THE INSURANCE ACT, 1938

1 CONTENTS THS INSURANCE ACT, 1938 Arrangement of Sections PART I PRELIMINARY 1. Short title, extent and commencement 2. Definitions 2A. Interpretation of certain words and expressions 2B Appointment of Authority of INSURANCE PART II PROVISIONS APPLICABIJE TO INSURERS 2C. Prohibition of transaction of INSURANCE business by certain persons 2D. Insurers to be subject to this Act while liabilities Main unsatisfied 2E. This Act not to apply to certain insurers, ceasing to enter into new Contracts before commencement of Act 3. Registration 3A. Renewal of registration 3B. Certification of soundness of terms of life INSURANCE business 4.

2 Minimum limits for annuities and other benefits secured by policies of life INSURANCE 5. Restriction on name of insurer 6. Requirement as to capital 6A. Requirements as to capital structure and voting rights and maintenance of registers of beneficial owners of shares 6AA. Manner of divesting excess shareholding by promoter in certain cases 6B. Provision for securing compliance with requirements relating to Capital structure 6C. Conversion of company limited by shares into company limited by guarantee 7.

3 Deposits 8. Reservation of deposits 9. Refund of deposit 10. Separation of accounts and funds 11 Accounts and balance sheet 12. Audit 13 Actuarial report and abstract 14. Register of policies and register of claims 15. Submission of returns 16. Returns by insurers established outside India 17. Exemption from certain provisions of the Indian Companies Act, 1913 17A. This Act not to apply to preparation of accounts, etc., for periods prior to this Act coming into force 18. Furnishing reports 19. Abstract of proceedings of general meetings 20.

4 Custody and inspection of documents and supply of copies 21. Powers of Authority regarding returns 22. Powers of Authority to order revaluation 23. Evidence of documents 24. [Repealed] 25. Returns to be published in statutory forms 26. Alterations in the particulars furnished with application for registration to be reported Investment, Loans and Management 27. Investment of assets 27A. Further provisions regarding investments 27B. Further provisions regarding investments 27C. Prohibition for investment of funds outside India 27D. Manner and conditions of investment 28.

5 Statement of investments of assets 28A. Return of investments relating to controlled fund and changes therein 28B. Returns of investments relating to the assets and changes therein 29. Prohibition of loans 30. Liability of directors, etc., for loss due to contravention of sections 27, 27A and 29 31. Assets of insurer how to be kept 31A. Provisions relation to managers, etc. 3IB. Power to restrict payment of excessive remuneration 32. Limitation on employment of managing agents and on the remuneration payable to them 32A. Prohibition of common officers and requirement as to whole time officers 32B.

6 INSURANCE business in rural or social sector 32C. Obligations of insurer in respect of rural or unorganized sector and backward classes Investigation 33. Power of investigation and inspection by authority Appointment of Staff 33A Power to appoint staff 34. Power of the Authority to issue directions Control over Management 34A. Amendment of provisions relating to appointments of managing directors, etc., to be subject to previous approval of the Authority 34B. Power of Authority to remove managerial persons from office 34C. Power of Controller to appoint additional directors 34D.

7 Sections 34B and 34C to override other laws 34E. Further powers 34F. Power of Authority to issue directions regarding re- INSURANCE treaties, etc. 34G. Power of Authority to order closure of foreign branches 34H. Search and seizure Amalgamation and Transfer of INSURANCE Business 35. Amalgamation and transfer of INSURANCE business 36. Sanction of amalgamation and transfer by Authority 37. Statements required after amalgamation and transfer 37A. Power of Authority to prepare scheme of amalgamation Assignment or Transfer of Policies and Nominations 38. Assignment and transfer of INSURANCE policies 39. Nomination by policy holder Commission and Rebates and Licensing of Agents 40.

8 Prohibition of payment by way of commission or otherwise for procuring business 40A. Limitation of expenditure on commission 40B. Limitation of expenses of management in life INSURANCE business 4OC. Limitation of expenses of management in general INSURANCE business 41. Prohibition rebates 42. Licensing of INSURANCE agents 42A. Registration of principal agents, chief agents and special agents 42B. Regulation of employment of principal agents 42C. Regulation of employment of chief agents and special agents 42D. Issue of license to intermediary or INSURANCE intermediary 42E.

9 Commission, brokerage or fee payable to intermediary or INSURANCE intermediary 43. Register of INSURANCE agents 44. Prohibition of cessation of payments of commission 44A. Power to call far information Special Provisions of Law 45. Policy not to be called in question on ground of mis-statement after two years 46. Application of the law in force in India to policies issued in India 47. Payment of money into court 47A. Claims on small life INSURANCE Policies 48. Directors of insurers being companies 48A. Life INSURANCE agents not to be directors of life INSURANCE companies 48B.

10 Further provision regarding directors 48C. [Repealed] 49. Restriction on dividends and bonus 50. Notice of options available to the assured on the lapsing of a policy 51. Supply of copies of proposals and medical reports 52. Prohibition of business on dividing principle Management by Administrator 52A. When Administrator for management of INSURANCE business may be appointed 52B. Powers and duties of the Administrator 52BB. Powers of Administrator respecting property liable to attachment under section 106 52C. Cancellation of contracts and agreements 52D.