This Bill is passed to amend the Insurance Act, 1938, General Insurance Business (Nationalisation) Act 1972, and Insurance Regulator and Development Authority Act 1999 enacted in 66th year of Republic of India by the parliament which will come into force on 26th day of December 2014 and called as Insurance Laws (Amendment) Act 2015.
Under Section 2 of the Bill amendment is brought relating to words used as Indian Companies Act 1913 and Companies Act 1956 are substituted with the words in Companies Act 2013. The words Actuary and Authority has got the meaning under Actuaries Act 2006, and Insurance Regulatory and Development Authority of India. Clause 5(A) has been omitted and Clause 6(C) has been inserted relation to Health Insurance Business. Clause (7A) has been substituted with regard to Indian Insurance Company meaning with reference to Companies Act 2013 and Insurance Laws (Amendment) Act 2015. Clause 8 has been omitted and in Clause 8A words like general insurance business or health insurance business is inserted. Word Insurer is substituted in Clause 9 of the Act.
Clause 10-16 of Insurance Act some words are omitted and some new words are inserted. Section 2CB which states that no person can renew insurance policy on property in India with a foreign insurer without prior permission of the authority and who contravenes it is punished with penalty of 5 crore rupees has been inserted in the Insurance Act and 2E is omitted. In Section 3 of Insurance Act sub-section (2) has got amendment with regard to registration (2C) which states about appeal on the decision of authority to the Securities Appellate Tribunal is also amended and sub-section 2D is omitted. Sub-section (3) (4) (5) (5A) also has got some changes. Sub-section (5C) also got amendment which relates to suspension of registration.
There is a substitution of new section for Section 3A relating to payment of annual fee by insurer. Section 4 also has some substitution regarding minimum limits for annuities and benefits secured by life insurance policies. Section 5 also has been changes and section 6 amended regarding requirement as to capital. Section 6A which deals with registered public company cannot carry on business until certain conditions are followed has been amended. Sub-sections of 6A (3) (6)(7)(8)(9)(10) and Section 6AA, 6C, 7, 8, 9 of Insurance Act has been omitted. Section 10 has been amended and there is a substitution of new section for Section 11 regarding accounts and balance sheet. There is substitution in Section 12 relating to audits and amendment to Section 13 of the Insurance Act.
Section 14 has been substituted which relates to record of policies and claims. Section 15 also amended which relates to submission of returns. Section 16, 17, 17A has been omitted. Section 20, 21 and 22 is amended. Section 27, 27A, 27B 27C and 27D changed regarding Investment of assets. Investment by insurer in certain cases and general insurance business provisions also amended, manner and condition of investment, prohibition for investment of funds outside India are amended. Section 28A and 28B is amended regarding statement and return of investment of assets. Section 29 regarding prohibition of loans is amended. Section 30 also amended regarding liability of directors for loss due to contravention of Section 27 (A, B, C, D) or 29. Section 31, 31A, 31B also has been amended regarding power to restrict payment of excessive remuneration. Section 32 omitted and 32A, 32B amended and 32D added regarding insurer’s obligation with respect to insurance business in 3rd party risk of motor vehicles. Section 33 regarding power to investigate and inspect by the authority is amended. Section 34B, 34C, 34H amended and 34G omitted. Section 35 amended and Section 36 amended regarding sanction of amalgamation and transfer by authority.
Section 38, 39, 40 amended regarding assignment and transfer of insurance policies, nomination by policy holder, prohibition of payment by way of commission to procure business. Section 40A omitted and 40B and 40C amended regarding the limits of expenses of management in insurance business, general health insurance and re-insurance. Changes in Section 41, 42 regarding appointment of insurance agents and 42A, B, C amended regarding prohibition of insurance business via agent, multilevel marketing and special agents. Section 42E amended regarding conditions for intermediary insurance and Section 43 regarding record of insurance agents is amended.
Section 44 omitted and 44A and 45 amended relating to power to call for information and policy cannot be called in question just for misstatement after 3 year period. 47A and 48 is omitted and 48A is substituted regarding insurance agent cannot be a director in any insurance company and Section 49 amended. Section 52, 52A amended regarding prohibition of business on dividing principle and when an administrator for management of insurance business can be appointed. Section 52BB amended Section 52D substituted regarding termination and appointment of administrator. Section 52E, F, G amended and Section 52H to 52N is omitted.
Section 53 and 58 is amended but 59, 64A, 64B is omitted. Section 64C and 64D is amended regarding council of general insurance and life insurance, authorisation to represent in council. Section 64F is substituted regarding executive committees of life insurance council and general insurance council. Section 64I omitted and 64J, L, N, R amended but 64S, 64T, 64U, 64UA – 64UL is omitted. New Section 64ULA is added regarding transitional provisions in the Act. Section 64UM regarding surveyors is amended and 64V and 64VA, 64VC amended regarding how to value the assets and liabilities, sufficiency of assets, restrictions on opening of new place of business. Part III and IIIA and IV omitted. Section 102, 103 and 104 some changes in it regarding penalty for carrying on business which is in contravention of Section 3 of the Act and contravention of Section 27, 27A, 27B, 27D and 27E of the Act. Section 105 amended. New Section 105B and C substituted regarding penalty for failure to comply with Sections 32B, C and D regarding power to adjudicate and factors that the adjudicating officer has to take. Amendment to Section 106A and omission of Section 107, 107A. Section 109 changes in regarding cognizance of offence and substitution of new section 110 regarding appeal to securities appellate tribunal is added in the Act. Section 110E, 110G, 110H is omitted but 110HA inserted regarding penalty with regard to arrears of land revenue that can be recovered. Section 111 amended and substitution of Section 113 regarding acquisition of surrender value by policy. Section 114, 114A amended but 5th, 6th and 8th schedules are omitted.
New Section 10B is inserted in Amendments to General Insurance Business (Nationalisation) Act 1972 regarding enhancement of equity capital of general insurance companies. Section 25 of this Act is omitted. Section 2, 3 and 16 is amended. Insurance Laws (Amendment) Ordinance 2014 is repealed but anything done under the above said all Acts shall be deemed to have done under the provisions of the said Acts.
by Sushma Javare.