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Legal Library
THE INSURANCE ACT, 1938
All Acts
THE INSURANCE ACT, 1938
ACT NO. 4 OF 1938 · Enacted [26th February, 1938.] · 253 sections
PRELIMINARY
Section 1.
Short title, extent and commencement.
Section 2.
Definitions.
Section 2A.
Interpretation of certain words and expressions.
Section 2B.
Appointment of Controller of Insurance.
PROVISIONS APPLICABLE TO INSURERS
Section 2C.
Prohibition of transaction of insurance business by certain persons.
Section 2CA.
Power of Central Government to apply provisions of this Act to Special Economic Zones.
Section 2CB.
Properties in India not to be insured with foreign insurers except with the permission of Authority.
Section 2D.
Insurers to be subject to this Act while liabilities remain unsatisfied.
Section 2E.
[Omitted.].
Section 3.
Registration.
Section 3A.
Payment of annual fee by insurer.
Section 3B.
Certification of soundness of terms of life insurance business.
Section 4.
Minimum limits for annuities and other benefits secured by policies of life insurance.
Section 5.
Restriction on name of insurer.
Section 6.
Requirements as to capital.
Section 6A.
Requirements as to capital structure and voting rights and maintenance of registers beneficial owners of shares.
Section 6AA.
[Omitted.].
Section 6B.
Provision for securing compliance with requirements relating to capital structure.
Section 6C.
[Omitted.].
Section 7.
[Omitted.].
Section 8.
[Omitted.].
Section 9.
[Omitted.].
Section 10.
Separation of accounts and funds.
Section 11.
Accounts and balance-sheet.
Section 12.
Audit.
Section 13.
Actuarial report and abstract.
Section 14.
Record of policies and claims.
Section 15.
Submission of returns.
Section 16.
[Omitted.].
Section 17.
[Omitted.].
Section 17A.
[Omitted.].
Section 18.
Furnishing reports.
Section 19.
Abstract of proceedings of general meetings.
Section 20.
Custody and inspection of documents and supply of copies.
Section 21.
Powers of Authority regarding returns.
Section 22.
Powers of Authority to order revaluation.
Section 23.
Evidence of documents.
Section 24.
[Omitted.].
Section 25.
Returns to be published in statutory forms.
Section 26.
Alterations in the particulars furnished with application for registration to be reported.
INVESTMENT, LOANS AND MANAGEMENT
Section 27.
Investment of assets.
Section 27A.
Further provisions regarding investments.
Section 27B.
Provisions regarding investments of assets of insurer carrying general insurance business.
Section 27C.
Investment by insurer in certain cases.
Section 27D.
Manner and conditions of investment.
Section 27E.
Prohibition for investment of funds outside India.
Section 28.
Statement and return of investment of assets.
Section 29.
Prohibition of loans.
Section 30.
Liability of directors, etc., for loss due to contravention of section 27, 27A, 27B, 27C, 27D or section 29.
Section 31.
Assets of insurer how to be kept.
Section 31A.
Provisions relating to managers, etc.
Section 31B.
Power to restrict payment of excessive remuneration.
Section 32.
[Omitted.].
Section 32A.
Prohibition of common officers and requirement as to whole-time officers.
Section 32B.
Insurance business in rural and social sectors.
Section 32C.
Obligations of insurer in respect of rural or unorganised sector and backward classes.
Section 32D.
Obligation of insurer in respect of insurance business in third party risks of motor vehicles.
INVESTIGATION
Section 33.
Power of investigation and inspection by Authority.
APPOINTMENT OF STAFF
Section 33A.
Power to appoint staff.
POWER TO ISSUE DIRECTIONS
Section 34.
Power of the Authority to issue directions.
CONTROL OVER MANAGEMENT
Section 34A.
Amendment of provisions relating to appointments of managing directors, etc., to be subject to previous approval of the Controller.
Section 34B.
Power of Authority to remove managerial persons from office.
Section 34C.
Power of Authority to appoint additional directors.
Section 34D.
Sections 34B and 34C to override other laws.
Section 34E.
Further powers.
Section 34F.
Power of Authority to issue directions regarding re-insurance treaties, etc.
Section 34G.
Power of Authority to order closure of foreign branches.
Section 34H.
Search and seizure.
AMALGAMATION AND TRANSFER OF INSURANCE BUSINESS
Section 35.
Amalgamation and transfer of insurance business.
Section 36.
Sanction of amalgamation and transfer by Controller.
Section 37.
Statements required after amalgamation and transfer.
Section 37A.
Power of Authority to prepare Scheme of Amalgamation.
ASSGNMENT OR TRANSFER OF POLICIES AND NOMINATIONS
Section 38.
Assignment and transfer of insurance policies.
Section 39.
Nomination by policy-holder.
COMMISSION AND REBATES AND LICENSING OF AGENTS
Section 40.
Prohibition of payment by way of commission or otherwise for procuring business.
Section 40A.
[Omitted.].
Section 40B.
Limitation of expenses of management in life insurance business.
Section 40C.
Limitation of expenses of management in general insurance business.
Section 41.
Prohibition of rebates.
Section 42.
Appointment of insurance agents.
Section 42A.
Prohibition of insurance business through principal agent, special agent and multilevel marketing.
Section 42D.
Issue of registration to intermediary or insurance intermediary.
Section 42E.
Commission, brokerage or fee payable to intermediary or insurance intermediary.
Section 43.
Register of insurance agents.
Section 44.
[Omitted.].
Section 44A.
Power to call for information.
SPECIAL PROVISIONS OF LAW
Section 45.
Policy not to be called in question on ground of mis-statement after two years.
Section 46.
Application of the law in force in India to policies issued in India.
Section 47.
Payment of money into Court.
Section 47A.
[Omitted.].
Section 48.
[Omitted.].
Section 48A.
Insurance agent or intermediary or insurance intermediary not to be director in insurance company.
Section 48B.
Further provision regarding directors.
Section 48C.
[Omitted.].
Section 49.
Restriction On dividends and bonuses.
Section 50.
Notice of options available to the assured on the lapsing of a policy.
Section 51.
Supply of copies of proposals and medical reports.
Section 52.
Prohibition of business of dividing principle.
ACQUISITION OF THE UNDERTAKINGS OF INSURERS IN CERTAIN CASES
Section 52-I.
[Omitted.].
Section 52H.
[Omitted.].
Section 52J.
[Omitted.].
Section 52K.
[Omitted.].
Section 52L.
[Omitted.].
Section 52M.
[Omitted.].
Section 52N.
[Omitted.].
MANAGEMENT BY ADMINISTRATOR
Section 52A.
When Administrator for management of insurance business may be appointed.
Section 52B.
Powers and duties of the Administrator.
Section 52BB.
Powers of Administrator respecting property liable to attachment under section 106.
Section 52C.
Cancellation of contracts and agreements.
Section 52D.
Termination of appointment of Administrator.
Section 52E.
Finality of decision appointing Administrator.
Section 52F.
Penalty for withholding documents or property from Administrator.
Section 52G.
Protection of action taken under sections 52A to 52D.
WINDING UP
Section 53.
Winding up by the Court.
Section 53A.
Unpaid-up share capital.
Section 54.
Voluntary winding up.
Section 55.
Valuation of liabilities.
Section 56.
Application of surplus assets of life insurance fund in liquidation or insolvency.
Section 57.
Winding up of secondary companies.
Section 58.
Schemes for partial winding up of insurance companies.
Section 59.
[Omitted.].
Section 60.
Notice of policy values.
Section 61.
Power of Court to reduce contracts of insurance.
Section 61A.
Appeal to National Company Law Appellate Tribunal.
SPECIAL PROVISIONS RELATING TO EXTERNAL COMPANIES
Section 62.
Power of Central Government to impose reciprocal disabilities on non-Indian companies.
Section 63.
Particulars to be filed by insurers established outside India.
Section 64.
Books to be kept by insurers established outside India.
LIFE INSURANCE COUNCIL AND GENERAL INSURANCE COUNCIL AND COMMITTEES THEREOF
Section 64-I.
[Omitted.].
Section 64-O.
[Omitted.].
Section 64A.
[Omitted.].
Section 64B.
[Omitted.].
Section 64C.
Councils of Life Insurance and General Insurance.
Section 64D.
Authorisation to represent in Councils.
Section 64E.
Authorities of the Life Insurance Council and the General Insurance Council.
Section 64F.
Executive Committees of the Life Insurance Council and the General Insurance Council.
Section 64G.
Resignation and filling up of casual vacancies.
Section 64H.
Duration and dissolution of Executive Committees.
Section 64J.
Functions of Executive Committee of Life Insurance Council.
Section 64K.
Executive Committee of Life Insurance Council may advise in controlling expenses.
Section 64L.
Functions of Executive Committee of General Insurance Council.
Section 64M.
Executive Committee of General Insurance Council may advise in controlling expenses.
Section 64N.
Power of the Executive Committees to act together in certain cases.
Section 64P.
[Omitted.].
Section 64Q.
[Omitted.].
Section 64R.
General power of Life Insurance Council and General Insurance Council.
Section 64S.
[Omitted.].
Section 64T.
[Omitted.].
TARIFF ADVISORY COMMITTEE AND CONTROL OF TARIFF RATES
Section 64U.
Establishment of Tariff Advisory Committee.
Section 64UA.
Composition of the Advisory Committee.
Section 64UB.
Power to make rules in respect of matters in this Part.
Section 64UC.
Power of the Advisory Committee to regulate rates, advantages, etc.
Section 64UD.
Transitional provisions.
Section 64UE.
Power of the Advisory Committee require information, etc.
Section 64UF.
Assets and liabilities of the General Insurance Council to vest in the Advisory Committee.
Section 64UG.
Contracts, etc., to be effective by or against the Advisory Committee.
Section 64UH.
Employees, etc., to continue.
Section 64UI.
Duty of person having custody or control of property to deliver such property to the Advisory Committee.
Section 64UJ.
Power of the Advisory Committee to constitute Regional Committees.
Section 64UK.
Levy of fees by the Advisory Committee.
Section 64UL.
Power of remove difficulties.
Section 64ULA.
Transitional provisions.
Section 64UM.
Licensing of surveyors and loss assessors.
SOLVENCY MARGIN, ADVANCE PAYMENT OF PREMIUM AND RESTRICTIONS ON THE OPENING OF A NEW PLACE OF BUSINESS
Section 64V.
Assets and liabilities how to be valued.
Section 64VA.
Sufficiency of assets.
Section 64VB.
No risk to be assumed unless premium is received in advance.
Section 64VC.
Restrictions on the opening of a new place of business.
[Omitted.].
Section 65.
[Omitted.].
Section 65A.
[Omitted.].
Section 66.
[Omitted.].
Section 67.
[Omitted.].
Section 68.
[Omitted.].
Section 69.
[Omitted.].
Section 70.
[Omitted.].
Section 70A.
[Omitted.].
Section 70B.
[Omitted.].
Section 71.
[Omitted.].
Section 72.
[Omitted.].
Section 73.
[Omitted.].
Section 73A.
[Omitted.].
Section 74.
[Omitted.].
Section 75.
[Omitted.].
Section 76.
[Omitted.].
Section 77.
[Omitted.].
Section 78.
[Omitted.].
Section 79.
[Omitted.].
Section 80.
[Omitted.].
Section 81.
[Omitted.].
Section 82.
[Omitted.].
Section 83.
[Omitted.].
Section 84.
[Omitted.].
Section 85.
[Omitted.].
Section 86.
[Omitted.].
Section 87.
[Omitted.].
Section 87A.
[Omitted.].
Section 88.
[Omitted.].
Section 89.
[Omitted.].
Section 90.
[Omitted.].
Section 90A.
[Omitted.].
Section 91.
[Omitted.].
Section 92.
[Omitted.].
Section 93.
[Omitted.].
Section 94.
[Omitted.].
Section 94A.
[Omitted.].
Section 95.
[Omitted.].
Section 96.
[Omitted.].
Section 97.
[Omitted.].
Section 98.
[Omitted.].
Section 98A.
[Omitted.].
Section 99.
[Omitted.].
Section 100.
[Omitted.].
Section 101.
[Omitted.].
RE-INSURANCE
Section 101A.
Re-insurance with Indian re-insurers.
Section 101B.
Advisory Committee.
Section 101C.
Examination of re-insurance treaties.
MISCELLANEOUS
Section 102.
Penalty for default in complying with, or act in contravention of this Act.
Section 103.
Penalty for carrying on insurance business in contravention of sections 3.
Section 104.
Penalty for contravention of sections 27, 27A, 27B, 27D and 27E.
Section 105.
Wrongfully obtaining or withholding property.
Section 105A.
Offences by companies.
Section 105B.
Penalty for failure to comply with sections 32B, 32C and 32D.
Section 105C.
Power to adjudicate.
Section 105D.
Factors to be taken into account by the adjudicating officer.
Section 106.
Power of Court to order restoration of property of insurer or compensation in certain cases.
Section 106A.
Notice to and hearing of Authority.
Section 107.
[Omitted.].
Section 107A.
Chairman, etc., to be public servants.
Section 108.
Power of Court to grant relief.
Section 109.
Cognizance of offences.
Section 110.
Appeal to Securities Appellate Tribunal.
Section 110A.
Delegation of powers and duties of Chairperson of the Authority.
Section 110B.
Signature of documents.
Section 110C.
Power to call for information.
Section 110D.
Certain claims for compensation barred.
Section 110E.
[Omitted.].
Section 110F.
Provisions applicable to state Governments, etc.
Section 110G.
[Omitted.].
Section 110H.
[Omitted.].
Section 110HA.
Penalty to be recoverable as arrear of land revenue.
Section 111.
Service of notices.
Section 112.
Declaration of interium bonuses.
Section 113.
Acquisition of surrender value by policy.
Section 114.
Power of Central Government to make rules.
Section 114A.
Power of Authority to make regulations.
Section 115.
Alteration of forms.
Section 116.
Power to exempt from certain requirements.
Section 116A.
Summary of returns to be published.
Section 117.
Saving of provisions of Indian Companies Act, 1913.
Section 118.
Exemptions.
Section 119.
Inspection and supply of copies of published prospectus, etc.
Section 120.
Determination of market value of securities deposited under this Act.
Section 121.
[Repealed.].
Section 122.
[Repealed.].
Section 123.
[Repealed.].