Section 6 - 12

(Requirement as to capital )

• (9)For section 6, substitute the following:--

• "6. No insurer carrying on the business of life insurance, general insurance, or re-insurance in India on or after the commencement of the Insurance Regulatory and Development Authority Act,1999, shall be registered unless he has,--

• (i) a paid-up equity capital of rupees one hundred crores, in case of a person carrying on the business of life insurance or general insurance; or

• (ii) a paid-up equity capital of rupees two hundred crores, in case of a person carrying on exclusively the business of re-insurer.

• Provided that in determining the paid-up equity capital specified under clause ( i) or (ii) ,the deposit to be made under section 7 and any preliminary expenses incurred in the formation and registration of the company shall be excluded:

• Provided further that an insurer carrying on business of life insurance, general insurance, re-insurance in India before commencement of the Insurance Regulatory and development Authority Act ,1999 and who is required to be registered under this Act, shall have a paid-up equity capital in accordance with clause (i) and clause (ii) as the case may be, within six months of the commencement of that Act".

• 10.Section 6A-

• (a)in sub section (4),in clause (b)-

• (I)in sub-clause (i),omit "and" occurring at the end;

• (II)in sub-clause (ii),for "sanction of the Central Government has been obtained to the transfer", substitute approval of the Authority has between obtained to the transfer";

• (III)after sub-clause (ii) insert the following:-

• "(iii)Where the, normal value of the shares intended to be transferred by any individual, firm, group, constituents of a group, or body corporate under the same management, jointly or severally exceeds one per cent. of the paid-up capital of the insurer, unless the previous approval of the Authority has been obtained for the transfer.

• Explanation.-For the purpose of this sub-clause, the expressions "group" and "same management" shall have the same meanings respectively assigned to them in the Monopolies and restrictive Trade Practices Act,1969.'; (54 of 1969)

• (b) in sub-section (II),-

• (i) for "Explanation 1".,substitute "Explanation";

• (ii) omit Explanation 2.

• 11.After section 6A,insert the following:-

  (Manner of Divesting excess share holding by promoter on certain cases)

• "6AA.(1) No promoter shall at any time hold more than twenty-six per cent. or such other percentage as may be prescribed, of the paid-up equity capital in an Indian Insurance company:

• Provided that in a case where as Indian Insurance company begins the business of life insurance, general insurance or re-insurance in which the promoters hold more than twenty-six per cent. of the paid-up equity capital or such other excess percentage as may be prescribed, the promoters shall divest in a phased manner the share capital in excess of the twenty-six per cent. of the paid-up equity capital or such excess paid-up equity capital as may be prescribed, after a period of ten years from the date of commencement of the said business by such Indian insurance company or within such period as may be prescribed by the Central Government ;

• Explanation-For the removal of doubts, it is hereby declared that nothing contained in the proviso shall apply to the promoters being foreign company, referred to in sub-clause (b) of clause (7A) of section 2.

• (2) The manner and procedure for divesting the excess share capital under sub-section (I) shall be specified by the regulations made by the Authority.";

• (12) Section 7,-

• (a) in sub-section (I).-

• (i) Omit" not being an insurer specified in sub-clause (c) of clause (9) of section 2";

• (ii) for clauses (a) and (b) ,substitute the following:-

  1. " in case the life insurance business, a sum equivalent to one per cent. of this total gross premium written in India in any financial year commencing after the 31st day of March,2000,not exceeding rupees ten crores;

  2. in the case the general insurance business, a sum equivalent to three per cent. of his total gross premium written in India, in any financial year commencing after the 31st day of March,2000,not exceeding rupees ten crores;

  3. in case the re-insurance business, a sum of rupees twenty crores;";

• (b) omit sub-sections (IA),(IB),(IC),(ID) an d (IE).

• (13) Section 11,--

• (a) in sub -section (I),for "calendar year", substitute "financial year";

• (b) after sub-section (I),insert the following:-

• " (IA) Notwithstanding anything contained in sub-section (I),every insurer, on or after the commencement of the Insurance Regulatory development Authority Act,1999,in respect of insurance business transacted by him and in respect of his shareholders funds, shall ,at the expiration of each financial year, a balance -sheet, a profit and loss account, a separate account of receipts and payments, a revenue account in accordance with the regulations made by the Authority.

• (IB) Every insurer shall keep separate accounts relating to funds of shareholders and policy-holders;".

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