin% on life insurance usiness, shall e,ery year, within thirty8one days from the e%innin% of the year su mit to the Authority a return in the form specified y the re%ulations made y the Authority showin% as at the &1st day of "arch of the precedin% year, the in,estments made out of the controlled fund referred to in Section 2-A, and e,ery such return shall e certified y a principal officer of the insurer. E2F #,ery insurer referred to in su 8section E1F shall also su mit to the Authority a return in the form specified y the re%ulations made y the Authority showin% all the chan%es that occurred in the in,estments aforesaid durin% each of the +uarters endin% on the last day of "arch, =une, Septem er and Decem er within thirty8one days from the close of the +uarter to which it relates, and e,ery such return shall e certified y a principal officer of the insurers. R(08'+5 /4 )+:(50*(+05 '(l,0)+< 0/ 0.( ,55(05 ,+2 3.,+<(5 0.('()+ !8B. E1F #,ery insurer carryin% on %eneral insurance usiness, shall, e,ery year, within thirty8one days from the e%innin% of the year, su mit to the Authority a return in the form specified y the re%ulations made y the Authority form showin% as at the &1st day of "arch of the precedin% year the in,estments made out of his assets referred to in Section 2-B, and e,ery such return shall e certified y a principal officer of the insurer. E2F #,ery insurer referred to in su 8section E1F shall also su mit to the Authority a return in the form specified y the re%ulations made y the Authority showin% all the chan%es that occurred in the in,estment aforesaid durin% each of the +uarters endin% on the last day of "arch, =une, Septem er and Decem er within thirty8one days from the close of the +uarter to which it relates, and e,ery such return shall e certified y a principal officer of the insurer. E&F #,ery insurer shall su mit, alon% with the returns referred to in su 8sections E1F and E2F, a statement, where any part of the assets are in the custody of a an5in% company, from that company, and in any other case, from the chairman, two directors and a principal officer, if the insurer is a company, or from a principal officer of the insurer, if the insurer, is not a company, specifyin% the assets, which are su !ect to char%e and certifyin% that the other assets are held free of any encum rance, char%e, hypothecation or lien, and e,ery such statement after the first shall also specify the char%es created in respect of any of those assets since the date of the statement immediately precedin%, and, if any such char%es ha,e een li+uidated, the date on which they were so li+uidated. P'/.)9)0)/+ /4 l/,+5 !9. E1F ;o insurer shall %rant loans or temporary ad,ances either on hypothecation of property or on personal security or otherwise, except loans on life policies issued y him within their surrender ,alue, to any director, mana%er, mana%in% a%ent, actuary, auditor or officer of the insurer if a company, or where the insurer is a firm, to any partner therein, or to any8other company or firm in which any such director, mana%er, mana%in% a%ent, actuary, officer or partner holds the position of a director, mana%er, mana%in% a%entI actuary, officer or partnerD P'/:)2(2 that nothin% contained in this su 8section shall apply to loans made y an insurer to a an5in% companyD P'/:)2(2 48'0.(' that nothin% in this section shall prohi it a company from %rantin% such loans or ad,ances to su sidiary company or to any other company of which the company %rantin% the loan or ad,ance is a su sidiary company eland where any such loan or ad,ance is made out of any life insurance fund the matter shall e reported within thirty days of the ma5in% of such loan or ad,ance to the Authority.

E2F $he pro,isions of Section .*D of the Indian Companies Act, 1/1& E- of 1/1&F, shall not apply to a loan %ranted to a director of an insurer ein% a company, if the loan is one %ranted on the security of a policy on which the insurer ears the ris5 and the policy was issued to the director on his own life, and the loan is within the surrender ,alue of the policy. E&F Su !ect to the pro,isions of su 8section E1F, no insurer carryin% on life insurance usiness shall %rantJ EaF any loans or temporary ad,ances either on hypothecation of property or on personal security or otherwise, except such loans as are specified in su 8section E1F of Section 2-AC

E F temporary ad,ances to any chief, special or insurance a%ent to facilitate the carryin% out of his functions as such except in cases where such ad,ances do not exceed in the a%%re%ateJ 7i8 7ii8 7iii8 in the case of a chief a%ent, the o,erridin% renewal commission earned y him durin% the year immediately precedin%, in the case of special a%ent, the renewal commission earned y him durin% the year immediately precedin%, in the case of an insurance a%ent, the renewal commission earned y him durin% the year immediately precedin%.

45planation. $he temporary ad,ance referred to in clause E*F of this su 8section shall also e admissi le in the case of any special a%ent or insurance a%ent newly appointed, ut such ad,anceJ EaF shall e repaya le within two years from the date on which such special a%ent was first appointed, and E*F shall not exceed, in the case of the special a%ent, fi,e hundred rupees, and, in insurance a%ent, one hundred rupees, or insurance a%ent the case of the

and the total amount of all ad,ances so made shall not exceed ten thousand rupees in the case of any insurer whose usiness in force is one crore of rupees or more and fi,e thousand rupees in any other case. E(F #,ery loan or ad,ance existin% at the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, which contra,enes the pro,isions of su section E&F shall e notified y the insurer to the Authority within thirty days of such commencement and shall notwithstandin% any contract to the contrary e repaid within one year from commencement. E)F <here any e,ent occurs %i,in% rise to circumstances, the existence of which at the time of the %rant of any su sistin% loan or ad,ance would ha,e made such %rant a contra,ention of this section, such loan or ad,ance shall, notwithstandin% anythin% in any contract to the contrary, e repaid within three months from the occurrence of such e,ent. E*F In case of default in complyin% with the pro,isions of su 8section E(F or su section E)F the director, mana%er, auditor, actuary, officer or partner, or the chief, special or insurance a%ent concerned shall, without pre!udice to any other penalty which he may incur, cease to hold office under, or to act for, the insurer %rantin% the loan on the expiry of the said period of one year or three months, as the case may e. L),9)l)0- /4 2)'(30/'5, (03. 4/' l/55 28( 0/ 3/+0',:(+0)/+5 /4 S(30)/+5 !@, !@A ,+2 !9 3%. If y reason of a contra,ention of any of the pro,isions of Section 2-, Section 2-A, Section 2-B or Section 2/, any loss is sustained y the insurer or y the policy8holders, e,ery director, mana%er, mana%in% a%ent, officer or partner who is 5nowin%ly a party to such contra,ention shall, without pre!udice to any other penalty to which he may e lia le under this Act, e !ointly and se,erally lia le to ma5e %oal the amount of such loss. A55(05 /4 )+58'(' ./7 0/ 9( C(60 31. E1F ;one of the assets in India of any insurer shall, except in the case of deposits made with the 'eser,e Ban5 of India under Section - or Section /. or in so far as assets are re+uired to e ,ested in trustees y su 8 section E(F of Section 2-, e 5ept otherwise than in the name of a pu lic officer appro,ed y the Authority, or in the corporate name of the underta5in%, if a company, or in the name of the partners, if a firm, or in the name of the proprietor, if an indi,idual.

E2F ;othin% contained in this section shall e deemed to prohi it the endorsement in fa,our of a an5in% company of any security or other document solely for the purpose of collection or for reali7ation of interest, onus or di,idend. P'/:)5)/+5 '(l,0)+< 0/ *,+,<('5, (03 #31$A. E1 F ;otwithstandin% anythin% to the contrary contained in the Indian Companies Act, 1/1& E- of 1/1&F, or in the articles of association of the insurer, if a company, or in any contract or a%reement, no insurer shall after expiry of one year from the commencement of the Insurance EAmendmentF Act, 1/)0 E(of 1/)0F, EaF e mana%ed y a company or a firm, or E*F e directed or mana%ed y, or employ as mana%er, or officer or in any capacity, any person whose remuneration or any part thereof ta5es the form of commission or onus or a share in the ,aluation surplus in respect of the life insurance usiness of the insurer, or EcF e directed or mana%ed y, or employ as mana%er or officer or in any capacity, any person whose remuneration or any part thereof ta5es the form of commission or onus in respect of the %eneral insurance usiness of the insurerD P'/:)2(2 that nothin% in this su 8section shall e deemed to prohi it8 EiF the payment of commission to a chief a%ent, special a%ent or an insurance a%ent, in respect of life insurance usiness procured y or throu%h himC 7ii8 the payment of commission to a principal a%ent or an insurance a%ent in respect of %eneral insurance usiness procured y or throu%h himC 7iii8 the payment of commission, with the appro,al of the Central 9o,ernment and for such period as it may determine, to a person not ein% an officer of an insurer who was, on the 1st ;o,em er, 1/((, employin% on ehalf of an insurer, chief a%ents or special a%ents and continues so to do in respect of insurance usiness procured y or throu%h himC Ei,F the employment of any indi,idual in a clerical or other su ordinate capacity who, as an insurance a%ent, recei,es commission In respect of insurance usiness procured y himC E,F the employment as an officer of any indi,idual who recei,es renewal commission in respect of life insurance usiness procured y him in his capacity as an insurance a%ent or as an employer of a%ents efore such employment, or efore the commencement of the Insurance EAmendmentF Act, 1/)0 E(of 1/)0F, whiche,er is laterC E,iF the payment of a share in the profits of %eneral insurance usinessC E,iiF the payment of onus in any year on a uniform asis to all salaried employees or any class of them y way of additional remuneration. E2F ;otwithstandin% anythin% to the contrary contained in the Indian Companies Act, 1/1& E- of 1/1&F, or in the articles of association of the insurer, ein% a company, or in any contract or a%reement, no mana%er, mana%in% director or any other person concerned in the mana%ement of an insurerIs usiness shall e entitled to nominate a successor to his office, and no person so nominated, whether efore or after the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, shall e entitled to hold or to continue in such office. E&F If in the case of any insurance company pro,ision is made y the articles of association of the company or y an a%reement entered into etween any person and the company for empowerin% a director or mana%er or other officer of the company to assi%n his office to any other person, any assi%nment of office made in pursuance of the said pro,ision, shall, notwithstandin% anythin% to the contrary contained in the said pro,isions or in Section .*B of the Indian Companies Act, 1/1& E- of 1/1&F, e ,oid. E(F ;o person shall ha,e any ri%ht, whether in contract or otherwise, to any compensation for any loss

incurred y reason of the operation of any pro,ision of this section.

P/7(' 0/ '(50')30 6,-*(+0 /4 (13(55):( '(*8+(',0)/+ 31B. E1F $he Authority may if it is satisfied that any insurer, in the case of an insurer specified in su 8clause EaF EiiF or su 8clause E F of C1ause E/F of Section 2 in respect of all insurance usiness transacted y him, and in the case of any other insurer in respect of the insurance usiness transacted y him in India, is payin% any person remuneration, whether y way of commission or otherwise on a scale disproportionate, accordin% to the normal standards pre,ailin% in insurance usiness, to the resources of the insurer, call upon the insurer to comply within six months with such directions as it may thin5 fit to issue in the matter, and if compliance with the directions so issued re+uires the alteration of any of the terms of the contract entered into y the insurer with such person, no compensation shall e paya le to such person y the insurer y reason only of such alteration or of the resi%nation of such person if the altered terms are not accepta le to him and no payment y way of renewal commission or otherwise shall e made to such person y the insurer in respect of any premiums paid after the date of such resi%nation except at such rate as may e appro,ed y the Central 9o,ernment in this ehalf. E2F #,ery insurer shall, efore the close of the month followin% e,ery year, su mit to the Authority a statement in the form specified y the re%ulations made y the Authority showin% the remuneration paid whether y way of commission or otherwise, to any person in cases where such remuneration exceeds such sum as may e specified y the re%ulations made y the Authority. E&F <here any person not ein% a chief a%ent, principal a%ent or special a%ent is in respect of remuneration exceedin% the sum of fi,e thousand rupees in any year, the Authority may, y notice in writin%, re+uire the insurer to su mit certified copies of the a%reement entered into etween the insurer and any such person, and the insurer shall comply with any such re+uisition within the time specified in the notice. E(F #,ery direction under this section shall e issued y an order made y the AuthorityD P'/:)2(2 that no order under this section shall e made unless the person concerned has een %i,en an opportunity of ein% heard L)*)0,0)/+ /+ (*6l/-*(+0 /4 *,+,<)+< ,<(+05 ,+2 /+ 0.( '(*8+(',0)/+ 6,-,9l( 0/ 0.(* 3!. E1F ;o insurer shall after the commencement of this Act, appoint a mana%in% a%ent for the conduct of usiness. E2F <here any insurer en%a%ed in the usiness of insurance efore the commencement of this Act employs a mana%in% a%ent for the conduct of his usiness, then notwithstandin% anythin% to the contrary contained in the Indian Companies Act, 1/1& E- of 1/1&F and notwithstandin% anythin% to the contrary contained in the articles of the insurer, if a company, or in any a%reement entered into y the insurer, such mana%in% a%ent shall cease to hold office on the expiry of three years from the commencement of this Act and no compensation shall e paya le to him y the insurer y reason only of the premature termination of his employment as mana%in% a%ent. E&F After the commencement of this Act, notwithstandin% anythin% contained in the Indian Companies Act, 1/1& E- of 1/1&F, and notwithstandin% anythin% to the contrary contained in any a%reement entered into y an insurer or in the articles of association of an insurer ein% a company, no insurer shall pay to a mana%in% a%ent and no mana%in% a%ent shall accept from an insurer as remuneration for his ser,ices as mana%in% a%ent more than two thousand rupees per month in all, includin% salary and commission and other remuneration paya le to and recei,a le y him, for his ser,ices as mana%in% a%ent. P'/.)9)0)/+ /4 3/**/+ /44)3('5 ,+2 '(>8)'(*(+0 ,5 0/ 7./l( 0)*( /44)3('5 3!A. E1F A mana%in% director or other officer of an insurer specified in su 8clause E F of clause E/F of Section 2 and carryin% on life insurance usiness shall not e a mana%in% director or other officer of any other insurer carryin% on life insurance usiness or of a an5in% company or of an in,estment companyD P'/:)2(2 that the Authority may permit such mana%in% director or other officer to e a mana%in% director or other officer of any other insurer carryin% on life insurance usiness for the purpose of amal%amatin% the

usiness of the two insurers or transferrin% the usiness of one insurer to the other. E2F <here an insurer specified in su 8clause E F of Clause E/F of Section 2 has a life insurance fund of more than twenty8fi,e la5hs of rupees or insurance funds totalin% more than fifty la5hs of rupees, the mana%er, mana%in% director or either officer of the insurer shall e a whole time employee of the insurerD P'/:)2(2 that the Authority may, for such period as it thin5s fit, permit the employment of any specified person as a part8time mana%er, mana%in% director or other officer of such insurer. E&F ;othin% in this section, shall pre,entJ 7a8 the mana%er, mana%in% director or other officer of a insurer ein% the mana%er, mana%in% director or other officer of a su sidiary company of the insurer with the pre,ious appro,al of the AuthorityC E*F the mana%er, mana%in% director or other officer of an insurer, exclusi,ely carryin% on life insurance usiness ein% the mana%er, mana%in% director or other officer of an insurer not carryin% on life insurance usinessC EcF any officer of a ranch of one insurer carryin% on %eneral insurance usiness from ein% any officer of a ranch in the same town of another insurer carryin% on %eneral insurance usinessC EdF an officer in the employment of an insurer for %i,in% professional ad,iceC 45planation; In this section the expression BofficerB does not include a director. I+58',+3( 985)+(55 )+ '8',l /' 5/3),l 5(30/' 3!B. #,ery insurer shall, after the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, underta5e such percenta%es of life insurance usiness and %eneral insurance usiness in the rural or social sector, as may e specified, in the 6fficial 9a7ette y the Authority, in this ehalf. O9l)<,0)/+5 /4 )+58'(' )+ '(56(30 /4 '8',l /' 8+/'<,+)D(2 5(30/' ,+2 9,3C7,'2 3l,55(5 3!C. #,ery insurer shall, after the commencement of the Insurance 'e%ulatory and De,elopment Authority act, 1/// dischar%e the o li%ations specified under section &2B to pro,ide life insurance or %eneral insurance policies to the persons residin% in the rural sector, wor5ers in the unor%ani7ed or informal sector or for economically ,ulnera le or ac5ward classes of the society and other cate%ories of persons as may e specified y re%ulations made y the Authority and such insurance policies shall include insurance for crops. Investigation P/7(' /4 )+:(50)<,0)/+ ,+2 )+56(30)/+ 9- A80./')0#33$. E1F $he Authority may at any time, y order in writin%, direct any person Ehereinafter in this section referred to as GIn,esti%atin% AuthorityHF specified in the order to in,esti%ate the affairs of any insurer and to report to the Authority on any in,esti%ation made y such In,esti%atin% AuthorityD P'/:)2(2 that the In,esti%atin% Authority may, where,er necessary, employ an auditor or actuary or oth for the purpose of assistin% him in any in,esti%ation under this section. E2F ;otwithstandin% anythin% to the contrary contained in Section 2&) of the Companies Act, 1/)* E1 of 1/)*F, the In,esti%atin% Authority may, at any time, and shall, on ein% directed so to do y the Authority, cause an inspection to e made y one or more of his officers of any insurer and his oo5s and accountsC and the In,esti%atin% Authority shall supply to the insurer a copy of his report on such inspection. E&F It shall e the duty of eatery mana%er, mana%in% director or other officer of the insurer to produce efore the In,esti%atin% Authority directed to ma5e the in,esti%ation under su 8section E1F or inspection under su 8section E2F, all such oo5s of account, re%isters and other documents in his custody or power and to furnish him with any statements and information relatin% to the affairs of the insurer as the said In,esti%atin% Authority may re+uire of him within such time as the said In,esti%atin% Authority may specify. E(F Any In,esti%atin% Authority, directed to ma5e an in,esti%ation under su 8section E1F, or inspection under

su 8section E2F may examine on oath, any mana%er, mana%in% director, or other officer of the insurer in relation to his ossiness and may administer oaths accordin%ly. E)F $he In,esti%atin% Authority shall, if he has een directed y the Authority to cause an inspection to e made, and may, in any other case, report to the Authority on any inspection made under this section. E(F 6n receipt of any report under su 8section E1F or under su 8section E)F, the Authority may, after %i,in% such opportunity to the insurer to ma5e a representation in connection with the report as in the opinion of the Authority, seems reasona le y order in writin%,J EaF re+uire the insurer to ta5e such action in respect of any matter arisin% out of the report as the Authority may thin5 fitC or E*F cancel the re%istration of the insurerC or EcF direct any person to apply to the Court for the windin% up of the insurer, if a company, whether the re%istration of the insurer has een cancelled under C1ause E*F or not. E-F $he Authority may, after %i,in% reasona le notice to the insurer pu lish the report su mitted y the In,esti%atin% Authority under su 8section E)F or such portion thereof as may appear to it to e necessary. E.F $he Authority may prescri e the minimum information to tee maintained y insurers in their oo5s, the manner in which such information should e maintained, the chec5s and other ,erifications to e adopted y insurer, necessary to ena le the In,esti%atin% Authority to dischar%e satisfactorily his functions under this section. 45planation.=for the purposes of this section, the expression BinsurerB shall include in the case of an insurer incorporated in IndiaJ 7a8 all his su sidiaries formed for the purpose of carryin% on the usiness of insurance outside IndiaC and 7*8 all his ranches whether situated in India or outside India. E/F ;o order made under this section other than an order made under Clause E F of su 8section E*F shall e capa le of ein% called in +uestion in any Court. E10F All expenses of, and incidental to, any in,esti%ation made under this section shall e defrayed y the insurer, shall ha,e priority o,er other de ts due from the insurer and shall e reco,era le as an arrear of land re,enue. P/7(' 0/ ,66/)+0 50,44 33A.$he Authority may appoint such staff, and at such places as it or he may consider necessary, for the scrutiny of the returns, statements and information furnished y insurers under this Act and %enerally to ensure the efficient performance of the functions of the Authority under this Act. P/7(' /4 0.( A80./')0- 0/ )558( 2)'(30)/+5 3A. E1F where the Authority is satisfied that 7a8 in the pu lic interestC or 7*8 E&F as to pre,ent the affairs of any insurer ein% conducted in a marina detrimental to the interests of the policy8holders or in a manner pre!udicial to the interests of the insurerC or %enerally to secure the proper mana%ement of any insurer, it is necessary to issue directions to insurers %enerally or to any insurer In particular, he may, from time to time, issue such directions he deems fit, and the insurers or the insurer, as the case may e, shall e ound to comply with such directionsD exclusi,ely

P'/:)2(2 that no such directions shall e issued to any insurer in particular unless such insurer has een

%i,en a reasona le opportunity of ein% heard E2F $he Authority may, on representation made to him or on his own motion, modify or cancel any direction issued under su 8section E1F, and in so modifyin% or cancelin% any directions, may impose such conditions as he thin5s fit, su !ect to which the modification or cancellation shall ha,e effect. "ont#ol ove# Management A*(+2*(+0 /4 6'/:)5)/+5 '(l,0)+< 0/ ,66/)+0*(+05 /4 *,+,<)+< 2)'(30/'5, (03., 0/ 9( 589;(30 0/ 6'(:)/85 ,66'/:,l /4 0.( A80./')03AA. E1F In the case of an insurer,J EaF no amendment made, after the commencement of the Insurance EAmendmentF Act, 1/*., of any pro,ision relatin% to the appointment, re8appointment, termination of appointment or remuneration of a mana%in% or whole8time director, or of a mana%er or a chief executi,e officer, y whate,er name called, whether that pro,ision e contained in the insurers memorandum or articles of associations, or in an a%reement entered into y him, or in any resolution passed y the insurer in %eneral meetin% or y his Board of Directors shall ha,e effect unless appro,ed y the AuthorityC E F no appointment, re8appointment or termination of appointment made after the commencement of the Insurance EAmendmentF Act, 1/*., of a mana%in% or whole8time director, or a mana%er or a chief executi,e officer, y whate,er name called, shall ha,e effect unless such appointment, reappointment or termination of appointment is made with the pre,ious appro,al of the Authority. 45planation6 1or the purposes of this su 8section, any pro,ision conferrin% any enefit or pro,idin% any amenity or per+uisite, in whate,er form, whether durin% or after the termination of the term of office of the mana%er or the chief executi,e officer, y whate,er name called or a mana%in% or whole8time director, shall e deemed to e a pro,ision relatin% to his remuneration. E2F ;othin% contained in Sections 2*. and 2*/, the pro,iso to su 8section E&F of Section &0/, Sections &10 and &11, the pro,iso to Section &.- and Section &.. Ein so far as Section &.. ma5es the pro,isions of Sections &10 and &11 apply in relation to the mana%er of a companyF of the Companies Act, 1/)* E1 of 1/)*F, shall apply to any matter in respect of which the appro,al of the Authority has to e o tained under sum section E1F. E&F ;o act done y a person as a mana%in% or whole8time director or a director not lia le to retire y rotation or a mana%er or a chief executi,e officer, y whate,er name called, shall e deemed to e in,alid on the %round that it is su se+uently disco,ered that his appointment or re8appointment had not ta5en effect y reason of any of the pro,isions of this ActC ut nothin% in this su section shall e construed as renderin% ,alid any act done y such person after his appointment or re8appointment has een shown to the insurer not to ha,e had effect. P/7(' /4 A80./')0- 0/ '(*/:( *,+,<('),l 6('5/+5 4'/* /44)3( 3AB. E1F <here the Authority is satisfied that in the pu lic interest or for pre,entin% the affairs of an insurer ein% conducted in a manner detrimental to the interests of the policy8holders or for securin% the proper mana%ement of any insurer it is necessary so to do, he may, for reasons to e recorded in writin%, y order, remo,e from office, with effect from such date as may e specified in the order, any director or the chief executi,e officer, y whate,er name called, of the insurer. E2F ;o order under su 8section E1F shall e made unless the director or chief executi,e officer concerned has een %i,en a reasona le opportunity of ma5in% a representation to the Authority a%ainst the proposed orderD P'/:)2(2 that if, in the opinion of the Controller, any delay would e detrimental to the interests of the insurer or his policy8holders, he may, at the time of %i,in% the opportunity aforesaid or at any time thereafter, y order direct that, pendin% the consideration of the representation aforesaid, if any, the director or, as the case may e, chief executi,e officer, shall not, with effect from the date of such order, 7a8 act as such director or chief executi,e officer of the insurerC 7*8 in any way, whether directly, indirectly, e concerned with, or ta5e part in the mana%ement of the insurer.

E&F <here any order is made in respect of a director or chief executi,e officer of an insurer under su 8section E1F, he shall cease to e a director or as the case may e chief executi,e officer of the insurer and shall not, in any way, whether directly or indirectly, e concerned with, or ta5e part in, the mana%ement of any insurer for such period not exceedin% fi,e years as may e specified in the order. E(F If any person in respect of whom an order is made y the Authority under su 8section E1F or under the pro,iso to su 8section E2F contra,enes the pro,isions of this section, he shall e punisha le with fine which may extend to two hundred and fifty rupees for each day durin% which such contra,ention continues. E)F <here an order under su 8section E1F has een made, the Authority may, y order in writin%, appoint a suita le person in place of the director or chief executi,e officer who has een remo,ed from his office under that su 8section, with effect from such date as may e specified in the order. E*F Any person appointed as director or chief executi,e officer under this section shall8 EaF hold office durin% the pleasure of the Controller and su !ect thereto for a period not exceedin% three years or such further periods not exceedin% three years at a time as the Authority may specifyC E F not incur any o li%ation or lia ility y reason only of his ein% a director or chief executi,e officer or for anythin% done or omitted to e done in %ood faith in the execution of the duties of his office or in relation thereto. E-F ;otwithstandin% anythin% contained in any law or in any contract, memorandum or articles of association, on the remo,al of a person from office under this section, that person shall not e entitled to claim any compensation for the loss or termination of office. P/7(' /4 C/+0'/ll(' 0/ ,66/)+0 ,22)0)/+,l 2)'(30/'5 3AC. ElF If the Authority is of opinion that in the pu lic interest or in the interests of an insurer or his policy8holders it is necessary so to do, he may, from time to time, y order in writin%, appoint, with effect from such date as may e specified in the order, one or more persons to hold office as additional directors of the insurerD P'/:)2(2 that the num er of additional directors so appointed shall not, at any time, exceed fi,e or one8third of the maximum stren%th fixed for the Board y the articles of association of the insurer, whiche,er is less. E2F Any person appointed as additional director in pursuance of this section,J EaF shall hold office durin% the pleasure of the Authority, and su !ect thereto for a period not exceedin% three years or such further periods not exceedin% three years at a time as the Authority may specifyC

E*F shall not incur any o li%ation or lia ility y reason only of his ein% a director or for anythin% done or omitted to e done in %ood faith in the execution of the duties of his office or in relation theretoC and 7&8 shall not e re+uired to hold +ualification shares of the insurer.

E&F 1or the purpose of rec5onin% any preparation of the total num er of directors of the insurer, any additional director appointed under this section shall not e ta5en into account. S(30)/+5 3AB ,+2 3AC 0/ /:('')2( /0.(' l,75 3A-D. Any appointment or remo,al of a director or chief executi,e officer in pursuance of Section &(B or Section &(C shall ha,e effect notwithstandin% anythin% to the contrary contained in the Companies Act, 1/)* E1 of 1/)*F, or any other law for the time ein% in force or in any contract or any other instrument. F8'0.(' 6/7('5 3AE. $he Controller may,J EaF caution or prohi it insurers %enerally or any insurer in particular a%ainst enterin% into any particular transaction or class of transactions, and %enerally %i,e ad,ice to any insurerC

E F

at any time, if he is satisfied that in the pu lic interest or in the interests of the insurer or for pre,entin% the affairs of the insurer ein% conducted in a manner detrimental to the interests of the insurer or his policy8holders, it is necessary so to do, y order in writin% and on such terms and conditions as may e specified therein,J E iF re+uire the insurer to call a meetin% of his directors for the purpose of considerin% any matter relatin% to or arisin% out of the affairs of the insurerC EiiF depute one or more of his officers to watch the proceedin%s at any meetin% of the Board of Directors of the insurer or of any committee or of any other ody constituted y itC re+uire the insurer to %i,e an opportunity to the officers so deputed to e heard at such meetin%s and also re+uire such officers to send a report of such proceedin%s to the AuthorityC EiiiF re+uire the Board of Directors of the insurer or any committee or any other ody constituted y it to %i,e in writin% to any officer specified y the Authority in this ehalf at his usual address all notices of, and other communications relatin% to, any meetin% of the Board, committee or other ody constituted y itC Ei,F appoint one or more of his officers to o ser,e the manner in which the affairs of the insurer or of his offices or ranches are ein% conducted and ma5e a report thereonC E,F re+uire the insurer to ma5e, within such time as may e specified in the order, such chan%es in the mana%ement as the Authority may consider necessary.

P/7(' /4 A80./')0- 0/ )558( 2)'(30)/+5 '(<,'2)+< '(-)+58',+3( 0'(,0)(5, (03 3AF. E1F <ithout pre!udice to the %enerality of the powers conferred y su 8section E1F of Section &(, the Authority may, if he is of opinion that the terms or conditions of any re8insurance treaty or other re8insurance contract entered into y an insurer are not fa,oura le to the insurer or are detrimental to the pu lic interest, he may, y order, re+uire, the insurer to ma5e, at the time when the renewal of such treaty or contract ecomes next due, such modifications in the terms and conditions of such treaty or contract as he 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 e deemed to ha,e failed to comply with the pro,isions of this Act. E2F $he Authority may, if he has reason to elie,e that an insurer is enterin% into or is li5ely to enter into re8insurance treaties or other re8insurance contracts which are not fa,oura le to the insurer or are detrimental to the pu lic interest, he may, y order, direct that the insurer shall not enter into such re8insurance treaty or other re8insurance contract unless a copy of such treaty or contract has een furnished to him in ad,ance and the terms and conditions thereof ha,e een appro,ed y him and if the insurer fails to comply with such order he shall e deemed to ha,e failed to comply with the re+uirements of this Act. P/7(' /4 A80./')0- 0/ /'2(' 3l/58'( /4 4/'()<+ 9',+3.(5 &(9. <ithout pre!udice to the %enerality of the powers conferred y su 8section E1F of Section &( the Controller may, if he has reason to elie,e that the wor5in% of any ranch outside India of an insurer ein% an insurer specified in su 8clause 7*8 of clause E/F of Section 2, is %enerally resultin% in a loss or that the affairs of that ranch are ein% conducted in a manner pre!udicial to the interests of the policy8holders or the pu lic interest, he may, after %i,in% an opportunity to the insurer of ein% heard, direct that the insurer shall cease, within such period not ein% less than one year, as may e specified in the order, to carry on insurance usiness in the country in which such ranch is situated and if the insurer fails to comply with such order he shall e deemed to ha,e failed to comply with the pro,isions of this Act. S(,'3. ,+2 5()D8'( 3AH. E1F <here the Chairperson of the Authority in conse+uence of information in his possession, has reason to elie,e thatJ 7a 8 any person who has een re+uired under su 8section E2F of Sec. && to produce, or cause to e produced, any oo5s, accounts or other documents in his custody or power has omitted or failed to produce, or cause to e produced, such oo5s, accounts or other documents, or any person to whom a re+uisition to produce any oo5s, accounts or other documents as aforesaid has een or mi%ht e issued will not, or would not, produce or cause to e produced, any oo5s, accounts or other documents which will e useful for, or rele,ant to an in,esti%ation under su 8section E1F of Section && or an inspection under su 8section E1AF of that section, or

7*8

7&8 7d8 7e8 78 7g8

a contra,ention of any pro,ision of this Act has een committed or is li5ely to e committed y an insurer, or any claim which is due to e settled y an insurer, has een or is li5ely to e settled at a fi%ure hi%her than a reasona le amount, or any claim which is due to e settled y an insurer, has een or is li5ely to e re!ected or settled at a fi%ure lower than a reasona le amount, any ille%al re ate or commission has een paid or is li5ely to e paid y an insurer, or any oo5s, accounts, receipts, ,ouchers, sur,ey reports or other documents, elon%in% to an insurer are li5ely to e tampered with, falsified or manufactured, he may authorise any su ordinate officer of his, not lower in ran5 than an officer authori7ed y the Authority Ehereafter referred to as the authorised officerF to8 enter and search any uildin% or place where he has reason to suspect that such oo5s, accounts or other documents, or any oo5s or papers relatin% to any claim, re ate or commission or any receipts, ,ouchers, reports or other documents are 5eptC rea5 open the loc5 of any door, ox, loc5er, safe, almirah or other receptacle for exercisin% the powers conferred y C1ause EiF where the 5eys thereof are not a,aila leC sei7e all or any such oo5s, accounts or other documents found as a result of such searchC place mar5s of identification on such oo5s, accounts or other documents or ma5e or cause to e made extracts or copies there from.

EiF

EiiF EiiiF Ei,F

E2F $he authorised officer may re+uisition the ser,ices of any police officer or of any officer of the Central 9o,ernment, or of oth, to assist him for all or any of the purposes specified in su 8section E1F and it shall e the duty of e,ery such officer to comply with such re+uisition. E&F $he authorised officer may, where it is not practica le to sei7e any such oo5, account or other document, specified in su 8section E1F, ser,e an order on the person who is in immediate possession or control thereof that he shall not remo,e, part with or otherwise deal with it except with the pre,ious permission of such officer and such officer may ta5e such steps as may e necessary for ensurin% compliance with this su 8section. E(F $he authonsed officer may, durin% the course of the search or sei7ure, examine on oath any person who is found to e in possession or control of any oo5s, accounts or other documents, and any statement made y such person durin% such examination may thereafter e used in e,idence in any proceedin% under this Act. E)F $he oo5s, accounts, papers, receipts, ,ouchers, reports, or other documents sei7ed under su section E1F shall not e retained y the authorised officer for a period exceedin% one hundred and ei%hty days from the date of the sei7ure unless the reasons for retainin% the same recorded y him in writin% and the appro,al of the Chairperson of the Authority for such retention is o tainedD P'/:)2(2 that the Chairperson of the Authority shall not authorise the retention of the oo5s, accounts, papers, receipts, ,ouchers, reports, or other documents for a period exceedin% thirty days after all the proceedin%s under this Act for which the oo5s, accounts, papers, receipts, ,ouchers, or other documents are rele,ant are completed. E*F $he person from whose custody any oo5s, accounts, papers, receipts, ,ouchers, reports, or other documents are sei7ed under su 8section E1F may ma5e copies thereof, or ta5e extracts there from, in the presence of the authorised officer or any other person empowered y him in this ehalf at such place and Idle as the authorised officer may appoint in this ehalf. E-F If a person le%ally entitled to the oo5s, accounts, papers, receipts, ,ouchers, reports, or other documents sei7ed under su 8section E1F o !ects for any reason to the appro,al %i,en y the Chairperson of the Authority under su 8section E)F, he may ma5e an application to the Central 9o,ernment statin% therein the reasons for

such o !ection and re+uestin% for the return of the oo5s, accounts, papers, receipts, ,ouchers, reports, or other documents. E.F 6n receipt of the application under su 8section E-F the Central 9o,ernment may, after %i,in% the applicant an opportunity of ein% heard, pass such orders as it thin5s fit. E/F $he pro,isions of the Code of Criminal Procedure, 1./. E) of 1./.F, relatin% to searchers and sei7ures shall apply, so far as may e, to e,ery search and sei7ure made under su 8section E1F. E10F $he Central 9o,ernment may, y notification in the official 9a7ette, ma5e rules in relation to any search or sei7ure under this sectionC in particular, and without pre!udice to the %enerality of the fore%oin% power, such rules may pro,ide for the procedure to e followed y the authorised officer,J EiF for o tainin% in%ress into such uildin% or place to e searched where free in%ress thereto is not a,aila leC EiiF for ensurin% safe custody of any oo5s, accounts, papers, receipts, ,ouchers, reports, or other documents sei7ed under this section. Amalgamation and $#ans e# o Ins%#an&e '%siness A*,l<,*,0)/+ ,+2 0',+54(' /4 )+58',+3( 985)+(55 3=. E1F ;o life insurance usiness of an insurer specified in su 8clause EaF EiiF or su 8clause E F of C1ause E/F of Section 2 shall e transferred to any person or transferred to or amal%amated with the life insurance usiness of any other insurer except in accordance with a scheme prepared under this section and appro,ed y the Authority. E2F Any scheme prepared under this section shall set out the a%reement under which the transfer or amal%amation is proposed to e effected, and shall contain such further pro,isions as may e necessary for %i,in% effect to the scheme. E&F Before an application is made to the Authority to appro,e any such scheme, notices of the intention to ma5e the application to%ether with a statement of the nature of the amal%amation or transfer, as the case may e, and of the reason there for shall, at least two months efore the application is made, e sent to the Authority and certified copies four in num er, of each of the followin% documents shall e furnished to the Authority, and other such copies shall durin% the two months aforesaid e 5ept open for the inspection of the mem ers and policy8holders at the principal and ranch offices and chief a%encies of the insurers concerned, namelyD8 7a8 7*8 a draft of the a%reement or deed under which it is proposed to effect the amal%amation or transferC alance8sheets in respect of the insurance usiness of each of the insurers concerned in such amal%amation of transfer, prepared in the form set forth in Part II of the 1irst Schedule and in accordance with the re%ulations contained in Part I of the ScheduleC actuarial reports and a stracts in respect of the life insurance usiness of each of the insurers so concerned, prepared in conformity with the re+uirements of Part II of the 1ourth and 1ifth Schedules and in accordance with the re%ulations contained in Part I of the Schedule concerned C a report on the proposed amal%amation or transfer, prepared y an independent actuary who has ne,er een, professionally connectedC with any of the parties concerned in the amal%amation or transfer at any time in the fi,e years precedin% the date on which he si%ns his reportC any other reports on which the scheme of amal%amation or transfer was founded.

7&8

7d8

EeF

$he alance8sheets, reports and a stracts referred to in Clauses 7*8, 7&8 and 7d8 shall all e prepared as at the date at which the amal%amation or transfer if appro,ed y the Authority is to ta5e effect, which date shall not e more than twel,e months efore the date on which the application to the Authority is made under this sectionD

P'/:)2(2 that if the Authority so directs in the case of any particular insurer there may e su stituted respecti,ely for the alance8sheet, report and a stract referred to in Clauses. E F and EcF prepared in accordance with this su 8section certified copies of the last alance8sheet and last report and a stract prepared in accordance with Sections 11 and 1& of this Act or Sections - and . of the Indian 4ife Assurance Companies Act, 1/12 E* of 1/12F, if that alance8sheet is prepared as at a date not more than twel,e months, and that report and a stract as at a date not more than fi,e years, efore the date on which the application to the Authority is made under this section. S,+30)/+ /4 ,*,l<,*,0)/+ ,+2 0',+54(' 9- A80./')0-. 3 . E1F <hen any application, such as, is referred to in su 8section E&F of Section &) is made to the Authority, the Authority shall cause, if for special reasons he so directs, notice of the application to e sent to e,ery person resident in India who is the holder of a life policy of any insurer concerned and shall cause a statement of the nature and terms of the amal%amation or transfer, as the case may e, to e pu lished in such manner and for such period as he may direct, and, after hearin% the directors and such policy8holders as apply to e heard and other persons whom he considers entitled to e heard, may appro,e the arran%ement, he is satisfied no sufficient o !ection to the arran%ement has een esta lished ( lend shall ma5e such conse+uential orders as are necessary to %i,e effect to the arran%ement, includin% orders as to the disposal of any deposit made under Section - or Section /.D P'/:)2(2 that Ea F no part of the deposit made y any party to the amal%amation or transfer shall e returned except where, after effect is %i,en to the arran%ement, the whole of the deposit to e made y the insurer carryin% on the amal%amated usiness or the person to whom the usiness is transferred is completed, E F only so much shall e returned as is no lon%er re+uired to complete the deposit last mentioned in C1ause EaF, and EcF while the deposit last mentioned in Clause E a8 remains uncompleted, on accession, resultin% from the arran%ement, to the amount already deposited y the insurer carryin% on the amal%amated usiness or the person to whom the usiness is transferred shall e appropriated as payment or part8payment of any instalment of deposit su se+uently due from him under Section - or Section /.. E2F If the arran%ement in,ol,es a reduction of the amount of the insurance and other contracts of the transferor insurer or of any or all of the insurers concerned in the amal%amation, the Authority may appro,e the arran%ement, reducin% the amount of such contracts upon such terms and su !ect to such conditions as he may thin5 proper, and the reduction of contracts as appro,ed y the Authority shall e ,alid end indin% on all the parties concerned. S0,0(*(+05 '(>8)'(2 ,40(' ,*,l<,*,0)/+ ,+2 0',+54(' 3@. <here an amal%amation ta5es place etween any two or more insurers, or where any usiness of an insurer is transferred, whether in accordance with a scheme confirmed y the Authority or otherwise, the insurer carryin% on the amal%amated usiness or the person to whom the usiness is transferred, as the case may e, shall, within three months from the date of the completion of the amal%amation or transfer, furnish in duplicate to the Authority8 EaF a certified copy of the scheme, a%reement or deed under which the amal%amation or transfer has een effected, and E F a declaration si%ned y e,ery party concerned or in the case of a company y the chairman and the principal officer that to the est of their elief e,ery payment made or to e made to any person whatsoe,er on account of the amal%amation or transfer is therein fully set forth and that no other payments eyond those set forth ha,e een made or are to e made either in money, policies, onds, ,alua le securities or other property y or with the 5nowled%e of any parties to the amal%amation or transfer, and EcF where the amal%amation or transfer has not een made in accordance with a scheme sanctioned y the Authority under Section &*8 EiF alance8sheet in respect of the insurance usiness of each of the insurers concerned in such

amal%amation or transfer, prepared in the 1orm set forth in Part II of the 1irst Schedule and in accordance with the re%ulations contained in Part I of that Schedule, and EiiF certified copies of any other reports on which the scheme of amal%amation or transfer was founded. P/7(' /4 0.( A80./')0- 0/ 6'(6,'( 53.(*( /4 A*,l<,*,0)/+ #3@A$. E1F If the Authority is satisfied that8 EiF in the pu lic interestC or EiiF in the interests of the policy8holdersC or EiiiF in order to secure the proper mana%ement of an insurerC or EivF in the interests of insurance usiness of the country as a wholeC it is necessary so to do, he may prepare a scheme for the amal%amation of that insurer with any other insurer Ehereinafter referred to in this section as the transferee insurerFD P'/:)2(2 that no such scheme shall e prepared unless the other insurer has %i,en his written consent to the proposal for such amal%amation E2F $he scheme aforesaid may contain pro,isions for all or any of the followin% matters, namelyD EaF the constitution, name and re%istered office, the capital, assets, powers, ri%hts, interests, authorities and pri,ile%es, and the lia ilities, duties and o li%ations of the transferee insurerC E Fthe transfer to the transferee insurer the usiness, properties, assets and lia ilities of the insurer on such terms and conditions as may e specified in the schemeC EcF any chan%e in the Board of Directors, or the appointment of a new Board of directors of the transferee8insurer and the authority y whom, the manner in which, and the other terms and conditions on which such chan%e or appointment shall e made, and in the case of appointment of a new Board of Director or of any director, the period for which such appointment shall e madeC EdF the alteration of the memorandum and articles of association of the transferee insurer for the purpose of alterin% the capital thereof or for such other purposes as may e necessary to %i,e effect to the amal%amationE EeO su !ect to the pro,isions of the scheme, the continuation y or a%ainst the transferee insurer, of any actions or proceedin%s pendin% a%ainst the insurerC EfF the reduction of the interest or ri%hts which the shareholders, policy holders and other creditors ha,e in or a%ainst the insurer efore the amal%amation to such extent as the Authority considers necessary in the pu lic interest or in the interests of the shareholders, policy8holders and other creditors or for the maintenance of the usiness of the insurerC E%F the payment in cash or otherwise to policy8holders, and other creditors in full satisfaction of their claim,8 EiF in respect of their interest or ri%hts in or a%ainst the insurer efore the amal%amationC or EiiF where their interest or ri%hts aforesaid in or a%ainst the insurer has or ha,e een reduced under clause EfF, in respect of such interest or ri%hts as so reducedC EhF the allotment to the shareholders of the insurer for shares held y them therein efore the amal%amation <hether their interest in such shares has een reduced under clause EfF or not3 of shares in the transferee insurer and where any shareholders claim payment in cash and not allotment of shares, or where it is not possi le to allot shares to any sharp holders the payment in cash to those shareholders in full satisfaction of their claimJ

EiF in respect of their interest in shares in the insurer efore the amal%amationC or EiiF where such interest has een reduced under clause EfF in respect of their interest in shares as so reducedC EiF the continuance of their ser,ices of all the employees of the insurer Eexceptin% such of them as not ein% wor5men within the meanin% of the Industrial Disputes Act, 1/(- E1( of 1/(-F, are specifically mentioned in the schemeF in the transferee insurer at the same remuneration and on the same terms and conditions of ser,ice, which they were %ettin% or, as the case may e, which they were ein% %o,erned, immediately efore the date of the amal%amationD P'/:)2(2 that the scheme shall contain a pro,ision that the transferee insurer shall pay or %rant not later than the expiry of the period of three years, front the date of the amal%amation, to the said employees the same remuneration and the same terms and conditions of ser,ice as are applica le to the other employees of correspondin% ran5 on status of the transferee insurer su !ect to the +ualifications and experience of the said employees ein% the same as or e+ui,alent to those of such other employees of the transferee insurerD P'/:)2(2 48'0.(' that if in any case any dou t or difference arises as to whether the +ualification and experience of any of me said employees are the same as or are e+ui,alent to the +ualifications and experience of the other employees of correspondin% ran5 or status of the transferee insurer, the dou t or difference shall e referred to the Authority whose decision thereon shall e finalC E!F notwithstandin% anythin% contained in clause EiF, where any of the employee, of the insurer not ein% wor5men within the meanin% of the Industrial Disputes Act, 1/(- E1( of 1/(-F, are specifically mentioned in the scheme under clause EiF or where any employees of the insurer ha,e y notice in writin% %i,en to the insurer or, as the case may e, the transferee insurer at any time efore the expiry of one month next followin% the date on which the scheme is sanctioned y the Central 9o,ernment, intimated their intention of not ecomin% employees of the transferee insurer, the payment to such employees of compensation, if any, to which they are entitled under the Industrial Disputes Act, 1/(-, and such pension, %ratuity, pro,ident fund, or other retirement enefits ordinarily admissi le to them under the rules or authori7ations of the insurer immediately efore the date of the amal%amationC E5F any other terms and conditions for the amal%amation of the insurerC ElF such incidental, conse+uential and supplemental matters as are necessary to secure that the amal%amation shall e fully and effecti,ely carried out. E&F EaF A copy of the scheme prepared y the Authority shall e sent in draft to the insurer and also to the transferee insurer and any other insurer concerned in the amal%amation, for su%%estions and o !ections, if any, within such period as the Authority may specify for this purpose. E F $he Authority may ma5e such modifications, if any, in the draft scheme as he may consider necessary in the li%ht of su%%estions and o !ections recei,ed from the insurer and also from the transferee insurer, and any other insurer concerned in the amal%amation and from any shareholder, policyholder or other creditor of each of those insurers and the transferee insurer. E(F $he scheme shall thereafter e placed efore the Central 9o,ernment for its sanction and the Central 9o,ernment may sanction the scheme without any modification or with such modifications as it may consider necessaryC and the scheme as sanctioned y the Central 9o,ernment shall come into force on such date as the Central 9o,ernment may specify in this ehalfD P'/:)2(2 that different dates may e specified for different pro,isions of the scheme E)F $he sanction accorded y the Central 9o,ernment under su 8section E(F shall e conclusi,e e,idence that all the re+uirements of this section relatin% to amal%amation ha,e een complied with and a copy of the sanctioned scheme certified in writin% y an officer of the Central 9o,ernment to e a true copy thereof, shall, in all le%al proceedin%s Ewhether in appeal or otherwiseF e admitted as e,idence to the same extent as the ori%inal scheme.

E*F $he Authority may, in li5e8manner, add to, amend or ,ary any scheme made under this section. E-F 6n and from the date of the comin% into operation of the scheme or any pro,ision thereofC the scheme or such pro,ision shall e indin% on the insurer or, as the case may e, on the transferee8insurer and any other insurer concerned in the amal%amation and also on all the shareholders, policy8holders and other creditors and employees of each of those insurers and of the transferee insurer, and on any other person ha,in% any ri%ht or lia ility in relation to any of those insurers or the transferee insurer. E.F 6n and from such date as may e specified y the Central 9o,ernment in this ehalf, their properties and assets of the insurer shall, y ,irtue of and to the extent pro,ided in the scheme, stand transferred to, and ,est in, and the lia ilities of the insurer shall, y ,irtue of and to the extent pro,ided in the scheme, stand transferred to and ecome the lia ilities of, the transferee insurer. E/F If any difficulty arises in %i,in% effect to the pro,isions of the scheme the Central 9o,ernment may y order do anythin% not inconsistent with such pro,isions which appears to it necessary or expedient for the purpose of remo,in% the difficulty. E10F Copies of e,ery scheme made under this section and of e,ery order made under su 8section E/F shall e laid efore each :ouse of Parliament, as soon as may e, after the scheme has een sanctioned y the Central 9o,ernment or, as the case may e, the order has een made. E11F ;othin% in this section shall e deemed to pre,ent the amal%amation with an insurer y a sin%le scheme of se,eral insurers. E12F $he pro,isions of this section and of any scheme made under it shall ha,e effect notwithstandin% anythin% to the contrary contained in any other pro,isions of this Act or in any other law or any a%reement, award or other instrument for the time ein% in force. E1&F $he pro,isions of section &- shall not apply to an amal%amation %i,en effect to under pro,isions of this section. Assignment o# t#ans e# o poli&ies and nominations A55)<+*(+0 ,+2 0',+54(' /4 )+58',+3( 6/l)3)(5 38. E1F A transfer or assi%nment of a policy of life insurance, whether with or without consideration, may e made only y an endorsement upon the policy itself or y a separate instrument, si%ned in either case y the transferor or y the assi%nor or his duly authorised a%ent and attested y at least one witness, specifically settin% forth the fact of transfer or assi%nment. E2F $he transfer or assi%nment shall e complete and effectual upon the execution of such endorsement or instrument duly attested ut except where the transfer or assi%nment is in fa,our of the insurer shall not e operati,e as a%ainst an Insurer and shall not confer upon the transferee or assi%nee, or his le%al representati,e, any ri%ht to sue for the amount of such policy or the moneys secured there y until a notice in writin% of the transfer or assi%nment if and either the said endorsement or instrument itself or a copy thereof certified to e correct y oth transferor and transferee or their duly authorised a%ents ha,e een deli,ered to the insurerD P'/:)2(2 that where the insurer maintains one or more places of usiness in India, such notice shall e deli,ered only at the place in s2India3 mentioned in the policy for the purpose or at his principal place of usiness in India. E&F $he date on which the notice referred to in su 8section E2F is deli,ered to the insurer shall re%ulate the priority of all claims under a transfer or assi%nment as etween persons interested in the policyD and where there is more then one instrument of transfer or assi%nment, the priority of the claims under such instruments shall e %o,erned y the order in which the notices referred to in su 8section E2F are deli,ered. E(F ?pon the receipt of the notice referred to in su 8section E2F, the insurer shall record the fact of such transfer or assi%nment to%ether with the date thereof and the name of the transferee or the assi%nee and shall, on the re+uest of the person y whom the notice was %i,en, or of the transferee or assi%nee, on payment of a fee not exceedin% one rupee, %rant a written ac5nowled%ment of the receipt of such noticeC and any such

ac5nowled%ment shall e conclusi,e e,idence a%ainst the insurer that he has duly recei,ed the notice to which such ac5nowled%ment relates. E)F Su !ect to the terms and conditions of the transfer or assi%nment, the insurer shall, from the date of the receipt of the notice referred to in su section E2F, reco%nise the transferee or assi%nee named in the notice as the only person entitled to enefit under the policy, and such person shall su !ect to all lia ilities and e+uities to which the transferor or assi%nor was su !ect at the date of the transfer or assi%nment and may institute any proceedin%s in relation to the policy without o tainin% the consent of the transferor or assi%nor or ma5in% him a party to such proceedin%s. E*F Any ri%hts and remedies of an assi%nee or transferee of a policy of life insurance under an assi%nment or transfer affected prior to the commencement of this Act shall not e affected y the pro,isions of this section. E-F ;otwithstandin% any law or custom ha,in% the force of law to the contrary, and assi%nment in fa,our of a person made with the condition that it shall e inoperati,e or that the interest shall pass to some other person on the happenin% of a specified e,ent durin% the lifetime of the person whose life is insured, and an assi%nment in fa,our of the sur,i,or or sur,i,ors of a num er of persons shall e ,alid. N/*)+,0)/+ 9- 6/l)3--./l2(' 39. E1F $he holder of a policy of life insurance on his own life, may, when effectin% the policy or at any time efore the policy matures for payment, nominate the person or persons to whom the money secured y the policy shall e paid in the e,ent of his deathD P'/:)2(2 that, where any nominee is a minor, it shall e lawful for the policy holder to appoint in the prescri ed manner any person to recei,e the money secured y the policy in the e,ent of his death durin% the minority of the nominee. E2F Any such nomination in order to e effectual shall, unless it is incorporated in the text of the policy itself, e made y an endorsement on the policy communicated to the insurer and re%istered y him in the records relatin% to the policy and any such nomination may at any time efore the policy matures for payment e cancelled or chan%ed y an endorsement or a further endorsement or a will, as the case may e, ut unless notice in writin% of any such cancellation or chan%e has een deli,ered to the insurer, the insurer shall not e lia le for any payment under the policy made *ona ide y him to a nominee mentioned in the text of the policy or re%istered in records of the insurer. E&F $he insurer shall furnish to the policy8holder a written ac5nowled%ment of ha,in% re%istered a nomination or a cancellation chan%e thereof, and may char%e a fee not exceedin% one rupee for re%isterin% such cancellation or chan%e. E(F A transfer or assi%nment of a policy made in accordance with section &. shall automatically cancel a nominationD P'/:)2(2 that the assi%nment of a policy to the insurer who ears the rats on the policy at the time of the assi%nment, in consideration of a loan %ranted y that insurer on the security of the policy within its surrender ,alue, or its reassi%nment on repayment of the loan shall not cancel a nomination, ut shall affect the ri%hts of the nominee only to the extent of the insurerIs interest in the policy. E)F <here the policy matures for payment durin% the lifetime of the person whose life is insured or where the nominee or, if there are more nominees than one, all the nominees die efore the policy8holder or his heirs or le%al representati,es or the holder of a succession certificate, as the case may e. E*F <here the nominee or, if there are more nominees than one, a nominee or nominees sur,i,e the person whose life is insured, the amount secured y the policy shall e paya le to such sur,i,or or sur,i,ors. E-F $he pro,isions of this section shall not apply to any policy of life insurance to which section * of the "arried <omenIs Property Act, 1.-( E& of 1.-(F, applies or has at any time appliedD P'/:)2(2 that where a nomination made whether efore or after the commencement of the Insurance EAmendmentF Act, 1/(* E@II of 1/(*F, in fa,our of the wife of the person who has insured his life or of his wife and children or any of them is expressed, whether or not on the face of the policy as ein% made under

this section, the said section * shall e deemed not to apply or not to ha,e applied to the policy. "ommission and Re*ates and Li&ensing o Agents P'/.)9)0)/+ /4 6,-*(+0 9- 7,- /4 3/**)55)/+ /' /0.('7)5( 4/' 6'/38')+< 985)+(55 A%. E1F ;o person shall after the expiry of six months from the commencement of this Act, pay or contract to pay any remuneration or reward whether y way of commission or otherwise for solicitin% or procurin% insurance usiness in India to any person except an insurance a%ent or an intermediary or insurance intermediary. E1AF In this section and section (0A, (1 and (& references to an insurance a%ent shell e construed as includin% references to an indi,idual solicitin% or procurin% insurance usiness exclusi,ely in the territories which Immediately efore the 1st ;o,em er, 1/)* were comprised in a Part B State notified in this ehalf y the Central 9o,ernment in the 6fficial 9a7ette and holdin% a ,alid licence as an insurance a%ent under the law of that Part B State. E2F ;o insurance a%ent shall e paid or contract to e paid y way of commission or as remuneration in any form an amount exceedin%, in the case of life insurance usiness, forty per cent of the first yearMs premium paya le on any policy or policies effected throu%h him and fi,e per cent of a renewal premium, paya le on such a policy, or, in the case of usiness of any other class, fifteen per cent of the premiumD P'/:)2(2 that insurers in respect of life insurance usiness only may pay durin% the first ten years of their usiness to their insurance a%ents fifty8fi,e per cent of the first years premium paya le on any policy or policies effected throu%h them and six per cent of the renewal premiums paya le on such policiesD P'/:)2(2 further that nothin% in this su 8section shall apply in respect of any policy of life insurance issued after the &1st day of Decem er, 1/)0, or in respect of any policy of %eneral insurance issued after the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F. E2AF Sa,e as hereinafter pro,ided, no insurance a%ent or intermediary or insurance intermediary shall e paid or contract to e paid y way of commission or as remuneration in any form any amount in respect of any policy not effected throu%h himD P'/:)2(2 that where a policy of life insurance has lapsed and it cannot under the terms and conditions applica le to it e re,i,ed without further medical examination of the person whose life was insured there y, an insurer, after %i,in% y notice in writin% to the insurance a%ent throu%h whom the policy was effected if such a%ent continues to e an a%ent of the insist an opportunity to effect the re,i,al of the policy within a time specified in the notice, ein% not less than one month from the date of the receipt y him of the notice, may pay to another insurance a%ent who effects the re,i,al of the policy an amount calculated at a rate not exceedin% half the rate of commission at which the a%ent throu%h whom the policy was effected would ha,e een paid had the policy not lapsed, on the sum paya le on re,i,al of the policy on account of arrear premiums Eexcludin% any interest on such arrear premiumsF and also on the su se+uent renewal premiums paya le on the policy. E&F ;othin% in this section shall pre,ent the payment under any contract existin% prior to the 2-th day of =anuary, 1/&-, of %ratuities or renewal commission to "any person, whether an insurance a%ent within the meanin% of this Act or not, or to his representati,es after his decease in respect of insurance usiness effected throu%h him efore the said date. L)*)0,0)/+ /4 (16(+2)08'( /+ 3/**)55)/+ A%A. ElF ;o person shall pay or contract to pay to an insurance a%ent, and no insurance a%ent shall recei,e or contract to recei,e y way of commission or remuneration in any form in respect of any policy of life insurance issued in India y an insurer after the &1st day of Decem er, 1/)0, and effected throu%h an insurance a%ent, an amount exceedin%8 EaF E F where the policy %rants an immediate annuity or a deferred annuity in consideration of a sin%le premium, or where only one premium is paya le on the policy, two per cent of that premium, where the policy %rants a deferred annuity in consideration or more than one premium, se,en and a half per cent of the first yearIs premium, and two per cent of each renewal premium paya le on the

policy, and EcF in any other case, thirty8fi,e per cent of the first yearIs premium, se,en and a half per cent of the second and third yearIs renewal premium, and thereafter fi,e per cent of each renewal premium paya le on the policyD

P'/:)2(2 that in a case referred to in clause EcF, an insurer, durin% the first ten years of his usiness may pay to an insurance a%ent and an insurance a%ent may recei,e from such an insurer, forty per cent of the first yearIs premium paya le on the policyD P'/:)2(2 further that in case referred to in clause EcF where the rate of commission paya le on the first yearMs premium is e+ual to or less than twenty8one per cent thereof, and the rate on the fourth and fifth yearMs premiums does not exceed sis per cent thereof, the 4ife Insurance Corporation of India may pay to an insurance a%ent, and the insurance a%ent may recei,e from it, commission on the sixth and su se+uent yearMs renewal premiums paya le on the policy at a rate not exceedin% six per cent of each renewal premium. E2F ;o person shall pay or contract to pay to a special a%ent, and no special a%ent, shall recei,e or contract to recei,e, y way of commission or as remuneration in any form, in respect of any policy of life insurance issued in India y an insurer after the &1st day of Decem er, 1/)0, and effected throu%h a special a%ent, an amount exceedin%J EaF in a case referred to in clause EaF of su 8section E1F, one8half per cent of the premium, E F in a case referred to in clause E F of su 8section E1F, two per cent of the first yearIs premium paya le on the policy and EcF in a case referred to in clause EcF of su 8section E1F, fifteen per cent of the first yearIs premium paya le on the policyD P'/:)2(2 that in a case referred to in clause EcF, an insurer, durin% the first ten years of his usiness, may pay to a special a%ent, and a special a%ent may recei,e from such an insurer, se,enteen and a half per cent of the first yearIs premium paya le on the policyD P'/:)2(2 48'0.(' that in a case referred to in clause EcF, where the rate of commission paya le on the first yearMs premium is e+ual to or less than twenty8one per cent thereof, and the rate on the fourth and fifty yearMs premiums does not exceed six per cent thereof, the 4ife Insurance Corporation of India may pay to an insurance a%ent, and the insurance a%ent may recei,e from it, commission on the sixth and su se+uent yearMs renewal premiums paya le on the policy at a rate not exceedin% six per cent of each renewal premium. E&F ;o person shall pay or contract to pay to a special a%ent, and no special a%ent, shall recei,e or contract to recei,e, y way of commission or remuneration in any form in respect of any policy of %eneral insurance issued in India y an insurer after the C6""#;C#"#;$ 61 Insurance EAmendment Act, 1/*., and effected throu%h an insurance a%ent, an amount not exceedin% fifteen per cent of the premium paya le on the policy where the policy relates to fire or marine insurance or miscellaneous insurance. E(F ;o person shall pay or contract to pay to a principal a%ent, and no principal a%ent shall recei,e or contract to recei,e, y way of commission or remuneration in any form, in respect of any policy of %eneral insurance issued in India y an insurer after the commencement of the Insurance EAmendmentF Act, l/)0, and effected throu%h a principal a%ent, an amount exceedin% EaF in the case referred to in clause EaF of su 8section E&F, twenty per cent of the premium paya le on the policy, and E F in the case referred to in clause E F of that su 8section, fifteen per cent of the policy, less any commission paya le to any insurance a%ent in respect of the said policyD P'/:)2(2 that the Authority may, in such circumstances and to such extent and for such period as may e specified, authorise the payment of commission or remuneration exceedin% the limits specified in this su 8section to a principal a%ent of an insurer incorporated or domiciled elsewhere than in India, if such a%ent carries out and has continuously carried out in his own office duties on ehalf of the insurer which would otherwise ha,e een performed y the insurer.

E)F <ithout pre!udice to the pro,isions of section 102 in respect of a contra,ention of any of the pro,isions of the precedin% su 8sections y an insurer, any insurance a%ent who contra,enes the pro,isions of su 8section E1F or su 8section E&F shall e punisha le with fine which may extend to one hundred rupees. L)*)0,0)/+ /4 (16(+5(5 /4 *,+,<(*(+0 )+ l)4( )+58',+3( 985)+(55 A%B. ElF #,ery insurer transactin% life insurance usiness in India shall furnish to the Controller, within such time as may e prescri ed, statements in the prescri ed form certified y an actuary on the asis of premiums currently used y him in re%ard to new usiness in respect of mortality, rate of interest, expenses and onus loadin%. E2F After the &1st day of Decem er, 1/)0, no insurer shall, in respect of life insurance usiness transacted y him in India, spend as expenses of mana%ement in any calendar year an amount in excess of the prescri ed limits and in prescri in% any such limits re%ard shall e had to the si7e and a%e of the insurer and the pro,ision %enerally "ade for expenses of mana%ement in the premium rates of insurersD P'/:)2(2 that where an insurer has spent as such expenses in any year an amount in excess of the amount permissi le under this su 8section, he shall not e deemed to ha,e contra,ened the pro,isions of this section, if the excess amount so spent is within such limits as may e fixed in respect of the year y the Authority after consultation with the #xecuti,e Committee of the 4ife Insurance Council constituted under section *(81, y which the actual expenses incurred may exceed the expenses permissi le under this su 8section. E&F In respect of any statement mentioned in su section E1F, the Authority may re+uire that it shall e su mitted to another actuary, appointed y the insurer for the purpose and appro,ed y the Authority, for certification y him, whether with or without modifications. E(F #,ery insurer transactin% life insurance usiness in India shall incorporate in the re,enue account EaF a certificate si%ned y the chairman and two directors and y the principal officer of the insurer, and an auditorIs certificate, certifyin% that all expenses of mana%ement in respect of life insurance usiness transacted y the insurer in India ha,e een fully de ited in the re,enue account as expenses, and E F if the insurer in carryin% on any other class of insurance usiness in addition to life insurance usiness an auditorIs certificate certifyin% that all char%es incurred in respect of his life insurance usiness and in respect of his usiness other than life insurance usiness ha,e een fully de ited in the respecti,e re,enue accounts. 45planation.=in this section.8 7a8 Bcalendar yearB or ByearB means, in relation to an insurer who is re+uired to furnish returns in accordance with su 8section E2F of section 1*, the period co,ered y the re,enue account furnished y such insurer under clause E F of that su 8sectionC 7*8 Bexpenses of mana%ementB means all char%es where,er incurred whether directly or indirectly, and includes8 7i8 7ii8 7iii8 commission payments of all 5inds, any amount of expenses capitali7ed, in the case of an insurer ha,in% his principal place of usiness outside India, a proper share of head office expenses which shall not e less than such percenta%e as may e prescri ed of the total premiums Eless re8insuranceF recei,ed durin% the year in respect of life insurance usiness transacted y him in India,

ut does not include in the case of an insurer ha,in% his principal place of usiness in India any share of head office expenses in respect of life insurance usiness transacted y him outside India. L)*)0,0)/+ /4 (16(+5(5 /4 *,+,<(*(+0 )+ <(+(',l )+58',+3( 985)+(55 A%C. E1F After the &1st day of Decem er, 1/(/, no insurer shall, in respect of any class of %eneral insurance usiness transacted y him in India, spend in any calendar year as expenses of mana%ement includin%

commission or remuneration for procurin% usiness an amount in excess of the prescri ed limits arid in prescri in% any such limits re%ard shall e had to the si7e and a%e of the insurerD P'/:)2(2 that where an insurer has spend as such expenses in any year an amount in excess of the amount permissi le under this su section, he shall not e deemed to ha,e contra,ened the pro,isions of this section, if the excess amount so spent is within such limits as may e fixed in respect of the year y the Authority after consultation with the #xecuti,e Committee of the 9eneral Insurance. Council constituted under section *(1, y which the actual expenses incurred may exceed the expenses permissi le under this su 8section. E2F #,ery insurer as aforesaid shall incorporate in8the re,enue account a certificate si%ned y the chairman and two directors and y the principal officer of the insurer, and y an auditor certifyin% that all expenses of mana%ement where,er incurred, whether directly or indirectly, in respect of the usiness referred to in this section ha,e een fully de ited in the re,enue account as expenses. 45planation.=In this section,J 7a8 Bcalendar yearB shall ha,e the meanin% assi%ned to it in section (0BC 7*8 Bexpenses of mana%ementB means all char%es, where,er insured whether directly or indirectly, includin% commission payments of all 5inds and, in the case of an insurer ha,in% his principal place of usiness outside India, a proper share of head office expenses, which shall not e less than such percenta%e as may e prescri ed, of his %ross premium income Ethat is to say, the premium income without ta5in% into account premiums or reinsurance ceded or acceptedF written direct in India durin% the year, ut in computin% the expenses of mana%ement in India the followin%, and only the followin% expenses may e excluded, namely EiF in the case of an insurer ha,in% his principal place of usiness in India, a share of head office expenses in respect of %eneral insurance usiness transacted y him outside India not exceedin% such percenta%e of his %ross direct premium written outside India as may e prescri edC in the case of an insurer ha,in% his principal place of usiness outside India, a share of the expenses of his office in India in respect of %eneral insurance usiness transacted y him outside India throu%h his office in India, not exceedin% such percenta%e of his %ross direct premium written outside India throu%h his office in India, as may e prescri edC any expenses de ited to profit and loss account relatin% exclusi,ely to the mana%ement of capital, and dealin%s with share holders and a proper share of mana%erial expenses calculated in such manner as may e prescri edC and any expenses de ited to claims in the re,enue account in 1orm 1 of Part II of the $hird ScheduleC

EiiF

EiiiF Ei,F 7&8

Binsurance usiness transacted in IndiaB includes insurance usiness, where,er effected relatin% to any property situate in India or to any ,essel or aircraft re%istered in India.

P'/.)9)0)/+ /4 '(9,0(5 A1. #1$ ;o person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to ta5e or renew or continue an insurance in respect of any 5ind of ris5 relatin% to li,es or property in India, any re ate of the whole or part of the commission paya le or any re ate of the premium shown on the policy, nor shall any person ta5in% out or renewin% or continuin% a policy accept any re ate, except such re ate as may e allowed in accordance with the pu lished prospectuses or ta les of the insurerD P'/:)2(2 that acceptance y an insurance a%ent of commission in connection with a policy of life insurance ta5en out y himself on his own life shall not e deemed to e acceptance of a re ate of premium within the meanin% of this su 8section if at the time of such acceptance the insurance a%ent satisfies the prescri ed conditions esta lishin% that he is a *ona ide insurance a%ent employed y the insurer. E2F Any person ma5in% default in complyin% with the pro,isions of this section shall e punisha le with fine which may extend to fi,e hundred rupees. L)3(+5)+< /4 )+58',+3( ,<(+05

A!. E1F $he Authority or an officer authorised y him in this ehalf shall, in the manner determined y the re%ulations made y it and on payment of the fee which shall not e determined y the re%ulations, which shall not e more than two hundred and fifty rupees, issue to any person ma5in% any application in the manner determined y the re%ulations, a licence to act as an insurance a%ent for the purpose of solicitin% or procurin% insurance usinessD P'/:)2(2 thatJ 7i8 in the case of an indi,idual, he does not suffer from any of the dis+ualification mentioned in su 8section E(FC and 7ii8 in the case of a company or firm, any of its directors or partners does not suffer from any of the said dis+ualificationsD P'/:)2(2 further that any licence issued immediately efore the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, shall e deemed to ha,e een issued in accordance with the re%ulations which pro,ide for such licence. E2F A licence issued under this section shall entitle the holder to act as an insurance a%ent for any insurer. E&F A licence issued under this section, after the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, shall remain in force for a period of three years only from the date of issue, ut shall, if the applicant ein% an indi,idual does not, or ein% a company or firm any of its directors or partners, does not suffer from any of the dis+ualification mentioned in clauses E F, EcF, EdF, EeF, EeaF and EfF of su 8section E(F and the application for renewal of the licence reaches the issuin% authority at least thirty days efore the date on which the licence ceases to remain in force, e renewed for a period of three years at any one time on payment of the fee determined y the re%ulations made y the Authority which shall not e more than rupees two hundred and fifty, and an additional fee of an amount determined y the re%ulations not exceedin% rupees one hundred y way of penalty, if the application for renewal of the licence does not reach the issuin% authority at least thirty days efore the date on which the licence ceases to remain in force. E&AF ;o application for the renewal of a licence under this section shall e entertained if the application does not reach the issuin% authority efore the licence ceases to remain in forceD P'/:)2(2 that the Authority may, if satisfied that undue hardship would e caused otherwise, accept any application in contra,ention of this su section on payment y the applicant of a penalty of se,en hundred and fifty rupees. E(F $he dis+ualifications a o,e referred to shall e the followin%D EaF that the person is a minorC E F that he is found to e of unsound mind y a Court of competent !urisdictionC EcF that he has een found %uilty of criminal misappropriation or criminal reach of trust or cheatin% or for%ery or an a etment of or attempt to commit any such offence y a Court of competent !urisdictionD P'/:)2(2 that where at least fi,e years ha,e elapsed since the completion of the sentence imposed on any person in respect of any such offence, the Authority shall ordinarily declare in respect of such person that his con,iction shall cease to operate as a dis+ualification under this clauseC EdF that in the course of any !udicial proceedin% relatin% to any policy of insurance of the windin% up of an insurance company or in the course of an in,esti%ation of the affairs of all insurer it has then found that he has een %uilty off or has 5nowin%ly participated in or conni,ed at any fraud, dishonestly fir misrepresentation a%ainst an insurer or an insured. EeF that in the case of an indi,idual, he does not possess the re+uisite +ualifications and practical trainin% for a period not exceedin% twel,e months, as may e specified y the re%ulations made y the Authority in this ehalfC EeaF that in the case of a company or firm ma5in% an application under su 8section E1F or su 8section E&F, a director or a partner or one or more of its officers or other employees so desi%nated y it and in the case of any other person, the chief executi,e, y whate,er name called, or one or more of his employees desi%nated y him, do not possess the re+uisite +ualifications and practical trainin% and

ha,e not passed such an examination as re+uired under clauses EeF and EfFC E%F that he ,iolates the code of conduct as may e specified y the re%ulations made y the Authority.

E)F if it e found that an insurance a%ent ein% an indi,idual is, or ein% a company or firm contains a director or partner who is sufferin% from any of the dis+ualifications mentioned in su 8section E(F, then, without pre!udice to any other penalty to which he may e lia le, the Authority shall, and if the insurance a%ent has 5nowin%ly contra,ened any of the pro,isions of this Act may, cancel the licence issued to the a%ent under this section. E*F $he Authority may issue a duplicate licence to replace a licence lost, destroyed or mutilated on payment of such fee not exceedin% rupees fifty as may e determined y the re%ulations. E-F Any person who acts as an insurance a%ent without holdin% a licence issued under this section to act as such shall e punisha le with fine which may extend to fi,e hundred rupees., and any insurer or any person actin% on ehalf of an insurer, who appoints as an insurance a%ent any person not licensed to act as such or transacts any insurance usiness in India throu%h any such person shall e punisha le with fine which may extend to one thousand rupees. E.F <here the person contra,enin% su 8section E-F is a company or a firm, then, without pre!udice to any other proceedin%s which may e ta5en a%ainst the company, or firm, e,ery director, mana%er, secretary or other officer of the company, and e,ery partner of the firm who is 5nowin%ly a party to such contra,ention shall e punisha le with fine which may extend to fi,e thousand rupees. R(<)50',0)/+ /4 6')+3)6,l ,<(+05, 3.)(4 ,<(+05 ,+2 56(3),l ,<(+05 A!A. E1F $he Authority or an officer authorised y it in this ehalf shall in the prescri ed manner and on payment of the prescri ed fee, which shall not e more than twenty8fi,e rupees for a principal a%ent or a chief a%ent and ten rupees for a special a%ent, re%ister any person who ma5es an application to him in the prescri ed manner if,J EaF in the case of an indi,idual, he does not suffer from any of the dis+ualifications mentioned in su 8section E(F of Section (2, or E F in the case of a company or firm, any of its directors or partners does not suffer from any of the said dis+ualifications, and a certificate to Act as a principal a%ent, chief a%ent or special a%ent, as the case may e, for the purpose of procurin% insurance usiness shall e issued to him. E2F A certificate issued under this section shall entitle the holder thereof to act as a principal a%ent, chief a%ent, or special a%ent, as the case may e, for any insurer. E&F A certificate issued under this section shall remain in force for a period of twel,e months only from the date of issue, ut shall, on application made on this ehalf, e renewed from year to year on production of a certificate from the insurer concerned that the pro,isions of clauses E2F and E&F of Part A of the Sixth Schedule in the case of a principal a%ent, the pro,isions of clauses E2F and E(F of Part B of the said Schedule in the case of a chief a%ent, and the pro,isions of clauses E2F and E&F of Part C of the said Schedule in the case of a special a%ent, ha,e een complied with, and on payment of the prescri ed fee, which shall not e more than twenty8fi,e rupees, in the case of a principal a%ent or a chief a%ent, and ten rupees in the case of a special a%ent, and an additional fee of the prescri ed amount not exceedin% fi,e rupees y way of penalty, in cases where the application for renewal of the certificate does not reach the issuin% authority efore the date on which the certificate ceases to remain in forceD P'/:)2(2 that, where the applicant is an indi,idual, he does not suffer from any of the dis+ualifications mentioned in clauses E F to EdF of su 8section E(F of section (2 and where the applicant is a company or a firm, any of its directors or partners does not suffer from any of the said dis+ualifications. E(F <here it is found that the principal a%ent, chief a%ent or special a%ent ein% an indi,idual is, or ein% a company or firm contains a director or partner who is sufferin% from any of the dis+ualifications mentioned in su section E(F of section (2, without pre!udice to any other penalty to which he may e lia le, the Authority shall, and where a principal a%ent, chief a%ent or special a%ent has contra,ened any of the pro,isions of this Act may cancel the certificate issued under this section to such principal a%ent, chief a%ent

or special a%ent. E)F $he authority which issued any certificate under this section may issue a duplicate certificate to replace a certificate lost, destroyed or mutilated on payment of the prescri ed fee, which shall not e more than two rupees. E*F Any person who acts as a principal a%ent, chief a%ent or special a%ent, without holdin% a certificate issued under this section to act as such, shall e punisha le with fine which may extend to fi,e hundred rupees, and any insurer or any person actin% on ehalf of an insurer, who appoints as a principal a%ent, chief a%ent or special a%ent any person not entitled to act as such or transacts any insurance usiness in India throu%h any such person, shall e punisha le with fine which may extend to one thousand rupees. E-F <here the person contra,enin% su 8section E*F is a company or a firm, then, without pre!udice to any other proceedin%s which may e ta5en a%ainst the company or firm, e,ery director, mana%er, secretary or any other officer of the company, and e,ery partner of the firm who is 5nowin%ly a party to such contra,ention shall e punisha le with fine which may extend to fi,e hundred rupees. E.F $he pro,isions of su 8sections E*F and E-F shall not ta5e effect until the expiry of six months from the commencement of the Insurance EAmendmentF Act, 1/)0. E/F ;o insurer shall, on or after the commencement of the Insurance EAmendmentF Act, 2002, appointment or transact any insurance usiness in India throu%h any principal a%ent, chief a%ent or special a%ent. R(<8l,0)/+ /4 (*6l/-*(+0 /4 6')+3)6,l ,<(+05 A!B. E1F ;o insurer shall, after the expiration of se,en years from the commencement of the Insurance EAmendmentF Act, 1/)0, appoint, or transact any insurance usiness in India, throu%h a principal a%ent. E2F #,ery contract etween an insurer and a principal a%ent shall e in writin% and the terms contained in Part A of the Sixth Schedule shall e deemed to e incorporated in, and form part of, e,ery such contract. E&F ;o insurer shall, after the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, appoint any person as a principal a%ent except in a presidency8town unless the appointment is y way of renewal of any contract su sistin% at such commencement. E(F <ithin sixty days of the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, e,ery principal a%ent shall file with the insurer concerned a full list of insurance a%ents employed y him indicatin% the terms of the contract etween the principal a%ent and each of such insurance a%ents, and, if any principal a%ent fails to file such a list within the period specified, any commission paya le to such principal a%ent on premiums recei,ed from the date of expiry of the said period of sixty days until the date of the filin% of the said list shall, notwithstandin% anythin% in any contract to the contrary, cease to e so paya le. E)F A certified copy of e,ery contract as is referred to in su 8section E2F shall e furnished y the insurer to the Authority within thirty days of his enterin% into such contract, and intimation of any chan%e in any such contract shall e furnished y the insurer with full particulars thereof to the Authority within thirty days of the ma5in% of any such chan%e. E*F If the commission due to any insurance a%ent in respect of any %eneral insurance usiness procured y such a%ent is not paid y the principal a%ent for any reason, the insurer may pay the insurance a%ent the commission so due and reco,er the amount so paid from the principal a%ent concerned. E-F #,ery contract as is referred to in su 8section E2F, su sistin% at the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, shall, with respect to terms re%ardin% remuneration, e deemed to ha,e een so altered as to e in accordance with the pro,isions of su 8section E(F of section (0A. E.F If any dispute arises as to whether a person is or was a principal a%ent the matter shall e referred to the Authority, whose decision shall e final. E/F #,ery insurer shall maintain a re%ister in which the name and address of e,ery principal a%ent appointed y him, the date of such appointment and the date, if any, on which the appointment ceased shall e entered. R(<8l,0)/+ /4 (*6l/-*(+0 /4 3.)(4 ,+2 56(3),l ,<(+05

A!C. #1$ #,ery contract etween art insurer carryin% on life insurance usiness and a chief a%ent shall e in writin%, and shall specify the area Enot ein% less in extent than a district or the e+ui,alent thereofF for which the chief a%ent is appointed, and the terms contained in Part B of the Sixth Schedule shall e deemed to e incorporated in, and form part of, e,ery such contract. E2F ;o chief a%ent shall, either directly or throu%h insurance a%ents or special a%ents employed y or throu%h him procure life insurance usiness for the insurer or any area outside the area for which he has een appointed or In any area for which another chief a%ent has een appointed or in any area in which the head office or any ranch office of the insurer is operatin%, and neither the head office nor any ranch office of the insurer shall operate in any area for which a chief a%ent has een appointedD P'/:)2(2 that nothin% in this su 8section shall e deemed to prohi it the head office of an insurer which had een operatin% at the commencement of the Insurance EAmendmentF Act, 1/)0C for a period of not less than ten years efore such commencement within the municipal limits of any town where the head office is situate, and a chief a%ent who, in pursuance of an a%reement in writin%, had een operatin% for a similar period within such limits, from continuin% to operate within the said limitsD P'/:)2(2 further that nothin% in this su 8section shall e deemed to prohi it an insurance a%ent from procurin% life insurance usiness in or from any area and su mittin% the proposals direct to the principal office of the insurer in India. E&F <ithin sixty days of the commencement of the Insurance EAmendmentF Act, 1/)0, e,ery chief a%ent shall file with the insurer concerned a full list of the insurance a%ents employed y him, indicatin% the terms of the contract etween the chief a%ent and each of such insurance a%ents and the usiness secured y each of such a%ents, and if any chief a%ent fails to file such a list within the period specified, any commission paya le to such chief a%ent on premiums recei,ed from the date of the expiry of the said period of sixty days until the date of the filin% of the said list shall, notwithstandin% anythin% in any contract to the contrary, cease to e so paya le. E(F #,ery contract etween an insurer carryin% on life insurance usiness and a special a%ent, or etween a chief a%ent of such insurer and a special a%ent, shall e in writin% and the terms contained in Part C of the Sixth Schedule shall e deemed to e incorporated in, and form part of, e,ery such contractD P'/:)2(2 that the Authority may, in the case of a contract etween a co8operati,e life insurance society as defined in clause E F of su 8section E1F of section /) and a co8operati,e society re%istered under the Indian Co8operati,e Societies Act, 1/12 E2 of 1/12F, or under any other law for the time ein% in force and actin% as a special a%ent, alter, to such extent as he thin5s fit, all or any of the said terms. E)F A certified copy of e,ery contract as is referred to in su 8section E1F or su 8section E(F shall e furnished y the insurer or the chief a%ent to the Authority within thirty days of his enterin% into such contract, and intimation of any chan%e in any such contract shall e furnished y the insurer or the chief a%ent with full particulars thereof to the Authority within thirty days of the ma5in% of any such chan%e. E*F ;o such contract as is referred to in su 8section E1F or su 8section E(F shall e entered into or renewed for a period exceedin% ten years at any one time and notwithstandin% the terms of any contract to the contrary, no option to renew any such contract %i,en to any of the parties shall e enforcea le without the consent of the other. E-F #,ery contract etween an insurer and a person actin% on ehalf of such insurer who, efore the commencement of the Insurance EAmendmentF Act, 1/)0F, has een employin% insurance a%ents for the purpose of life insurance usiness, which is su sistin% on such commencement, shall terminate after the expiration of ten years from such commencement, if it does not terminate earlierD P'/:)2(2 that e,ery such contract shall e modified y the parties efore the 1st day of =anuary, 1/)1, to rin% it into conformity with this act, and ant, such modification shall8 EiF as respects remuneration, whether in respect of usiness already procured or in respect of usiness to e procured thereafter, e such as may e mutually a%reed upon etween the parties, su !ect in the case of remuneration paya le on usiness procured efore such commencement, to a maximum of an o,erridin% commission of two and a half per cent. plus

EiiF

a further commission not exceedin% three and three8+uarter per cent. on premiums in respect of which no commission is paya le to any insurance a%entC e deemed to include all the terms specified in Part B or Part C of the Sixth Schedule, as the case may eD

P'/:)2(2 48'0.(' that, in the e,ent of any dispute as to the terms of any fresh contract, the matter shall e referred to ar itration E.F Any such contract as is referred to in su 8section E-F which was su sistin% on the lst day of =anuary, 1/(/, ut has terminated or has een terminated efore the commencement of the Insurance EAmendmentF Act, 1/)0, shall e su !ect to the maximum limits specified in clause EiF of the pro,iso to su 8section E-F as respects remuneration, if any, paya le on usiness procured efore the termination of the contract. E/F ;othin% in this section shall e deemed to pre,ent any special a%ent from recei,in% any renewal commission on policies effected throu%h him as an insurance a%ent at any time efore his appointment as such special a%ent. E10F If any dispute arises as to whether a person is or was a chief a%ent or a special a%ent for the purposes of this Act, the matter shall e referred to the Authority whose decision shall e final. E11F #,ery insurer shall maintain a re%ister in which the name and address of e,ery chief a%ent appointed y him, the date on which the appointment was made and the date, if any, on which the appointment ceased shall e entered, and a separate re%ister in which similar particulars relatin% to e,ery special a%ent shall e entered, and e,ery chief a%ent shall maintain a re%ister in which similar particulars relatin% to e,ery special a%ent appointed y him shall e entered. I558( /4 l)3(+3( 0/ )+0('*(2),'- /' )+58',+3( )+0('*(2),'A!D. E1F $he Authority or an officer authori7ed y it in this ehalf shall, in the manner determined y the re%ulations made y the Authority and on payment of the fees determined y the re%ulations made y the Authority, issue to any person ma5in% an application in the manner determined y the re%ulations, and not sufferin% from any of the dis+ualifications herein mentioned, a licence to act as an intermediary or an insurance intermediary under this ActD P'/:)2(2 that,8 7a8 in the case of an indi,idual, he does not suffer from any of the dis+ualifications mentioned in su 8 section E(F of section (2, or 7*8 in the case of a company or firm, any of its directors or partners does not suffer from any of the said dis+ualifications. E2F A licence issued under this section shall entitle the holder thereof to act as an intermediary or insurance intermediary. E&F A licence issued under this section shall remain in force for a period of three years only from the date of issue, ut shall, if the applicant, ein% an indi,idual does not, or ein% a company or firm any of its directors or partners does not suffer from any of the dis+ualifications mentioned in clauses E *F, E&F, EdF, EeF and E F of su 8section E(F of section (2 and the application for renewal of licence reaches the issuin% authority at least thirty days efore the date on which the licence ceases to remain in force, e renewed for a period of three years at any one time on payment of the fee, determined y the re%ulations made y the Authority and additional fee for an amount determined y the re%ulations, not exceedin% one hundred rupees y way of penalty, if the application for renewal of the licence does not reach the issuin% authority at least thirty days efore the date on which the licence ceases to remain in force. E(F ;o application for the renewal of a licence under this section shall e entertained if the application does not reach the issuin% authority efore the licence ceases to remain in forceD P'/:)2(2 that the Authority may, if satisfied that undue hardship would e caused otherwise, accept any application in contra,ention of this su 8section on payment y the application of the penalty of se,en hundred and fifty rupees. E)F $he dis+ualifications a o,e referred to shall e the followin%D 8

7a8 that the person is a minorC 7*8 that he is found to e a unsound mind y a court of competent !urisdictionC 7&8 that he has een found %uilty of criminal misappropriation or criminal reach of trust or cheatin% or for%ery or an a etment of or attempt to commit any such offence y a court of competent !urisdictionD P'/:)2(2 0.,0, where at least fi,e years ha,e elapsed since the completion of the sentence imposed on any person in respect of any such offence, the Authority shall ordinarily declare in respect of such person that his con,iction shall cease to operate as a dis+ualification under this clauseC 7d8 that in the course of any !udicial proceedin%s relatin% to any policy of insurance of the windin% up of an insurance company or in the course of an in,esti%ation of the affairs of an insurer it has een found that he has een %uilty of or has 5nowin%ly participated in or conni,ed at any fraud dishonestly or misrepresentation a%ainst an insurer or an insuredC 7e8 that he does not possess the re+uisite +ualifications and practical trainin% for a period not exceedin% twel,e months, as may e specified y the re%ulations made y the Authority in this ehalfC 7 8 that he has not passed such examinations as may e specified y the re%ulations made y the Authority in this ehalfC 7g8 that he ,iolates the code of conduct as may e specified y the re%ulations made y the Authority. E*F If it e found that an intermediary or an insurance intermediary suffers from any of the fore%oin% dis+ualifications, without pre!udice to any other penalty to which he may e lia le, the Authority shall, and if the intermediary or an insurance intermediary has 5nowin%ly contra,ened any pro,isions of this Act may cancel the licence issued to the intermediary or insurance intermediary under this section. E-F $he Authority may issue a duplicate licence to replace a licence lost, destroyed or mutilated, on payment of such fee, as may e determined y the re%ulations made y the Authority. E.F Any person who acts as an intermediary or an insurance intermediary without holdin% a licence issued under this section to act as such, shall e punisha le with fine, and any insurer or any person who appoints as an intermediary or an insurance intermediary or any person not licensed to act as such or transacts any insurance usiness in India throu%h any such person, shall e punisha le with fine. E/F <here the person contra,enin% su 8section E.F is a company or a firm, then, without pre!udice to any other proceedin%s which may e ta5en a%ainst the company or firm, e,ery director, mana%er, secretary or other officer of the company, and e,ery partner of the firm who is 5nowin%ly a party to such contra,ention shall e punisha le with fine. C/**)55)/+, 9'/C(',<( /' 4(( 6,-,9l( 0/ )+0('*(2),'- /' )+58',+3( )+0('*(2),'A!E. E1F ;o intermediary or insurance intermediary shall e paid or contract to e paid y way of commission, fee or as remuneration in any form, an amount exceedin% thirty per cent of the premium paya le as may e specified y the re%ulations made y the Authority, in respect of any policy or policies effected throu%h himD P'/:)2(2 that the Authority may specify different amounts paya le y way of commission, fee or as remuneration to an intermediary or insurance intermediary or different classes of usiness of insurance. E2F <ithout pre!udice to the pro,isions contained in this Act, the Authority may, y the re%ulations made in this ehalf, specify the re+uirements of capital, form of usiness and other conditions to act as an intermediary or insurance intermediary. R(<)50(' /4 )+58',+3( ,<(+05 (&. ElF #,ery insurer and e,ery person who actin% on ehalf of an insurer employs insurance a%ents shall maintain a re%ister showin% the name and address of e,ery insurance a%ent appointed y him and the date on which his appointment e%an and the date, if any, on which his appointment ceased. P'/.)9)0)/+ /4 3(55,0)/+ /4 6,-*(+05 /4 3/**)55)/+ AA. E1F ;otwithstandin% anythin% to the contrary contained in any contract etween any person and an insurance a%ent pro,idin% for the forfeiture or stoppa%e of payment of renewal commission to such insurance a%ent, no such person shall, in respect of life insurance usiness transacted in India, refuse payment to an insurance a%ent of commission due to him on renewal premium under the a%reement y reason only of the termination of his a%reement, except for fraudD P'/:)2(2 that8

EaF such a%ent ceases to act for the insurer concerned after the Central 9o,ernment has notified in the official 9a7ette that it is satisfied that the circumstances in which the said insurer is placed are suc5s as to !ustify the a%entIs ceasin% to act for himC or E F such a%ent has ser,ed the insurer continually and exclusi,ely in respect of life insurance usiness for at least fi,e years and policies assurin% a total sum of not less than fifty thousand rupees effected throu%h him for the insurer were in force on a de to one year efore his ceasin% to act as such a%ent for the insurer, and that the commission on renewal premiums due to him does not exceed four per cent in any caseC or EcF such a%ent has ser,ed the insurer continually and exclusi,ely for at least ten years and after his ceasin% to act as such a%ent he does not directly or indirectly solicit or procure insurance usiness for any other person.

45planation.=1or the purpose of this su 8section, ser,ice of an insurance a%ent under a chief a%ent of the insurer, whether efore or after the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, shall e deemed to e ser,ice under the insurer. E2F Any commission paya le to an insurance a%ent under the pro,isions of clause E F and EcF of the pro,iso to su 8section E1F shall, notwithstandin% the death of the a%ent, continue to e paya le to his heirs for so lon% as such commission would ha,e een paya le had such insurance a%ent een ali,e. P/7(' 0/ 3,ll 4/' )+4/'*,0)/+ AAA. 1or the purposes of ensurin% compliance with the pro,isions of sections (0A, (0B, (0C, (2B and (2C the Authority may y notice,J EaF E F re+uire from an insurer, principal a%ent, chief a%ent, or special a%ent such information, certified if so re+uired y an auditor or actuary, as he may consider necessaryC re+uire an insurer, principal a%ent, chief a%ent, or special a%ent to su mit for his examination as the principal place of usiness of the insurer in 1IndiaF, any oo5 of account, re%ister or other document, or to supply any statement which may e specified in the noticeC examine any officer of an insurer or a principal a%ent, chief a%ent or special a%ent on oath, in relation to any such information, oo5, re%ister, document or statement and administer the oath accordin%lyC

EcF

and an insurer, principal a%ent, chief a%ent or special a%ent shall comply with any such re+uirement within such time as may e specified in the notice. !pe&ial p#ovisions o laP/l)3- +/0 0/ 9( 3,ll(2 )+ >8(50)/+ /+ <'/8+2 /4 *)5-50,0(*(+0 ,40(' 07/ -(,'5 A=. ;o policy of life insurance effected efore 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 comin% into force of this Act shall, after the expiry calf two years from the date on which it was effected e called in +uestion y an insurer on the %round that statement made in the proposal or in any report of a medical officer, or referee, or friend of the insured, or in any other document leadin% to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made y the policy8holder and that the policy8holder 5new at the time of ma5in% it that the statement was false or that it suppressed facts which it was material to discloseD P'/:)2(2 that nothin% in this section shall pre,ent the insurer from callin% for proof of a%e at any time if he is entitled to do so, and no policy shall e deemed to e called in +uestion merely ecause the terms of the policy are ad!usted on su se+uent proof that the a%e of the life insured was incorrectly stated in the proposal. A66l)3,0)/+ /4 0.( l,7 )+ 4/'3( )+ I+2), 0/ 6/l)3)(5 )558(2 )+ I+2),

A .$he holder of a policy of insurance issued y an insurer in respect of insurance usiness transacted in India after the commencement of this Act shall ha,e the ri%ht, notwithstandin% anythin% to the contrary contained in the policy or in any a%reement relatin% thereto, recei,e payment in India of any sum secured there y and to sue for any relief in respect of the policy in any court of competent !urisdiction in IndiaC and if the suit is rou%ht in India any +uestion of law arisin% in connection with any such policy shall e determined accordin% to the law in force in IndiaD P'/:)2(2 that nothin% in this section shall apply to a policy of marine insurance P,-*(+0 /4 */+(- )+0/ C/8'0 A@. E1F <here in respect of any policy of life insurance maturin% for payment an insurer is of opinion that y reason of conflictin% claims to or insufficiency of proof of title to the amount secured there y or for any other ade+uate reason it is impossi le otherwise for the insurer to o tain a satisfactory dischar%e for the payment of such amount, the insurer may, apply to pay the amount into the Court within the !urisdiction of which is situated the place at which such amount is paya le under the terms of the policy or otherwise. E2F A receipt %ranted y the Court for any such payment shall e a satisfactory dischar%e to the insurer for the payment of such amount. E&F An application for permission to ma5e a payment into Court under this section, shall e made y a petition ,erified y an affida,it si%ned y a principal officer of the insurer settin% forth the followin% particulars, namelyD EaF E F EcF EdF the name of the insured person and his addressC if the insured person is deceased, the date and place of his deathC the nature of the policy and the amount secured y itC the name and address of each claimant so far as is 5nown to the insurer with details of e,ery notice of claim recei,edC EeF the reasons why in the opinion of the insurer satisfactory dischar%e cannot e o tained for the payment of the amountC and EfF the address at which the insurer may e ser,ed with notice of any proceedin% relatin% to disposal of the amount paid into Court. E(F An application under this section shall not e entertained y the Court if the application is made efore the expiry of six months from the maturin% of the policy y sur,i,al, or from the date of receipt of notice y the insurer of the death of the insured, as the case may e. E)F If it appears to the Court that a satisfactory dischar%e for the payment of the amount cannot otherwise e o tained y the insurer it shall allow the amount to e paid into Court and shall in,est the amount in 9o,ernment securities pendin% its disposal. E*F $he insurer shall transmit to the Court e,ery notice of claim recei,ed after the ma5in% of the application under su 8section E&F, and any payment re+uired y the Court as costs of the proceedin%s or otherwise in connection with the disposal of the amount paid into Court shall as to the cost of the application under su 8section E&F e orne y the insurer and as to any other costs e in the discretion of the Court. E-F $he Court shall cause notice to e %i,en to e,ery ascertained claimant of the fact that the amount has een paid into Court, and shall cause notice at the cost of any claimant applyin% to withdraw the amount to e %i,en to e,ery other ascertained claimant. E.F $he Court shall decide all +uestions relatin% to the disposal of claims to the amount paid into Court. Cl,)*5 /+ 5*,ll l)4( )+58',+3( 6/l)3)(5 A@A E1F In the e,ent of any dispute relatin% to the settlement of a claim on a policy of life insurance assurin% a sum not exceedin% two thousand rupees Eexclusi,e of any profit or onus not ein% a %uaranteed profit or onusF issued y an insurer in respect of insurance usiness transacted in India, arisin% etween a claimant under the policy and the insurer who issued the policy or has otherwise assumed lia ility in respect thereof, the dispute may at the option of the claimant e referred to the Authority for decision and the Authority may,

after %i,in% an opportunity to the parties to e heard and after ma5in% such further in+uires as he may thin5 fit, decide the matter. E2F $he decision of the Authority under this su 8section shall e final and shall not e called in +uestion in any Court, and may e executed y the Court which would ha,e een competent to decide the dispute if it had not een referred to the Authority as if it wore a decree passed y that Court. E&F $here shall e char%ed and collected in respect of the duties of the Authority under this section such fees whether y way of percenta%e or otherwise as may e prescri ed. D)'(30/'5 /4 )+58'('5 9()+< 3/*6,+)(5 A8. E1F <here the insurer is a company incorporated under the Indian Companies Act, 1/1& E- of 1/1&F, or under the Indian Companies Act, 1..2 E* of 1..2F, or under the Indian Companies Act, 1.** E10 of 1.**F, or under any Act repealed there y, and carries on the usiness of life insurance, not less than one8fourth of the whole num er of the directors of the company the num er to e elected not ein% less than two in any case shall notwithstandin% anythin% to the contrary in the Articles of Association of the company e elected in the prescri ed manner y the holders of policies of life insurance issued y the company. E2F 6nly and all persons holdin% otherwise than as assi%nees policies of life insurance issued y the company of such minimum amount and ha,in% een in force for such minimum period as may e prescri ed shall unless dis+ualified under su 8section E2AF e eli%i le for election as directors under su 8section E1F, and only and all persons holdin% policies of life insurance issued y the company and ha,in% een in force at the time of the election for not less than six months shall e eli%i le to ,ote at such electionsD P'/:)2(2 that the assi%nment of a policy to the persons who too5 out the policy shall not dis+ualify that person for ein% eli%i le for election as a director under su 8section E1F E2AF A person shall e ineli%i le for election as a director, under su section E1F of any company if he is a director, officer, employee, or le%al or technical ad,iser of that company, or any other insurer, and shall cease to e a director under su 8section E1F if after election he ac+uires any dis+ualification specified in this su 8section or no lon%er holds the +ualifications re+uired y su 8section E2FD P'/:)2(2 that nothin% in this su 8section shall dis+ualify a person who is an elected director under su 8section E1F and is not otherwise dis+ualified under this su 8section, from ein% re8electedD P'/:)2(2 further that the Authority may exempt any director of a su sidiary company of the insurer from any dis+ualification imposed y this su 8section E&F $he Central 9o,ernment may, for such period, or to such extent and su !ect to such conditions as may e specified y it in this ehalf, exempt from the operation of this sectionJ EaF any mutual Insurance Company as defined in clause EaF of su 8section E1F of section /) in respect of which the Authority certifies that in his opinion owin% to conditions %o,ernin% mem ership of the company or to the nature of the insurance contracts underta5en y it the application of the pro,isions of this section to the company is practica le, or E F any company in respect of which the Authority certifies that in opinion the company, ha,e ta5en all reasona le steps to achie,e compliance with the pro,isions of this section, has een una le to o tain the re+uired num er of directors with the re+uired +ualifications. E(F $his section shall not ta5e effect, in respect of any company in existence at the commencement of this Act, until the expiry of one year there from, and in respect of any company incorporated after the commencement of this Act, until the expiry of two years from the date of re%istration to carry on life insurance usiness. L)4( I+58',+3( ,<(+05 +/0 0/ 9( 2)'(30/'5 /4 l)4( )+58',+3( 3/*6,+)(5 A8A. ;o insurance a%ent who solicits or procures life insurance usiness, and no chief a%ent or special a%ent shall e eli%i le to e or remain a director of any insurance company carryin% on life insurance usinessD P'/:)2(2 that any director holdin% office at the commencement of the Insurance EAmendmentF Act, 1/(* E* of 1/(*F, shall not ecome ineli%i le to remain a director y reason of this section until the expiry of six

months from the commencement of that Act. F8'0.(' 6'/:)5)/+ '(<,'2)+< 2)'(30/'5 A8B. E1F An insurer specified in su 8clause 7*8 of clause E/F of section 2 and carryin% on life insurance usiness shall not ha,e a common director with another such insurer. E2F $he Authority may, for such period, to such extent and su !ect to such conditions as it may specify, exempt from the operation of this I sectionJ EaF any insurer, who is a su sidiary company of another insurer, or 7*8 two or more insurers, for the purpose of facilitatin% their amal%amation or the transfer of usiness of one insurer to the other. A66/)+0*(+0 /4 ,22)0)/+,l 2)'(30/'5 A8C. 2Repealed *, t1e Ins%#an&e 7Amendment8 A&t, 1968762 o 19688.3 R(50')30)/+ /+ 2):)2(+25 ,+2 9/+85(5 A9.E1F ;o insurer, ein% an insurer specified in su 8clause EaF EiiF or su 8clause E F of clause E/F of section 2, who I carries on the usiness of life insurance or any other class or su class of insurance usiness to which Sec. 1& applies, shall, for the purpose of declarin% or payin% any di,idend to shareholders or any onus to policy8holders or of ma5in% any payment in ser,ices of any de entures, utili7e directly or indirectly any portion of the life insurance fund or of the fund of such other class or su 8class of insurance usiness, as the case may e, except a surplus shown in the ,aluation alance8sheet in such form as may e specified y the re%ulations made y the Authority su mitted to the Authority as part of the a stract referred to in Section 1) as a result of an actuarial ,aluation assets and lia ilities of the insurerC nor shall he increase such surplus y contri utions out of any reser,e fund or otherwise unless such contri utions ha,e een rou%ht in as re,enue account applica le to that class or su 8class of insurance usiness on or efore the date of the ,aluation aforesaid, except when the reser,e fund is made up solely of transfers from similar surpluses disclosed y ,aluations in respect of which returns ha,e een su mitted to the Authority under Section 1) of this Act or to the Central 9o,ernment under Section 11 of the Indian 4ife Assurance Companies Act, 1/12 E* of 1/12FD P'/:)2(2 that payments made out of any such surplus in ser,ice of any de entures shall not exceed fifty per cent. of such surplus includin% any payment y way of interest on the de entures, and interest paid on the de entures shall not exceed ten per cent of any such surplus except where the interest paid on the de entures is offset a%ainst the interest credited to the fund or funds concerned in decidin% the interest asis adopted in the ,aluation disclosin% the aforesaid surplusD P'/:)2(2 48'0.(' that the share of any such surplus allocated to or reser,ed for the shareholders Eincludin% any amount for the payment of di,idends %uaranteed to them, whether y way of first char%e or otherwiseF shall not exceed such sums as may e specified y the Authority and such share shall in no case exceed ten percent of such surplus in case of participatin% policies and in other cases the whole thereof. E2F 1or the purposes of su 8section E1F the actual amount of income8tax deducted at source durin% the period followin% the date as at which the last precedin% ,aluation was made and precedin% the date as at which the ,aluation in +uestion is made may e added to such surplus after deductin% an estimated amount for income8tax on such surplus, such addition and deduction ein% shown in an a stract of the report of the actuary referred to in su 8section E1F of section 1&. N/0)3( /4 /60)/+5 ,:,)l,9l( 0/ 0.( ,558'(2 /+ 0.( l,65)+< /4 , 6/l)3=%. An insurer shall, efore the expiry of three months from the date on which the premiums in respect of a policy of life insurance were paya le ut not paid, %i,e notice to the policy 8holder informin% him of the options a,aila le to him unless these are set forth in the policy. S866l- /4 3/6)(5 /4 6'/6/5,l5 ,+2 *(2)3,l '(6/'05 )1. #,ery insurer shall, on application y a policy8holder and on payment of a fee not exceedin% one rupee, supply to the policy8holder certified copies of the +uestions put to him and his answers thereto

contained in his proposal for insurance and in the medical report supplied in connection therewith. P'/.)9)0)/+ /4 985)+(55 /+ 2):)2)+< 6')+3)6l( )2. ElF ;o insurer shall after the commencement of this Act e%in, or after three years from that date continue to carry on, any usiness upon the di,idin% principle, that is to say, on the principle that the enefit secured y a policy is not fixed ut depends either wholly or party on the results of a distri ution of certain sums amon%st policies ecomin% claims within certain time8limits, or on the principle that the premiums paya le y a policy8holder depend wholly or partly on the num er of policies ecomin% claims within certain time8limitsD Pro,ided that nothin% in this section shall e deemed to pre,ent an insurer from allocatin% onuses to holders of policies of life insurance as a result of a periodical actuarial ,aluation either as re,ersionary additions to the sums insured or as immediate cash onuses or otherwiseD Pro,ided further that an insurer who continues to carry on insurance usiness on the di,idin% principle after the commencement of this Act shall withhold from distri ution a sum of not less than forty per cent of the premiums recei,ed durin% each year after the commencement of this Act in which such usiness is continued so as to ma5e up the amount re+uired for in,estment under Section 2-. E2F 6n the expiry of the period of three years referred to in su 8section E1F, or on the insurerIs ceasin% efore such expiry ut at any time after the commencement of the Insurance EAmendmentF Act, 1/(1 E1& of 1/(1F, to carry on usiness on the di,idin% principle, the insurer shall forthwith cause an in,esti%ation to e made y an actuary, who shall determine the amount accumulated out of the contri utions recei,ed from the holders of all policies to which the di,idin% principle applies and the extent of the claims of those policy8holders a%ainst the realisa le assets of the insurer, and shall, efore the expiration of six months from the date on which he is entrusted with the in,esti%ation, ma5e recommendations re%ardin% the distri ution, whether y cash payment or y the allocation of paid8up policies or y a com ination of oth methods, of such assets as he finds to appertain to such policy8holderC and the insurer shall, efore the expiry of six months from the date on which the actuary ma5e his recommendations, distri ute such assets in accordance with those recommendations. E&F <here at any time prior to the commencement of the Insurance EAmendmentF Act, 1/(1 E1& of 1/(1F, an insurer has to carry on usiness on the di,idin% principle, the insurer shall efore the expiration of two months from the commencement of that Act, report to the Authority the measures ta5en or proposed y him for the distri ution amon% holders of policies to which the di,idin% principle applies of the assets due to themC and the Authority may either sanction such measures or refuse his sanction, and, if he refuses his sanction or if the insurer does not report to him as re+uired y this su 8section, the pro,isions of su 8section E2F shall apply to the insurer forthwith. Mismanagement *, Administ#ato# W.(+ A2*)+)50',0/' 4/' *,+,<(*(+0 /4 )+58',+3( 985)+(55 *,- 9( ,66/)+0(2 )2A E1F If at any time the Authority has reason to elie,e that an insurer carryin% on life insurance usiness is actin% in a manner li5ely to e pre!udicial to the interests of holders of life insurance policies, he may, after %i,in% such opportunity to the insurer to e heard as he thin5s fit, ma5e a report thereon to the Central 9o,ernment. E2F $he Central 9o,ernment, if it is of opinion after considerin% the report that it is necessary or proper to do so, may appoint an Administrator to mana%e the affairs of the insurer under the direction and control of the Authority. E&F $he Administrator shall recei,e such remuneration as the Central 9o,ernment may direct and the Central 9o,ernment may at any time cancel the appointment and appoint some other person as Administrator. E(F $he mana%ement of the usiness of the insurer shall as on and after the date of appointment of the Administrator ,est in such Administrator, ut except with the lea,e of the Authority the Administrator shall not issue any further policies. E)F As on and after the date of appointment of the Administrator any person ,ested with any such mana%ement immediately prior to that date shall e di,ested of that mana%ement.

E*F $he Authority may issue such directions to the Administrator as to his powers and duties as he deems desira le in the circumstances of the case , and the Administrator may apply to the Authority at any time for instructions as to the manner in which he shall conduct the mana%ement of the usiness of the insurer or in relation to any matter arisin% in the course of such mana%ement. P/7('5 ,+2 280)(5 /4 0.( A2*)+)50',0/' =!B E1F $he Administrator shall conduct the mana%ement of the usiness of the insurer with the %reatest economy compati le with efficiency and shall, as soon as may e possi le, file with the Authority a report statin% which of the followin% courses is in the circumstances most ad,anta%eous to the %eneral interests of the holders of life insurance policies, namelyD8 EaF the transfer of the usiness of the insurer to some other insurerD E F the carryin% on of its usiness y the insurer Ewhether with the policies of the usiness continued for the ori%inal sum insured with the addition of onuses that attach to the policies or for reduced amountsFC EcF the windin% up of the insurerC and EdF such other course as he deems ad,isa le. E2F 6n the filin% of the report with the Authority, the Authority may ta5e such action as he thin5s fit for promotin% the interests of the holders of life insurance policies in %eneral. E&F Any order passed y the Authority under su 8section E2F, shall e indin% on all persons concerned, and shall ha,e effect notwithstandin% anythin% in the memorandum or articles of association of the insurer, or a company. P/7('5 /4 A2*)+)50',0/' '(56(30)+< 6'/6('0- l),9l( 0/ ,00,3.*(+0 8+2(' S(30)/+ 1% )2BB. E1F If the Administrator is satisfied that any person has rendered himself lia le to e proceeded a%ainst under Section 10*, he may, pendin% the institution of proceedin%s a%ainst such person under that section, y order in writin%, prohi it him or any other person from transferrin% or otherwise disposin% of any property which, in the opinion of the Administrator, would e lia le to attachment in proceedin%s under that section. E2F Any person a%%rie,ed y an order made y the Administrator under su 8section E1F may, within fourteen days from the date on which the order is ser,ed on him, appeal a%ainst such order to the Central 9o,ernment, and the Central 9o,ernment may pass such order thereon as it thin5s fit. E&F An order made y the Administrator under su 8section E1F shall, su !ect to any order made y the Central 9o,ernment on appeal, e in force for a period of three months from the date of the order unless, efore the expiry of the said period, an application is made under su 8section E1F of Sec. 10* to the Court competent to exercise !urisdiction under that su 8section, and when such an application is made, the order shall, su !ect to any order made y that Court, continue in force as if it were an order of attachment made y that Court in proceedin%s under that section. E(F An order made y the Administrator under this section shall,J EaF in the case of an order affectin% a corporation or firm, e ser,ed in the manner pro,ided for the ser,ice of summons in rule 2 of 6rder PPIP or rule & of 6rder PPP, as the case may e, in the 1irst Schedule to the Code of Ci,il Procedure, 1/0. E) of 1/0.F, and E F in the case of an order affectin% a person not ein% a corporation or firm, e ser,ed on such person 8 EiF 7ii8 personally, y deli,erin% or tenderin% to him the order, or y post, or

7iii8

where the person cannot e found, y lea,in% a copy of the order with some adult male mem er of his family or y affixin% such copy to some conspicuous part of the premises in which he is 5nown to ha,e last resided or carried on usiness or personally wor5ed for %ain.

and e,ery such order shall also e pu lished in the official 9a7ette. E)F If any +uestion arises whether a person was duly ser,ed with an order under su 8section E(F, the pu lication of the order in the official 9a7ette shall e conclusi,e proof that the order was so ser,ed, and a failure to comply with the pro,isions of Clause EaF or Clause E F of su 8section E(F shall not affect the ,alidity of the order. E*F ;otwithstandin% anythin% contained In this sections any property in respect of which an order has een made y the Administrator may, with the pre,ious permission of the Administrator and su !ect to such terms and conditions as he may impose, e transferred or otherwise disposed of. E-F ;otwithstandin% anythin% contained in any other law for the time ein% in force, the transfer or other disposition of any property in contra,ention of any order made y the Administrator under this section or of any terms and conditions imposed y him shall e ,oid. E.F 1or the purpose of ena lin% him to form an opinion as to whether any property would e lia le to attachment in proceedin%s under Sec. 10* or for the purpose of ena lin% him to institute proceedin%s under that section, the Administrator may re+uire any person to furnish information on such points or matters as, in the opinion of the Administrator, may e rele,ant for the purpose, and any person so re+uired shall e deemed to e le%ally ound to furnish such information within the meanin% of Sec. 1-* of the Indian Penal Code E() of 1.*0F. E/F $he Administrator shall ha,e all the powers of a ci,il court under the Code of Ci,il Procedure, 1/0. E) of 1/0.F, while tryin% a suit in respect of the followin% matters, namelyD EaF summonin% and enforcin% the attendance of witnesses and examinin% them on oathC E F re+uirin% the production of documentsC and EcF recei,in% e,idence on affida,its, and any proceedin% efore the Administrator under this section shall e deemed to e a !udicial proceedin% within the meanin% of Sections 1/& and 22. of the Indian Penal Code E() of 1.*0F. E10F Sa,e as pro,ided in this section or in Section 10*, and notwithstandin% anythin% contained in any other law for the time ein% in force,J EaF no suit or other le%al proceedin% shall lie in any Court to set aside or modify any order of the Administrator or the Central 9o,ernment made under this section, and E F no Court shall pass any decree, %rant any in!unction or ma5e any other order which shall ha,e the effect of nullifyin% or affectin% in any way any such order. C,+3(ll,0)/+ /4 3/+0',305 ,+2 ,<'((*(+05 =!C. $he Administrator may, at any time durin% the continuance of his appointment with respect to an insurer and after %i,in% an opportunity to the persons concerned to e heard, cancel or ,ary Eeither unconditionally or su !ect to such conditions as he thin5s fit to imposeF any contract or a%reement Eother than a policyF etween the insurer and any other person which the Administrator is satisfied is pre!udicial to the interest of holders of life insurance policies. T('*)+,0)/+ /4 ,66/)+0*(+0 /4 A2*)+)50',0/' )2D. If at any time, on a report made y the Authority in this ehalf, it appears to the Central 9o,ernment that the purpose of the order appointin% the Administrator has een fulfilled or that for any reason it is undesira le that the order of appointment should remain in force, the Central 9o,ernment may cancel the order and thereupon the Administrator shall e di,ested of the mana%ement of the insurance usiness which

shall, unless otherwise directed y the Central 9o,ernment, a%ain ,est in the person in whom it was ,ested immediately prior to the date of appointment of the Administrator. F)+,l)0- /4 2(3)5)/+ ,66/)+0)+< A2*)+)50',0/' )2#. Any order or decision of the Central 9o,ernment made in pursuance of Section )28A or Section )28D shad e final and shall not e called in +uestion in any Court. P(+,l0- 4/' 7)0../l2)+< 2/38*(+05 /4 6'/6('0- 4'/* A2*)+)50',0/' )2 1 If any director or officer of the insurer or any other person fails to deli,er to the Administrator any oo5s of account, re%isters, or any other documents in his custody relatin% to the usiness of the insurer the mana%ement of which has ,ested in the Administrator, or retains any property of such insurer, he shall e punisha le with imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, or with oth. P'/0(30)/+ /4 ,30)/+ 0,C(+ 8+2(' S(30)/+5 =!-A 0/ =!-D =!G ;o suit, prosecution or other le%al proceedin% shall lie a%ainst an Administrator for anythin% which is in %ood faith done or intended to e done in pursuance o !e&tion )28A, Section )28B, Section )28BB or Section )28C. E2F ;o suit or other le%al proceedin% shall lie a%ainst the Central 9o,ernment or the Authority for any dama%e caused8 or li5ely to e caused y anythin% which is in %ood faith done or intended to e done under Section )28A, Section )28B, or Section )28D. A&0%isition o t1e 2nde#ta+ings o Ins%#e#s in "e#tain "ases P/7(' /4 C(+0',l G/:('+*(+0 0/ ,3>8)'( 8+2('0,C)+<5 /4 )+58'('5 )+ 3('0,)+ 3,5(5 )2: E1F If, upon receipt of a report from the Authority, the Central 9o,ernment is satisfied that an insurer, EaF has persistently failed to comply withJ EiF any direction %i,en to him under Section &(, Section &(81 or Section &(9,or EiiF any order made under Sec. &(8#C or E F is ein% mana%ed in a manner detrimental to the pu lic interest or to the interests of his policy8holders, or share8holders, and that I. in the pu lic interest, or II. in the interest of the policy8holders or share8holders of such insurer, it is necessary to ac+uire the underta5in% of such insurer, the Central 9o,ernment may, y notified order, ac+uire the underta5in% of such insurer Ehereafter in this section and in Sections )28I, )28= and )28; and in the #i%hth Schedule referred to as the ac+uired insurerF with effect from such date as may e specified in the order Ehereinafter in this section and in Sections )281 and )2= and in the #i%hth Schedule referred to as the appointed dayFD Pro,ided that no underta5in% off an insurer shall e so ac+uired unless such insurer has een %i,en a reasona le opportunity of showin% cause a%ainst the proposed action 45planation?.=1or the purposes of this section and of Sections )281 to )2;J 7a8 Bnotified orderB means an order pu lished in the official 9a7etteC E F Bunderta5in%B, in relation to an insurer incorporated outside India, means the underta5in% of the insurer in India,

E2F Su !ect to the other pro,isions contained in this section and in Sections )28I to )2", on the appointed day, all the assets and lia ilities of the underta5in% of the ac+uired insurer shall stand transferred to, and ,est in, the Central 9o,ernment. E&F $he assets and lia ilities of the underta5in% of the ac+uired insurer shall e deemed to include all ri%hts, powers, authorities and pri,ile%es and all property, whether mo,a le or immo,a le, includin%, in particular, cash alances, reser,e funds, in,estments, deposits and all other interests and ri%hts in, or arisin% out of, such propertyI as may e in the possession of or held y, the ac+uired insurer immediately efore the appointed day and all oo5s, accounts and documents relatin% thereto, and shall also e deemed to include all de ts, lia ilities and o li%ations of whate,er 5ind, then existin% of the ac+uired insurer. E(F ;otwithstandin% anythin% contained in su 8section E2F, the Central 9o,ernment may, if it is satisfied that all the assets and lia ilities of the underta5in% of the ac+uired insurer should, instead of ,estin% in the Central 9o,ernment, or continuin% to so ,est, ,est in a corporation or company, whether esta lished under the scheme made under Sec. )28I or not Ehereafter In this section and in Section )281 to )28; and in the #i%hth Schedule referred to as the ac+uired insurerF, y order, direct that the assets and lia ilities of the said underta5in%, shall ,est in the ac+uirin% insurer, either on the pu lication of the notified order or no such other date as may e specified in this ehalf in the direction. E)F <here the underta5in% of the ac+uired insurer ,ests in an ac+uirin% insurer under su 8section E(F, the ac+uirin% insurer shall, on and from the date of such ,estin%, e deemed to ha,e ecome the transferee of the ac+uired insurer and all the ri%hts and lia ilities in relation to the ac+uired insurer shall, on and from the date of such ,estin%, e deemed to ha,e een the ri%hts and lia ilities of such ac+uirin% insurer. E*F ?nless otherwise expressly pro,ided y or under this section or Sections )28I to )2", all contracts, deeds, onds, a%reements, powers of attorney, %rants of le%al representation and other instruments of whate,er nature su sistin%, ha,in% effect immediately efore the appointed day and to which the ac+uired insurer is a party or which are in fa,our of the ac+uired insurer shall e of as full force and effect a%ainst or in fa,our, of the Central 9o,ernment or, as the case may e, the ac+uirin% insurer, and may e enforced or acted upon as fully and effectually as of in the place of the ac+uired insurer the Central 9o,ernment or the ac+uirin% insurer had een a party thereto or as if they had een issued in fa,our of the Central 9o,ernment or the ac+uirin% insurer, as the case may e. E-F If, on the appointed day, any suit, appeal or other proceedin%, of whate,er nature, is pendin% y or a%ainst the ac+uired insurer the same shall not a ate, e discontinued or e, in any way, pre!udicially affected y reason of the transfer of the underta5in% of the ac+uired insurer or of anythin% contained in this section or in Sections )28I to )2", ut the suit, appeal or other proceedin% may e continued, prosecuted and enforced y or a%ainst the Central 9o,ernment or the ac+uirin% insurer, as the case may e. P/7(' /4 C(+0',l G/:('+*(+0 0/ *,C( 53.(*( =!-I E1F $he Central 9o,ernment may ma5e a scheme for carryin% out the purposes of Sections )2 : and )2= to )28" E oth inclusi,eF in relation to the ac+uired insurer. E2F In particular, and without pre!udice to the %enerality of the fore%oin% power, the said scheme may pro,ide for all or any of the followin% matters, namelyD EaF transfer of the underta5in%, includin% the property, assets and lia ilities of the ac+uired insurer to an ac+uirin% insurer, and the capital, constitution, name and officer of the ac+uirin% insurerC E F the constitution of the first Board of mana%ement E y whate,er name calledF of the ac+uirin% insurer and all such matters in connection therewith or incidental thereto as the Central 9o,ernment may consider to e necessary or expedientC EcF the continuance of the ser,ices of all the employees of the ac+uired insurer Eexceptin% such of them as not ein% wor5men within the meanin% of the Industrial Disputes ActI 1/(- are specifically mentioned in the schemeF in the Central 9o,ernment or in the ac+uirin% insurer, as the case may e, on the same terms and conditions, so far as may e, as are specified in Clauses EiF and E!F of su 8section E2F of Sec. &-A so far as they may applyC

EdF the continuance of the ri%hts of any person who, on the appointed day, is entitled to, or is in receipt of, a pension or other superannuation or compassionate allowance or enefit from the ac+uired insurer or any pro,ident, pension or other fund or any authority administerin% such fund to e paid y, and to recei,e from the Central 9o,ernment or the ac+uirin% insurer, as the case may e, or any pro,ident, pension or other fund or any authority administerin% such fund, the same pension, allowance or enefit so lon% as he o ser,es the conditions on which the pension, allowance or enefit was %ranted, and if any +uestion arises whether he has so o ser,ed such conditions, the +uestion shall he determined y the Central 9o,ernment and the decision of the Central 9o,ernment thereon shall e finalC EeF the manner of payment to the ac+uired insurer in full satisfaction of his claim in relation to the compensation paya le in accordance with the pro,isions of Section )2=C EfF the pro,ision, if any, completin% the effectual transfer to the Central 9o,ernment or the ac+uirin% insurer of any asset or lia ility which forms part of the underta5in% of the ac+uired insurer in any country outside IndiaC E%F such incidental, conse+uential and supplemental matters as may e necessary to secure that the transfer of the underta5in%, property, assets and lia ilities of the ac+uired insurer to the Central 9o,ernment or the ac+uirin% insurer, as the case may e, is effectual and complete. E&F $he Central 9o,ernment may, y notification in the official 9a7ette, add to, amend or ,ary any scheme made under this section. E(F #,ery scheme made under this section shall e pu lished in the official 9a7ette. E)F Copies of e,ery scheme made under this section shall e laid efore each :ouse of Parliament as soon as may e after it is made. E*F $he pro,isions of Sections )2: and )2= to )2" and of any scheme made under this section shall ha,e effect notwithstandin% anythin% to the contrary contained in any other pro,ision of this Act or in any other law or any a%reement, award or other instrument for the time ein% in force. C/*6(+5,0)/+ 0/ 9( <):(+ 0/ 0.( ,3>8)'(2 )+58'(' =!J #1F $he ac+uired insurer shall e %i,en y the Central 9o,ernment or the ac+uirin% insurer, as the case may e, such compensation in respect of the transfer of the underta5in% of the ac+uired insurer as is determined in accordance with the principles contained in the #i%hth Schedule. E2F $he amount of compensation to e %i,en in accordance with the principles contained in the #i%hth Schedule shall e determined, in the first instance, y the Central 9o,ernment or the ac+uirin% insurer, as the case may e, in consultation with the Authority, and shall e offered y it to the ac+uired insurer, in full satisfaction thereof. E&F If the amount of compensation offered in terms of su 8section E2F is not accepta le to the ac+uired insurer, he may, efore such date as may e notified y the Central 9o,ernment in the official 9a7ette, re+uest the Central 9o,ernment in writin% to ha,e the matter referred to the $ri unal constituted under Section )2>. E(F If efore the date notified under su 8section E&F the Central 9o,ernment does not recei,e re+uest as pro,ided in that su 8section, the amount of compensation offered under su 8section E2F, or where a reference has een made to the $ri unal, the amount determined y it, shall e the compensation paya le under su 8section ElF and shall e final and indin% on all the parties concerned. E)F <here the Central 9o,ernment does not recei,e re+uest as pro,ided In su 8section E&F, the compensation paya le in pursuance of the pro,isions of this section shall ecome due for payment on the expiry of one year from the appointed day, and where a reference has een made to the $ri unal under su 8 section E&F, the amount determined y the $ri unal as compensation shall ecome due for payment on the expiry of one year from the appointed day or on the date of decision of the $ri unal, whiche,er is earlier. E*F If etween the appointed day and the date on which the compensation ecomes due in pursuance of su 8section E)F, any facts come to li%ht which call for re,ision of the amount of the compensation, the

necessary modification of the amount of the compensation shall e made and the amount of the compensation so determined shall e the compensation paya le in pursuance of su 8section E1F. E-F $here shall also e paid simple interest at the rate of three per cent per annum on the amount of the compensation for the period from the appointed day to the date on which payment of the compensation ecomes due. C/+50)080)/+ /4 0.( T')98+,l =!F E1F $he Central 9o,ernment may, for the purposes of Sections )28: to )2=, constitute a tri unal which shall consist of a Chairman and two other mem ers. E2F $he Chairman shall e a person who is, or has een, a =ud%e of a :i%h Court or of the Supreme Court and of the two other mem ers, one shall e a person who, in the opinion of the Central 9o,ernment, has had experience of matters connected with %eneral insurance and the other shall e a person who is a chartered accountant within the meanin% of the Chartered Accountants Act, 1/(/ E&. of 1/(/F. E&F If, for any reason, a ,acancy occurs in the office of the Chairman or any other mem er of the $ri unal, the Central 9o,ernment may fill the ,acancy y appointin% another person thereto in accordance with the pro,isions of su section E2F, and any proceedin% may e continued efore the $ri unal so constituted from the sta%e at which the ,acancy occurred. E(F $he $ri unal may, for the purpose of determinin% any compensation paya le under Sec. )2=, choose one or more persons ha,in% special 5nowled%e or experience of any rele,ant matter to assist it in the determination of such compensation. T')98+,l 0/ .,:( 6/7('5 /4 C):)l C/8'0 =!L E1F $he $ri unal shall ha,e the powers of a Ci,il Court, while tryin% a suit, under the Code of Ci,il Procedure, 1/0. E) of 1/0.F, in respect of the followin% matters, namelyD8 EaF summonin% and enforcin% the attendance of any person and examinin% him on oathC E F re+uirin% the disco,ery and production of documentsC EcF recei,in% e,idence on affida,itsC EdF issuin% commission for the examination of witnesses or documents. E2F ;otwithstandin% anythin% contained in su 8section E1F or in any other law for the time ein% in force, the $ri unal shall not compel the Central 9o,ernment or the Authority8 EaF to produce any oo5s of account, or other documents which the Central 9o,ernment Authority claims to e of a confidential natureC E F to ma5e any such oo5s or documents a part of the record of the proceedin%s efore $ri unalC or the the

EcF to %i,e inspection of any such oo5s or documents to any party efore it and to any other person. E&F Any proceedin% efore the $ri unal shall e deemed to e a !udicial proceedin% within the meanin% of Sections 1/& and 22. of the Indian Penal Code, and the $ri unal shall e deemed to e a ci,il Court for the purposes of Section 1/) and Chapter PPP@ of the Code of Criminal Procedure, 1./. E) of 1./.F. P'/3(28'( /4 0.( T')98+,l =!M E1F $he $ri unal shall ha,e power to re%ulate its own procedure. E2F $he $ri unal may hold the whole or any part of its in+uiry in &ame#a. E&F Any clerical or arithmetical error in any order of the $ri unal or any error arisin% therein from any

accidental slip or omission may, at any time, e corrected y the $ri unal either of its own motion or on the application of any of the parties. S6(3),l 6'/:)5)/+5 4/' 0.( 2)55/l80)/+ /4 ,3>8)'(2 )+58'('5 =!N <here any ac+uired insurer, ein% a company, has in accordance with the pro,isions of this Act, collected and distri uted any monies paid to him y the Central 9o,ernment or the ac+uirin% insurer, as the case may e, y way of compensation or otherwise, and has also complied with any directions %i,en to him y the Central 9o,ernment or the ac+uirin% insurer, as the case may e, y way of compensation or otherwise, and has also complied with any directions %i,en to him y the Central 9o,ernment or the ac+uirin% insurer, as the case may e, for the purpose of securin% that the ownership of any property or any ri%ht is effecti,ely transferred to the Central 9o,ernment or the ac+uirin% insurer, as the case may e, the Central 9o,ernment may, on application ein% made to it in this ehalf y such insurer, %rant a certificate to e the insurer that there is no reason for the continued existence of the insurer, and upon the pu lication of such certificate, the insurer shall e dissol,ed. 3inding %p W)+2)+< 86 9- 0.( C/8'0 =3. E1F $he Court may order the windin% up in accordance with the Indian Companies Act, 1/1& E- of 1/1&F, of any insurance company and the pro,isions of that Act shall, su !ect to the pro,isions of this Act apply accordin%ly. E2F In additional to the %rounds on which such an order may e ased, the Court may order the windin% up of an insurance company EaF if with the sanction of the Court pre,iously o tained a petition in this ehalf is presented y shareholders not less in num er than one8tenth of the whole ody of shareholders and holdin% not less than one tenth of the whole share capital or y not less than fifty policy8holders holdin% policies of life insurance that ha,e een in force for not less than three years and are of the total ,alue of not less than fifty thousand rupeesC or E F if the Authority, who is here y authorised to do so, applies in this ehalf to the Court on any of the followin% %rounds, namely EiF that the company has failed to deposit or to 5eep deposited with the 'eser,e Ban5 of India the amounts re+uired y Section - or Section /.C EiiF that the company ha,in% failed to comply with any re+uirement of this Act has continued such failure ;or ha,in% contra,ened any pro,ision of this Act has continued such contra,ention for a period of three months after notice of such failure ;or contra,ention has een con,eyed to the company y the Authority. EiiiF that it appears from "any returns or statements furnished under the pro,isions of this Act or from the results of any in,esti%ation made there under that the company is, or is deemed to e, insol,ent, or Ei,F that the continuance of the company is pre!udicial to the interest if the policy 8holders or to the pu lic interest %enerally U+6,)2-86 5.,'( 3,6)0,l =3A ;otwithstandin% anythin% contained in any other law, in ascertainin% for any purpose of this Act the sol,ency or otherwise of an insurer no account shall e ta5en of any assets of the insurer consistin% of unpaid8up share capital. V/l8+0,'- 7)+2)+< 86 =A. ;otwithstandin% anythin% contained in the Indian Companies Act, 1/1& E- of 1/1&F, an insurance company shall not e wound up ,oluntarily except for the purpose of effectin% an amal%amation or a re8construction of the company, or on the %round that y reason of its lia ilities it cannot continue its

usiness. V,l8,0)/+ /4 l),9)l)0)(5 ==. E1F In the windin% up of an insurance company or in the insol,ency of any other insurer the ,alue of the assets and the lia ilities of the insurer shall e ascertained in such manner and upon such asis as the li+uidator or recei,er in insol,ency thin5s fit, su !ect, so far as applica le, to the rule contained in the Se,enth Schedule and to any directions which may e %i,en y the Court. E2F 1or the purposes of any reduction y the Court of the amount of the contracts of any insurance company the ,alue of the assets and lia ilities of the company and all claims in respect of policies issued y it shall e ascertained in such manner and upon such asis as the Court thin5s proper ha,in% re%ard to the rule aforesaid. E&F $he rule in the Se,enth Schedule shall e of the same force and may e repealed, altered or amended as if it were a rule made in pursuance of section 2(* of the Indian Companies Act, 1/1& E- of 1/1&F and rules may e made under that section for the purpose of carryin% into effect the pro,isions of this Act with respect to the windin% up of insurance companies. A66l)3,0)/+ /4 58'6l85 ,55(05 /4 l)4( )+58',+3( 48+2 )+ l)>8)2,0)/+ /' )+5/l:(+3= E1F In the windin% up of an insurance company and in the insol,ency of any other insurer the ,alue of the assets and the lia ilities of the insurer in respect of life insurance usiness shall e ascertained separately from the ,alue of any other assets or any other lia ilities of the insurer and no such assets shall e applied to the dischar%e of any lia ilities other than those in respect of life insurance usiness except in so far as those assets exceed the lia ilities in respect of life8insurance usiness. E2F In the windin% up of an insurance company carryin% on the usiness of life insurance or in the insol,ency of any other insurer carryin% on such usiness where any proportion of the profits of the insurer was efore the commencement of the windin% up or insol,ency allocated to policy8holders, if, when the assets and lia ilities of the insurer ha,e een ascertained, there is found to e a surplus of assets o,er lia ilities Ehereinafter referred to as a p#ima a&ie surplusF there shall e added to the lia ilities of the insurer in respect of the life8insurance usiness an amount e+ual to such proportion of the p#ima a&ie surplus as is e+ui,alent to such proportion of the profits allocated to shareholders and policy8holders as was allocated to policy8holders durin% the ten years immediately precedin% the commencement of the windin% up and the assets of the insurer shall e deemed to exceed his lia ilities only in so far as those assets exceed those lia ilities after such additionD P'/:)2(2 that8 7a8 if in any case there has een no such allocation or if it appears to the Court that y reason of special circumstances it would e ine+uita le that the amount to e added to the lia ilities of the insurer in respect of the life insurance usiness should e an amount e+ual to such proportion as aforesaid, the amount to e so added shall e such amount as the Court may direct, and E F for the purpose of the application of this su 8section to any case where efore the commencement of the windin% up or insol,ency a proportion of such profits as aforesaid of a ranch only of the life insurance usiness in +uestion has een allocated to policy8holders, the ,alue of the assets and lia ilities of the insurer in respect of that ranch shall e separately ascertained in li5e manner as the ,alue of his assets and lia ilities in respect to the life insurance usiness was ascertained, and the surplus so found, if any, of assets o,er lia ilities shall, for the purpose of determinin% the amount to e added to Dthe lia ilities of the insurer in respect of the life insurance usiness e deemed to e the p#ima a&ie s%#pl%s.. W)+2)+< 86 /4 5(3/+2,'- 3/*6,+)(5 =@ ElF <here the insurance usiness or any part of the insurance usiness of an insurance company has een transferred to another insurance company under an arran%ement in pursuance of which the first mentioned company Ein this section referred to as the secondary companyF or the creditors thereof has or ha,e claims a%ainst the company to which such transfer was made Ein this section referred to as the principal companyF then, if the principal company is ein% wound up y or under the super,ision of the Court, the Court shall Esu !ect as hereinafter mentionedF order the secondary company to e wound up in con!unction with the

principal company and may, y the same or any su se+uent order appoint the same person to e li+uidator for the two companies and ma5e pro,ision for such other matters as may seem to the Court necessary with a ,iew to the companies ein% wound up as if they were one company. E2F $he commencement of the windin% up of the principal company shall, sa,e as otherwise ordered y the Court, e the commencement of the windin% up of the secondary company. E&F In ad!ustin% the ri%hts and lia ilities of the mem ers of the se,eral companies amon% themsel,es the Court shall ha,e re%ard to the constitution of the companies and to the arran%ements entered into etween the companies in the same manner as the Court has re%ard to the ri%hts and lia ilities of different classes of contri utories in the case of the windin%8up of a sin%le company or as near thereto as circumstances admit. I E(F <here any company alle%ed to e secondary is not in process of ein% wound up at the same time as the principal company to which it is alle%ed to e secondary, the Court shall not direct the secondary company to e wound up, unless, after hearin% all o !ections Eif anyF that may e ur%ed y or on ehalf of the company a%ainst its ein% wound up, the Court is of opinion that the company is secondary to the principal company and that the windin% up of the company in con!unction with the principal company is !ust and e+uita le. E)F An application may e made in relation to the windin% up of any secondary company in con!unction with the principal company y any creditor of, or person interested in, the principal or secondary company. E*F <here a company stands in the relation of a principal company to one insurance company and in the relation of a secondary company to some other insurance company or where there are se,eral insurance companies standin% in the relation of secondary companies to one principal company, the court may deal with any num er of such companies to%ether or in separate %roups as it thin5s most expedient upon the principles laid down in this section. S3.(*(5 4/' 6,'0),l 7)+2)+<-86 /4 )+58',+3( 3/*6,+)(5 =8. #1$ If at any time it appears expedient that the affairs of an insurance company in respect of any class of usiness comprised in the underta5in% of the Company should e wound up ut that any other class of usiness comprised in the underta5in% should continue to e carried on y the company or e transferred to another insurer, a scheme for such purposes may e prepared and su mitted for confirmation of the Court in accordance with the pro,isions of this Act. E2F Any scheme prepared under this section shall pro,ide for the allocation and distri ution of the assets and lia ilities of the company etween any classes of usiness affected Eincludin% the allocation of any surplus assets which may arise on the proposed windin%8upF for any future ri%hts of e,ery class of policy8holders in respect of their policies and for the manner of windin%8up any of the affairs of the company which are proposed to e wound up and may contain pro,isions for alterin% the memorandum of the company with respect to its o !ects and such further pro,isions as may e expedient for %i,in% effect to the scheme. E&F $he pro,isions of this Act relatin% to the ,aluation of lia ilities of insurers in li+uidation and insol,ency and to the application of surplus assets of the life insurance fund in li+uidation or insol,ency shall apply to the windin% up of any part of the affairs of a company in accordance with the scheme under this section in li5e manner as they apply in the windin% up of an insurance company, and any scheme under this section may apply with the necessary modifications any of the pro,isions of the Indian Companies Act, 1/1& E- of 1/1&F, relatin% to the windin% up of companies. E(F An order of the Court confirmin% a scheme under this section where y the memorandum of a company is altered with respect to its o !ects shall as respects the alteration ha,e effect as if it where an order confirmed under Sec. 12 of the Indian Companies Act, 1/1& E- of 1/1&F, and the pro,isions of Sections 1) and 1* of that Act shall apply accordin%ly. R(08'+ /4 2(6/5)05 =9. In the windin% up of an insurance company Eotherwise than in a case to which Section ). appliesF and in the insol,ency of any other insurer the li+uidator or assi%nee as the case may e shall apply to the Court for an order for the return of the redeposit made y the company or the insurer, as the case may e, under Section - or Section /. and the Court shall on such application order a return of the deposit su !ect to such terms and conditions as it shall direct.

N/0)3( /4 6/l)3- :,l8(5 %. In the windin% up of an insurance company for the purposes of a cash distri ution of the assets and in the insol,ency of any other insurer the li+uidator or assi%nee, as the case may e, in the case of all persons appearin% y the oo5s of the company or other insurer to e entitled to or interested in the policies %ranted y the company or other insurer shall ascertain the ,alue of the lia ility of the company or other insurer to each such person and shall %i,e notice of such ,alue to those persons in such manner as the Court may direct and any person to whom notice is so %i,en shall e ound y the ,alue so ascertained unless he %i,es notice of his intention to dispute such ,alue in such manner and within such time as may e specified y a rule or order of the Court. P/7(' /4 C/8'0 0/ '(283( 3/+0',305 /4 )+58',+3( 1. E1F where an insurance company is in li+uidation or any other insurer is insol,ent, the Court may ma5e an order reducin% the amount of the insurance contracts of the company or other insurer upon such terms and su !ect to such conditions as the Court thin5s =ust. E2F <here a company carryin% on the usiness of life insurance has een pro,ed to e insol,ent, the Court may if it thin5s fit in place of ma5in% a windin% up order reduce the amount of the insurance contracts of the company upon such terms and su !ect to such conditions as the Court thin5s fit. E&F Application for an order under this section may e made either y the li+uidator or y or on ehalf of the company or y a policy8holder, or y the Authority and the Authority and any person whom the Court thin5s li5ely to e affected shall e entitled to e heard on any such application. !pe&ial (#ovisions Relating to 45te#nal "ompanies P/7(' /4 C(+0',l G/:('+*(+0 0/ )*6/5( '(3)6'/3,l 2)5,9)l)0)(5 /+ +/+-I+2),+ 3/*6,+)(5 *2. <here y the law or practice of any country outside India in which an insurer carryin% on insurance usiness in India is constituted, incorporated or domiciled, insurance companies incorporated in India are re+uired as a condition of carryin% on insurance usiness in that country to comply with any special re+uirement whether as to the 5eepin% of deposits or assets in that country or otherwise which is not imposed upon insurers of that country under this Act, the Central 9o,ernment shall, if satisfied of the existence of such special re+uirement, y notification in the official 9a7ette, direct that the same re+uirement or re+uirements, as similar thereto as may e, shall e imposed upon insurers of that country as a condition of carryin% on the usiness of insurance in India. P,'0)38l,'5 0/ 9( 4)ll(2 9- )+58'('5 (50,9l)5.(2 /805)2( I+2), 3. #,ery insurer, ha,in% his principal place of usiness or domicile outside Indian, who esta lishes a place of usiness within India or appoints a representati,e in India with the o !ect of o tainin% insurance usiness shall within three months from the esta lishment of such place of usiness or the appointment of such representati,e file with the Authority. EaF a certified copy of the charter, statutes, deed of settlement or memorandum and articles or other instrument constitutin% or definin% the constitution of the insurer, and, if the instrument is not written in the #n%lish lan%ua%e, a certified translation thereof. E F a list of the directors, if the insurer is a company, EcF the name and address of some one or more persons resident in India authorised to accept on ehalf of the insurer ser,ice of process and any notice re+uired to e ser,ed on the insurer to%ether with a copy of the power of attorney %ranted to him. EdF the full address of the principal office of the insurer in India. EeF a statement of the classes of insurance usiness to e carried on y the insurer, and EfF a statement ,erified y an affida,it settin% forth the special re+uirements, if any, of the nature specified in Section *2 imposed in the country of ori%in of the insurer on Indian nationals,

and, in the e,ent of any alteration ein% made in the address of the principal office or in the classes of usiness to e carried on, or in any instrument here referred to, or in the name of any of the persons here referred to, or in the matters specified in C1auseEfF a o,e, the company shall forthwith furnish to the Authority particulars of such alteration. B//C5 0/ 9( C(60 9- )+58'('5 (50,9l)5.(2 /805)2( I+2), *(. #,ery insurer ha,in% his principal place of usiness or domicile outside India shall 5eep at his principal office in India such oo5s of account, re%isters and documents as will ena le the accounts, statements and a stracts which he is re+uired under this Act to furnish to the Authority in respect of the insurance usiness transacted y him, in India to e complied and if necessary, chec5ed y the Authority and shall furnish to the Authority on or efore the last day of =anuary in e,ery calendar year a certificate from an auditor to the effect that the said oo5s of account, re%ister and documents are ein% 5ept as re+uired at the principal office of the insurer in India. (AR$ II6 A I+58',+3( A55/3),0)/+ /4 I+2),, C/8+3)l5 /4 0.( A55/3),0)/+ ,+2 C/**)00((5 0.('(/4 I+3/'6/',0)/+ /4 0.( I+58',+3( A55/3),0)/+ /4 I+2), *(A. E1F All insurers carryin% on insurance usiness in India at the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, all insurers who may after such commencement e%in to carry on insurance usiness in India, and, if the Central 9o,ernment, y notification in the official 9a7ette, so declares all pro,ident societies carryin% on insurance usiness in India on the date of such notification and all pro,ident societies which may e%in to carry on insurance usiness in India after such date are here y constituted a ody corporate y the name of the Insurance Association of India. E2F All insurers and pro,ident societies incorporated or domiciled in India shall e 5nown as mem ers of the Insurance Association of India, and all insurers and pro,ident societies incorporated or domiciled elsewhere than in India shall e 5nown as associate mem ers of that Association. E&F $he Insurance Association of India shall ha,e perpetual succession and a common seal and shall ha,e power to ac+uire, hold and dispose of all property oth mo,ea le, and immo,ea le and shall y the said name sue and e sued. E+0'- /4 +,*(5 /4 *(*9('5 )+ 0.( '(<)50(' AB. E1F $he Authority shall ta5e or cause to e ta5en throu%h such a%ency as he thin5s fit such steps as may e necessary to ha,e the names of all insurers and pro,ident societies, who or which are entitled to ha,e their names entered in the re%ister of mem ers and associate mem ers of the Insurance Association of India maintained for this purpose entered therein. E2F <here any insurer or pro,ident society has ceased to carry on usiness as such the Authority shall cause such steps to e ta5en as may e necessary to ha,e the name of such insurer or pro,ident society, as the case may e, remo,ed from the re%ister. C/8+3)l5 /4 0.( I+58',+3( A55/3),0)/+ /4 I+2), AC. $here shall e two Councils of the Insurance Association of India, namelyD EaF the 4ife Insurance Council consistin% of all the mem ers and associate mem ers of the Association, who carry on life insurance usiness in India, and E F the 9eneral Insurance Council consistin% of all the mem ers and associate mem ers of the Association who carry on %eneral insurance usiness in India. A80./')0- /4 *(*9('5 /4 A55/3),0)/+ 0/ ,30 0.'/8<. ,<(+05 AD. It shall e lawful for any mem er of the 4ife Insurance Council or the 9eneral Insurance Council to authorise any indi,idual, whether an officer of the insurer or not, to act as the representati,e of such mem er

at any meetin% of the Council concerns or to stand as a candidate for any election held y that Council. A80./')0)(5 /4 0.( L)4( I+58',+3( C/8+3)l ,+2 0.( G(+(',l I+58',+3( C/8+3)l AE. $he authorities of the 4ife Insurance Council and the 9eneral Insurance Council shall e the #xecuti,e Committees constituted in the manner pro,ided in this Part. E1(380):( C/**)00((5 /4 0.( L)4( I+58',+3( C/8+3)l ,+2 0.( G(+(',l I+58',+3( C/8+3)l AF.1F $he #xecuti,e Committee of the 4ife Insurance Council shall consist of the followin% persons, namelyD EaF two officials nominated y the Authority, one as the Chairman and the other as a mem erC E F ei%ht representati,es of mem ers of the Insurance Association of India carryin% on life insurance usiness elected in their indi,idual capacity y the said mem ers in such manner, from such %roups of mem ers and from such areas as may e specified y the Authority. EcF one official not connected with any insurance usiness, nominated y the Authority and EdF fi,e persons connected with life insurance usiness, nominated y the Authority for the purpose of representin% such %roups of insurers carryin% on life insurance usiness or such areas as ha,e not een a le to secure ade+uate representation on the #xecuti,e Committee of the 4ife Insurance Council or for any other purpose. E2F $he #xecuti,e Committee of the 9eneral Insurance Council shall consist of the followin% persons, namelyD EaF two officials nominated y the Authority, one as the Chairman and the other as a mem erC E F ei%ht representati,es of mem ers of the Insurance Association of India carryin% on %eneral insurance usiness elected in their indi,idual capacity y the said mem ers in such manner, from such %roups of mem ers and from such areas as may e specified y the Authority Q one non8official not connected with any insurance usiness, nominated y the Authority and EdF fi,e persons connected with %eneral insurance usiness, nominated y the Authority for the purpose of representin% such %roups of insurers carryin% on %eneral insurance usiness or such areas as ha,e not een a le to secure ade+uate representation on the #xecuti,e Committee of the 9eneral Insurance Council or for any other purpose. E&F If any ody of persons specified in su 8sections E1F and E2F fails to elect any of the mem ers of the #xecuti,e Committees of the 4ife Insurance Council or the 9eneral Insurance Council, the Authority may nominate any person to fill the ,acancy, and any person so nominated shall e deemed to e a mem er of the #xecuti,e Committee of the 4ife Insurance Council or the 9eneral Insurance Council, as the case may e, as if he had een duly elected thereto. E(F ;o official nominated y the Authority shall e entitled, whether as chairman or as a mem er, to ,ote in respect of any matter comin% up efore any meetin% of the #xecuti,e Committee of the 4ife Insurance Council or the #xecuti,e Committee of the 9eneral Insurance Council, as the case may e, and su !ect thereto each of the said #xecuti,e Committees may, with the appro,al of the Authority, ma5e ye8laws for the transaction of any usiness at any meetin% of the said Committee, and any such ye 8law may pro,ide that any mem er of the Committee who is interested in any matter for the time ein% efore that Committee may not e present at or ta5e part in any meetin% thereof. E)F $he life insurance Council or the 9eneral Insurance Council may form such other committees consistin% of such persons as it may thin5 fit to dischar%e such functions as may e dele%ated theretoD P'/:)2(2 that any action ta5en y any of the said Council under this su section shall e with the pre,ious consent of the Authority and nothin% in this su 8section shall dero%ate from any of the powers ,ested in the #xecuti,e Committees.

E*F $he Secretary of the #xecuti,e Committee of the 4ife Insurance Council and of the #xecuti,e Committee of the 9eneral Insurance Council shall in each case e an official nominated y the Authority. R(5)<+,0)/+ ,+2 4)ll)+< 86 /4 3,58,l :,3,+3)(5 *(9. E1F Any mem er of the #xecuti,e Committee of the 4ife Insurance Council or of the 9eneral Insurance Council may resi%n his mem ership of the Committee y notice in writin% addressed to the Chairman of the Committee to that effect. E2F Casual ,acancies in the #xecuti,e Committee of the 4ife Insurance Council or of the 9eneral Insurance Council, whether caused y resi%nation, death or otherwise, shall e filled y nomination y the Authority, and any person so nominated to fill the ,acancy shall hold office until the dissolution of the Committee to which he has een nominated. E&F ;o act of the #xecuti,e Committee of the 4ife Insurance Council or of the 9eneral Insurance Council shall e called in +uestion on the %round merely of the existence of any ,acancy in, or defect in the constitution of, the Committee concerned. D8',0)/+ ,+2 2)55/l80)/+ /4 E1(380):( C/**)00((5 *(:. ElF $he duration of the #xecuti,e Committee of the 4ife Insurance Council or the 9eneral Insurance Council shall e three years from the date of its first meetin% on the expiry of which it shall stand dissol,ed and a new #xecuti,e Committee constituted. E2F;otwithstandin% the dissolution of the #xecuti,e Committee of the 4ife Insurance Council or the 9eneral Insurance Council, the out8%oin% mem ers thereof shall continue to hold office and dischar%e such administrati,e and other duties as may e prescri ed until such time as a new #xecuti,e Committee of the 4ife Insurance Council or the 9eneral Insurance Council, as the case may e, shall ha,e een constituted. P/7(' /4 E1(380):( C/**)00(( /4 L)4( I+58',+3( C/8+3)l 0/ ./l2 (1,*)+,0)/+5 4/' I+58',+3( ,<(+05 A-I $he 4ife Insurance Council may, with the appro,al of the Authority authorise its #xecuti,e Committee to hold examinations for indi,iduals wishin% to +ualify themsel,es as insurance a%ents for the purpose of procurin% life insurance usiness, and if the Authority, y notification in the official 9a7ette, so declares, then, not withstandin% anythin% contained in Sec. (2, only indi,iduals who ha,e passed any such examination shall e eli%i le to apply for a 1icence under Section (2D P'/:)2(2 that nothin% in this su 8section shall affect the ri%ht of any indi,idual, who has een licensed to act as an insurance a%ent under Section (2 efore the date of such notification, to act as such, or to ha,e his 1icence renewed from time to time F8+30)/+5 /4 E1(380):( C/**)00(( /4 L)4( I+58',+3( C/8+3)l AJ. E1F $he functions of the #xecuti,e Committee of the 4ife Insurance Council shall e EaF to aid, ad,ise and assist insurers carryin% on life insurance usiness in the matter of settin% up standards of conduct and sound practice and in the matter of renderin% efficient ser,ice to holders of life insurance policiesC E F to render ad,ice to the Authority in the matter of controllin% the expenses of insurers in respect of their life insurance usiness in IndiaC EcF to rin% to the notice of the Authority the case of any insurer actin% in a manner to the interests of holders of life insurance policiesC pre!udicial

EdF to act in any matter incidental or ancillary to any of the matters specified in Clauses EaF to EcF as, with the appro,al of the Authority, may e notified y the 4ife Insurance Council in the 9a7ette of India. E2F 1or the purpose of ena lin% it effecti,ely to dischar%e its functions, the #xecuti,e Committee of the 4ife Insurance Council may collect such sums of money, whether y way of fees or otherwise, as may e prescri ed from all mem ers and associate mem ers of the Insurance Association of India who carry on life

insurance8 usiness. E1(380):( C/**)00(( /4 L)4( I+58',+3( C/8+3)l *,- ,2:)5( )+ 3/+0'/ll)+< (16(+5(5 AF. E1FIt shall e the duty of the #xecuti,e Committee of the 4ife Insurance Council to meet at least once efore the &1st day of "arch e,ery year to ad,ise the Authority in fixin% under the pro,iso to su 8section E2F of Section (08B the limits y which the actual expenses incurred y an insurer carryin% on life insurance usiness in respect of such usiness in the precedin% year may exceed the limits prescri ed under that su 8section, and in fixin% any such limits the Authority shall ha,e due re%ard to the conditions o tainin% in life insurance usiness %enerally durin% that year and he may fix different limits for different %roups of insurers. E2F <here an insurer is %uilty of contra,enin% the pro,isions of Section (0B with respect to the expenses of mana%ement, the Authority may, after %i,in% the insurer an opportunity of ein% heard, administer a warnin% to the insurer. E&F <here within a period of se,en years two warnin%s ha,e een %i,en to an insurer under su 8section E2F and they ha,e een disre%arded y him, the Authority may cause an in,esti%ation and ,aluation, as at such date as the Authority may specify, to e made at the expense of the insurer y an actuary appointed y the insurer for this purpose and appro,ed y the Authority, and the insurer shall place at the disposal of the said actuary all the materials re+uired y him for the purpose of such in,esti%ation and ,aluation, within such period, not ein% less than three months, as the Authority may specify. E(F $he pro,isions of su 8sections E1F and E(F of Section 1& and su 8sections E1F and E2F of Section 1), or, as the case may e, of su 8section E2F of Sec. 1* shall apply in relation to an in,esti%ation and ,aluation under this sectionD P'/:)2(2 that the a stract and statement prepared as the result of such in,esti%ation and ,aluation shall e furnished y such date as the Authority may specify. E)F $here shall e appended to e,ery such a stract a statement si%ned y the actuary %i,in% such information as may e prescri ed. E*F 6n receipt of the a stract and statement furnished in accordance with su 8section E(F, the Authority may ta5e such action as may e prescri ed. F8+30)/+5 /4 0.( E1(380):( C/**)00(( /4 G(+(',l I+58',+3( C/8+3)l AL E1F $he functions of the #xecuti,e Committee of the 9eneral Insurance Council shall e 8 EaF to aid and ad,ise insurers, carryin% on %eneral insurance usiness , in the matter of settin% up standards of conduct and sound practice and in the matter of renderin% efficient ser,ice to holders of policies of %eneral insuranceC E F to render ad,ice to the Authority in the matter of controllin% the expenses of such insurers carryin% on usiness in India in the matter of commission and other expensesC EcF to rin% to the notice of the Authority the case of any such insurer actin% in a manner pre!udicial the interests of holders of %eneral insurance po1iciesC EdF to act in any matter incidental or ancillary to any of the matters specified in Clauses EaF to EcF as with the appro,al of the Authority may e notified y the 9eneral Insurance Council in the 9a7ette of India. E2F 1or the purpose of ena lin% it effecti,ely to dischar%e its functions, the #xecuti,e Committee of the 9eneral Insurance Council may collect such fees as may e prescri ed from all insurers carryin% on %eneral insurance usinessD Pro,ided that if the 9eneral Insurance Council thin5s fit, it may y a resolution passed y it, wai,e the collection of the prescri ed fees for any year and where any such resolution has een appro,ed y the Authority, the #xecuti,e Committee of the 9eneral Insurance Council shall not collect any fees in relation to that year.

E1(380):( C/**)00(( /4 0.( G(+(',l I+58',+3( C/8+3)l *,- ,2:)5( )+ 3/+0'/ll)+< (16(+5(5. AM. E1F It shall e the duty of the #xecuti,e Committee of the 9eneral Insurance Council to meet at least once efore the &1st day of "arch e,ery year to ad,ise the Authority in fixin% under the pro,iso to su section E1F of Section (08C the limits y which the actual expenses of mana%ement incurred y an insurer carryin% on %eneral insurance usiness in respect of such usiness in the precedin% year may exceed the limits prescri ed under that su 8section, and in the fixin% any such limits the Authority shall ha,e due re%ard to the conditions o tainin% in %eneral insurance usiness in the precedin% year, and he may fix different limits for different %roups of insurers. E2F <here an insurer is %uilty of contra,enin% the pro,isions of Section (0C with respect to the expenses of mana%ement the Authority may, after %i,in% the insurer an opportunity of ein% heard, administer a warnin% to the insurer. E&F <here in any case two warnin%s %i,en to an insurer under su 8section E2F ha,e een disre%arded y him, the Authority may ta5e such action a%ainst the insurer as may e prescri ed. P/7('5 /4 E1(380):( C/**)00((5 0/ ,30 0/<(0.(' )+ 3('0,)+ 3,5(5 *(;. $he Central 9o,ernment may prescri e the circumstances in which, the manner in which, and the conditions su !ect to which, the #xecuti,e committee of the 4ife Insurance Council and the #xecuti,e Committee of the 9eneral Insurance Council may hold !oint meetin%s for the purpose of doin% with any matter of common interest to oth Committee, and it shall e lawful for the two Committees at any such !oint meetin% to dele%ate any matter under consideration for the determination of a su committee appointed for this purpose from amon%st the mem ers of the two Committees. G(+(',l 6/7('5 /4 L)4( I+58',+3( C/8+3)l ,+2 G(+(',l I+58',+3( C/8+3)l AR #1F 1or the efficient performance of its duties, the 4ife Insurance Council or the 9eneral Insurance Council, as the case may e, may EaF appoint such officers and ser,ants as may e necessary and fix the conditions of ser,iceC E F determine the manner in which any prescri ed fee may e collectedC EcF 5eep and maintain up to date a copy of the list of all insurers who are mem ers mem ers of the Insurance Association of IndiaC EdF with the pre,ious appro,al of the Authority, ma5e re%ulations for EiF the holdin% of elections other than the first electionsC or associate their

EiiF the summonin% and holdin% of meetin%s, the conduct of usiness thereat and the num er of persons necessary to form a +uorumC EiiiF the su mission y insurers to the #xecuti,e Committee of the 4ife Insurance Council, or the 9eneral Insurance Council of such statements or information as may e re+uired of them and the su mission of copies thereof y the insurers to the AuthorityC Ei,F the le,y and collection of any feesC E,F the re%ulation o any other matter which may e necessary for the purpose of ena lin% it to carry out its duties under this Act. E2F $he 4ife Insurance Council or the 9eneral Insurance Council may authorise the #xecuti,e Committee concerned to exercise any of the powers conferred on the 4ife Insurance Council or the 9eneral Insurance Council, as the case may e, under C1ause EaF, C1ause E F or C1ause EcF of su 8section E1F. P/7(' /4 C(+0',l G/:('+*(+0 0/ '(*/:( 2)44)38l0)(5 AS. $he Central 9o,ernment may exercise such powers as may e necessary for rin%in% the 4ife

Insurance Council, the 9eneral Insurance Council or the #xecuti,e Committee of any of the said Councils, as the case may e, into effecti,e existence for the purposes of this Part, and any such powers shall include EaF the power to hold, in such manner as may e directed y the Central 9o,ernment, the first elections to the #xecuti,e Committees of the 4ife Insurance Council and the 9eneral Insurance CouncilC E F where a notification under su 8section E1F of Section *(A has een issued declarin% pro,ident societies to e mem ers of the Insurance Association of India, the powers to associate pro,ident societies effecti,ely in the exercise of all powers and the dischar%e of all functions of the 4ife Insurance Council and the #xecuti,e Committee thereofC EcF the power to ma5e the pro,isions of Section (0B applica le to the pro,ident societies specified in Clause E F in the same manner as they apply to insurers. P/7(' 0/ (1(*60 AT. $he Central 9o,ernment may, su !ect to such conditions and restrictions as it may thin5 fit to impose, exempt any insurer specified in su -clause EcF of C1ause E/F of Section 2 from the operation of all or any of the pro,isions of this Part. PART II-B TARIFF ADVISORY COMMITTEE AND AUTHORITY OF TARIFF RATES E50,9l)5.*(+0 /4 T,')44 A2:)5/'- C/**)00(( AU E1F <ith effect from the commencement of the Insurance EAmendmentF Act,.1/*., there shall e esta lished a Committee, to e called the $ariff Ad,isory Committee Ehereafter in this Part 8referred to as the Ad,isory CommitteeF to control and re%ulate the rates, ad,anta%es, terms and conditions that may e offered y insurers in respect of %eneral insurance usiness. E2F $he Ad,isory Committee shall e a ody corporate ha,in% perpetual succession and a common seal, with power, su !ect to the pro,isions of this Act, to ac+uire, hold and dispose of property, oth mo,ea le and immo,ea le, and to contract, and may, y the said name, sue and e sued. C/*6/5)0)/+ /4 0.( A2:)5/'- C/**)00(( AUA. E1F $he Ad,isory Committee shall consist of the followin% mem ers, namelyDJ Ea F the Chairperson of the Authority ex o i&io, who shall e the ChairmanC E Fa senior officer of the office of the Authority nominated y the Authority, who shall e the @ice8ChairmanC EcF not more than ten representati,es of Indian insurers, elected EIn their indi,idual capacitiesF y such insurers in such manner, from such areas and from amon% such insurers or %roups of insurers as may e prescri edC EdF not more than four representati,es of insurers incorporated or domiciled elsewhere than in India ut re%istered in India elected Ein their indi,idual capacitiesF y such insurers in such manner, and from amon% such insurers or %roups of insurers as may e prescri ed. E2F $he Secretary to the Ad,isory Committee shall e an officer of the office of the Authority, nominated y the Authority. P/7(' 0/ *,C( '8l(5 )+ '(56(30 /4 *,00('5 )+ 0.)5 6,'0 AUB. #1F $he Authority may y notification in the official 9a7ette may ma5e re%ulations to carry out the purposes of this Part. E2F In particular, and without pre!udice to the %enerality of the fore%oin% power, such re%ulations

may pro,ide for all or any of the followin% matters, namelyD8 EaF the functions to e dischar%ed y the Ad,isory CommitteeC E F the term of office of the mem ers of the Ad,isory Committee, the procedure for their election and the manner of fillin% casual ,acancies in the Ad,isory CommitteeC EcF the tra,elin% and other allowances paya le to the mem ers of the Ad,isory CommitteeC EdF the procedure for holdin% the meetin% of the Ad,isory Committee and for transaction of usiness thereat. E&F$he Ad,isory Committee may, y notification in the 6fficial 9a7ette with the pre,ious appro,al of the Authority, ma5e re%ulations for all or any of the followin% matters, namely,J EaF the constitution, powers and duties of 'e%ional Committees and of su -committees constituted y the Ad,isory committee or any 'e%ional CommitteeE E F the method of election of candidates for 'e%ional Committees and of su 8committees, their eli%i ility, term of office and method of fillin% casual ,acanciesC EcF the procedure for con,enin% meetin%s and transaction of usiness y 'e%ional committees and su 8committeesC EdF the appointment of officers and other employees of the Ad,isory Committee and of 'e%ional Committees or su 8committees constituted y or under the Ad,isory Committee or any 'e%ional Committee and the terms and conditions of their ser,ice includin% tra,ellin% and other allowancesC EeF such other matters pertainin% to procedure as are not inconsistent with the pro,isions of this Act or of rules made there under, and may, from time to time, with the pre,ious appro,al of the Authority, add to, amend or ,ary any such re%ulations. E(F $he re%ulations made y the $ariff Committee of the 9eneral Insurance Council under Section *(86 as they were in force immediately efore the commencement of the Insurance EAmendmentF Act, 1/*., shall, after such commencement, continue to e in force until rules are made y the Central 9o,ernment under su 8section E1F and immediately after such rules ha,e come into effect, the re%ulations aforesaid shall cease to e ,alid. E)F $he Chairperson of the Authority shall e in direct char%e of the esta lishment of the Ad,isory Committee and the Secretary of the Ad,isory Committee shall wor5 under his direction and control. P/7(' /4 0.( A2:)5/'- C/**)00(( 0/ '(<8l,0( ',0(5, ,2:,+0,<(5, (03 AUC. E1F $he Ad,isory Committee may, from time to time and to the extent it deems expedient, control and re%ulate the rates, ad,anta%es, terms and conditions that may e offered y insurers in respect of any ris5 or any class or cate%ory of ris5s, the rates, ad,anta%es, terms and conditions of which, in its opinion, it is proper to control and re%ulate, and any such rate, ad,anta%es, terms and conditions shall e indin% on all insurersD P'/:)2(2 that the Authority may, permit any insurer to offer, durin% such period E ein% not more than two years ut which may e extended y periods of not more than two years at a timeF and su !ect to such conditions as may e specified y him, rates, ad,anta%es, terms or conditions different from those fixed y the Ad,isory Committee in respect of any particular cate%ory of ris5s, if he is satisfied that such insurer %enerally issues policies only to a restricted class of the pu lic or under a restricted cate%ory of ris5s. E2F In fixin%, amendin% or modifyin% any rates, ad,anta%es, terms or conditions, relatin% to any ris5, the Ad,isory Committee shall try to ensure, as far as possi le, that there is no unfair discrimination etween ris5 of essentially the same ha7ard, and also that consideration is %i,en to past and prospecti,e loss experienceD Pro,ided that the Ad,isory Committee may, at its discretion, ma5e suita le allowances for the de%ree of credi ility to e assi%ned to the past experience includin% allowances for random fluctuations and may also,

at its discretion, ma5e suita le allowances for future fluctuations and unforeseen future contin%encies includin% ha7ards of confla%ration or catastrophe or oth. E&F #,ery decision of the Ad,isory Committee shall e ,alid only after and to the extent it is ratified y the Authority, and e,ery such decision shall ta5e effect from the date on which it is so ratified y the Authority, or if the Authority so orders in any case, from such earlier date as he may specify in the order. E(F $he decisions of the Ad,isory Committee in pursuance of the pro,isions of this section shall e final. E)F <here an insurer is %uilty of reach of any rate, ad,anta%e, term or condition fixed y the Ad,isory Committee, he shall e deemed to ha,e contra,ened the pro,isions of this Act. Pro,ided that instead of proceedin% a%ainst the insurer for such contra,ention, the Authority may, if the insurer remo,es the contra,ention y reco,erin% the deficiency in the premium, or where it is not practica le to do so, modifies suita ly or cancels the contract of insurance, compound the offence on payment to the Ad,isory Committee of such fine, not exceedin% rupees one thousand, as he may decide in consultation with the Ad,isory Committee. T',+5)0)/+,l 6'/:)5)/+5 AUD. E1F ;otwithstandin% anythin% contained in this Part, until the names of the mem ers of the Ad,isory Committee elected for the first time after the commencement of the Insurance EAmendmentF Act, 1/*., are notified, the $ariff Committee of the 9eneral Insurance Council appointed under re%ulations made under su 8section E2F of Section *(80 as it was in force immediately efore the commencement of the Insurance EAmendmentF Act, 1/*., and in existence on such commencement #hereafter in this Part referred to as the $ariff CommitteeF shall continue to function and shall e deemed to e the Ad,isory Committee duly elected under this Part and the Authority of Insurance shall ecome the Chairman of that Committee with effect from the commencement of the Insurance EAmendmentF Act, 1/*., and function as such, and any chairman of the $ariff Committee holdin% office immediately efore such commencement shall cease to e the Chairman thereof from the date of such commencement ut shall continue to e an ordinary mem er of the Ad,isory Committee. P'/:)2(2 that the Chairperson of the Authority shall ecome the Chairman of the Ad,isory committee with effect from the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1/// and function as such, and any chairman of the $ariff Committee holdin% office immediately efore such commencement shall cease to e the Chairman. E2F ;otwithstandin% anythin% contained in this Part, the constitution of the 'e%ional Councils esta lished under Section *(8P, as in force immediately efore the commencement of the Insurance EAmendmentF Act, 1/*. Ehereafter referred to as the 'e%ional CouncilsF, and of the Sectional Committees formed there under, existin% immediately efore such commencement, shall continue to e in full force and e of full effect until the re%ulations made y the Ad,isory Committee for the first time under Section *(?B come into effect and as soon as such re%ulations ha,e come into effect such constitutions shall cease to ha,e effect. E&F ;otwithstandin% anythin% contained in this Part, until the Secretary to the Ad,isory Committee is nominated under su 8section E2F of Section *(?A, the Secretary to the $ariff Committee holdin% office immediately efore the commencement of the Insurance EAmendmentF Act, 1/*., shall function as the Secretary and shall e deemed to ha,e een duly nominated under this Part. E(F All rates, ad,anta%es, terms and conditions fixed y the $ariff Committee or the 'e%ional Councils prior to the commencement of the Insurance EAmendmentF Act, 1/*., and in force immediately efore such commencement shall continue, except to such extent as they may e altered, replaced or a olished y the Ad,isory Committee, to e ,alid and fully in force as if they were rates, ad,anta%es, terms and conditions fixed y the Ad,isory Committee. 8 P/7(' /4 0.( A2:)5/'- C/**)00(( 0/ '(>8)'( I+4/'*,0)/+, (03 AUE. E1F $he Ad,isory Committee may re+uire, y notice in writin%, any insurer to supply to it such information or statements, periodical or ad 1o&, as it may consider necessary to ena le it to dischar%e its functions under this Part and e,ery insurer shall comply with such re+uirements within such period as may e specified y the Ad,isory Committee in this ehalf, failin% which the insurer shall e deemed to ha,e contra,ened the pro,isions of this Act.

E2F Any information supplied under this section shall e certified y a principal officer of the insurer or where the Ad,isory Committee has a%reed in ad,ance, y 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 re+uires, also y an auditor. E&F $he Authority may, at any time, in writin%, depute any su ordinate of his, to ma5e a personal inspection of the oo5s of account, led%ers, policy re%isters and other oo5s or documents of any insurer to ,erify the accuracy of any return or statement furnished y him under su section E1F, or to ,erify that full particulars ha,e een supplied y him in respect of all policies issued y him and the insurer shall pro,ide all facilities for such inspection, and ma5e a,aila le to such person all the oo5s of account, led%ers, policy re%isters and other oo5s or documents of the insurer which mi%ht e needed y him for such ,erification and the person deputed may himself extract from out of the oo5s and records of the insurer such information as may e needed to fill up or complete the returns re+uired to e su mitted to the Ad,isory Committee under this section. E(F $he Ad,isory Committee may, at any time, on the application of an insurer, ma5e arran%ements for the inspection of an or%ani7ation which is concerned with the inspection of ris5s, ad!ustment of losses or fire8fi%htin% appliances, and may, whene,er necessary, ad,ise insurers a out the ade+uacy of the arran%ements for the inspection of ris5s and ad!ustment of losses or the suita ility of such appliancesD P'/:)2(2 that no such inspection shall or%ani7ation e made without the written permission of the concerned

A55(05 ,+2 l),9)l)0)(5 /4 0.( G(+(',l I+58',+3( C/8+3)l 0/ :(50 )+ 0.( A2:)5/'- C/**)00(( AUF. E1F 6n the commencement of the Insurance EAmendmentF Act, 1/*., all the assets and lia ilities of the 9eneral Insurance Council appertainin% to its $ariff Committee and to its 'e%ional Councils and their Sectional Committees existin% on that day shall e transferred to, and ,est in, the Ad,isory Committee. E2F $he assets appertainin% to the $ariff Committee, the 'e%ional Councils, and their Sectional Committees shall e deemed to include all ri%hts and powers and all property, whether mo,ea le or immo,a le, includin%, in particular, cash alances, reser,e funds, in,estments, deposits and all other interests and ri%hts in, or arisin% out of, such property as may e in the possession of the $ariff Committee, 'e%ional Councils and their Sectional Committees and all oo5s of account or documents thereofC and lia ilities shall e deemed to include all de ts, lia ilities and o li%ations of whate,er 5ind existin% and appertainin% to the wor5 of the $ariff Committee, the 'e%ional Councils and their Sectional Committees. E&F <here the 9eneral Insurance Council has esta lished a pro,ident or superannuation fund or any other fund for the enefit of the employees of its $ariff Committee or 'e%ional Councils and constituted a trust in respect thereof Ehereafter in this section referred to an existin% trustF, the monies standin% to the credit of any such fund at the commencement of the Insurance EAmendmentF Act, 1/*., shall, su !ect to the pro,isions of su section E(F, stand transferred to, and ,est in, on such commencement, the Ad,isory Committee. E(F <here any employee of the $ariff Committee, or the 'e%ional Councils, or the 9eneral Insurance Council does not ecome an employee of the Ad,isory Committee, the monies and other assets appertainin% to any fund referred to in su section E&F shall e apportioned etween the trustees of the fund and the Ad,isory Committee in the prescri ed mannerC and in case of any dispute re%ardin% such apportionment, the decision of the Central 9o,ernment thereon shall e final. E)F $he Ad,isory Committee shall, as soon as may e after the commencement of the Insurance EAmendmentF Act, 1/*., constitute in respect of the monies and other assets which are transferred to, and ,ested in it, under su section E&F, one or more trusts ha,in%, as far as practica le, o !ects similar to the o !ects of the existin% trusts. E*F <here all the monies and other assets elon%in% to an existin% trust are transferred to, and ,ested in, the Ad,isory Committee under su 8section E&F, the trustees of such trust shall, on the commencement of the Insurance EAmendmentF Act, 1/*., e dischar%ed from the trust except as respects thin%s done or omitted to e done y them efore such commencement. C/+0',305, (03., 0/ 9( (44(30):( 9- /' ,<,)+50 0.( A2:)5/'- C/**)00(( AUG E1F ?nless otherwise expressly pro,ided y or under this Act, all contracts, a%reements and other instruments of whate,er nature su sistin% or ha,in% effect immediately efore the commencement of the

Insurance EAmendmentF Act, 1/*., and to which $ariff Committee, or any 'e%ional Council is a party or which is in fa,our of that Committee or that Council, shall e of as full force and effect a%ainst or in fa,our of the Ad,isory Committee and may e enforced or acted upon as fully and effectually as if, instead of the $ariff Committee, or the 'e%ional Council, the Ad,isory Committee had een a party thereto or as if they had een entered into or issued in fa,our of the Ad,isory Committee. E2F If, at the commencement of the Insurance EAmendmentF Act, 1/*., any suit, appeal or other le%al proceedin% of whate,er nature is pendin% y or a%ainst the $ariff Committee, or any 'e%ional Council then it shall not a ate, e discontinued or in any way e pre!udicially affected y reason of the transfer to the Ad,isory Committee of the assets and lia ilities of the $ariff Committee, and the 'e%ional Councils or of anythin% done under this Act, ut the suit, appeal or other proceedin% may e continued, prosecuted or enforced y or a%ainst the Ad,isory Committee. E*6l/-((5, (03., 0/ 3/+0)+8(.? AUH. E1F #,ery whole8time employee of the $ariff Committee, or the 'e%ional Councils who was employed y that Committee or those Councils wholly or mainly in connection with its or their statutory duties immediately efore the commencement of the Insurance EAmendmentF Act, 1/*., shall, on and from such commencement, ecome an employee of the Ad,isory Committee and shall hold his office in it y the same tenure, at the same remuneration, and upon the same terms and conditions and with the same rates and pri,ile%es as to pension, %ratuity and other matters as he would ha,e held on such commencement if this Part had not een enacted, and shall continue to do so until his employment under the Ad,isory Committee is terminated or until his remuneration, terms and conditions, are duly altered y the Ad,isory CommitteeD P'/:)2(2 that nothin% contained in this su 8section shall apply to any employee who has %i,en notice to the Central 9o,ernment in writin% either prior to or within two months from the commencement of the Insurance EAmendmentF Act, 1/*., intimatin% his intention of not ecomin% an employee of the Ad,isory Committee. E2F <here the Central 9o,ernment is satisfied that for the purpose of securin% uniformity in the scales of pay, remuneration and other terms and conditions of ser,ice applica le to employees of the $ariff Committee or the 'e%ional Councils, it is necessary so to do, or that a reduction in the remuneration paya le or re,ision of the other terms and conditions of ser,ice applica le to employees or any class of them is called for, the Central 9o,ernment may, notwithstandin% anythin% contained in su 8section E1F, or in the Industrial Disputes Act, 1/(- E1( of 1/(-F, or in any other law for the time ein% in force or in any award settlement, or a%reement for the time ein% in force, alter Ewhether y way of reduction or otherwiseF the remuneration and other terms and conditions of ser,ice to such extent and in such manner as it thin5s fitC and if the alteration is not accepta le to any employee, the Ad,isory Committee may terminate his employment y %i,in% him compensation e+ui,alent to three monthsI remuneration, unless the contract of ser,ice with such employees pro,ides for a shorter notice of termination. 45planation. 6 $he compensation paya le to an employee under this su section shall e in addition to and shall not affect any pension, %ratuity, pro,ident fund money or any other enefit to which the employee may e entitled under his contract of ser,ice. E&F If any +uestion arises as to whether any person was a whole8time employee of the $ariff Committee, or the 'e%ional Council, on the commencement of the Insurance EAmendmentF Act, 1/*., or as to whether any employee was employed wholly or mainly in connection with the statutory duties of the $ariff Committee, or any 'e%ional Council immediately efore such commencement, the +uestion shall e referred to the Central 9o,ernment whose decision thereon shall e final. E(F ;otwithstandin% anythin% contained in the Industrial Disputes Act, 1/(- E1( of 1/(-F, or in any other law for the time ein% in force, the transfer of the ser,ices of any employee of the $ariff Committee, or the 'e%ional Councils, to the Ad,isory Committee shall not entitle any such employee to any compensation under that Act or other law, and no such claim shall e entertained y any Court, tri unal or other authority. D80- /4 6('5/+ .,:)+< 3850/2- /' 3/+0'/l /4 6'/6('0- 0/ 2(l):(' 583. 6'/6('0- 0/ 0.( A2:)5/'C/**)00(( AUI. E1F <here any property of the $ariff Committee, or the 'e%ional Councils Eappertainin% to its or their statutory dutiesF has een transferred to, and ,ested in, the Ad,isory Committee, then,

EaF e,ery person in whose possession, custody or control any such property may e, shall deli,er the property to the Ad,isory Committee forthwithC E F any person, who, on the commencement of the Insurance EAmendmentF Act, 1/*., has in his possession, custody or control any oo5s, documents and other papers relatin% to the $ariff Committee, or the 'e%ional Councils, shall e lia le to account for the said oo5s, documents and papers to the Ad,isory Committee and shall deli,er them to such person as the Committee may direct. E2F <ithout pre!udice to the pro,isions contained in this section, it shall e lawful for the Ad,isory Committee to ta5e all necessary steps for securin% possession of all properties which ha,e een transferred to and ,ested in it, under this Act. P/7(' /4 0.( A2:)5/'- C/**)00(( 0/ 3/+50)080( R(<)/+,l C/**)00((5 AUJ. E1F $he Ad,isory Committee may constitute such 'e%ional Committees as and when it deems fit for one or more of the prescri ed re%ions. E2F #ach 'e%ional Committee shall consist of not more than se,en persons of which not more than fi,e shall e elected y such %roups of insurers carryin% on %eneral insurance usiness in the re%ion as may e prescri ed and not more than two shall e nominated y the Authority. E&F 1or the purpose of ena lin% it effecti,ely to dischar%e its duties, and 'e%ional Committee may constitute such su committees as it may thin5 fit, whether consistin% of mem ers of the 'e%ional Committee or not. E(F It shall e the duty of e,ery 'e%ional committee to ad,ise the Ad,isory Committee on any +uestion connected with the fixation of rates, ad,anta%es, terms and conditions for ris5s in its re%ion which may e referred to it y the Ad,isory Committee for ad,ice, and in addition, e,ery 'e%ional Committee shall perform such other functions as may e dele%ated to it y the Ad,isory Committee y re%ulations made y it with the pre,ious appro,al of the Central 9o,ernment. E)F <here, in the exercise of any functions dele%ated to it under this section any 'e%ional Committee or any su 8committee thereof restrains an insurance a%ent from procurin% or causin% to e procured %eneral insurance usiness in any area, such a%ent may prefer an appeal to the Authority a%ainst such order within thirty days from the date of ser,ice of that order on him and the Authority may after %i,in% such a%ent an opportunity of ein% heard, pass such orders thereon as it may thin5 fit and the orders made y the Authority on such appeal shall e final. E*F ;otwithstandin% anythin% contained in this section e,ery 'e%ional Council and e,ery Sectional or other Committee of the 'e%ional Council, in existence immediately efore the commencement of the Insurance EAmendmentF Act, 1/*., shall, until it is a olished y the Ad,isory Committee, e deemed to e a 'e%ional Committee or su 8committee as the case may e, esta lished in accordance with the pro,isions of this section and shall function as such and shall ha,e all the powers and responsi ilities which it had immediately efore such commencement, and if the term of any such Council or Committee expires efore 'e%ional Committees constituted under su 8section E1F and su committees constituted under su 8section E&F come into existence, such terms shall e deemed to ha,e een ,alidly extended up to the time when such 'e%ional Committees and su 8committees are esta lished. L(:- /4 4((5 9- 0.( A2:)5/'- C/**)00((. AUF. E1F #,ery insurer shall annually efore the prescri ed date ma5e payment to the Ad,isory Committee in the prescri ed manner of such fees, not exceedin% for any year, in the case of an insurer doin% only re8insurance usiness in India, one per cent of his total premiums in respect of facultati,e re8insurance accepted y him in India in the precedin% year and in the case of any other insurer, one per cent of the total %ross premium written direct y him in India in the precedin% year, as may e specified y the Ad,isory Committee for the purpose of this part. E2F $he Ad,isory Committee may collect, in addition to the fees mentioned in su 8section E1F, reasona le fees and char%es from any person to co,er the cost of any specific ser,ices rendered y it. E&F If an insurer fails to ma5e payment within the prescri ed date of any fee re+uired to e paid under su 8section E1F he shall e deemed to ha,e failed to comply with the pro,isions of this Act.

E(F $he Authority may, so lon% as an application to the Court under su section E) 8DF of Section & has not een made, re,i,e the re%istration which mi%ht ha,e een cancelled for failure to ma5e payment of the fee re+uired to e made under su section E1F, if the insurer ma5es payment of such fee to%ether with such penalty not exceedin% the actual amount of fee paya le as the Authority may re+uire. P/7(' 0/ '(*/:( 2)44)38l0)(5 AUL. If any difficulty arises in %i,in% effect to the pro,isions of this Part, the Central 9o,ernment may, y order, ma5e such pro,isions or %i,e such directions not inconsistent with the pro,isions of this Act as may appear to it to e necessary or expedient for the remo,al of the difficultyD P'/:)2(2 that no such power shall commencement of this Part e exercised after the expiry of a period of four years from the

L)3(+5)+< /4 58':(-/'5 ,+2 l/55 ,55(55/'5 AUM #1$ #A$ Sa,e as otherwise pro,ided in this section, no person shall act as a sur,eyor or loss assessor in respect of %eneral insurance usiness after the expiry of a period of one year from the commencement of the Insurance EAmendmentF Act, 1/*., unless he holds a ,alid licence issued to him y the Authority. EBF #,ery person who intends to act as a sur,eyor or loss assessor after the expiry of a period of one year from the commencement of the Insurance EAmendmentF Act, 1/*., ut efore the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///,shall ma5e an application to the Authority within such time, in such form, in such manner and on payment of such fee, not exceedin% rupees two hundred and fifty, as may e prescri ed. EBAF #,ery person who intends to act as a sur,eyor or loss assessor after the expiry of a period of one year from the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1/// shall ma5e an application to the Authority within such time, in such manner and on payment of such fee as may e determined y the re%ulations made y the AuthorityC P'/:)2(2 that any licence issued immediately efore the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1/// shall e deemed to ha,e een issued in accordance with the re%ulations pro,idin% for such licence. ECF #,ery licence issued under this section shall remain in force, unless cancelled earlier, for a period of fi,e years from the date of issue thereof, and may e renewed for a period of fi,e years at a time, on payment of such fee, not exceedin% rupees two hundred, as may e determined y the re%ulations. EDF ;o licence to act as a sur,eyor or loss assessor shall e issued unless EiF the applicant, where he is an indi,idual, satisfies the Authority that he R 7a8 1as *een in practice as a sur,eyor or loss assessor on the date of commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1/// or E F holds a de%ree of a reco%nised ?ni,ersity in any ranch of en%ineerin%, or EcF is a fellow or associate mem er of the Institute of Chartered Accountants of India or the Institute of cost and <or5s Accountants of India, or EdF Possesses actuarial +ualifications or holds a de%ree or diploma of any reco%ni7ed ?ni,ersity or institute in relation to insurance, or EeF holds a diploma in insurance %ranted or reco%nised y the 9o,ernment, or EfF possesses such other technical +ualifications as may e specified y the re%ulations made y the Authority, and E%F does not suffer from any of the dis+ualifications mentioned in su section E(F of Section (2C 7ii8 the applicant, where he is a company or firm, satisfies the Authority that all his directors or partners, as the case may e, possess one or more of the +ualifications specified in C1ause EiF and none of such directors or partners suffer from any of the dis+ualifications mentioned in su section E(F of Section (2.

E#F #,ery application for the renewal of the licence shall e made at least thirty days efore the expiry of the period of ,alidity thereof. E1F $he Authority may, if he is satisfied that any licence issued or renewed under this section has een lost or destroyed, issue a duplicate licence on payment of a fee of rupees fi,e and the duplicate licence so issued shall remain in force for the remainder of the period of a ,alidity of the licence in lieu of which it is issued. E9F <ithout pre!udice to the powers conferred y su 8section E-F, the Authority, if satisfied that the holder of any licence has made a statement which is false in material particulars with re%ard to his eli%i ility for o tainin% such licence or has, after the issue or renewal of such licence, ac+uired any of the dis+ualifications mentioned in su 8section E(F of Section (2, may, after %i,in% a reasona le opportunity to the holder of such licence of ein% heard, y order cancel such licence and notify such cancellation in the official 9a7ette. E1AF #,ery sur,eyor and loss assessor shall comply with the code of conduct in respect of their duties, responsi ilities and other professional re+uirements as may e specified y the re%ulations made y the Authority. E2F ;o claim in respect of a loss which has occurred in India and re+uirin% to e paid or settled in India e+ual to or exceedin% twenty thousand rupees in ,alue on any policy of insurance, arisin% or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance EAmendmentF Act, 1/*., shall, unless otherwise directed y the Authority, e admitted for payment or settled y the insurer unless he has o tained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a sur,eyor or loss assessor Ehereafter referred to as Bappro,ed sur,eyor or loss assessorsF P'/:)2(2 that nothin% in this su 8section shall e deemed to ta5e away or a rid%e the ri%ht of the insurer to pay or settle any claim at any amount different from the amount assessed y the appro,ed sur,eyor or loss assessor. E&F $he Authority may, at any time, in respect of any claim of the nature referred to in su 8section E2F, call for an independent report from any other appro,ed sur,eyor or loss assessor specified y him and such sur,eyor or loss assessor shall furnish such report to the Authority within such time as may e specified y the Authority or if no time limit has een specified y him within reasona le time and the cost of, or incidental to, such report shall e orne y the insurer. E(F $he Authority may, on receipt of a report referred to in su 8section E&F, issue such directions as he may consider necessary with re%ard to the settlement of the claim includin% any direction to settle a claim at a fi%ure less than, or more than, that at which it is proposed to settle it or it was settled and the insurer shall e ound to comply with such directionsD P'/:)2(2 that where the Authority issues a direction for settlin% a claim at a fi%ure lower than that at which it has already een settled, the insurer shall e deemed to comply with such direction if he satisfies the Authority that all reasona le steps with due re%ard to the +uestion whether the expenditure in,ol,ed is not disproportionate to the amount re+uired to e reco,ered, ha,e een ta5en with due despatch y himD P'/:)2(2 further that no direction for the payment of a lesser sum shall e made where the amount of the claim has already een paid and the Authority is of opinion that the reco,ery of the amount paid in excess would cause undue hardship to the insuredD P'/:)2(2 ,l5/ that nothin% in this section shall relie,e the insurer from any lia ility, ci,il or criminal, to which he would ha,e een su !ect ut for the pro,isions of this su 8section. E)F ;o insurer shall, after the expiry of a period of one year from the commencement of the Insurance EAmendmentF Act, 1/*., pay to any person any fee or remuneration for sur,eyin%, ,erifyin% or reportin% on a claim of loss under a policy of insurance unless the person ma5in% such sur,ey, ,erification or report is an appro,ed sur,eyor or loss assessor. E*F <here, in the case of a claim of less than twenty thousand rupees in ,alue on any policy of insurance it is not practica le for an insurer to employ an appro,ed sur,eyor or loss assessor without incurrin% expenses disproportionate to the amount of the claim, the insurer may employ any other person Enot ein% a person dis+ualified for flee time ein% for ein% employed as a sur,eyor or loss assessorF for sur,eyin% such loss and may pay such reasona le fee or remuneration to the person so employed as he may thin5 fit.

E-F If the Authority is satisfied that an appro,ed sur,eyor or loss assessor has een %uilty of wilfully ma5in% a false statement 5nowin% it to e false or of ein% 5nowin%ly a party to the settlement of a claim in a fraudulent manner, he may, after %i,in% such sur,eyor or loss assessor an opportunity of ein% heard, cancel the licence issued to him with effect from such date as may e specified y him and shall notify such cancellation in the official 9a7ette. E.F Any sur,eyor or loss assessor whose licence has een cancelled shall not e eli%i le for ha,in% a licence to act as a sur,eyor or loss assessor for a period of three years from the date on which the cancellation is notified in the official 9a7ette. E/F$he Authority may in respect of any claim of ,alue of less than twenty thousand rupees on an insurance policy, if the claim has not een or is not proposed to e reported upon y a sur,eyor or loss assessor, direct that such claim shall e reported upon y an appro,ed sur,eyor or loss assessor and where the Authority ma5es such direction, the pro,isions of su sections E&F and E(F shall apply in respect of such claim. E10F <here, in relation to any class of claims, the Authority is satisfied that it is customary to entrust the wor5 of sur,ey or less assessment to any person other than a licensed sur,eyor or loss assessor, or if not practica le to ma5e any sur,ey or loss assessment, it may, y an order pu lished in the 9a7ette, exempt such class of claims from the operation of this section. PART II- C SOLVENCY MARGIN, ADVANCE PAYMENT OF PREMIUM AND RESTRICTIONS ON THE OPENING OF A NEW PLACE OF BUSINESS A55(05 ,+2 l),9)l)0)(5 ./7 0/ 9( :,l8(2 AV. E1F 1or the purpose of ascertainin% compliance with the pro,isions of Section *( @A,J EiF assets shall e ,alued at ,alues not exceedin% their mar5et or realisa le ,alue and the assets hereafter mentioned shall e excluded to the extent indicated, namelyD i. ii. iii. i,. ,. ,i. ,ii. ,iii. a%entsI alances and outstandin% premiums in India, to the extent they are not reali7ed within a period of thirty daysC a%entsI alances and outstandin% premiums outside India, to the extent they are not realisa leC sundry de ts, to the extent they are not reali7a leC ad,ances of an unreali7a le characterC furniture, fixtures, dead stoc5 and stationeryC deferred expensesC profit and loss appropriation account alance and any fictitious assets other than pre8paid expensesC such other asset or assets as may e specified y the re%ulations made in this ehalf.

EiiF a proper ,alue shall e placed on e,ery item of lia ility and lia ilities in respect of share capital, %eneral reser,e and other reser,es of similar nature not created to meet specific lia ilities and in,estment reser,es, reser,e for ad and dou tful de ts, and depreciation fund shall e excluded and lia ilities hereafter mentioned shall e included to the extent indicated, namelyD EaF pro,ision for di,idends declared or recommended, and outstandin% di,idends in fullC E F reser,es for unexpired ris5s in respect of EiF EiiF fire and miscellaneous usiness, )0 per cent., marine car%o usiness, )0 per cent., and EiiiF marine hull usiness, 100 per cent., of the premium, net of re8insurances, durin% the precedin% twel,e monthsC

EcF estimated lia ility in respect of outstandin% claims, in fullC

EdF amount due to insurance companies carryin% on insurance usiness in fullC EeF amounts due to sundry creditors, in fullC EfF pro,ision for taxation, in full. E%Fsuch other lia ility which may the purpose of clause EiiF e made in this ehalf to e included for

45planation. In the case of an insurer, whose principal place of usiness or domicile is outside India, where, in the accounts filed with the pu lic authority of the country in which the insurer is constituted, incorporated or domiciled, in respect of marine insurance usiness, the pro,isions for unexpired ris5s and outstandin% claims are not shown separately, the lia ilities under items E F and EcF of C1ause 7ii8 in respect of marine insurance usiness shall e ta5en to%ether at a fi%ure of not less than the total premium less8reinsurances in respect of that class of usiness durin% the precedin% twel,e months. E2F #,ery insurer shall furnish to the Authority with his returns under Section 1) or Section 1*, as the case may e, a statement certified y an auditor, of his assets and lia ilities assessed in the manner re+uired y this section as on the &1st day of Decem er of the precedin% year. E&F #,ery insurer shall ,alue his assets and lia ilities in the manner re+uired accordance with the re%ulations which may e made y the Authority in this ehalf. S844)3)(+3- /4 ,55(05 *(@A. E1F An insurer shall, at all times, efore the commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, maintain an excess of the ,alue of his assets o,er the amount of his lia ilities of not less than the amount arri,ed at as follows Ehereafter in this section referred to as the Brele,ant amountBF, namelyJ EiF in the case of an insurer whose total premium income less reinsurances in respect of %eneral insurance rininess Ehereafter in this su section referred to as the Bsaid incomeBF in the precedin% twel,e months did not exceed fi,e crores of rupees, one fifth of the said income su !ect to a minimum of a. . fi,e la5hs of rupees in the case of an insurer who is a cooperati,e society re%istered under the Cooperati,e Societies Act, 1/12 E2 of8 1/12F, or any other law for the time ein% in force in any State relatin% to co8operati,e societies, or ten la5hs of rupees in the case of any other insurerC and y this section and in

7ii8 in the case of an insurer whose said income in the precedin% twel,e months exceeded fi,e crores of rupees, the a%%re%ate of one8fifth of the first fi,e crores of rupees of the said income and one8tenth of the amount y which the said income in the precedin% twel,e months exceeded fi,e crores of rupeesD P'/:)2(2 that where a num er of insurers occupyin% the status of parent and su sidiary companies prepare, under the laws of the country of ori%in of the parent company, a consolidated alance sheet, the pro,isions of this su section shall apply to such of them as are not mem ers of any %roup as if they constituted a sin%le insurer, su !ect to the further condition that the rele,ant amount shall, in no case, e less than a sum e+ual to J I. the num er of such insurers multiplied y ten la5hs of rupees, or II. where all the insurers are co8operati,e societies re%istered under the Co8operati,e Societies Act, 1/12 E2 of 1/12F, or any other law for the time ein% in force in any State relatin% to co8operati,e societies, the num er of such insurers multiplied y fi,e la5hs of rupeesD Pro,ided further that If in respect of any insurer the Central 9o,ernment is satisfied that either y reason of an unfa,ora le claim, experience or ecause of a sharp increase in the ,olume of new usiness or for any other reason, compliance with the pro,isions of this su 8section would cause undue hardship to the insurer, it may direct that for such period and su !ect to such conditions as it may specify, the pro,isions of this su 8section shall apply to that insurer with the modification that instead of the proportion of one 8fifth, where,er mentioned in this su 8section, such other proportion ein% not less than one8tenth as may e specified y that 9o,ernment shall e applica le to that insurerD

Pro,ided also that in the case of an insurer carryin% on insurance usiness at the commencement of the Insurance EAmendmentF Act, 1/*., it shall e sufficient compliance with the pro,isions of this su 8section until the &1st Decem er, 1/-2 or until such su se+uent date, not ein% later than &1st Decem er, 1/-*, as the Central 9o,ernment may, at its discretion, allow for any particular insurer, if he pro%ressi,ely rin%s up the excess of the ,alue of his assets o,er the amount of his lia ilities, in such manner as may e prescri ed, to the rele,ant amount. E1AF #,ery Insurer shall, at all times, on or after the commencement of the Insurance 'e%ulatory and De,elopment of Authority Act, 1///, maintain an excess of the ,alue of his assets o,er the amount of his lia ilities of not less than the amount arri,ed at as follows Ehereinafter referred to in this section referred to as the Gre+uired sol,ency mar%inHF, namelyD8 i. in the case of an insurer carryin% on life insurance usiness, the re+uired sol,ency mar%in shall e the hi%her of the followin% amounts8 aF fifty crores of rupees Eone hundred crores of rupees in case of reinsurersFC or F the a%%re%ate sums of the results arri,ed at in items EIF and EIIF stated elowD8 I. the a%%re%ate of the results arri,ed at y applyin% the calculation descri ed in item EAF elow EStep IF and the calculation descri ed in items EBF elow EStep IIFD A. for Step I8 EA.1F there shall e ta5en, a sum e+ual to a percenta%e determined y the re%ulations not exceedin% fi,e per cent of the mathematical reser,es for direct usiness and re8insurance acceptances without any deduction for re8 insurance cessionsC EA.2F the amount of mathematical reser,es at the end of the precedin% financial year after the deduction of re8 insurance cessions shall e expressed as a percenta%e of the amount of those mathematical reser,es efore any such deductionC and EA.&F the sum mentioned in item EA.1F a o,e shall e multiplied8 EA.&81F where the percenta%e arri,ed at under item EA.2F a o,e is %reater then ei%hty8fi,e per cent. E6r in the case of a re8insurer carryin% on exclusi,e re8insurance usiness, fifty percentF, y that %reater percenta%eC and EA.&82F in any other case, y ei%hty8fi,e percent. Eor in the case of a re8 insurer carryin% on exclusi,e re8insurance usiness, y fifty per cent.FC EBF for Step II R EB1F there shall e ta5en, a sum e+ual to a percenta%e determined y the re%ulations made y the Authority not exceedin% one per cent of the sum at ris5 for the policies on which the sum at ris5 is not a ne%ati,e fi%ure, and EB.2F the amount of sum at ris5 at the end of the precedin% financial year for policies on which the sum at ris5 is not a ne%ati,e fi%ure after the deduction of re8insurance cession shall e expressed as a percenta%e of the amount of that sum at ris5 efore any such deduction, and EB.&F the sum arri,ed at under item EB.1F a o,e shall e multiplied8 EB.&81F where the percenta%e arri,ed at under item EB.2F a o,e is %reater than fifty per cent, y that %reater percenta%eC and EB.&82F in any other case, y fifty per cent EIIF a percenta%e determined y the re%ulations made y the Authority of the ,alue of assets determined in accordance with the pro,isions of section *(@C EiiF in the case of an insurer carryin% on %eneral insurance usiness, the re+uired sol,ency mar%in, shall e the hi%hest of the followin% amountsD8 aF fifty crores of rupees Eone hundred crores of rupees in case of reinsurerFC or F a sum e+ui,alent to twenty per cent of net premium incomeC or cF a sum e+ui,alent to thirty per cent of net incurred claims, su !ect to credit for re8insurance in computin% net premiums and net incurred claims ein% actual ut a percenta%e, determined y the re%ulations, not exceedin% fifty per centC P'/:)2(2 that if in respect of any insurer, the Authority is satisfied that either y reason of an unfa,ora le claim experience or ecause of sharp increase in the ,olume of the usiness, or for any other reason, compliance with the pro,isions of this su 8section would cause undue hardship to the insurer, the Authority

may direct, for such period and su !ect to such conditions, such sol,ency mar%in not ein% less than the lower of the amount mentioned in su 8clause EiF or su 8clause EiiF a o,e, as the case may e. #xplanation R 1or the purposes of this su 8section, the expressions8 EiF G"athematical reser,esH means the pro,ision made y an insurer to co,er lia ilities Eexcludin% lia ilities which ha,e fallen due and lia ilities arisin% from deposit ac5 arran%ement in relation to any policy where y an amount is deposited y re8insurer with the cedantF arisin% under or in connection with policies or contracts for life insurance usiness. "athematical reser,es also include specific pro,ision for ad,erse de,iations of the ases, such as mortality and mor idity rates, interest rates, and expense rates, and any explicit pro,ision made in the ,aluation of lia ilities in accordance with the re%ulations made y the Authority for this purposeC EiiF Gnet incurred claimsH means the a,era%e of the net incurred claims durin% the specified period of not exceedin% three precedin% financial yearsC EiiiF Gsum at ris5H, in relation to a life insurance policy, means a sum which is8 a. in any case in which an amount is paya le in conse+uence of death other than a case fallin% within su 8clause E F elow, the amount paya le on death, and . in any case in which the enefit under the policy in +uestion consists of the ma5in%, in conse+uence of death, of the payments of annuity, payment of a sum y instalments or any other 5ind of periodic payments, the present ,alue of that enefit, less in either case the mathematical reser,es in respect of the rele,ant policies.F E2F An insurer who does not comply with the pro,isions o su 8section E1F shall e deemed to e insol,ent and may e wound up y the Court. E2AF If, at any time an insurer does not maintain the re+uired sol,ency mar%in in accordance with the pro,isions of this section, he shall, in accordance with the directions issued y the Authority, su mit a financial plan, indicatin% a plan of action to correct the deficiency to the Authority within a specified period not exceedin% three months. E2BF An insurer who has su mitted a plan under su 8section E2AF to the Authority shall propose modifications to the plan if the Authority considers it inade+uate, and shall %i,e effect to any plan accepted y the Authority as ade+uate. E2CF An insurer who does not comply with pro,isions of su 8sections E2AF shall e deemed to e insol,ent and may e wound up y the court. E&F $he Authority shall e entitled at any time to ta5e such steps as he may consider necessary for the inspection or ,erification of the assets and lia ilities of any insurer o# o# securin% the particulars necessary to esta lish that the re+uirements of this section ha,e een complied with as on any date and the insurer shall comply with any re+uisition made in this ehalf y the Authority, and if he fails to do so within two months from the receipt of the re+uisition, he shall e deemed to ha,e made default in complyin% with the re+uirements of this section. E(F $he pro,isions of this section shall not apply to an insurer specified in su 8clause EcF of Clause E/F of Section 2. E)F In applyin% the pro,isions of su 8section E1F to any insurer, who is a mem er of a %roup, the rele,ant amount for that insurer shall e an amount e+ual to that proportion of the rele,ant amount which that %roup, if considered as a sin%le insurer, would ha,e een re+uired to maintain as the proportion of his share of the ris5 on each policy issued y the %roup ears to the total ris5 on that policyD P'/:)2(2 that when a %roup of insurers ceases to e a %roup, e,ery insurer in that %roup who continues to carry on any class of insurance usiness in India shall comply with the re+uirements of su 8section E1F as if he had not een an insurer in a %roup at any timeD P'/:)2(2 48'0.(' that it shall e sufficient compliance with the pro,isions of the fore%oin% pro,iso if the insurer rin%s up the excess of the ,alue of his assets o,er the amount of his lia ilities to the re+uired amount within a period of six months from the date of cessation of the %roupD P'/:)2(2 ,l5/ that the Central 9o,ernment may, on sufficient cause ein% shown, extend the said period of six months y such further periods as it may thin5 fit, so howe,er that the total period may not in any case

exceed one year. E*F $he Central 9o,ernment may, y notification in the 6fficial 9a7ette, reduce the sum of ten la5hs of rupees or fi,e la5hs of rupees, as the case may e, referred to in su 8section E1F to a lower fi%ure not less than one hundred thousand rupees in respect of a country craft insurer or in respect of an insurer not ha,in% a share capital and carryin% on only such insurance usiness as, in the opinion of the Central 9o,ernment, is not carried on ordinarily y insurers under separate policies. E-F #,ery insurer shall furnish to the Authority his returns under section 1) or section 1* as the case may e, in case of life insurance usiness a statement certified y the actuary appro,ed y the Authority, and in case of %eneral insurance usiness a statement certified y an auditor appro,ed y the Authority, of the re+uired sol,ency mar%in maintained y the insurer in the manner re+uired y su 8section EIAF. N/ ')5C 0/ 9( ,558*(2 8+l(55 6'(*)8* )5 '(3():(2 )+ ,2:,+3(. AVB. E1F ;o insurer shall assume any ris5 in India in respect of any insurance usiness on which premium is not ordinarily paya le outside India unless and until the premium paya le is recei,ed y him or is %uaranteed to e paid y such person in such manner and within such time as may e prescri ed or unless and until deposit of such amount as may e prescri ed, is made in ad,ance in the prescri ed manner. E2F 1or the purposes of this section, in the case of ris5s for which premium can e ascertained in ad,ance, the ris5 may e assumed not earlier than the date on which the premium has een paid in cash or y che+ue to the insurer. 45planation. ? <here the premium is tendered y postal money8order or che+ue sent y post, the ris5 may e assumed on the date on which the money8order is oo5ed or the che+ue is posted, as the case may e. E&F Any refund of premium which may ecome due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall e paid y the insurer directly to the insured y a crossed or order che+ue or y postal money8order and a proper receipt shall e o tained y the insurer from the insured, and such refund shall in no case e credited to the account of the a%ent. E(F <here an insurance a%ent collects a premium on a policy of insurance on ehalf of an insurer, he shall deposit with, or despatch y post to, the insurer, the premium so collected in full without deduction of his commission within twenty8four hours of the collections excludin% an5 and postal holidays. E)F $he Central 9o,ernment may, y rules, relax the re+uirements of su 8section E1F In respect of particular cate%ories in insurance policies. R(50')30)/+5 /+ 0.( /6(+)+< /4 , +(7 6l,3( /4 985)+(55 AVC. E1F ;o insurer shall, after the commencement of the Insurance EAmendmentF Act, 1/*., open a new place of usiness in India or chan%e otherwise than within the same city, town or ,illa%e, the location of an existin% place of usiness situated in India without o tainin% the prior permission of the Authority. E2F $he Authority may %rant permission under su 8section E1F su !ect to such conditions as he may thin5 fit to impose either %enerally or with reference to any particular case. E&F <here, in the opinion of the Authority, an insurer has, at any time, failed to comply with any of the conditions imposed on him under this section, the Authority may, y order in writin% and after affordin% reasona le opportunity to the insurer for showin% cause a%ainst the action proposed to e ta5en a%ainst him, re,o5e any permission %ranted under this section. 45planation.=1or the purposes of this section, Bplace of usinessB include a ranch , su - ranch, inspectorate, or%anisation office and any other office, y whate,er name called.

PART III P'/:)2(+0 S/3)(0)(5 =. Definition of Bpro,ident societyB. 8 E1F In this Part BPro,ident societyB means a person who, or a ody of persons Ewhether corporate or unincorporate, which, not ein% an insurer re%istered for the time ein% under Part II of this Act, carries on theD usiness of insurin% the payment, on the happenin% of any of the contin%encies mentioned in su 8section E2F, ofJ EaF E F an annuity of or e+ui,alent to one hundred rupees or less, paya le for an uncertain period, or a %ross sum of one thousand rupees or less whether paid for paya le in a lump sum or in two or more installments o,er a certain period,

exclusi,ely in oth cases EaF and E F of any profit or onus not ein% a %uaranteed profit or onus. 45planation.=1or the purposes of this su 8section a period is BcertainB if its duration is ascertaina le in ad,ance and BuncertainB if its duration is not so ascertaina le. E2F $he contin%encies referred to in su 8section E1F are the followin%, namelyD aF the irth, marria%e or death of any person or the sur,i,al y a person of a stated or implied a%e or contin%encyC F failure of issueC cF the occurrence of social, reli%ious or other ceremonial occasionC dF loss of or retirement from employmentC eF disa lement in conse+uence of sic5ness or accidentC fF the necessity of pro,idin% for the education of a dependentC %F any other contin%ency which may e prescri ed or which may e authorised y the State 9o,ernment with the appro,al of the Central 9o,ernment. E&F 1or the purposes of su 8sections E1F and E2F,J EaF contracts entered into efore the commencement of this Act shall not e ta5en into accountC

E F two or more policies issued to one person shall, for the purposes of determinin% whether the limits fixed y su 8section E1F ha,e or ha,eD not een exceeded, e deemed to e one policy if the contin%encies on the happenin% of which the sums are paya le under the policies Ewhether the contin%encies e the same or differentF relate to one8person only, whether he e the policy8holder or some other person. E(F #,ery person or ody of persons for the time ein% re%istered as a pro,ident society under the Pro,ident Insurance Societies Act, 1/12 E) of 1/12F and e,ery person or ody of persons for the time ein% re%istered as a pro,ident society under this Act shall e deemed to e a pro,ident society for all the purposes of this Act. E)F If any +uestion arises whether any person or ody of persons is or is not a pro,ident society within the meanin% of this section, the Authority shall decide the +uestion and his decision shall e final. P'/.)9)0)/+ /4 0',+5,30)/+ /4 )+58',+3( 985)+(55 9- 6'/:)2(+0 5/3)(0)(5 /0.(' 0.,+ 689l)3 3/*6,+)(5 /' 3/-/6(',0):( 5/3)(0)(5 =A. ;o person shall, after the commencement of the Insurance EAmendmentF Act, 1/)0 E(- of 1/)0F, e%in to carry on in India any usiness specified in su 8section E1F of Section *), and no pro,ident society carryin% on any such usiness in India shall, after the expiry of one year from such commencement continue to carry on any such usiness, unless he or it isJ EaF a pu lic company, or E F a society re%istered under the Co8operati,e Societies Act, 1/12 E2 of 1/12F, or under any other law for the time ein% in force in any State relatin% to co8operati,e societies, or EcF a ody corporate incorporated under the law of any country outside India not ein% of the nature of a pri,ate company.

R(50')30)/+5 /+ 6'/:)2(+0 5/3)(0)(5 . ;o pro,ident society shall underta5e any form of insurance not fallin% within the limits fixed y su 8 section E1F of Section *), nor shall any pro,ident society e eli%i le to e re%istered under Section &. N,*( @. ;o pro,ident society esta lished after the commencement of this Act shall adopt as its name, and no pro,ident society esta lished efore the commencement of this Act shall continue after the expiry of six months from the commencement thereof to use as its name any com ination of words which fails to include the word Bpro,identB or which includes the word BlifeB. I+58',9l( )+0('(50.8. 'epealed y the Insurance EAmendmentF Act, 1/)0 D):)2)+< 985)+(55 9. E1F ;o pro,ident society shall carry on any usiness upon the di,idin% principle, that is to say, on the principle that the enefit secured y a policy is not fixed ut depends either wholly or partly on the results of a distri ution of certain sums amon%st policies ecomin% claims within certain time8limits, or on the principle that the premiums paya le y a policy8holder depend wholly or partly on the num er of policies ecomin% claims within certain time8limits. E2F $he Authority shall, as so8on as possi le, ta5e steps to ha,e any pro,ident society which carries on usiness on di,idin% principle wound upD P'/:)2(2 that, where any such pro,ident society in existence at the commencement of this Act applies within three months of such commencement to the Authority for permission to continue carryin% on its usiness with a ,iew meanwhile to reor%anise its usiness in accordance with the pro,isions of this Act, the Authority may at his discretion, with due re%ard to the past history of the society, permit the society to continue usiness for a period not exceedin% two years from the date of receipt o such permission, so howe,er that no new usiness on the di,idin% principle is underta5en y the society. E&F <here after the commencement of the Insurance EAmendmentF Act, 1/(1 E1& of 1/(1F, a pro,ident society is to e wound up in pursuance of this section, or where, whether efore or after the commencement of that Act, a pro,ident society ceases to carry on usiness on the di,idin% principle the pro,isions of su 8sections E2F and E&F of Section )2 shall, so far as may e apply in li5e manner as they apply to an insurer ceasin% to carry on usiness on the di,idin% principle. R(<)50',0)/+ @%. E1F ;o pro,ident society except a pro,ident society re%istered under the pro,isions of the Pro,ident Insurance Societies Act, 1/12 E) of 1/12F, shall recei,e any premium or contri ution until it has, o tained from the Authority, efore the date of commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, a certificate of re%istration. E2F #,ery application for re%istration shall e accompanied yD 7a8 a certified copy of the rules of the society, and when the society is a company incorporated under the Indian Companies Act, 1/1& E- of 1/1&F or under the Indian Companies Act, 1..2 E* of 1..2F, or under the Indian Companies Act, 1.** E10 of 1.**F, or under any Act repealed there y,3 a certified copy of the memorandum and articles of association or where the society is not such a company a certified copy of the deed of constitution of the societyC the names and addresses of the proprietors or directors, and the mana%ers of the society, the full address of the re%istered office of the society, the full address of the principal office of the society in India the name of the mana%er at such office, and the name and address of some one or more persons resident in India authorised to accept any notice re+uired to e ser,ed on the societyC a certificate from the 'eser,e Ban5 of India that the initial deposit referred to in Section -& has een madeC a declaration ,erified y an affida,it made y the principal officer of the society authorised in that ehalf that the minimum wor5in% capital re+uired y Section -2 is a,aila leC and

7*8

7&8 7d8

7e8

the receipt showin% payment in the prescri ed manner of the prescri ed fee for re%istration ein% not more than two hundred rupees.

E&F $he Authority may refuse to issue a certificate of re%istration until he is satisfied that the rules of the society comply with the pro,isions of this Act and that the society complies with the pro,isions of Sections *)8A, *-, -1, -2, -& and -&8A, ut if he is so satisfied he shall re%ister the society and its rules. E(F $he Authority may, after %i,in% pre,ious notice in writin% in such manner as he thin5s fit specifyin% the %rounds for the proposed cancellation, and allowin% the society concerned an opportunity of ein% heard, apply to the Court and o tain sanction for cancellation of the re%istration made under this section or made under the pro,isions of the Pro,ident Insurance Societies Act, 1/12 E) of 1/12F.J EaF if he is satisfied from the returns furnished under the pro,isions of this Act or as the result of an in+uiry made under Section .- 8 I. that the society is insol,ent or is li5ely to ecome so, or II. that the usiness of the society is conducted fraudulently or not in accordance with the rules thereof, or that it is in the interests of the policy8holders that the society should cease to carry on usiness, or E F if the society, ha,in% failed to comply with any re+uirement or ha,in% contra,ened any pro,ision of this Act, has continued such failure or contra,ention for a period of one month after notice of such failure or contra,ention has een con,eyed to the society y the AuthorityD P'/:)2(2 that the Authority may, if he thin5s fit, instead of applyin% for cancellation of the re%istration under su 8clause EiF of C1ause EaF of this su section ma5e a recommendation to the Court that the contracts of the society should e reduced in such manner and su !ect to such conditions as he may indicateD P'/:)2(2 further that the Authority may, without pre,ious notice and without application to the Court for sanction,J EaF cancel the re%istration of a pro,ident society which has failed to ha,e its re%istration renewed, or EaaF cancel the re%istration of a pro,ident society if any deposit re+uired y Sec. -& has not een made, or E F cancelI on such terms and conditions as he thin5s fit, the re%istration of any pro,ident society which applies to him for such cancellation if he it satisfied that the society has ceased to carry on insurance usiness and the all its lia ilities in respect of insurance policies are either satisfied or otherwise pro,ided for, or EcF cancel the re%istration of a pro,ident society if he has reason to elie,e that any claim upon the society arisin% in India under any policy of insurance remains unpaid for three months after final !ud%ment in re%ular course of law. E)F <hen a re%istration is cancelled the pro,ident society shall not, after the cancellation has ta5en effect, enter into any new contracts of insurance, ut all ri%hts and lia ilities in respect of contracts of insurance entered into y it efore such cancellation ta5es effect shall, su !ect to the pro,isions of Section .., continue as if the cancellation had not ta5en place. E*F <here a re%istration is cancelled under "la%se * of su 8section E(F, or C1ause EcF of the second pro,iso to that su 8section, or ecause the society has failed to ha,e its re%istration renewed, the Authority may at his discretion re,ise the re%istration of the pro,ident society, within six months from the date on which the cancellation too5 effect, ma5es the deposits re+uired y Section -& or satisfies the Authority that no claim upon it such as is referred to in the said C1ause Q remains unpaid, or has had an application under su 8section E&F of Sec. -0A accepted, as the case may e, and complies with any directions which may e %i,en to it y the Authority. E-F $he Authority may, on payment of the prescri ed fee which shall not exceed fi,e rupees, issue a duplicate certificate of re%istration to replace a certificate lost, destroyed or mutilated, or in any other case where he is of opinion that the issue of a duplicate certificate is necessary.

R(+(7,l /4 '(<)50',0)/+ @%A E1F #,ery pro,ident society re%istered under this Act, or under the Pro,ident Insurance Societies Act, 1/12 E) of 1/12F, shall ha,e its re%istration renewed annually for each period of twel,e months after that endin% on the &0th day of =une, 1/(2. E2F An application for the renewal of a re%istration shall e made y the society to the Authority efore the &0th day of =une precedin% the period for which renewal is sou%ht, and shall e accompanied as pro,ided in su 8section E&F y e,idence of payment of the prescri ed fee which shall not exceed two hundred rupees ut may ,ary accordin% to the ,olume of insurance usiness done y the society. E&F $he prescri ed fee for the renewal of a re%istration for any year shall e paid into the 'eser,e Ban5 of India, or, where there is no office of that Ban5, into the Imperial Ban5 of lndia actin% as the a%ent of that Ban5, or into any 9o,ernment treasury, and the receipt shall e sent alon% with the application for renewal of the re%istration. E(F If a pro,ident society fails to apply for renewal of re%istration efore the date specified in su 8section E2F the Authority may, so lon% as he has ta5en no action under Section .. to ha,e the society wound up, accept an application for renewal of re%istration on receipt from the society of the fee paya le with the application and such penalty, not exceedin% the prescri ed fee paya le y the society, as he may re+uire. E)F $he Authority shall, on ein% satisfied that the society has fulfilled the re+uirements of this section, renew the re%istration and %rant it a certificate of renewal of re%istration. S866l(*(+05 )+4/'*,0)/+ ,+2 '(6/'05 /4 ,l0(',0)/+5 )+ 6,'0)38l,'5 48'+)5.(2 7)0. ,66l)3,0)/+ 4/' '(<)50',0)/+. @%B. E1F #,ery pro,ident society re%istered under Section -0 efore the commencement of the Insurance EAmendmentF Act, 1/(1 E1& of 1/(1F, shall, efore the expiration of three months from the commencement of the Insurance EAmendmentF Act, 1/(1 furnish to the Authority such particulars in addition to those already supplied for the purpose of o tainin% re%istration as are re+uired y su 8section E2F of Section -0 of this Act as amended y the Insurance EAmendmentF Act, 1/(1. E2F #,ery pro,ident society re%istered under the pro,isions of the Pro,ident Insurance Societies Act, 1/12 75 o 1/12F, shall, efore the expiration of three months from the commencement of the Insurance EAmendmentF Act, 1/(1 E1& of 1/(1F, furnish to the Authority so far as it has not already done so the documents and information re+uired y Clauses EaF and E F of su 8section E2F of Section -0 to accompany an application y a pro,ident society for re%istration under that section. E&F <hen any alteration occurs or is made which affects any of the matters which are re+uired under the pro,isions of su 8section E2F of Section -0 to accompany an application y pro,ident society for re%istration under that section, or are to e furnished to the Authority, under this section, the pro,ident society shall furnish forthwith to the Authority full particulars duly authenticated of such alteration. C('0,)+ 6'/:)5)/+5 /4 P,'0 II 0/ ,66l- 0/ 6'/:)2(+0 5/3)(0)(5 @1. $he pro,isions of su 8sections E2F and E&F of Section 10, Section 20, su 8section E1F of Section 2-, Sections 2-8A, 2., 2/, &18A, &18B &2, (* and )&A shall apply to pro,ident societies as they apply to insurers, and in such application references to shareholders of an insurer shall e construed as references to mem ers of a pro,ident society and references to Section - or Section /. shall tee construed as references to Section -&D Pro,ided that a pro,ident society may char%e a fee not exceedin% one rupee for supplyin% a copy of any document referred to in su 8section E2F of Section 20. W/'C)+< 3,6)0,l @!. ;o pro,ident society shall e re%istered unless it has a paid8up capital sufficient to pro,ide as wor5in% capital a net sum of not less than fi,e thousand rupees exclusi,e of deposits made under this Act and exclusi,e in the case of a company of any expenses incurred in connection with the formation of the company.

-&. D(6/5)05.JE1F #,ery pro,ident society shall, if esta lished efore the commencement of this Act within one year from such commencement, applies for re%istration under Section -0, deposit and 5eep deposited with the 'eser,e Ban5 of India in one of the offices in India of the Ban5, for and on ehalf of the Central 9o,ernment, cash or appro,ed securities amountin% at the mar5et ,alue of the securities on the date of deposit to fi,e thousand rupees, and shall thereafter ma5e each calendar year a further deposit amountin% to not less than one8fifth of the premium income for the precedin% calendar year as shown in the re,enue account of the society Eincludin% admission fees and other fees recei,ed y the societyF until the total amount so deposited and 5ept is fifty thousand rupees. E2F $he pro,isions of su 8sections E.F, E/F, E/8AF, E/8BF and E10F of Section - and of su 8section E1F of Section . and of Section / shall apply to the deposits made under this section as they apply to deposits made y an insurer. R(50')30)/+ /+ +,*( /4 6'/:)2(+0 5/3)(0@3A. E1F A pro,ident society shall not e re%istered y a name identical with that y which an insurer or another pro,ident society in existence is already re%istered, or so nearly resem lin% that name as to e calculated to decei,e, except when the pro,ident society in existence is in the course of ein% dissol,ed and si%nifies its consent, or the insurer in existence si%nifies his consent to the Authority. E2F If a pro,ident society, throu%h inad,ertence or otherwise, is without such consent as aforesaid re%istered y a name identical with that y which an insurer or another pro,ident society already in existence is re%istered, or so nearly resem lin% it as to e calculated to decei,e, the first8mentioned society shall, if called upon to do so y the Authority on the application of the insurer or the second8mentioned society, chan%e its name within a time to e fixed y the AuthorityD P'/:)2(2 that nothin% in this section shall apply to any pro,ident society carryin% on usiness efore the commencement of the Insurance EAmendmentF Act, 1/(* E* of 1/(*F R8l(5. @A. E1F #,ery pro,ident society shall, in its rules, set forth8 EaF the name, the o !ect and the location of the re%istered office of the society E F the contin%encies or classes of contin%ency on the happenin%, of which money is to e paidC EcF the condition to e complied with efore, and the payments to e made on, admission to the societyC EdF the rates of premium or contri ution, and the periods for which or the times at which premiums or contri utions are paya leC EeF the maximum amount paya le to a su scri er or policy8holderC EfF the nature and amounts of the enefits pro,ided for y the societyC E%F the circumstances in which a onus may e paid to a policyholderC EhF the nature of the e,idence re+uired for the proof of the happenin% of any contin%ency on which money is to e paidC EiF the circumstances in which policies may e forfeited or renewed or the whole or a part of the premiums paid on a policy may e returned or a surrender ,alue of a policy may e %rantedC E!F the penalties for delay in payin% or failure to pay premiums or contri utionsC E5F the proportion of the annual income of society which may e dis ursed on and the pro,isions to e made for meetin% the expenses of the mana%ement of the societyC ElF the person or persons who or the authority which shall ha,e power to in,est the funds of the societyC EmF the pro,isions for appointment of auditors and their remunerationsC EnF the procedure to e adopted in alterin% the rules of the societyC EoF unless these are pro,ided for in the articles of association of a society which is a company incorporated under the Indian Companies Act, 1/1& E- of 1/1&F, or under the Indian Companies Act, 1..2 E* of 1..2F or under the Indian Companies Act, 1.** E10 of 1.**F, or under any Act repealed there yD i. ii. the mode of appointment and remo,al, the +ualification and the powers of a director, mana%er, secretary or other officer of the societyC the manner of raisin% additional capitalC and

iii.

the pro,isions for the holdin% of %eneral meetin%s of the mem ers and policy holders and for the powers to e exercised and the procedure to e followed thereatC and

EpF such other matters as may e prescri ed. E2F <here the rules of any pro,ident society re%istered under the Pro,ident Insurance Societies Act, 1/12 E) of 1/12F, fail to comply with the pro,isions of this section, the society shall, efore the expiry of twel,e months from the commencement of this Act, amend the rules so as to comply with these pro,isions. A*(+2*(+0 /4 '8l(5 @=. E1F ;o amendment of any rule of a pro,ident society shall e ,alid until it has een sent to the Authority and has een re%istered y him. E2F $he Authority on ein% satisfied that the proposed amendment is not contrary to the pro,isions of this Act shall, unless he is of opinion that the amendment unfairly affects the ri%hts of existin% mem ers or policy8holders of the society, issue to the society an ac5nowled%ment of the re%istration of the amended rule. S866l- /4 3/6- /4 '8l(5 @ . #,ery pro,ident society shall on demand deli,er free of cost to any mem er of the society a copy of the rules of the society and to any person other than a mem er a copy of such rules on the payment of a sum not exceedin% one rupee. R(<)50('(2 /44)3( @@. #,ery pro,ident society shall ha,e in India a principal office Eon the outside of which it shall 5eep displayed its name in a conspicuous position in le%i le charactersF to which all communications and notices may e addressed, and shall %i,e notice to the Authority of any chan%e in the location thereof within twenty8ei%ht days of its occurrence. P89l)3,0)/+ /4 ,80./')5(2 3,6)0,l 0/ 3/+0,)+ ,l5/ 58953')9(2 ,+2 6,)2-86 3,6)0,l @8. <here any notice, ad,ertisement or other official pu lication of a pro,ident society contains a statement of the amount of the authorised capital of the society, the pu lication shall also contain a statement of the amount of the capital which has een su scri ed and the amount paid8up. R(<)50('5 ,+2 9//C5. @9. #,ery pro,ident society shall 5eep at its principal office in India EaF such re%isters in such form as may e prescri ed E F a cash oo5 in <hich shall e entered separately for each class of contin%ency separately specified in Section *) all sums recei,ed and expended y the society and matters in respect of which the receipt or expenditure ta5es place, EcF a led%erC EdF a !ournal. R(:(+8( ,33/8+0, 9,l,+3(-5.((0 ,+2 ,++8,l 50,0(*(+05 8%. E1F #,ery pro,ident society shall at the expiry of the calendar year prepare a re,enue account and alance8sheet in the prescri ed form ,erified in the prescri ed manner, to%ether with a report on the %eneral state of the societyIs affairs and shall cause the re,enue account and alance 8sheet to e audited y an auditor, and the auditor shall so far as may e the audit of a pro,ident society ha,e the powers of, exercise the functions ,ested in, and dischar%e the duties and e su !ect to the lia ilities imposed on, an auditor of companies y Section 1() of the Indian Companies Act, 1/1& E- of 1/1&F. E2F #,ery pro,ident society shall at the expiry of. the calendar year prepare with respect to that year8 7a8 a statement showin% separately for each class of contin%ency separately specified in Section *)

the num er of new policies effected, the total amount insured there y and the total premium income recei,ed in respect thereof and the num er of existin% policies discontinued durin% the year with the total amount insured there y, and ii. the total amount of claims made and the total amount paid in satisfaction thereofC 7*8 a statement showin% details of e,ery insurance effected on a life other than the life of the person insurin%C and 7&8 a statement showin% the total amount paid as allowances to a%ents and can,assers. E&F ?ntil the expiry of two years from the commencement of this Act this section and Section -& shall apply to pro,ident societies re%istered efore the commencement of this Act under the Pro,ident Insurance8Societies Act, 1/12 E) of 1/12F, as if the reference to the calendar year were a reference to either the financial year or the calendar year. A308,'),l '(6/'0 ,+2 ,950',30 81. #,ery pro,ident society shall once in e,ery fi,e years or at such shorter inter,als as may e laid down y the rules of the society cause an in,esti%ation to e made as at the last day of a calendar year into its financial condition includin% the ,aluation of its lia ilities and assets y an actuary. E2F $he report of the actuary shall contain an a stract in which shall e stated . EaF the %eneral principles adopted in the ,aluation, includin% the method y which the ,aluation a%e of li,es was ascertained, E F the rate at each a%e of the mortality and any other factor assumed and the annuity ,alues used in ,aluation, EcF the reser,e ,alues held a%ainst policies effected, EdF the rate of interest assumed, and EeF the pro,ision made for expenses, and shall ha,e appended to it a certificate si%ned y a principal officer of the society that all material necessary for proper ,aluation has een placed at the disposal of the actuary and that full and accurate particulars of e,ery policy under which there is a lia ility either actual or contin%ent ha,e een furnished to the actuary for the purpose of the in,esti%ation. E&F If the actuary finds that the financial conditions o the society is such that no surplus exists for distri ution as onus to the policy8holders, or as di,idend to the shareholders, he shall state in his report whether in his opinion the society is insol,ent and, if so, whether it should e wound up or not, and the extent to which in his opinion existin% contracts should e modified or existin% rates of premium should e ad!usted to ma5e %ood the deficiency in the assets. S89*)55)/+ /4 '(08'+5 0/ A80./')08!.E1F $he re,enue account and alance8sheet with the auditorIs report thereon and the report on the %eneral state of the societyIs affairs referred to in su 8section E2F of Section .0, shall e printed and four copies of these and of the statements referred to in su 8section E2F of Section .0, shall e furnished as returns to the Authority within six months from the end of the period to which they relate. E2F All the material necessary for the proper ,aluation of the lia ilities of the society under the pro,isions of Section .1 shall e placed at disposal of the actuary within three months from the end of the period to which such material relates, and the report and a stract referred to in Section .1 shall e furnished as a return to the Authority within a further period of three monthsD P'/:)2(2 that the Central 9o,ernment may, in any case, extend the time allowed y this su 8section for the furnishin% of such return y a period not exceedin% three months. E&F $he pro,isions of su 8section E2F of Section 1) relatin% to the copies therein referred shall apply to the returns referred to in su 8section E1F of this section, and the pro,isions of Section 1- shall apply to the accounts and alance sheet of pro,ident society ein% a company incorporated under the Indian Companies Act, 1/1& E- of 1/1&F,or under the Indian Companies Act, 1..2 E* of 1..2F, or under the Indian Companies Act, 1.** E10 of 1.**F or under any Act repealed there y, as they apply to the accounts and alance8sheet of an insurer, and the Authority may exercise, in respect of returns made y a pro,ident society and in respect

i.

of an in,esti%ation or ,aluation to which Section .1 refers, the same powers as are exercisa le y him under Sections 21 and 22, respecti,ely, in the case of an insurer. A308,'),l (1,*)+,0)/+ /4 53.(*(5 83. E1F #,ery pro,ident society, re%istered after the commencement of this Act, shall cause e,ery scheme of insurance which it proposes to put into operation, and e,ery pro,ident society re%istered efore the commencement of this Act under the pro,isions of the Pro,ident Insurance Societies Act, 1/12 E) of 1/12F, shall cause any scheme which it proposes to put into operation for the first time, after such commencement to e examined y an actuary, and shall not recei,e any premium or contri ution in connection with the scheme until the actuary has certified that the rates, ad,anta%es, terms and conditions of the scheme are wor5a le and sound and such certificate has een forwarded to the Authority. E2F $he pro,isions of su 8section E1F shall apply to any alteration of a scheme already in operation, ut the Authority may, if he is of opinion that the alteration unfairly affects the interests of existin% policy holders, prohi it the alteration, and, if he does so, the society shall not put the altered scheme into operation, unless it first dischar%es to the satisfaction of the Authority all its lia ilities to those of the existin% policy holders who dissent from the alteration. E&F #,ery pro,ident society re%istered efore the commencement of this Act under the pro,isions of the Pro,ident Insurance Societies Act, 1/12 E) of 1/12F, shall, as soon as may e and in any e,ent efore the expiry of six months from the commencement of this Act, su mit all schemes of insurance which the society has in operation at the commencement of this Act to examination y an actuary and shall, efore the expiration of six months from the commencement of the Insurance EAmendmentF Act, 1/(1 E1& of 1/(1F, send the report of the actuary thereon to the Authority E(F $he report of the actuary shall state in respect of each scheme whether the ad,anta%es, terms and conditions are wor5a le and sound and, where no actuarial report such as is referred to in Section .1 has een made within the two years precedin% the examination the report shall also state whether the assets of the society are sufficient to meet its lia ilities under the existin% schemes, and, if not how in the opinion of the actuary the existin% contracts should e modified. E)F If the rates, ad,anta%es, terms and conditions of any scheme are not reported y the actuary to e wor5a le and sound, Authority shall %i,e notice to the society prohi itin% the scheme, and the society shall not after its receipt of such notice enter into any new contract of insurance under the scheme, ut all ri%hts and lia ilities in respect of contracts of insurance entered into y the society efore receipt of the notice shall, su !ect to the pro,isions of su section E*F, continue as if the notice had not een %i,en. E*F <here a scheme is prohi ited under the pro,isions of su section E)F the society shall, where its assets are sufficient to meet8all existin% lia ilities, set apart out of its assets the sum sufficient in the opinion of the actuary to meet the lia ilities incurred under the scheme so prohi ited, and, where its assets are not so sufficient, within three months from the date of the prohi ition, apply to the Court for a modification of its existin% contracts or failin% such modification for the windin% up of the society. S(6,',0)/+ /4 ,33/8+05 ,+2 48+25 8A. <here a pro,ident society effects policies of insurance in connection with more than one of the classes of contin%ency separately specified in su 8section E2F of Section *), the receipts and payments in respect of each such class shall e recorded in a separate account in the cash oo5 5ept in accordance with Section -/. I+:(50*(+0 /4 48+25 8=. E1F 2'epealedO E2F ;o funds or in,estments of a pro,ident society except a deposit made under Section -& or under the law of any State or country relatin% to insurance shall e 5ept otherwise than in the name of the society or in the name of a pu lic officer appro,ed y the Central 9o,ernment. E&F ;o loan shall e made out of the assets of a pro,ident society to any director, mana%er, mana%in% a%ent, 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 ,alue and no such loans shall e made to any concern of which a director,

mana%er, mana%in% a%ent, actuary, officer or partner of the society is a director, mana%er mana%in% a%ent, actuary, officer or partnerD P'/:)2(2 that nothin% in this su 8section shall apply to loans made y a pro,ident society to a an5in% companyD P'/:)2(2 48'0.(' that where any e,ent occurs %i,in% rise to circumstances, the existence of which at the time of the %rant of any su sistin% loan would ha,e made such %rant a contra,ention of this su 8section, such loan shall, notwithstandin% any contract to the contrary, e repaid within three months from the occurrence of such e,ent or from the commencement of the Insurance EAmendmentF Act, 1/(* E* of 1/(*F, whiche,er is laterC and in case of default, the director, mana%er, auditor, actuary or partner concerned shall, without pre!udice to any other penalty which he may incur, cease to hold office in the society on the expiry of the said three months. E&AF Any loan prohi ited under su 8section E&F, made efore and outstandin% at the commencement of the Insurance EAmendmentF Act, 1/(0 E2 of 1/(0F shall e repaid efore the 1st day of =anuary, 1/(1, and in case of default the director, mana%er mana%in% a%ent, auditor, actuary, officer or partner who has recei,ed the loan or is connected with the concern which has recei,ed the loan, as the case may e, shall cease to hold office in or e a partner of the society and shall e ineli%i le to hold office in or to e a partner of the society until the loan is repaid. E(F Any director, mana%er, mana%in% a%ent, auditor, actuary, officer or partner of a society which contra,enes the pro,isions of su 8section E&F, who is 5nowin%ly a party to the contra,ention, shall without pre!udice to any other penalty which he may incur e !ointly and se,erally lia le to the society for the amount of the loan, and such amount, to%ether with interest from the date of the loan at such rate not exceedin% twel,e per cent per annum as the Authority may fix, shall on application y the Authority to any ci,il court of competent !urisdiction e reco,era le y execution as if a decree for such amount had een passed y that Court. E)F $he pro,isions of Section .*D of the Indian Companies Act, 1/1& E- of 1/1&F, shall not apply to a loan %ranted to a director of a pro,ident society ein% a company if the loan is one %ranted on the security of a policy on which the society ears the ris5 and the policy was issued to the director on his own life and the loan is within the surrender ,alue of the policy. I+56(30)/+ /4 9//C5. 8 . $he oo5s of e,ery pro,ident society shall at all reasona le times e open to inspection y the Authority or any person appointed y him in this ehalf or y any mem er or policy8holder of the society who has, on application in this ehalf, een permitted y the Authority su !ect to such conditions, if any, as he may impose, to ma5e such inspection. .-. I+>8)'- 9- /' /+ 9(.,l4 /4 A80./')0-. 8@. ElF $he Authority shall at least once in two years and may, if he thin5s fit, at any time ,isit personally or depute a suita le person to ,isit the principal office of a pro,ident society or the principal office in India of a society ha,in% its principal place of usiness or domicile outside India and in+uire into the affairs of the society or may , after %i,in% notice to the society and %i,in% it an opportunity to e heard, direct such an in+uiry to e made y an auditor or actuary appointed y him or y oth an auditor and an actuary appointed simultaneously, or first y an auditor only or an actuary only and afterwards y an actuary or auditor. E2F 1or the purposes of any such in+uiry Authority or the auditor or actuary, as the case may e, shall e entitled to examine all oo5s and documents of the society and may demand from the society or any officer of the society such explanations as he may re+uire on any matter relatin% to the affairs of the society. E&F $he results of any such in+uiry shall e recorded in writin% y the person ma5in% the in+uiry, and four copies of the record shall e supplied to the Authority and when the in+uiry is completed, a copy of the record, or of each such record where more than one are made in the course of the same in+uiry, shall e sent y the Authority to the society concerned and shall e open to inspection y any mem er or policy 8holder of the society.

E(F All expenses of incidental to any in+uiry made y an auditor or actuary under su 8section E1F includin% any expenses incurred efore the date on which the Authority recei,es notice of an appeal under C1ause EeF of su 8section E1F of Section 110 shall e defrayed y the pro,ident society, shall ha,e priority o,er other de ts due from the society, and shall e reco,era le as an arrear of land8re,enue. E)F $he Authority may y notice in writin% re+uire the pro,ident society to comply within a time to e specified therein Enot ein% less than fifteen days from the receipt of the notice y the societyF with any directions he may issue to remedy defects disclosed y an in+uiry under this section. E*F If the society fails to comply with any direction issued under su section E)F, the Authority may, after %i,in% notice to the society and %i,in% it an opportunity to e heard, apply to the Court for the windin% up of the society. A*,l<,*,0)/+ ,+2 0',+54(' /4 )+58',+3( 985)+(55 .-A E1F $he insurance usiness of a pro,ident society may e transferred to any person or transferred to or amal%amated with the insurance usiness of any other pro,ident society in accordance with a scheme prepared under this section and sanctioned y the Authority. E2F Any scheme prepared under this section shall set out the a%reement under which the transfer or amal%amation is proposed to e effected, and shall contain such further pro,isions as may e necessary for %i,in% effect to the scheme. E&F Before an application is made to the Authority to sanction any such scheme, notice of the intention to ma5e the application to%ether with a statement of the nature of the amal%amation or transfer, as the case may e, and of the reason there for, shall at least two months efore the application is made, e sent to the Authority and certified copies, four in num er, of each of the followin% documents shall e furnished to him, and other such copies shall durin% the two months aforesaid e 5ept open for the inspection of the mem ers and policy8holders at the principal and ranch offices of the pro,ident societies concerned, namelyD aF a draft of the a%reement or deed under which it is proposed to effect the amal%amation or transfer, F alance8sheets in respect of the insurance usiness of each of the pro,ident societies concerned in such amal%amation or transfer, cF actuarial reports and a stracts in respect of the insurance usiness of each of the pro,ident societies so concerned, dF a report on the proposed amal%amation or transfer, prepared y an independent actuary, eF any other reports on which the scheme of amal%amation or transfer was foundedC and the alance8sheets, reports and a stracts referred to in Clauses E F, EcF and EdF shall all e prepared as at the date at which the amal%amation or transfer if sanctioned y the Authority is to ta5e effect, which date shall not e more than twel,e months efore the date on which the application to the Authority is made under this sectionD P'/:)2(2 that the Authority may exempt the pro,ident society or societies concerned from furnishin% to him and from 5eepin% open for inspection any one or more of the a o,e documents E(F <hen any application such as is referred to in su 8section E&F is made to the Authority, he may re+uire, if for special reasons he so directs, notice of the application to e sent to e,ery person resident in India who is the holder 6f a policy of any pro,ident society concerned and may cause a statement of the nature and terms of the amal%amation or transfer, as the case may e, to e pu lished in such manner and for such periods as he may direct, and after hearin%D the societies concerned, such policy8holders as apply to e heard and such other persons as he may deem fit, may sanction the arran%ement, if he is satisfied that no sufficient o !ection to the arran%ement has een esta lished and shall ma5e such conse+uential orders as are necessary to %i,e effect to the arran%ement, includin% orders as to the disposal of any deposit made under Section -&D P'/:)2(2 thatD aF no part of the deposit made y any party to the amal%amation or transfer shall e returned except where, after effect is %i,en to the arran%ement the whole of the deposit to e made y the pro,ident society carryin% on the amal%amated usiness or the person to whom the usiness is transferred is

completedC F only so much shall e returned as is no lon%er re+uired to complete the deposit last mentioned in C1ause EaFC cF while the deposit last mentioned in C1ause EaF remains uncompleted, no accession, resultin% from the arran%ement, to the amount already deposited y the pro,ident society carryin% on the amal%amated usiness or the person to whom the usiness is transferred shall e appropriated as payment or part payment of any instalment of deposit su se+uently due from it or him under Section -&. E)F A copy of the order under su section E(F sanctionin% or refusin% to sanction the arran%ement shall e sent to each of the societies concerned and to each of the policy8holders who applied to e heard. E*F If the scheme in,ol,es a reduction of the amount of the insurance and other contracts of the transfer or society or of any or all of the societies concerned in the amal%amation, the Authority may sanction the scheme, reducin% the amount of such contracts upon such terms and su !ect to such conditions as he may thin5 proper, and the reduction of the contracts as sanctioned y the Authority shall e ,alid and indin% on all the parties concerned. W)+2)+< 86 9- C/8'0 ,+2 :/l8+0,'- 7)+2)+< 86 88. E1F $he Court may order the windin% up of a pro,ident society ein% a company incorporated under the Indian Companies Act, 1/1& E- of 1/1&F, or under the Indian Companies Act, 1..2, E* of 1..2F or under the Indian Companies Act, 1. E10 of 1.**F, or under any Act repealed there y and the pro,isions of the Indian Companies Act, 1/1& E-of 1/1&F shall, su !ect to the pro,isions of this Part, apply accordin%ly. E2F In addition to the %rounds on which an order may e ased, the Court may order the windin% up of a pro,ident society if the Authority, who is here y authorised to do so, applies in this ehalf to the Court on any of the followin% %rounds, namelyD EaF that the re%istration of the society has een cancelled under su section E(F of Section -0C E F that it appears from the returns furnished under the pro,isions of this Act or as the result of an in+uiry made under Section .- that the society, is insol,entC EcF that the continuance of society is pre!udicial to interests of the policy8holders. E&F A pro,ident society ein% a company incorporated under the Indian Companies Act, 1/1& E- of 1/1&F or under the Indian Companies Act, 1..2, E* of 1..2F, or under the Indian Companies Act 1.** E10 of 1.**F or under any Act repealed there y may e wound up ,oluntarily in accordance with the pro,isions of the Indian Companies Act, 1/1&, ut shall not e so wound up except for the purpose of effectin% an amal%amation or re8construction of the society or on the %round that y reason of its lia ilities it cannot continue its usiness. E(F A pro,ident society not ein% a company incorporated under the Indian Companies Act, 1/1& E- o 1/1&F if or under the Indian Companies Act 1..2 E* of 1..2F, or under the Indian Companies Act, 1.** E10 of 1.**F or under any Act repealed there y may e wound up ,oluntarily under this Act if a resolution is passed y the proprietors that the society should e wound up ,oluntarily for the purposes or on the %round specified in su 8section E&F, and the Authority may, in any case where he has ordered the cancellation of the re%istration of a society under su 8section E(F of Sec. -0, order the windin% up of the society under this Act. R(2830)/+ /4 )+58',+3( 3/+0',305 89. $he Court may ma5e an order reducin% the amount of the insurance contracts of a pro,ident society upon such terms and su !ect to such conditions as the Court thin5s !ust8 EaF if the Authority as an alternati,e to cancelin% the re%istration of a society under su 8section E(F of Section -0 applies to the Court in this ehalfC E F if while a society is in li+uidation the Court thin5s fitC EcF if when a society has een pro,ed to e insol,ent the Court thin5s fit to do so in place of ma5in% an order for the windin% up of the societyC or EdF if the Court is satisfied on an application made in this ehalf y the society supported y the report of an actuary, and after %i,in% the policy8holders an opportunity to e heard that it is desira le to do so.

A66/)+0*(+0 /4 l)>8)2,0/' 9%. E1F <here a pro,ident society is to e wound up whether under the Indian Companies Act, 1/1& Eof 1/1&F, or under this Act, the society shall, within se,en days from the date of the order of the Court orderin% the windin% up of the passin% of the resolution authorisin% the windin% up, as the case may e, %i,e notice thereof to the Authority shall appoint the li+uidator and shall determine the remuneration to e paid to himD P'/:)2(2 that if the Authority is not satisfied that the assets of the society are sufficient to meet the costs of li+uidation includin% the remuneration of the li+uidator, he may decline to ma5e such appointment, and in such a case the society shall itself appoint a li+uidator who shall carry out the li+uidation as if the windin% up was ein% done y an order of the Court. E2F Any li+uidator appointed y the Authority under su section E1F may e remo,ed y the Authority if satisfied that the duties entrusted to him are not ein% properly dischar%ed. A66l)3,0)/+ /4 A30 0/ l)>8)2,0/'5 9%A. ;otwithstandin% anythin% to the contrary contained in the Indian Companies Act, 1/1& E- of 1/1&F, the pro,isions of Sections /1, /2 and /& shall apply to any li+uidator appointed to wind up a pro,ident society, whether y the Court, the Authority or the society itself. P/7('5 /4 l)>8)2,0/'. 91. E1F A li+uidator appointed to wind up a society shall ha,e power EaF to institute or defend any le%al proceedin%s on ehalf of the society y his name of officeC E F to determine the contri ution to e made y mem ers of the society respecti,ely to the assets of the societyC EcF to in,esti%ate all claims a%ainst the society and to decide +uestions of priority arisin% etween claimantsC EdF to determine y what persons and in what proportion the costs of the li+uidation includin% the remuneration of the li+uidator and any expenses incurred under C1ause E%F of this su 8section are to e orneC EeF to %i,e such directions in re%ard to the collection and distri ution of the assets of the society as may appear to him to e necessary for windin% up the affairs of the societyC EfF to summon, and enforce the attendance of, witnesses and to compel the production of documents y the same means and as far as may e in the same manner as is pro,ided in the case of a ci,il court y the Code of Ci,il Procedure, 1/0. E) of 1/0.FC E%F with the sanction of the Authority to employ such esta lishment and to o tain such assistance from an actuary or an auditor as may e necessary for the dischar%e of his dutiesC EhF to sell the immo,ea le and mo,ea le property of the society y pu lic auction or pri,ate contract, with power to transfer the whole thereof to any person or society or to sell the same in parcels. E2F $he li+uidator shall, for settlin% the list of contri utories and releasin% the amount of contri utions, ha,e the same powers as an official li+uidator appointed y the Court for the windin% up of a company under the Indian Companies Act, 1/1& E- of 1/1&F. P'/3(28'( ,0 l)>8)2,0)/+ 9!. E1F As soon as a li+uidator is appointed to wind up a society he shall ta5e char%e of all property mo,ea le or immo,ea le of the society and of all its oo5s and documents. E2F If any proprietor or officer of the society or any other person retains any portion of the assets of the society or fails to deli,er to the li+uidator any oo5 or document when so re+uired y the li+uidator, he shall e punisha le with imprisonment which may extend to six months, or with fine which may extend to fi,e hundred rupees, or with oth, and the Court may order the deli,ery of the assets or oo5 or document to the li+uidator. E&F $he li+uidator shall, within fifteen days of his appointments send notice y post to all persons who

appear to him to e creditors of the society that a meetin% of the creditors of the society will e held on a date not ein% less than twenty8one or more than twenty8ei%ht days after his appointment, and at a place and hour to e specified in the notice, and shall also ad,ertise notice of the meetin% once in the local official 9a7ette and once at least in two newspapers circulatin% in the State in which the society is situated. E(F At the meetin% so held the creditors shall determine whether an application shall e made for the appointment of any person as li+uidator in the place of or !ointly with the li+uidator already appointed, or for the appointment of a committee of inspection, and, if they so resol,e and an application accordin%ly is made at any time not later than fourteen days after the date of the meetin% y any creditor appointed for the purpose at the meetin%, the Authority may, if he thin5s fit, appoint a suita le person in place of or !ointly with the li+uidator already appointed, and determine the remuneration to e paid to him and if he considers it desira le, may also appoint a committee of inspection. E)F $he committee of inspection shall, su !ect to any prescri ed conditions, ha,e a %eneral power of super,ision o,er the acts of the li+uidator and shall ha,e the ri%ht to inspect his accounts at all reasona le times. E*F $he li+uidator shall, with such assistance from an actuary as may e re+uired, ascertain as soon as practica le the amount of the societyIs lia ility to e,ery person appearin% y the societyIs oo5s to e entitled to or interested in any policy issued y the society, and shall %i,e notice of the amount so found to each such person in the prescri ed manner and each such person on recei,in% such notice shall e ound y the ,alue so ascertained. E-F $he li+uidator shall ma5e a ,aluation of the assets of the society and an estimate of the costs of the windin% up, and shall, on the asis of these settle the list of contri utories. E.F $he li+uidator shall apply to the Authority for an order for the return of the deposit made y the society under Section -& and the Authority shall on such application order the return of the deposit su !ect to such terms and conditions as he may thin5 fit. E/F In administerin% and distri utin% the assets of the society the li+uidator shall ha,e re%ard to any directions that may e %i,en y the creditors or contri utories at a %eneral meetin% or y the Authority. E10F $he li+uidator shall 5eep oo5s of account in which he shall record the proceedin%s at all meetin%s attended y him, all amounts recei,ed or expended y him and any other matter that may e prescri ed, and these oo5s may with the sanction of the Authority e inspected y any creditor or contri utory. E11F If the windin% up continues for more than a year the li+uidator shall summon a meetin% of the creditors and contri utories at the end of the first year and of each succeedin% year, and shall lay efore them an account of his acts and dealin%s and of the conduct of the windin% up, and that account to%ether with any ,iews expressed thereon y the meetin% shall e forward y the li+uidator within one wee5 after the meetin% to the Authority. E12F So far as is not otherwise pro,ided herein or is not otherwise prescri ed under this Act, the li+uidator shall so far as practica le follow the procedure to e followed y an official li+uidator appointed y the Court for the windin% up of a company under the Indian Companies Act, 1/1& E- of 1/1&F. E1&F $he costs of the li+uidation includin% the remuneration of the li+uidator and any expenses incurred under Clause E%F of su 8section E1F of Section /1 shall, if the li+uidator decides that they shall e paya le out of the assets of the society, e paya le in priority to all other claims. D)55/l80)/+ /4 6'/:)2(+0 5/3)(093. E1F As soon as the affairs of a pro,ident society are fully wound up the li+uidator shall prepare an account of the windin% up showin% how the windin% up has een conducted and the property of the society has een disposed of and shall call a meetin% of the mem ers, creditors and contri utories for the purpose of layin% efore it the account and %i,in% any explanation there of. E2F ;otice of the meetin% shall e sent to each person indi,idually and shall e ad,ertised in the local official 9a7ette and in at least two newspapers circulatin% in the State in which the society is situated. E&F <ithin one wee5 after the meetin% the li+uidator shall send to the Authority a Copy of the account

and shall report to him the holdin% of the meetin% and its date and shall forward to him a copy of the proceedin%s of the meetin%. E(F $he Authority may return the account to the li+uidator if it is incomplete or unsatisfactory and may re+uire the li+uidator to carry out any further steps necessary to complete the windin% up and the li+uidator shall comply with such re+uirement and shall su mit a further report to the Authority within six months. E)F If the Authority is satisfied that the affairs of the society ha,e een fully wound up he shall re%ister the account of the li+uidator who shall forthwith ma5e o,er to the Authority sums, If any, remainin% undisposed ofC and on the expiry of three months from the re%isterin% of the account the Authority shall declare the society dissol,ed and cause the dissolution of the society to e notified in the local official 9a7ette, and the li+uidator shall thereupon e dischar%ed from further responsi ility. E*F If within a period of fi,e years from the date on which any sums ha,e een made o,er to the Authority under su 8section E)F an order of a court of competent !urisdiction has not een o tained at the instance of any claimant to such sums for their disposal, the said sums shall ecome the property of 9o,ernment. N/*)+,0)/+5 ,+2 ,55)<+*(+05 9A. E1F $he pro,isions of Sections &. and &/ relatin% to assi%nment, transfer and nomination in the case of life insurance policies shall, su !ect to the pro,isions of this section, apply to policies of insurance issued y any pro,ident society co,erin% any of the contin%encies specified in C1ause EaF of su 8section E2F of Section *). (AR$ I@ MUTUAL INSURANCE COMPANIES AND CO-OPERATIVE LIFE INSURANCE SOCIETIES D(4)+)0)/+5. 9=. E1F In this Part, efore the date of commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, 8 EaF B"utual Insurance CompanyB means an insurer, ein% a company incorporated under the Indian Companies Act, 1/1& E- of 1/1&F, or under the Indian Companies Act, l..2 E* of 1..2F, or under the Indian Companies Act, 1.** E10 of 1.**F or under any Act, repealed there y, which has no share capital and of which y its constitution only and all policy8holders are mem ersC and E F BCo8operati,e 4ife Insurance SocietyB means an insurer ein% a society re%istered under the Co8operati,e Societies Act, 1/12 E2 of 1/12F or under an Act of a State 4e%islature %o,ernin% the re%istration of cooperati,e societies which carries on the usiness of life insurance and which has no share capital on which di,idend or onus is paya le and of which y its constitution only ori%inal mem ers on whose application the society is re%istered and all policy8holders are mem ersD P'/:)2(2 that any co8operati,e life insurance society in existence at the commencement of this Act shall e allowed a period of one year to comply with the pro,isions of this Act. E2F ;otwithstandin% anythin% contained in su 8section E1F, other cooperati,e societies may e admitted as mem ers of a co8operati,e life insurance society, without ein% eli%i le to any di,idend, profit or onus. E&F A State 9o,ernment may, su !ect to any rules made y the Central 9o,ernment, empower the 'e%istrar of Co8operati,e Societies of the State to re%ister co8operati,e societies for the insurance of cattle or crops or oth under the pro,isions of the Co8operati,e Societies Act in force in the State. E(F A State 9o,ernment may ma5e rules not inconsistent with any rules made y the Central 9o,ernment to %o,ern such societies, and the pro,isions of this Act, in so far as they are inconsistent with those rules, shall not apply to such societies.

A66l)3,0)/+ /4 A30 0/ M808,l I+58',+3( C/*6,+)(5 ,+2 C/-/6(',0):( L)4( I+58',+3( S/3)(0)(5 9 . $he pro,isions of Sections * and - and of su 8section E2F of Section 20, so far as those pro,isions are inconsistent with the pro,isions of this part, shall not apply, and the pro,isions of this Part shall apply, to co8operati,e life insurance societies. W/'C)+< 3,6)0,l /4 M808,l I+58',+3( C/*6,+)(5 ,+2 C/-/6(',0):( L)4( I+58',+3( S/3)(0)(5 9@. ;o co8operati,e life insurance society re%istered after the 2*th day of =anuary, 1/&- under the Co8operati,e Societies Act, 1/12 E2 of 1/12F or under an Act of a State 4e%islature %o,ernin% the re%istration of co8operati,e societies shall e re%istered under this Act, unless it has as wor5in% capital a sum of fifteen thousand rupees, exclusi,e of the deposit to e made efore or at the time of application for re%istration in accordance with su 8section E2F of Section /. of this Act and of the preliminary expenses, if any, incurred in the formation of the company or society. D(6/5)0 0/ 9( *,2( 9- M808,l I+58',+3( C/*6,+)(5 ,+2 C/-/6(',0):( L)4( I+58',+3( S/3)(0)(5 98. E1F #,eryday Co8operati,e 4ife Insurance Society shall, in respect of the life insurance usiness carried on y it in India, deposit and 5eep deposited with one of the offices in India, of the 'eser,e Ban5 of India for and on ehalf of the Central 9o,ernment, a sum of two hundred thousand rupees in cash or in appro,ed securities estimated at the mar5et ,alue of the securities on the day of deposit. E2F $he deposit referred to in su 8section E1F may e made in instalments, of which the first shall e a payment, made efore or at the time the application for re%istration under this Act is made, of not less than twenty fi,e thousand rupees or such sum as with any deposit pre,iously made y the insurer under the pro,isions of the Indian 4ife Assurance Companies Act, 1/12 E* of 1/12F, rin%s the amount deposited up to not less than twenty8fi,e thousand rupees, and the su se+uent instalments shall e annual instalments made efore the expiry of each su se+uent calendar year of an amount in cash or in appro,ed securities estimated at the mar5ed ,alue of the securities on the day of payment of the instalment, e+ual to not less than one8third of the premium income in the precedin% calendar year as shown in the re,enue account. E&F $he pro,isions of su 8section E-F of Section - shall apply in respect of a co8operati,e life insurance society as if for the words Bunder the fore%oin% pro,isions of this sectionB the words and fi%ures Bunder the pro,isions of Sec. /.B were su stituted. P'/.)9)0)/+ /4 l/,+5 98A. $he pro,isions of Section 2/ shall apply to cooperati,e life insurance societies as they apply to other insurers. T',+54('((5 ,+2 ,55)<+((5 /4 6/l)3)(5 +/0 0/ 9(3/*( *(*9('5 99. ;o transferee or assi%nee of a policy issued y an insurer to whom this Part applies shall ecome a mem er of a mutual insurance company or a cooperati,e life insurance society merely y reason of any such transfer or assi%nment. P89l)3,0)/+ /4 +/0)3(5 ,+2 2/38*(+05 /4 M808,l I+58',+3( C/*6,+)(5 ,+2 C//6(',0):( L)4( I+58',+3( S/3)(0)(5 1%%. ;otwithstandin% the pro,isions of Sections -/ and 1&1 of the Indian Companies Act, 1/1& E- of 1/1&F, a mutual insurance company or a co8operati,e life insurance society may, instead of sendin% the notices and the copies of the alance8sheet, re,enue account and other documents which they are re+uired to send to the mem ers under those sections, pu lish such notice to%ether with a summary in the prescri ed form of the alance8sheet and re,enue account once in a newspaper pu lished in the #n%lish lan%ua%e and in a newspaper pu lished in an Indian lan%ua%e circulatin% in the place where the principal office of the company is situatedD P'/:)2(2 that, where any mem ers of the company are domiciled in a State other than that in which the principal office of the company is situated, pu lication of the notice of the meetin%s shall made in a newspaper or newspapers pu lished in the principal lan%ua%es of that State and circulatin% therein and any mem er of the company domiciled in that State shall e entitled on application to the company to recei,e

from it a copy of the alance8sheet and re,enue account. S866l- /4 2/38*(+05 0/ *(*9('5 1%1. #,ery mutual insurance company and e,ery Co8operati,e 4ife Insurance Society shall, on the application of any mem ers made within two years from the date on which any such document is furnished to the 'e%istrar of Companies under the pro,isions of Section 1&( of the Indian Companies Act, 1/1& E- of 1/1&F, or to the 'e%istrar of Co8operati,e Societies of the State in which the Co8operati,e 4ife Insurance Society is re%istered furnish a copy of the document free of cost to the mem er within fourteen days of the application.

(AR$ I@6 A RE-INSURANCE R(-)+58',+3( 7)0. I+2),+ '()+58'('5 1%1A. E1F #,ery insurer shall re insure with Indian re8insurers such percenta%e of the sum assured on each policy as may e specified y the Authority with the pre,ious appro,al of the Central 9o,ernment under su 8section E2F. E2F 1or the purposes of su 8section E1F, the Authority may, y notification in the official 9a7ette,J EaF specify the percenta%e of the sum assured on each policy to percenta%es may e specified for different classes of insuranceD e reinsured and different

P'/:)2(2 that no percenta%e so specified shall exceed thirty per cent of the sum assured on such policyC and E F also specify the proportions in which the said percenta%e shall e allocated amon% re8insurers. the Indian

E&F ;otwithstandin% anythin% contained in su 8section E1F, an insurer carryin% on fire8insurance usiness in India may, in lieu of re8insurin% the percenta%e specified under su 8section E2F of the sum assured on each policy in respect of such usiness, re8insure with Indian re8insurers such amount out of the first surplus in respect of that usiness as he thin5s fit, so howe,er that the a%%re%ate amount of the premiums paya le y him on such re8insurance in any year is not less than the said percenta%e of the premium income Ewithout ta5in% into account premiums on re8insurance ceded or acceptedF in respect of such usiness durin% that year 45planation6 1or the purposes of this8section, the year 1/*1 shall e deemed to mean the period from the 1st April to the &1st Decem er of that year. E(F A notification under su section E2F may also specify the terms and conditions in respect of any usiness of re8insurance re+uired to e transacted under this section and such terms and conditions shall e indin% on Indian re8insurers and other insurers. E)F ;o notification under su 8section E2F shall e issued except after consultation with the Ad,isory Committee constituted under Section 101B. E*F #,ery notification issued under this section shall e laid efore each :ouse of Parliament, as soon as may e, after it is made. E-F 1or the remo,al o dou ts, it is here y declared that nothin% in su section E1F shall e construed as pre,entin% an insurer from reinsurin% with any Indian re8insurer or other insurer the entire sum assured on any policy or any portion thereof in excess of the percenta%e specified under su 8section E2F.

E.F In this section, i. ii. BpolicyB means a policy issued or renewed on or after the 1st day of April, 1/*1, in 'espect o %eneral insurance usiness transacted in India and does not include a re8insurance policyC and IIndian re8insurerB means an insurer specified in su 8clause E F of Clause E/F of Section 2 who carries on exclusi,ely re8insurance usiness and is appro,ed in this ehalf y the Central 9o,ernment.

A2:)5/'- C/**)00(( 101B. E1F $he Authority with the pre,ious appro,al of the Central 9o,ernment shall, for the purposes of Section 101A, constitute an Ad,isory Committee consistin% of not more than fi,e persons ha,in% special >nowled%e and experience of the usiness of insurance. E2F $he term of office of, and the allowance paya le to, mem ers of the Ad,isory Committee, the procedure to e followed y, and the +uorum necessary for the transaction of usiness of, the Committee and the manner of fillin% casual ,acancies therein shall e such as may e determined y the re%ulations made y the Authority. E1,*)+,0)/+ /4 '(-)+58',+3( 0'(,0)(5 1%1C. $he Authority may, at any time EaF call upon an insurer to su mit for his examination at the principal place of usiness of the insurer in India all re8insurance treaties and other re8insurance contracts entered into y the insurerC E F examine any officer of the insurer on oath in relation to any such document as is referred to in C1ause EaF a o,eC or EcF y notice in writin%, re+uire any insurer to supply him with copies of any of the documents referred to in Clause EaF, certified y a principal officer of the insurer. (AR$ @ "ISC#44A;#6?S P(+,l0- 4/' 2(4,8l0 )+ 3/*6l-)+< 7)0. /' ,30 )+ 3/+0',:(+0)/+ /4, 0.)5 A30. 1%!. I an, pe#son, -1o is #e0%i#ed %nde# t1is A&t, o# #%les o# #eg%lations made t1e#e %nde#,6 EaF to %#nis1 an, do&%ment, statement, a&&o%nt, #et%#n o# #epo#t to t1e A%t1o#it, ails to %#nis1 t1e same: o# E F to &ompl, -it1 t1e di#e&tions, ails to &ompl, -it1 s%&1 di#e&tions: EcF to maintain solven&, ma#gin, ails to maintain s%&1 solven&, ma#gin: EdF to &ompl, -it1 t1e di#e&tions on t1e ins%#an&e t#eaties, ails to &ompl, -it1 s%&1 di#e&tions on t1e ins%#an&e t#eaties, he shall e lia le to a penalty not exceedin% fi,e la5h rupees for each such failure and punisha le with fine. P(+,l0- 4/' 3,''-)+< /+ )+58',+3( 985)+(55 )+ 3/+0',:(+0)/+ /4 5(30)/+5 3, @ ,+2 98G 1%3. I a pe#son ma+es a statement, o# %#nis1es an, do&%ment, statement, a&&o%nt, #et%#n o# #epo#t -1i&1 is alse and -1i&1 1e eit1e# +no-s o# *elieves to *e alse o# does not *elieve to *e t#%e,6 EaF 1e s1all *e lia*le to a penalt, not e5&eeding ive la+1 #%pees o# ea&1 s%&1 ail%#e: and E F 1e s1all *e p%nis1a*le -it1 imp#isonment -1i&1 ma, e5tend to t1#ee ,ea#s o# -it1 ine o# ea&1 s%&1 ail%#e. P(+,l0- 4/' 4,l5( 50,0(*(+0 )+ 2/38*(+0 1%A. I a pe#son ails to &ompl, -it1 t1e p#ovisions o se&tion 27 o# se&tion 27A o# se&tion 27' o#

se&tion 27" o# se&tion 27<, 1e s1all *e lia*le to a penalt, not e5&eeding ive la+1 #%pees o# ea&1 s%&1 ail%#e. W'/+<48ll- /90,)+)+< /' 7)0../l2)+< 6'/6('0-. 1%=. If any director, mana%in% director, mana%er, or other officer or employees of an insurer wron%fully o tains possession of any property or wron%fully applies to any purpose of the Act, he shall e lia le to a penalty not exceedin% two la5h rupees for each such failure. O44(+3(5 9- C/*6,+)(5 1%=A. E1F 31e#e an, o en&e %nde# t1is A&t 1as *een &ommitted *, a &ompan,, eve#, pe#son -1o, at t1e time t1e o en&e -as &ommitted, -as in &1a#ge o , and -as #esponsi*le to, t1e &ompan, o# t1e &ond%&t o t1e *%siness o t1e &ompan, as -ell as t1e &ompan, s1all *e deemed to *e g%ilt, o t1e o en&e and s1all *e lia*le to *e p#o&eeded against and p%nis1ed a&&o#dingl,; P'/:)2(2 t1at not1ing &ontained in t1is s%*6se&tion s1all #ende# an, s%&1 pe#son lia*le to an, p%nis1ment, i 1e p#oves t1at t1e o en&e -as &ommitted -it1o%t 1is +no-ledge o# t1at 1e 1ad e5e#&ised all d%e diligen&e to p#event t1e &ommission o s%&1 o en&e. E2F ;otwithstandin% anythin% contained in su 8sectionE1F, where any offence under this Act has een committed y a company and it is pro,ed that the offence has een committed with the consent or conni,ance of, or it attri uta le to any ne%lect on the part of, any director, mana%er, secretary or other officer of the company, such director, mana%er, secretary or other officer shall e deemed to e %uilty of that offence and shall e lia le to e proceeded a%ainst and punished accordin%ly. #xplanation8 1or the purposes of this section,8 EaF GcompanyH means any ody corporate, and includes8 i. a firmC and ii. an association of persons or a ody of indi,iduals, whether incorporated or notC and E F GdirectorH in relation to R i. a firm, means a partner in the firmC ii. an association of persons or a ody of indi,iduals, means any mem er controllin% the affairs thereof. P(+,l0- 4/' 4,)l8'( 0/ 3/*6l- 7)0. 5(30)/+ 3!B 1%=B. If an insurer fails to comply with the pro,isions of section &2B, he shall e lia le to a penalty not exceedin% fi,e la5h rupees for each such failure and shall e punisha le with imprisonment which may extend to three years or with fine for each such failure. P(+,l0- 4/' 4,)l8'( 0/ 3/*6l- 7)0. 5(30)/+ 3!C 1%=C. If an insurer fails to comply with the pro,isions of section &2C, he shall e lia le to a penalty not exceedin% twenty8fi,e la5h rupees for each such failure and in the case of su se+uent and continuin% failure, the re%istration %ranted to such insurer under section & shall e cancelled y the Authority. P/7(' /4 C/8'0 0/ /'2(' '(50/',0)/+ /4 6'/6('0- /4 )+58'(' /' 3/*6(+5,0)/+ )+ 3('0,)+ 3,5(5 1% . ElF If, on the application of the Authority or an Administrator appointed under Section )28A or an insurer or any policy8holder or any mem er of an insurance company or the li+uidator of an insurance company Ein the e,ent of the insurance company ein% in li+uidationF, the Court is satisfiedJ EaF that any insurer Eincludin% in any case where the insurer is an insurance company any person who has ta5en part in the promotion or formation of the insurance company or any past or present director, mana%in% a%ent, mana%er secretary or li+uidatorF or any officer employee or a%ent of the insurer,J i. has misapplied or retained or ecome lia le or ecome accounta le for any money or property of the insurerC or ii. has een %uilty of any misfeasance or reach of trust in relation to the insurerC or

E F

that any person, whether he is or has een in any way connected with the affairs of the insurer or not, is in wron%ful possession of any money or property of the insurer or ha,in% any such money or property in his possession wron%fully withholds it or has con,erted it to any use other than that of the insurerC or that y reason of any contra,ention of the pro,isions of this Act, the amount of the life 8insurance fund has een diminishedC

EcF

the Court may examine any such insurer, director, mana%in% a%ent, mana%er, secretary or li+uidator or any such other officer, employee or a%ent of the insurer or such other person, as the case may e, and may compel him to contri ute such sums to the assets of the insurer y way of compensation in respect of the misapplication, retainer, misfeasance or reach of trust, as the Court thin5s fit, or to pay such sum as may e found due from him in respect of any money or property of the insurer for which he is lia le or accounta le or to restore any money or property of the insurer or any part thereof, as the case may eC and where the amount of the life insurance fund has een diminished y reason of any contra,ention of the pro,isions of this Act, the Court shall ha,e power to assess the sum y which the amount of the fund has een diminished and to order the person %uilty of such contra,ention to contri ute to the fund the whole or any part of that sum y way of compensationC and in any of the aforesaid cases the Court shall ha,e power to order interest to e paid at such rate and cases the Court shall ha,e power to order interest to e paid at such rate and from such time as the Court may deem fit. E2F <ithout pre!udice to the pro,isions contained in su 8section E1F or su section E&F, where it is pro,ed that any money or property of an insurer has disappeared or has een lostI the Court shall presume that e,ery person in char%e of, or ha,in% a disposin% power o,er, such money or property at the rele,ant time Ewhether a director, mana%er, principal officer or any other officerF has ecome accounta le for such money or property within the meanin% of su 8clause EiF of Clause EaF to su 8section E1F, and the pro,isions of that su 8 section shall apply accordin%ly, unless such person pro,es that the money or property has een utilised or disposed of in the ordinary course of the usiness of the insurer and for the purpose of that usiness or that he too5 all reasona le steps to pre,ent the disappearance or loss of such money or property or otherwise satisfactorily accounts for such disappearance or loss. E&F <here the insurer is an insurance company and any of the acts referred to in Clauses EaF, E F and EcF of su 8section E1 F has een committed y any person, e,ery person who was at the rele,ant time a director, mana%in% a%ent, mana%er, li+uidator, secretary or other officer of the insurance company shall, for the purposes of that su 8section, e deemed to e lia le for that act in the same manner and to the same extent as the person who has committed the act, unless she pro,es that the act was committed without his consent or conni,ance and was not facilitated y any ne%lect or omission on his part. E(F <here at any sta%e of the proceedin%s a%ainst any person under this section Ehereinafter referred to as the delin+uentF, the Court is satisfied y affida,it or otherwiseJ EaF that a p#ima a&ie &ase has een made out a%ainst the delin+uentC and E F that it is !ust and proper so to do in the interests of the policyholders of an insurer or of the mem ers of an insurance company, the Court may direct the attachment of i. any property of the insurer in the possession of the delin+uentC ii. any property of the delin+uent which elon%s to him or is deemed to elon% to him with the meanin% of su 8section E)FC iii. any property transferred y the delin+uent within two years efore the commencement of proceedin%s under su 8section E1F or durin% the pendency of such proceedin%sS if the Court is satisfied y affida,it or otherwise that the transfer was otherwise than in %ood faith and for consideration. E)F 1or the purposes of su 8section E(F, the followin% classes of property shall e deemed to elon% to a delin+uentD EaF E F any property standin% in the name of any person which y reason of the person ein% connected with the delin+uent, whether y way of relationship or otherwise, or on account of any other rele,ant circumstances appears to elon% to the delin+uentC the property of a pri,ate company in respect of the affairs of which the delin+uent, y himself or throu%h his nominees, relati,es, partners or persons interested in any shares of the company is a le to exercise or is entitled to ac+uire control, whether direct or indirect.

45planation.=1or the purposes of this section a person shall e deemed to e a nominee of a delin+uent, if, whether directly or indirectly, he possesses on ehalf of the delin+uent, or may e re+uired to exercise on the direction or on ehalf of the delin+uent, any ri%ht or power which is of such a nature as to ena le the delin+uent to exercise or to entitle the delin+uent to ac+uire control o,er the companyIs affairs. E*F Any claim to any property attached under this section or any o !ection to such attachment shall e made y an application to the Court, and it shall e for the claimant or o !ect or to adduce e,idence to show that the property is not lia le to attachment under this section, and the Court shall proceed to in,esti%ate the claim or o !ection in a summary manner. E-F <hen disposin% of an application under su 8section E1F, the Court shall, after %i,in% all persons who appear to it to e interested in any property attached under this section an opportunity of ein% heard, ma5e such order as it thin5s fit respectin% the disposal of any such property for the purpose of effectually enforcin% any lia ility under this section, and all such persons shall e deemed to e parties to the proceedin%s under this section. E.F In any proceedin%s under this section the Court shall ha,e full power and exclusi,e !urisdiction to decide all +uestions of any nature whatsoe,er arisin% there under and, in particular, with respect to any property attached under this section, and no other court shall ha,e !urisdiction to decide any such +uestion in any suit or other le%al proceedin%. E/F In ma5in% any order with respect to the disposal of the property of any pri,ate company referred to in C1ause E F of su 8section E)F, the Court shall ha,e due re%ard to the interests of all persons interested in such property other than the delin+uent and persons referred to in that clause. E10F $his section shall apply notwithstandin% that the act is one for which the person concerned may e criminally lia le. E11F In proceedin%s under this section the Court shall ha,e all the powers which a court has under Section 2&- of the Indian Companies Act, 1/1& E- of 1/1&F. E12F $his section shall apply in respect of a pro,ident society as defined in Part III as it applies in respect of an insurer. E1&F 6n and from the commencement of the Insurance ESecond AmendmentF Act, 1/)) E)( of 1/))F, the Court entitled to exercise !urisdiction under this section shall e the :i%h Court within whose !urisdiction the re%istered office of the insurer is situate Ehereinafter referred to as the :i%h CourtF and any proceedin%s under this section pendin% at such commencement in any Court other than the :i%h Court shall, on such commencement, stand transferred to the :i%h Court. E1(F $he :i%h Court may ma5e rules pro,idin% for EaF the manner in which en+uiries and proceedin%s may e held under this section, E F any other matter for which pro,ision has to e made for ena lin% the :i%h Court to effecti,ely exercise its !urisdiction under this section. N/0)3( 0/ ,+2 .(,')+< /4 A80./')0-. 10*A. E1F <hen application is made to the Court for the ma5in% of any order to which this section applies the Court shall, unless the Authority has himself made the application or has een made a party thereto, send a copy of the application to%ether with intimation of the date fixed for the hearin% thereof to the Authority, and shall %i,e him an opportunity of ein% heard. E2F $he orders to which this section applies are the followin% namelyD EaF an order for the attachment in execution of a decree of any deposit made under Section - or Section /.C E F an order under Section / or Section )/ for the return of any such depositC EcF an order under Section &* sanctionin% any arran%ement for the transfer or amal%amation of life insurance usiness or any order conse+uential thereonC EdF an order for the windin% up of an insurance company or a pro,ident societyC

EeF an order under Section ). confirmin% a scheme for the partial windin% up of an insurance companyC EfF an order under Section ./ reducin% the amount of the insurance contracts of a pro,ident society. P'(:)/85 5,+30)/+ /4 A2:/3,0(-G(+(',l 4/' )+50)080)/+ /4 6'/3((2)+<5 1%@. E1F #xcept where proceedin%s are instituted y the Authority or an Administrator appointed under Section )2A, no proceedin%s under this Act a%ainst an insurer or any director, mana%in% a%ent, mana%er, secretary or other 6fficer of an insurer or any li+uidator or any employee or a%ent of an insurer or any person who is lia le under su 8section E2F of Sec. (1 or any other person shall e instituted y any person unless he has pre,ious thereto o tained the sanction of the Ad,ocate89eneral of the State where the principal place of usiness in India of such insurer is situate to the institution of such proceedin%sD P'/:)2(2 that where the principal place of usiness of such insurer is situated in a ?nion territory references in this section to the Ad,ocate 9eneral of the Pro,ince shall e construed as references to the Attorney 9eneral for India. E2F $his section shall apply in respect of a pro,ident society as defined in Part III as it applies in respect of an insurer. C.,)'*,+, (03. 0/ 9( 689l)3 5(':,+0 10-A. #,ery whole8time Chairman, whole8time director, auditor, li+uidator, mana%er and any other employee of an insurer shall e deemed to e a pu lic ser,ant for the purposes of Chapter IP of the Indian Penal Code E() of 1.*0F. P/7(' /4 C/8'0 0/ <',+0 '(l)(4 1%8. In any proceedin%s, ci,il or criminal, it. appears to the Court hearin% the case that a person is or may e lia le in respect of ne%li%ence, default, reach of duty or reach of trust ut that he has acted honestly and reasona ly and that ha,in% re%ard to all the circumstances of the case he ou%ht fairly to e excused for the ne%li%ence, default, reach of duty or reach of trust, the Court may relie,e him either wholly or partly from his lia ility on such terms as it may thin5 fit. C/<+)D,+3( /4 /44(+3(5 1%9. E1F ;o Court inferior to that of a Presidency "a%istrate or a "a%istrate of the first class shall try any offence under this Act. 8 E2F ;o Court shall ta5e co%ni7ance of any offence punisha le under su 8section E(F of Section &(B or su 8section E1AF of Section 102 except upon complaint in writin% made y an officer of the Central 9o,ernment %enerally or specially authorised in writin%, in this ehalf y the Authority, and no Court inferior to that of a Presidency "a%istrate or a "a%istrate of the first class shall try any such offence. A66(,l5 110. E1F An appeal shall lie to the Court ha,in% !urisdiction from any of the followin% orders, namelyD EaF E F EcF EdF EeF EfF an order under Section & cancellin% the re%istration of an insurerC an order under Section ) directin% the insurer to chan%e his nameC an order under Section (2 cancellin% the licence issued to an a%entC an order under Section -) refusin% to re%ister an amendment of rulesC an order under Section .- or Section .-AC an order made in the course of the windin% up or insol,ency of an insurer or a pro,ident society.

E2F $he Court ha,in% !urisdiction for the purposes of su 8section E1F shall e the principal Court of ci,il !urisdiction within whose local limits the principal place of usiness of the insurer concerned is situate. E&F An appeal shall lie from any order made under stu 8section E1F to the authority authorised to hear appeals from the decisions of the Court ma5in% the same and the decision on such appeal shall e final.

E(F ;o appeal under this section shall e entertained unless it is made efore the expiration of four months from the date on which the order appealed a%ainst was communicated to the appellant. D(l(<,0)/+ /4 6/7('5 ,+2 280)(5 /4 C.,)'6('5/+ /4 0.( A80./')0110A. $he Chairperson of the Authority may y %eneral or special order dele%ate any of his powers or duties under this act to any person su ordinate to him. $he exercise or dischar%e of any of the powers or duties so dele%ated shall e su !ect to such restrictions, limitations and conditions, if any as the Chairperson of the Authority may impose, and shall e su !ect to his control and re,ision. S)<+,08'( /4 2/38*(+05 11%B. #,ery document which is re+uired y Act or y any rule made there under to e si%ned y the Chairperson of the Authority or y any person su ordinate to him or y any officer authorised y him under su 8section E1F of Section (2 shall e deemed to e properly si%ned, if it ears a facsimile of the si%nature of such Chairperson of the Authority, person or officer printed, en%ra,ed, litho%raphed or impressed y any of other mechanical process appro,ed y the Central 9o,ernment. P/7(' 0/ 3,ll 4/' )+4/'*,0)/+ 11%C. #1$ $he Chairperson of the Authority may, y notice in writin%, re+uire any insurer to supply him with any information relatin% to his insurance usiness, and the insurer shall comply with such re+uirement within such period after receipt of the notice as may e specified therein. E2F Any information supplied under this section shall e certified y a principal officer of the insurer and if the notice so re+uires also y an auditor. C('0,)+ 3l,)*5 4/' 3/*6(+5,0)/+ 9,''(2 11%D. ;o person shall ha,e any ri%ht, whether in contract or otherwise, to any compensation for any loss incurred y reason of the operation of any of the pro,isions contained in Section &( or Section &(A or Section &(# or Section &-A car y reason of the compliance y an insurer with any order or direction %i,en to him under this Act. S(30)/+5 3A, !@B, !8B, 33, (03. 0/ ,66l- 0/ <(+(',l )+58',+3( 985)+(55 /4 0.( L)4( I+58',+3( C/'6/',0)/+ /4 I+2), 11%E. ;otwithstandin% anythin% contained in the 4ife Insurance Corporation Act, 1/)* E&1 of 1/)*F, the pro,isions of Sections &A, 2-B, 2.B, &&, &(. Clause EaF of Section &(#, &(1, (0C, ((A, *(? to *(?" E oth inclusi,eF, *(@, *(@A, *(@B, *(@C, l0lA, 101C, 110 D, 1109 and 110:, shall also apply, so far as may e to and in relation to the %eneral insurance usiness carried on y the 4ife Insurance Corporation of India and the pro,isions of Section &-A shall also apply to that Corporation if it ecomes an ac+uirin% insurer. P'/:)5)/+5 ,66l)3,9l( 0/ S0,0( G/:('+*(+05, (03 11%F. $he pro,isions of Section &, &A, 2-B, 2.B,&&, &(, Clause EaF of Section &(#C &(1, (0A, (0C, ((A, *(? to *( ?" E oth inclusi,eF, *(@, *(@A, *(@B, *(@C and 101A, 101C, 1108D, 11089 and 1108: shall, notwithstandin% any exemption %ranted under Section 11., also apply, so far as may e, and in relation to the %eneral insurance usiness carried on y a State 9o,ernment or a 9o,ernment company as defined in Section *1- of the Companies Act, 1/)* E1 of 1/)*F. C/+50)080)/+ /4 C/+58l0,0):( C/**)00(( 11%G E1F $he Central 9o,ernment shall constitute a Consultati,e Committee consistin% of the Chairperson of the Authority Ewho shall e the Chairman thereofF and not more than four other mem ers ha,in% special 5nowled%e and experience of the usiness of insurance. E2F $he term of office of, and the allowance paya le to the mem ers of the Consultati,e Committee, the procedure to e followed y, and the +uorum necessary for the transaction of usiness of, the Consultati,e Committee and the manner of fillin% casual ,acancies therein shall e such as may e prescri ed. E&F Before ma5in% any order under Sections &(, &(A, &(B, &(C, &(#, &(1, &(9, su 8sections E(F and E-F

of Section *(?" and Section *(@C, the Authority shall consult the Consultati,e Committee constituted under su 8section E1F. A66(,l5 11%H. E1F any person a%%rie,ed y any order made y the Authority under Sections 2-D, &(, &(A, &(B, &(C, &(#, &(1, &(9, su 8sectionsE1F, E(F, and E-F of Section *(?" or Section *(@C may, within a period of thirty days from the date of such order prefer an appeal a%ainst such order to the Central 9o,ernment and that 9o,ernment may, y order, confirm, modify or re,erse the order made y the Authority and the order so made y the Central 9o,ernment shall e final. E2F ;o claim for compensation shall lie in fa,our of any person for anythin% done in pursuance of an order of the Authority so lon% as such order was effecti,e. E&F $he Central 9o,ernment may, on the application of an appellant, stay, until the decision of the appeal, the operation of any order made under Section &( or su section E)F of Section &(8B or su 8clause E,F of C1ause E F of Section &(#. S(':)3( /4 +/0)3(5 111. E1F Any process or notice re+uired to e ser,ed on an insurer or pro,ident society shall e sufficiently ser,ed if addressed to any person re%istered with the Authority as a person authorised to accept notices on ehalf of the insurer or pro,ident society and left at, or sent y re%istered post to, the address of such person as re%istered with Authority. E2F any notice or other document which is y this Act re+uired to e sent to any policy8holder may e addressed and sent to the person to whom notices respectin% such policy are usually sent and any notice so addressed and sent shall e deemed to e notice to the holder of such policyD P'/:)2(2 that, where any person claimin% to e interested in a policy as transferee, assi%nee or nominee has %i,en to an insurer or to a pro,ident society notice in writin% of his interest, any notice which is y his Act re+uired to e sent to policy8holders shall also e sent to such person at the address specified y him in his notice. D(3l,',0)/+ /4 )+0(')* 9/+85(5 112. ;otwithstandin% anythin% to the contrary contained in this Act an insurer carryin% on the usiness of life insurance shall e at li erty to declare an inte#im *on%s or onuses to policy holders whose policies mature for payment y reason of death or otherwise durin% the inter8,aluation period on the recommendation of the in,esti%atin% actuary made at the last precedin% ,aluation. A3>8)5)0)/+ /4 58''(+2(' :,l8(5 9- 6/l)3-. 113.E1F A policy of life insurance under which the whole of the enefits ecome paya le either on the occurrence, or at a fixed inter,al or fixed inter,als after the occurrence, of a contin%ency which is ound to happen, shall, if all premiums ha,e een paid for at least three consecuti,e years in the case of a policy issued y an insurer, or fi,e years in the case of a policy issued y a pro,ident society defined in Part III, ac+uire a %uaranteed surrender ,alue, to which shall e added the surrender ,alue of any su sistin% onus already attached to the policy, and e,ery such policy issued y insurer shall show the %uaranteed surrender ,alue 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 throu%hout the currency of the policyD P'/:)2(2 that the re+uirements of this su 8section as to the addition of the surrender ,alue of the onus attachin% to the policy at surrender shall e deemed to ha,e een complied with where the method of calculation of the %uaranteed surrender ,alue of the policy ma5es pro,ision for the surrender ,alue of the onus attachin% to the policyD P'/:)2(2 further that the re+uirements of this su 8section as to the showin% of the %uaranteed surrender ,alue on a policy shall e deemed to ha,e een complied with where the insurer shows on the policy the %uaranteed surrender ,alue of the policy y means of a formula accepted in this ehalf y the Authority as satisfyin% the said re+uirementsD

P'/:)2(2 further that the pro,isions of this su 8section as to the showin% of the %uaranteed surrender ,alue on a policy shall not ta5e effect until after the expiry of six months from such date as the Authority may, y notification in the official 9a7ette, appoint in this ehalf E2F ;otwithstandin% any contract to the contrary, a policy which has ac+uired a surrender ,alue shall not lapse y reason of the non8payment of further premiums ut shall e 5ept ali,e to the extent of the paid8up sum insured, and the paid8up sum insured shall for the proposes of this su 8section include in full all su sistin% re,ersionary onuses that ha,e already attached to the policy, and shall, where the policy is one on which the maximum num er of annual premiums paya le is fixed and the premiums are of uniform amount, e efore the inclusion of such onuses not less than the amount earin% to the total sum insured y the policy exclusi,e of onuses the same proportion as the total period for which premiums ha,e already een paid ears to the maximum period o# which premiums were ori%inally paya le. E&F A policy 5ept ali,e to the extent of the paid8up sum insured under su section E2F shall not e entitled y ,irtue of that su 8section to participate in any profits declared distri uta le after the con,ersion of the policy into a paid8up policy. E(F Su 8section E2F and su 8section E&F shall not apply 8 EaF where the paid8up sum insured y a policy ein% a policy issued y an insurer, is less than one hundred rupees inclusi,e of any attached onus or ta5es the form of an annuity of less than twenty8fi,e rupees, or where the paid8up sum insured y a policy, ein% a policy issued y a pro,ident society as defined in Part III, is less than fifty rupees inclusi,e of any attached onus or ta5e the form of an annuity of less than twenty8fi,e rupees, or where the parties after the default has occurred in the payment of the premium a%ree in writin% to some other arran%ement, or to policies in which the surrender ,alue is automatically applied under the terms of the contract to maintainin% the policy in force after its lapse throu%h non8payment of premium.

E F EcF

P/7(' /4 C(+0',l G/:('+*(+0 0/ *,C( '8l(5 11A. #1$ $he Central 9o,ernment may, su !ect to the condition of pre,ious pu lication y notification in the official 9a7ette, ma5e rules to carry out the purposes of this Act. E2F In particular and without pre!udice to the %enerality of the fore%oin% power, such rules may prescri e EaF the +ualifications to e possessed y actuariesC EaaFsuch other percenta%e of paid8up e+uity capital in excess of twenty8 six percent of the paid8up e+uity capital and the period within which such excess paid8up e+uity capital shall e di,ested under su 8section E1F of section *AA. the manner in which it shall e determined which of the transactions of an insurer are to e deemed for the purposes of this Act to e insurance usiness transacted in India. the procedure to e followed y the 'eser,e Ban5 of India in dealin% with deposits made in pursuance of this Act, includin% the receipt of custody of, withdrawal of, and payment of interest on securities lod%ed as such deposits, and their inspection and ,erification y the Authority. the form referred to in Clause EdF of su 8section E2F of Section 1*C the manner in which the prospectuses and ta les referred to in su 8section E1F of Section (1 shall e pu lished and the form in which they shall e drawn upC the matters to e prescri ed for the purposes of section (.C E6mittedF the contin%encies other than those specified in Clauses EaF to EfF of Section 728 o Section *) on the happenin% of which money may e paid y pro,ident societiesC the matters other than those specified in Clauses 7a8 to 7o8 of su section E1F of Section -( on which a pro,ident society shall ma5e rulesC the form of any account, return or re%ister re+uired y Part III and the manner in which such account, return or re%ister shall e ,erifiedC

E F EcF

EdF EeF EfF E%F EhF EiF E!F

E5F ElF

su !ect to the pro,isions of this Act, the fees paya le there under and the manner in which they are to e collectedC the conditions and the matters which may e prescri ed under su 8sections E)F, E*F, E10F and E12F of Section /2C

E&F #,ery rule made under this section or :inder su section E10F of Section &(: or under su 8section E1F of Section *(?B and e,ery re%ulation made under su 8section E&F of Section *(?B and e,ery re%ulation made under this part shall e laid, as soon as may e after it is made, efore each :ouse of Parliament, while it is in session, for a total period of thirty days which may e comprised in one session or in two or more successi,e sessions, and if, efore the expiry of the session immediately followin% the session or the successi,e sessions aforesaid, oth :ouses a%ree in ma5in% any modification in the rule or re%ulation or oth :ouses a%ree that the rule or re%ulation should not e made, the rule or re%ulation shall thereafter ha,e effect only in such modified form or e of no effect, as the case may e so, howe,er, that any such modification of annulment shall e without pre!udice to the ,alidity of anythin% pre,iously done under that rule or re%ulation. E(F All rules made y a 4ocal 9o,ernment under the pro,isions of Section 2( of the Pro,ident Insurance Societies Act, 1/12 E) of 1/12F, and in force at the commencement of this Act shall, so a# as not inconsistent with the pro,isions of Part III, continue in force and ha,e effect as if duly made under this section until they are replaced y rules made under this section. P/7(' /4 A80./')0- 0/ *,C( '(<8l,0)/+5 11AA E1F $he Authority may, y notification in the 6fficial 9a7ette, ma5e re%ulations consistent with this Act and the rules made there under, to carry out the purposes of this Act. E2F In particular, and without pre!udice to the %enerality of the fore%oin% power, such re%ulations may pro,ide for all or any of the followin% matters, namelyD8 aF the matters includin% fee relatin% to the re%istration of insurers under section&C F the manner of suspension or cancellation of re%istration under su 8section E)#F of section&C cF such fee, not exceedin% fi,e thousand rupees as may e determined y the re%ulations for issue of a duplicate certificate of re%istration under su 8section E-F of section &C dF the matters relatin% to he renewal of re%istration and fee there for under section &AC eF the manner and procedure for di,estin% excess share capital under su 8section 2 section *AAC fF the preparation of alance8sheet, profit and loss account and a separate account of receipts and payments and re,enue account under su 8section E1AF of section 11. %F the manner in which a stract of the report of the actuary to e specified under the fourth pro,iso to su 8section E1F of section 1&C hF the form and manner in which the statement referred to in su 8sectionE(F of section 1& shall e appendedC iF the time, the manner and other conditions of in,estment of assets held y an insurer under su 8 sections E1F, E1AF and E2F of section 2-DC !F the minimum information to e maintained y insurer in their oo5s, the manner in which such information should e maintained, the chec5s and other ,erifications to e adopted y insurers in that connection and all other matters incidental thereto under su 8section E.F of section &&C 5F the manner for ma5in% an application, the manner and the fee for issue of a licence to act as an insurance a%ent, under su 8section E1F of section, (2C lF the fee and the additional fee to e determined for renewal of licence of insurance a%ent under su 8 section E&F of section (2C mF the re+uisite +ualifications and practical trainin% to act as an insurance a%ent under clause EeF of su 8section E(F of section (2C nF the passin% of examination to act as an insurance a%ent under clause EfF of su 8section E(F of section (2C oF the code of conduct under clause E%F of su 8section E(F of section (2C pF the fee not exceedin% rupees fifty for issue of duplicate licence under su 8section E*F of section (2C +F the manner and the fees for issue of a licence to an intermediary or an insurance intermediary under su 8section E1F of section of section (2C rF the fee and the additional fee to e determined for renewal of licence of intermediaries or insurance intermediaries under su 8section E&F of section (2DC sF the re+uisite +ualifications and practical trainin% of intermediaries or insurance intermediaries under clause EeF of su 8section E)F of section (2DC tF the examination to e passed to act as an intermediary or insurance intermediary under clause EfF of

su 8section E)F of section (2DC uF the code of conduct clause E%F of su 8section E)F of section (2 DC ,F the fee for issue of duplicate licence under su 8section E-F of section (2DC wF such matters as specified under su 8section E2F of section *(?B relatin% to the $ariff Ad,isory Committee. xF $he matters relatin% to relatin% to licensin% of sur,eyors and loss assessors, their duties, responsi ilities and other professional re+uirements under section *(?"C yF Such other asset or assets as may e specified under clause EhF of su 8section E1F of section *(@ for the purposes of ascertainin% sufficiency of assets under section *(@AC 7F the ,aluation of assets and lia ilities under su 8section E&F of section *(@C 7aF the matters specified under su 8section E1AF of section *(@A relatin% to sufficiency of assetsC 7 F the matters relatin% to reinsurance under sections 101A and 101BC 7cF the matters relatin% to redressal of %rie,ances of policy8holders to protect their interest and to re%ulate, promote and ensure orderly %rowth of insurance industryC and 7dF any other matter which is to e, or may e, specified y the re%ulations made y the Authority or in respect of which pro,ision is to e made or may e made y the re%ulationsC E&F #,ery re%ulation made under this Act shall e laid, as soon as may e after it is made, efore each :ouse of Parliament, while it is in session, for a total period of thirty days which may e comprised in one session or in two or more successi,e sessions, and if efore the expiry of the session immediately followin% the session or the successi,e sessions aforesaid, oth :ouses a%ree in ma5in% any modification in the re%ulation or oth houses a%ree that the re%ulations should not e made, the re%ulations shall thereafter ha,e effect only in such modified form or e of no effect, as the case may eC so howe,er, that any such modification or annulment shall e without pre!udice to the ,alidity of anythin% pre,iously done under that re%ulation. Al0(',0)/+ /4 4/'*5 11). $he Central 9o,ernment may, on the application or with the consent of an insurer, not ein% a company, alter the forms contained in the Schedules as respects that insurer, for the purpose of adaptin% them to the circumstances of that insurerD Pro,ided that nothin% done under this section shall exempt the insurer from supplyin% all information re+uired under this Act so far as it is possi le for the insurer to do so. P/7(' 0/ (1(*60 4'/* 3('0,)+ '(>8)'(*(+05 11 . E1F $he Central 9o,ernment may, y notification in the official 9a7ette, exempt any insurer constituted, incorporated or domiciled in any country or State outside India from any of the pro,isions of this Act which may e specified in the notification either a solutely or su !ect to such conditions or modifications as may e specified in the notification. E2F $his section shall apply in respect of pro,ident societies as defined in Part III as it applies in respect of insurers. S8**,'- /4 '(08'+5 0/ 9( 689l)5.(2 11 A. $he Central 9o,ernment efore the date of commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1///, shall e,ery year cause to e pu lished, in such manner as it may direct, a summary of the accounts, alance8sheets, statements, a stracts and other returns under this Act or purportin% to e under this Act which ha,e een furnished in pursuance of the pro,isions of this Act to the Authority durin% the year precedin% the year of pu lication, and may append to such summary any note of the Authority or of the Central 9o,ernment efore the date of commencement of the Insurance 'e%ulatory and De,elopment Authority Act, 1/// and any correspondenceD P'/:)2(2 that nothin% in this section shall re+uire the pu lication of the statement referred to in su 8section E2F of Section 10 of the returns referred to in su 8section E1F of Section 2.or Section 2.A or Section 2.B or the statements referred to in su section E2F of Section &1B or Section (0B. S,:)+< /4 6'/:)5)/+5 /4 I+2),+ C/*6,+)(5 A30, 1913 11@. ;othin% in this Act shall affect the lia ility of an insurer ein% a company or a pro,ident society as

defined in Part III ein% a company to comply with the pro,isions of the Indian Companies Act, 1/1& E- of 1/1&F, in matters not otherwise specifically pro,ided for y this Act. E1(*60)/+5 118. ;othin% in this Act shall applyJ EaF to any trade union re%istered under the Indian $rade ?nions Act 1/2* E1* of 1/2*FC or E F to any pro,ident fund to which the pro,isions of the Pro,ident 1unds Act, 1/2) E1/ of 1/2)F, applyC or EcF if the Central 9o,ernment so orders in any case, and to such extent or su !ect to such conditions or modifications as may e specified in the order, to any insurance usiness carried on y the Central 9o,ernment or a 9o,ernment company as defined in Section *1- of the Companies Act, 1/)* E1 of 1/)*FCor EdF if the Authority so orders in any case, and to such extent or su !ect to such conditions or modifications as may e specified in the order, toJ i. any appro,ed superannuation fund as defined in Clause EaF of Section ).8; of the Indian Income8tax Act, 1/22 E11 of 1/22FC or ii. any fund in existence and officially reco%ni7ed y the Central 9o,ernment efore the 2-th day of =anuary, 1/&- maintained y or on ehalf of 9o,ernment ser,ants or 9o,ernment pensioners for the mutual enefit of contri utors to the fund and of their dependents or iii. any mutual or pro,ident insurance society composed wholly of 9o,ernment ser,ants or of railway ser,ants which has een exempted from any or all of the pro,isions of the Pro,ident Insurance Societies Act, 1/12 E) of 1/12F I+56(30)/+ ,+2 5866l- /4 3/6)(5 /4 689l)5.(2 6'/56(3085, (03 119. Any person may, on payment of a fee of fi,e rupees, inspect the documents filed y an insurer with the Authority under Clause EfF of su 8section E2F of Section &, and may o tain a copy of any such document or part thereof on payment in ad,ance at the prescri ed rate, for the ma5in% of the copy. D(0('*)+,0)/+ /4 *,'C(0 :,l8( /4 5(38')0)(5 2(6/5)0(2 8+2(' 0.)5 A30 1!%. $he mar5et ,alue on the day of deposit of securities deposited in pursuance of any of the pro,isions of this Act with the 'eser,e Ban5 of India shall e determined y the 'eser,e Ban5 of India whose decision shall e final. 121.E Repealed8 122 E'epealedF 12& E'epealedF