° f n e w sect ion for section 15.
"15. (/) The audited accounts and statements referred to in Submission of section 11 or subsection (5) of section 13 and the abstract and rcturnsstatement referred to in section 13 shall be printed, and four copies thereof shall be furnished as returns to the Authority within six months from the end of the period to which they refer.
(2) Of the four copies so furnished one shall be signed in the ease of a company by the chairman iind two directors and by the principal officer of the company and, if the company 16 THE GAZETTE OF INDIA EXTRAORDINARY [PARTII— has a managing director by that managing director and one shall be signed by the auditor who made the audit or the actuary who made the valuation,- as the-case may be.".
21. Section 16 of the Insurance Act shall be omitted. Omission of section 16.
22. Sections 17 and 17A of the Insurance Act shall be Omission of omitted. sections 17 and 17 A.
23. In section 20 of the Insurance Act,— Amendment of section 20.
(f) for sub-section (1), the following sub-section shall be substituted, namely:— "(/) Every return furnished to the Authority or certified copy thereof shall be kept by the Authority and shall be open to inspection; and any person may procure a copy of any such return, or of any part thereof, on payment of such fee as may be specified by the regulations.";
(if) in sub-section (2), the words and figures "or section 16" shall be omitted;
(Hi) in sub-section (3), for the words "one rupee", the words "such fee as may be specified by the regulations" shall be substituted.
24. In section 21 of the Insurance Act,— Amendment of section 21.
(/') in clause (d) of sub-section (/), the words and figures "or section 16" shall be omitted;
(/'/) for sub-section (2), the following sub-section shall be substituted, namely:— "(2) The Securities Appellate Tribunal may, on the application of an insurer and after hearing the Authority, cancel any order made by the Authority under clause (d) of sub-section (i) or may direct the acceptance of such a return which the Authority has declined to accept, if the insurer satisfies the Tribunal that the action of the Authority was in the circumstances unreasonable:
Provided that no application under this sub-section shall be entertained unlcss.it is made before the expiration of four months from the date when the Authority made the http://unlcss.it SEC. 1] THEGAZETTEOFINDIAEXTRAORDINARY 17 order or declined to accept the return.".
25. In section 22 of the Insurance Act,— Amendment of section 22.
(/) in sub-section (/), the words, brackets, letter and figures "or an abstract of a valuation report furnished under clause (c) of sub-section (2) of section 16" shall be omitted;
(/'/) in sub-section (2), the words, brackets and figures "or, as the case may be, of sub-section (2) of section 16" shall be omitted.
. 26. For sections 27, 27A, 27B, 27C and 27D of the Insurance Act, the following sections shall be substituted, namely:— "27. (7) Every insurer shall invest and at all times keep Investment of invested assets equivalent to not less than the sum of — assets.
(a) the amount of his liabilities to holders of life insurance policies in India on account of matured claims, and
(b) the amount required to meet the liability on policies of life insurance maturing for payment in India, less— (/') the amount of premiums which have fallen due to the insurer on such policies but have not been paid and the days of grace for payment of which have not expired, and (//) any amount due to the insurer for loans granted on and within the surrender values of policies of life insurance maturing for payment in India issued by him or by an insurer whose business he has acquired and in respect of which he has assumed liability in the following manner, namely,—
(a) twenty-five per cent, of the said sum in Government securities, a further sum equal to not less than twenty-five per cent. of\ the said sum in Government securities or other approved securities;
and
(b) the balance in any of the approved investments, Substitution of new sections for sections 27, 27A, 27B, 27C and 27D.
18 THE GAZETTE OF INDIA EXTRAORDINARY [PART l i as may be specified in the regulations subject to the limitations, conditions and restrictions specified therein.
(2) In the case of an insurer carrying on general insurance business, twenty per cent, of the assets in Government Securities, a further sum equal to not less than ten per cent, of the assets in Government Securities or other approved securities and the balance in any other investment in accordance with the regulations of the Authority and subject to such limitations, conditions and restrictions as. may be specified by the Authority in this regard.
Explanation— In this section, the term "assets" means all the assets of insurer at their carrying value but does not include any assets specifically held against any fund or portion thereof in respect of which the Authority is satisfied that such fund or portion thereof, as the case may be, is regulated by the law of any country outside India or miscellaneous expenditure or in respect of which the Authority is satisfied that it would not be in the interest of the insurer to apply the provisions of this section.
(3) For the purposes of sub-sections (/) and (2), any specified assets shall, subject to such conditions, if any, as may be specified, be deemed to be assets invested or kept invested in approved investments specified by regulations.
(4) In computing the assets referred to in sub-sections (1) and
(2), any investment made with reference to any currency other than the Indian rupee which is in excess of the amount required to meet the liabilities of the insurers in India with reference to that currency, to the extent of such excess, shall not be taken into account:
Provided that nothing contained in this sub-section shall affect the operation of sub-section (2):
Provided further that the Authority may, either generally or in any particular case, direct that any investment shall, subject to such conditions as may be imposed, be taken into account, in such manner as may be specified in computing the assets referred to in subsections (/) and (2) and where any direction has been issued under this proviso, copies thereof shall be laid before each house of Parliament as soon as may be after it is issued.
(5) Where an insurer has accepted re-insurance in respect Sic. 1] THE GAZETTE OF INDIA EXTRAORDINARY 19 of any policies of life insurance issued' by another insurer and maturing for payment in India or has ceded reinsurance to another insurer in respect of any such policies issued by himself, the sum referred to in sub-section (7) shall be increased by the amount of the liability involved in such acceptance and decreased by the amount of the liability involved in such cession.
(6) The Government securities and other approved securities in which assets are under sub-section (7) or sub section (2) to be invested and kept invested shall be held by the insurer free of any encumbrance, charge, hypothecation or lien.
(7) The assets required by this section to be held invested by an insurer incoiporated or domiciled outside India shall, except to the extent of any part thereof which consists of foreign assets held outside India, be held in India and all such assets shall be held in trust for the discharge of the liabilities of the nature referred to in sub-section (7) and shall be vested in trustees resident in India and approved by the Authority, and the instrument of trust under this sub-section shall be executed by the insurer with the approval of the Authority and shall define the manner in which alone the subject-matter of the trust shall be dealt with.
Explanation.—This sub-section shall apply to an . insurer incorporated in India whose share capital to the extent of one-third is owned by, or the members of whose governing body to the extent of one-third consists of members domiciled elsewhere than in India.
27A. (7) No insurer carrying on life insurance business shall invest or keep invested any part of his controlled fund arid no insurer carrying on general business shall invest or keep invested any part of his assets otherwise than in any of the approved investments as may be specified by the regulations subject to such .limitations, conditions and restrictions therein.
(2) Notwithstanding anything contained in sub-section (7) or sub-section (2) of section 27, an insurer may, subject to the provisions contained in the next succeeding sub-sections, invest or keep invested any part of his controlled fund or assets otherwise than in an approved investment, if— Further provisions regarding investments.
(/) after such investment, the total amounts of all such 20 THEGAZETTEOFINDIAEXTRAORDINARY [PARTII— investments of the insurer do not exceed fifteen per cent.
of the sum referred to in sub-section (i) of section 27 or fifteen per cent, of the assets referred to in sub-section (2) as the case may be;
(ii) the investment is made, or, in the case of any investment already made, the continuance of such investment is with the consent of all the directors present at a meeting and eligible to vote, special notice of which has been given to all the directors then in India, and all such investments, including investments in which any director is interested, are reported without delay to the Authority with full details of the investments and the extent of the director's interest in any such investment.
(5) An insurer shall not out of his controlled fund or assets as referred to in subsection (2) of section 2 7,—
(a) invest in the shares of any one banking company, or
(b) invest in the shares or debentures of any one company, more than the percentage specified by the regulations.
(4) An insurer shall not out of his controlled fund or assets as referred to in sub-section (2) of section 27 invest or keep invested in the shares or debentures of any private limited company.
(5) All assets forming the controlled fund or assets as referred to in sub-section (2), of section 27, not being Government securities or other approved securities in which assets are to be invested or held invested in accordance with this section, shall (except for a part thereof not exceeding onetenth of the controlled fund or assets as referred to in sub section (2) thereof in value which may, subject to such conditions and restrictions as may be prescribed, be offered as security for any loan taken for purposes of any investment), be held free of any encumbrance, charge, hypothecation or lien, (<5) If at any time the Authority considers any one or more of the investments of an insurer to be unsuitable or undesirable, the Authority may, after giving the insurer an opportunity of being heard, direct him to realise the investment or investments, and the insurer shall comply with SEC.1] THE GAZETTE OF INDIAEXTRAORDINARY 21 the direction within such time as may be specified in this behalf by the Authority.
(7) Nothing contained in this section shall be deemed to affect in any way the manner in which any moneys relating to the provident fund of any employee or to any security taken from any employee or other moneys of a like nature are required to be held by or under any Central Act, or Act of a State legislature.
Explanation.—In this section "controlled fund" means—
(a) in the case of any insurer carrying on life insurance business— (/) all his funds, if he carries on no other class of insurance business;
"(ii) all the funds in India appertaining to his life insurance business if he carries on some other class of insurance business also.
Explanation.—For the purposes of subclauses (i) and (ii), the fund does not include any fund or portion thereof in respect of which the Authority is satisfied that such fund or portion, as the case may be, is regulated by the law in force of any country outside India or it would not be in the interest of the insurer to apply the provisions of this section.";
(b) in the case of any other insurer carrying on life insurance business— (0 all his funds in India, if he carries on no other class of insurance business;
(ii) all the funds in India appertaining to his life insurance business if he carries on some other class of insurance business also; but does not include any fund or portion thereof in respect of which the Authority is satisfied that such fund or portion thereof, as the case may be, is regulated by the law of any country outside India or in respect of which the Authority is satisfied that it would not be in the interest of the insurer to apply the provisions of this section.
27B. (J) All assets of an insurer carrying on general Provisions insurance business shall, subject to such conditions, if any, as 1^&rimS investments of 22 THE GAZETTE OF INDIA EXTRAORDINARY [PART II— may be prescribed, be deemed to be assets invested or kept invested in approved investments specified in section 27.
(2) All assets shall (except for a part thereof not exceeding one-tenth of the total assets in value which may subject to such conditions and restrictions as may be prescribed, be offered as security for any loan taken for purposes of any investment or for payment of claims, or which may be kept as security deposit with the banks for acceptance of policies) be • held free of any encumbrance, charge, hypothecation or lien.
(3) Without prejudice to the powers conferred on the Authority by sub-section (5) of section 27A nothing contained in this section shall be deemed to require any insurer to realise any investment made in conformity with the previsions of 62 of 1968. sub-section (7) of section 27 after the commencement of the Insurance (Amendment) Act, 1968, which, after the making thereof, has ceased to be an approved investment within the meaning of this section.
27C. An insurer may invest not more than five per cent, in aggregate of his controlled fund or assets as referred to in sub section (2) of section 27 in the companies belonging to the promoters, subject to such conditions as may be specified by the regulations.
27D. (7) Without prejudice to anything contained in this section, the Authority may, in the interests of the policy holders, specify by the regulations, the time, manner and other conditions of investment of assets to be held by an insurer for the purposes of this Act.
(2) The Authority may give specific directions for the time, manner and other conditions subject to which the funds of policy-holders shall be invested in the infrastructure and social sector as may be specified by the regulations and such regulations shall apply uniformly to all the insurers carrying on the business of life insurance, general insurance, or health insurance or re-insurance in India on or after the commencement of the Insurance Regulatory and Development 41 of 1999. Authority Act, 1999.
(3) The Authority may, after taking into account the nature of business and to protect the interests of the policy-holders, issue to an insurer the directions relating to the time, manner and other conditions of investment of assets to be held by him:
assets of insurer carrying general insurance business.
Investment by insurer in certain cases.
Manner and condition of investment.
Provided that no direction under this sub-section shall be SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 23 issued unless the insurer concerned reasonable opportunity of being heard.
has been given a
27E. No insurer shall directly or indirectly invest outside India the funds of the policy-holders.".
Prohibition for investment of funds outside India.