Section 101-116

RE-INSURANCE

(Re-insurance with Indian re-insurers)

• 101a. (1) Every insurer shall re-insure with Indian re-insurers such percentage of the sum assured on each policy as may be specified by the Central Government under sub-section(2). (2) For the purpose of sub-section (1), the Central Government may, by notification in the Official Gazette,--

  1. specify the percentage of the sum assured on each policy to be re0insured and different percentages may be specified for different classes of insurance: Provided that no percentage so specified shall exceed thirty per cent. of the sum assured on such policy; and

• also specify the proportions in which the said percentage shall be allocated among the Indian re-insurers.

  (Advisory Committee)

• 101B. (1) The Central Government shall, for the purposes of section 101A, constitute an Advisory Committee consisting of not more than five persons having special knowledge and experience of the business of insurance.

• (2) The term of office of, and the allowances payable to, members of the Advisory Committee, the procedure to be followed by, and the quorum necessary for the transaction of business of, the Committee and the manner of filling casual vacancies therein shall be such as may be prescribed.

  MISCELLANEOUS

  (Penalty for default in complying with or act in contravention of this act)

• 102.(1) Except as otherwise provided in this Act, any insurer, principal agent, chief agent, of special agent, who makes default in complying with, or acts in contravention of, any requirement of this Act, or of any rule or order made thereunder and, where the insurer is a company, any partner of the firm who is knowingly a party to the default or contravention, shall be punishable with fine which may extend to one thousand rupees, and in the case of a continuing default or contravention with an additional fine which may extend to five hundred rupees for every day during which the default or contravention continues.

• (1A) If any person fails to produce any book, account or other document or to furnish any statement or information which, under sub-section (2) of section 33 or under sub-section (3) of section 64UE, it is his duty to produce or furnish, or to answer any question relating to the business of an insurer which he is asked he is asked by an officer making an inspection under wither of those sections, he shall be punishable with fine which may extend to two thousand rupees in respect of each failure and if the failure fine which may extend to one hundred rupees for each day after the first, during which such failure continues.

• (2) Any provident society as defined in Part III which makes default in complying with or acts in contravention of any requirement of this Act or of any rule or order made thereunder and any director, managing agent, manager, secretary or other of the society who is knowingly a party to the default or contravention, shall be punishable with fine which may extend to five hundred rupees or in the case of a continuing default or contravention with fine which may extend to two hundred and fifty rupees for every day during which the default or contravention continues.

  (Penalty for carrying on Insurance Business in contravention of section 3,7 and 98)

• 103.(1) Any insurer or any person acting on behalf of an insurer, who carries on any class of insurance business in contravention of any of the provisions of section 3, section 7, or section 98, or does any one or more of the acts constituting the business of insurance in relation to any insurance business carried on in contravention of any of the said sections shall be punishable with fine which may extend to two thousand rupees.

• (2) Any person knowingly taking out a policy of insurance with any insurer or person guilty of an offence under sub-section (1) shall be punishable with fine which may extend to five hundred rupees: Provided that nothing in sub-section (1) or sub-section (2) shall apply to the business of re-insurance between the head office of an insurer in India and the head office of an insurer not having an office in India.

• (3) Any provident society or any person acting on behalf of a provident society who carries on any class of insurance business in contravention of any of the provisions of section 70, section 73 or section 83 or dons any one or more of the acts constituting the business of insurance in relation to any insurance business carried on in contravention of any of the said sections shall be punishable with fine which may extend to one thousand rupees.

  (Penalty for false statement in document)

• 104. Whoever, in any return, report, certificate, balance-sheet or other document, required by or for the purposes of any of the provisions of this Act, willfully makes a statement false in any material particular, knowing it to be false, shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to one thousand rupees, or with both.

  (Wrongfully obtaining or withholding property )

• 105. (10 Any director, managing agent, manager or other officer or employee of an insurer who wrongfully obtain possession of any property of the insurer or having any such property in his possession wrongfully withholds it or willfully applies it to purposes other than those expressed or authorized by this Act shall on the complaint of the Controller made after giving the insurer not less than fifteen days notice of his intention, or on the complaint of the insurer not less member or any policy-holder thereof, be punishable with fine which may extend to one thousand rupees and may be ordered by the Court trying the offence to deliver up or refund within a time to be fixed by the Court any such property improperly obtained or wrongfully withheld or willfully misapplied and in default to suffer imprisonment for a period not exceeding two years.

• (2) This section shall apply in respect of a provident society as defined in Part III as it applies in respect of an insurer.

  (Delegation of powers and duties of Controller)

• 110A. The Controller may be general or special order delegate any of his powers or duties under this Act to any person subordinate to him. The exercise or discharge of any of the powers or duties so delegated shall be subject to such restrictions, limitations and conditions, if any, as the Controller may impose, and shall be subject to his control and revision.

  (Signature of documents)

• 110B. Every document which is required by this Act or by any rule made thereunder to be signed by the controller or by any person subordinate to him by any officer authorized by him under sub-section (1) of section 42 shall be deemed to be properly signed, if it bears a facsimile of the signature of such Controller, person or officer printed, engraved, lithographed or impressed by any of other mechanical process approved by the Central Government.

  (Powers to call to information )

• 110C. (1) The Controller may, by notice in writing, require any insurer to supply him with any information relating to his insurance business, and the insurer shall comply with such requirement within such period after receipt of the notice as may be specified therein.

• (2) Any information supplied under this section shall be certified by a principal officer of the insurer and if the notice so requires also by an auditor.

  (Constitution of consultative Committee)

• 110G. (1) The Central Government shall constitute a Consultative Committee consisting of the Controller(who shall be the Chairman thereof) and not more than four other member having special knowledge of the business of insurance.

• (2) The term of office of, and the allowances payable to the Consultative Committee, the procedure to be followed by, and the quorum necessary for the transaction of business of, the Consultative Committee and the manner of filling casual vacancies therein shall be such as may be prescribed.

• (3) Before making any order under section 34,34A,34B, 34C, 34E, 34F, 34G, sub-sections (4) and (7) of section 64UM and section 64VC, the Controller shall consult the Consultative Committee constituted under sub-section (1).

  (Appeals)

• 110H. (1) Any person aggrieved by any order made by the Controller under sections 34, 34A, 34B, 34C, 34E, 34F, 34G, sub-section (1), (4) and (7) of section 64UM or section 64VC may, within a period of thirty days from the date from the date of such order prefer an appeal against such order to the Central Government and the Government may, by order, confirm, modify or reverse the order made by the Controller and the order so made by the Central Government shall be final.

  (Acquisitions of surrender values by policy)

• 113. (1) A policy of life insurance under which the whole of the benefits become payable either on the occurrence, or at a fixed interval or fixed intervals after the occurrence, of a contingency which is bound to happen, shall, if all premiums have been paid for at least three consecutive years in the case of a policy issued by an insurer or five years in surrender value, to which shall be added the surrender value of any subsisting bonus already attached to the policy, and every such policy issued by an insurer shall show the guaranteed surrender value of the policy at the close of each year after the second year of its currency or at the close of each period of three years throughout the currency of the policy:

• Provided that the requirements of this sub-section as to the addition of the surrender value of the bonus attaching to a policy at surrender shall be deemed to have been complied with where the insurer shows on the policy the guaranteed surrender value of the policy by means of a formula accepted in this behalf by the Controller as satisfying the said requirements:

• Provided further that the requirements of this sub-section as to the showing of the guaranteed surrender value on a policy shall not take effect until after the expiry of six months from such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf.

• (2) Notwithstanding any contract to the contrary, a policy which has acquired a surrender value shall not lapse by reason of the non-payment or further premiums but shall be kept alive to the extent of the paid-up sum insured, and the paid-up sum insured shall for the purposes of this sub-section include in full all subsisting reversionary bonuses that have already attached to the policy, and shall, where the policy is one on which the maximum number of annual premiums payable is fixed and the premiums are of uniform amount, be before the inclusion of such bonuses the same proportion as the total period for which premiums have already been paid bears to the maximum period for which premiums were originally payable.

• (3) A policy kept alive to the extent of the paid-up sum insured under sub-section (2) shall not be entitled by virtue of that sub-section to participate in any profits declare distributable after the conversion of the policy into a paid-up policy.

• (4) sub-section (2) and sub-section (3 shall not apply-- )

  1. where the paid-up sum insured by a policy, being a policy issued by an insurer, is less than one hundred rupees inclusive of any attached bonus, or takes the form of an annuity of less than twenty-five rupees, or where the paid-up sum insured by a policy, being a policy issued by a provident bonus or kept the form of an annuity or less than twenty-five rupees, or

  2. where the parties after the default has occurred in the payment of the premium agree in writing to some other arrangement, or

  3. to policies in which the surrender value is automatically applied under the terms of the contract to maintaining the policy in force after its lapse through non-payment of premium.

  (Power of Central Government to make rules)

• 114.(a) The Central Government may, subject to the condition of previous publication by notification in the Official Gazette,, make rules to carry out the purposes of this Act.

• (2) In particular and without prejudice to the generality of the foregoing power, such rules may prescribe---

  1. the qualifications to be possessed by actuaries;

  2. the manner in which licenses to act as insurance agent may be applied for, issued or cancelled;

• (ii) the term of office of and the allowances payable to members of the Advisory Committee constituted under section 101B, the procedure to be followed by, and the quorum necessary for the transaction of business of, the Committee and the manner of filling casual vacancies therein.

  (Summary of returns to be published)

• 116A. The Central Government shall every year cause to be published, in such manner as it may direct, a summary of the accounts, balance-sheets, statements, abstracts and other returns under this Act or purporting to be under this Act which have been furnished in pursuance of the provisions of this Act to the Controller during the year preceding the year of publication, and may append to such summary any note of the Controller or of the Central Government and any correspondence:

• Provided that nothing in this section shall require the publication of the statement referred to in sub-section (2) of section 10 or the returns referred to in sub-section (1) or section 28 for section 28A or section 28B.

  [Previous]   [IRDA]