'42A. (1) No insurer shall, on or after the commencement of the Insurance Laws (Amendment) Ordinance, 2014, appoint any principal agent, chief agent, and special agent and transact any insurance business in India through them.
(2) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance policy through Substitution of new section for section 42A, 42B and
42C.
Prohibition of insurance business through principal agent, special agent and multilevel marketing.
Sic. 1] THE GAZETTE OF INDIA EXTRAORDINARY 39 multilevel marketing scheme.
(3) The Authority may, through an officer authorised in this behalf, make a complaint to the appropriate police authorities relating to the entity or persons involved in the multilevel marketing scheme.
Explanation.—For the purpose of this section "multilevel marketing scheme" means any scheme or programme or arrangement or plan (by whatever name called) for the purpose of soliciting and procuring insurance business through persons not authorised for the said purpose with or without consideration of whole or part of commission or remuneration earned through such solicitation and procurement and includes enrolment of persons into a multi level chain for the said purpose either directly or indirectly.'.
51. In section 42D of the Insurance Act,— Amendment of section 42D
(i) for the words "licence" and "licence issued", wherever they occur, the words "registration" and "registration made", shall respectively be substituted;
(ii) in sub-section (7), in clause {a) of the proviso, for the word, brackets and figure "sub-section (4)", the word, brackets and figure "sub-section (J)" shall be substituted;
(///)*in sub-section (3),—
(a) after the words "directors or partners" the words "or one or more of its officers or other employees so designated by it and in the case of any other person, the chief executive by whatever name called, or one or more of his employees designated by him" shall be inserted;
(b) for the words, brackets, letters and figures "in clauses
(b), (c), (d), (e) and (f) of sub-section (4) of section 42", the words, brackets, letters and figures " in clauses (b), (c), (d), (c) and (g) of sub-section (3) of section 42" shall be substituted;
(iv) for sub-sections (8) and (9), the following sub-sections, shall be substituted, namely:- "(8) Any person who acts as an intermediary or an insurance intermediary without being registered under this section to act as such, shall be liable to a penalty which may extend to ten lakh rupees and any person who appoints as an intermediary or an insurance intermediary or any person not registered to act as such or transacts any insurance business in India through any 40 THE GAZETTE OF INDIA EXTRAORDINARY [PART II— such person, shall be liable to a penalty which may extend to one crore rupees.
(9) Where the person contravening sub-section (8) is a company or a firm, then, without prejudice to any other proceedings which may be taken against the company or firm, every director, manager, secretary or other officer of the company, and every partner of the firm who is knowingly a party to such contravention shall be liable to a penalty which may extend to ten lakh rupees.".