Section Text
Section 64UL Power to remove difficulties If any difficulty arises in giving effect to the provisions of this Part, the Central Government may, by order, make such provisions or give such directions not inconsistent with the provisions of this Act as may appear to it to be necessary or expedient for the removal of the difficulty :
Provided that no such power shall be exercised after the expiry of a period of four years from the commencement of this Part. Section 64UM Licensing of surveyors and loss assessors (A) Save as otherwise provided in this section, no person shall act as a surveyor or loss assessor in respect of general insurance business after the expiry of a period of one year from the commencement of the Insurance. (Amendment) Act, 1968, unless he holds a valid licence issued to him by the Controller.
(B) Every person who intends to act as a sureyor or loss assessor after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall make an application to the Controller within such time, in such form, in such manner and on payment of such fee, not exceeding rupees two hundred and fifty, as may be prescribed.
(C) Every licence issued under this section shall remain in force, unless cancelled earlier, for a period of five years from the date of issue thereof, and may be renewed for a period of five years at a time, on payment of such fee, not exceeding rupees two hundred, as may be prescribed.
(D) No licence to act as a surveyor or loss assessor shall be issued unless-
(i) the applicant, where he is an individual, satisfies the Controller that he-
(a) has been in practice as a surveyor or loss assessor on the 26th day of October, 1968, or (b) holds a degree of a recognised University in any branch of engineering, or (c) is a fellow or associate member of the Institute of Chartered Accountants of India or the Institute of Cost and Works Accountants of India, or (d) possesses actuarial qualifications or holds a degree or diploma of any recognised University or institute in relation to insurance, or (e) holds a diploma in insurance granted or recognised by the Government, or (f) possesses such other technical qualification as may be prescribed, and (g) does not suffer from any of the disqualifications mentioned in sub-section (4) of section 42;
(ii) the applicant, where he is a company or firm, satisfies the Controller that all his directors or partners, as the case may be possess one or more of the qualifications specified in clause (i) and none of such directors or partners suffer from any of the disqualifications mentioned in sub-section (4) of section 42.
(E) Every application for the renewal of the licence shall be made at least thirty days before the expiry of the period of validity thereof.
(F) The Controller may, if he is satisfied that any licence issued or renewed under this section has been lost or destroyed, issue a duplicate licence on payment of a fee of rupees five and the duplicate licence so issued shall remain in force for the remainder of the period of validity of the licence in lieu of which it is issued.
(G) Without prejudice to the powers conferred by sub-section (7), the Controller, if satisfied that the holder of any licence has made a statement which is false in material particulars with regard to his eligibility for obtaining such licence or has, after the issue or removal of such licence, acquired any of the disqualifications mentioned in sub-section (4) of section 42, may, after giving a reasonable opportunity to the holder of such licence of being heard, by order cancel such licence and notify such cancellation in the Official Gazette.
(2) No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the Controller, be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as "approved surveyor or loss assessor"):
Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.
(3) The Controller may, at any time, in respect of any claim of the nature referred to in sub-section (2), call for an independent report from any other approved surveyor or loss assessor specified by him and such surveyor or loss assessor shall furnish such report to the Controller within such time as may be specified by the Controller or if no time limit has been specified by him within a reasonable time and the cost of, or incidental to, such report shall be borne by the insurer.
(4) The Controller may, on receipt of a report referred to in sub-section (3), issue such directions as he may consider necessary with regard to the settlement of the claim including any direction to settle a claim at a figure less than, or more than, that at which it is proposed to settle it or it was settled and the insurer shall be bound to comply with such directions:
Provided that where the Controller issues a direction for settling a claim at a figure tower than that at which it has already been settled, the insurer shall be deemed to comply with such direction if he satisfies the Controller that all reasonable steps, with due regard to the question whether the expenditure involved is not disproportionate to the amount required to be recovered have been taken with due dispatch by him :
Provided further that no direction for the payment of a lesser sum shall be made where the amount of the claim has already been paid and the Controller is of opinion that the recovery of the amount paid in excess would cause undue hardship to the insured :
Provided also that nothing in this section shall relieve the insurer from any liability, civil or criminal, to which he would have been subject but for the provisions of this sub-section.
(5) No insurer shall, after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, pay to any person any fee or remuneration for surveying, verifying or reporting on a claim of loss under a policy of insurance, unless the person making such survey, verification or report is an approved surveyor or loss assessor.
(6) Where, in the case of a claim of less than twenty thousand rupees in value on any policy of insurance it is not practicable for an insurer to employ an approved surveyor or loss assessor without incurring expenses disproportionate to the amount of the claim, the insurer may employ any other person (not being a person disqualified for the time being employed as a surveyor or loss assessor) for surveying such loss and may pay such reasonable fee or remuneration to the person so employed as he may think fit.
(7) If the Controller is satisfied that an approved surveyor or loss assessor has been guilty of willfully making a false statement knowing it to be false or of being knowingly a party to the settlement of a claim in a fraudulent manner, he may, after giving such surveyor or loss assessor an opportunity of being heard, cancel the licence issued to him with effect from such date as may be specified by him and shall notify such cancellation in the Official Gazette.
(8) Any surveyor or loss assessor whose licence has been cancelled shall not be eligible for having a licence to act as a surveyor or loss assessor for a period of three years from the date on which the cancellation is notified in the Official Gazette.
(9) The Controller may in respect of any claim of value of less than twenty thousand rupees on an insurance policy, if the claim has not been or is not proposed to be reported upon by a surveyor or loss assessor, direct that such claim shall be reported upon by an approved surveyor or loss assessor and where the Controller makes such direction, the provisions of sub-sections (3) and (4) shall apply in respect of such claim.
(10) Where, in relation to any class of claims, the Central Government is satisfied that it is customary to entrust the work of survey or loss assessment to any person other than a licensed surveyor or loss assessor, or it is not practicable to make any survey or loss assessment, it may, by an order published in the Official Gazette, exempt such class of claims from the operation of this section.] PART 2C SOLVENCY MARGIN, ADVANCE PAYMENT OF PREMIUM AND RESTRICTIONS ON THE OPENING OF A NEW PLACE OF BUSINESS 489 Part II C consisting of Sections 64V to 64VC inserted by the Insurance (Amendment) Act, 1968 (62 of 1968), Section 29 (1-6-1969).[PART Section 64-V Assets and liabilities how to be valued (1) For the purpose of ascertaining compliance with the provisions of section 64-VA.--
(i) assets shall be valued at values not exceeding their market or realisable value and the assets hereafter mentioned shall be excluded to the extent indicated, namely :-
(a) agents' balances and outstanding premiums in India, to the extent they are not realised within a period of thirty days;
(b) agents' balances and outstanding premiums outside India, to the extent they are not realisable;
(c) sundry debts, to the extent they are not realisable;
(d) advances of an unrealisable character;
(e) furniture, fixtures, dead stock and stationery;
(f) deferred expenses;
(g) profit and loss appropriation account balance and any fictitious assets other than pre-paid expenses;
(ii) a proper value shall be placed on every item of liability and liabilities in respect of share capital, general reserve and other reserves of similar nature not created to meet specific liabilities and investment reserve, reserve for bad and doubtful debts, and depreciation fund shall be excluded and liabilities hereafter mentioned shall be included to the extent indicated, namely:-
(a) provision for dividends declared or recommended, and outstanding dividends in full;
(b) reserves for unexpired risks in respect of-
(i) fire and miscellaneous business, 40 per cent.;
(ii) marine cargo business, 40 per cent.; and (iii) marine hull business, 100 per cent. of the premium, net of re-insurances, during the preceding twelve months;
(c) estimated liability in respect of outstanding claims, in full;
(d) amount due to insurance companies carrying on insurance business, in full;
(e) amounts due to sundry creditors, in full;
(f) provision for taxation, in full.
(2) Every insurer shall furnish to the Controller with his returns under section 15 or section 16, as the case may be, a statement certified by an auditor, of his assets and liabilities assessed in the manner required by this section as on the 31st day of December of the preceding year. Section 64VA Sufficiency of assets (1) An insurer shall, at all times, maintain an excess of the value of his assets over the amount of his liabilities of not less than the amount arrived at as follows (hereafter in this section referred to as the "relevant amount"), namely:-
(i) in the case of an insurer whose total premium less re-insurances in respect of general insurance business (hereafter in this sub-section referred to as the "said income") in the preceding twelve months did not exceed five crores of rupees, one-fifth of the said income subject to a minimum of-
(a) five lakhs of rupees in the case of an insurer who is a co-operative society registered under the Co-operative Societies Act, 1912, or any other law for the time being in force in any State relating to co-operative societies, or (b) ten lakhs of rupees in the case of any other insurer; and (ii) in the case of an insurer whose said income in the preceding twelve months exceeded five crores of rupees, the aggregate of one-fifth of the first five crores of rupees of the said income and one-tenth of the amount by which the said income in the preceding twelve months exceeded five crores or rupees:
Provided that where a number of insurers occupying the status of parent and subsidiary companies prepare, under the laws of the country of origin of the parent company, a consolidated balance-sheet, the provisions of this sub-section shall apply to such of them as are not members of any group as if they constituted a single insurer subject to the further condition that the relevant amount shall, in no case, be less than a sum equal to-
(i) the number of such insurers multiplied by ten lakhs of rupees, or (ii) where all the insurers are co-operative societies registered under the Co-operative Societies Act, 1912, or any other law for the time being in force in any State relating to co-operative societies the number of such insurer multiplied by five lakhs of rupees :
Provided further that if in respect of any insurer the Central Government is satisfied that either by reason of an unfavourable claim experience or because of a sharp increase in the volume of new business or for any other reason compliance with the provisions of this sub-section would cause undue hardship to the insurer, it may direct that for such period and subject to such conditions as it may specify, the provisions of this sub-section shall apply to that insurer with the modification that instead of the proportion of one-fifth wherever mentioned in this sub-section, such other proportion being not less than one-tenth as may be specified by that Government shall be applicable to that insurer:
Provided also that in the case of an insurer carrying on insurance business at the commencement of the Insurance (Amendment) ACT. 1968, it shall be sufficient compliance with the provisions of this sub-section until the 31st December, 1972 or until such subsequent date, not being later than 31st December, 1976 as the Central Government may at its discretion allow for any particular insurer if he progressively brings up the excess of the value of his assets over the amount of his liabilities, in such manner as may be prescribed to the relevant amount.
(2) An insurer who does not comply with the provisions of sub-section (1) shall be deemed to be insolvent and may be wound up by the Court.
(3) The Controller shall be entitled at any time to take such steps as he may consider necessary for the inspection or verification of the assets and liabilities of any insurer or for securing the particulars necessary to establish that the requirements of this section have been complied with as on any date and the insurer shall comply with any requisition made in this behalf by the Controller, and if he fails to do so within two months, from the receipt of the requisition, he shall be deemed to have made default in complying with the requirements of this section.
(4) The provisions of this section shall not apply to an insurer specified in sub-clause (c) of clause (9) of section 2.
(5) In applying the provisions of sub-section (1) to any insurer, who is a member of a group, the relevant amount for that insurer shall be an amount equal to that proportion of the relevant amount which that group, if considered as a single insurer, would have been required to maintain as the proportion of his share of the risk on each policy issued by the group bears to the total risk on that policy:
Provided that when a group of insurers ceases to be a group, every insurer in that group who continues to carry on any class of insurance business in India, shall comply with the requirements of sub-section (1) as if he had not been an insurer in a group at any time:
Provided further that it shall be sufficient compliance with the provisions of the foregoing proviso if the insurer brings up the excess of the value of his assets over the amount of his liabilities to the required amount within a period of six months from the date of cessation of the group:
Provided also that the Central Government may, on sufficient cause being shown, extend the said period of six months by such further periods as it may think fit, so, however, that the total period may not in any case exceed one year.
(6) The Central Government may, by notification in the Official Gazette, reduce the sum often lakhs of rupees or five lakhs of rupees, as the case may be, referred to in sub-section (1) to a tower figure not less than one hundred thousand rupees in respect of a country craft insurer or in respect of an insurer not having a share capital and carrying on only such insurance business as, in the opinion of the Central Government, is not carried on ordinarily by insurers under separate policies. Section 64VB No risk to be assumed unless premium is received in advance 1) No insurer hall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is unarmed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner.
(2) For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer.
(3) Any refund of premium which may become due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money order and a proper receipt shall be obtained by the insurer from the insured, and such refund shall in no case be credited to the account of the agent.
(4) Where an insurance agent collects a premium on a policy of insurance on behalf of an insurer, he shall deposit with, or despatch by post to, the insurer, the premium so collected in full without deduction of his commission within twenty-four hours of the collection excluding bank and postal holidays.
(5) The Central Government may, by rules, relax the requirements of sub-section (1) in respect of particular categories of insurance policies. 490 In Section 64VB, sub-section (6) shall be inserted by Insurance (Amendment) Act, 2002 (42 of 2002), published in the Gazette of India, Extra., Part 11, Section 1(6) The Authority may, from time to time, specify, by the regulations made by it, the manner of receipt of premium by the insurer. Section 64VC Restrictions on the opening of a new place of business (1) No insurer shall, after the commencement of the Insurance (Amendment) Act, 1968, open a new place of business in India or change otherwise than within the same city, town or village, the location of an existing place of business situated in India without obtaining the prior permission of the Controller.
(2) The Controller may grant permission under sub-section (1) subject to such conditions as he may think fit to impose either generally or with reference to any particular case.
(3) Where, in the opinion of the Controller, an insurer has, at any time failed to comply with any of the conditions imposed on him under this section, the Controller may, by order in writing and after affording reasonable opportunity to the insurer for showing cause against the action proposed to be taken against him. revoke any permission granted under this section, PART 3 PROVIDENT SOCIETIES 1) In this Part "provident society" means, a person who or a body of persons (whether corporate or unincorporate) which, not being an insurer registered for the time being under Part II of this Act, carries on the business of insuring the payment, on the happening of any of the contingencies mentioned in sub-section (2), of-
(a) an annuity of or equivalent to 496[b] Substituted for "fifty", by Insurance (Amendment) Act, 1946 (6 of 1946),