1. A Government Servant may at his option, propose insurance on a state pay higher than the average pay of the post held by him.
2. Where premia calculated at Six and a quarter per cent of the average pay results in fraction of less than fifty paise, it shall be rounded off to fifty paise; where it 5 results in fraction of more than fifty paise it shall be rounded off to the next higher rupees.
3. In the case of a Government Servant who has exercised the option to pay enhanced premium under Clause (b) of Rule 5, such enhanced premium even though in excess of Six and a quarter per cent of the average pay shall be deducted from his pay every month.
When the pay of an insured is increased temporarily on account of his promotion to a higher grade from which there is little chance of his reverting to this lower substantive post, the insured shall so effect such further insurance as will make the total premium to be not less than Six and a quarter per cent of the average pay in the higher grade. If he so elects, he may effect further insurance so as to make the total premium to be not less than Six and a quarter per cent of any stage pay higher than the average pay or the maximum pay of the grade to which he has been temporarily promoted subject to the proviso that the official should have served at least for a period of one year in the higher grade of pay and also that there is no likelihood of his reversion from his non-substantive post, a Certificate to that effect being obtained from the Departmental Head.
Procedure for Effecting Insurance
9. A proposer shall submit to his immediate official superior his proposal for Insurance along with a Treasury/Bank Receipt in token of having remitted the amount specified in Rule 15. In the case of illiterate persons the official superior or any subordinate officer duly authorized by him in this behalf shall fill up the form.
The immediate official superior shall then forward the proposal to a Medical Officer possessing the qualifications prescribed in these rules and inform the Proposer of his having done so.
Medical Examination
10. It shall be the duty of the Medical Examiner to examine the proposer and forward the proposal and the prescribed Medical Report direct to the Director in a sealed cover after obtaining the signature of the proposer to the declaration prescribed therein.
6 Qualification of the examining Medical Officer
11. All Medical Officers in the service of Government (with the exception of the Joint Director (Public Health), Joint Director (Medical), Joint Director (Medical Education) of the Directorate of Health Services, the Superintendents of Vaccine Institute and the Public Health Institute and officers drafted for Public Health Research work) who have been in the service of Government for at least one year are eligible to examine proposer for Insurance under these rules, provided that:-
(i) Assistant Surgeons (Class III) are not authorized to examine proposers when the premium proposed exceeds Rs.15/- (Rupees fifteen per mensem).
(ii) If there should be more than one officer at a place who are eligible to examine proposers the examination has to be conducted by –
(a) The Seniormost of such officers, or
(b) The District Surgeon of the District or
(c) A Medical Officer to be nominated by the Director in consultation with the Director of Health Services and Ex-Officio Chief Medical Officer, Karnataka Government Insurance Department.
(iii) Lady proposers shall be ordinarily be examined by Lady Medical Officers;
however in places where no eligible Lady Medical Officer is available such proposers, with their consent, may be permitted to be examined by male doctors, who are otherwise, eligible with the assistance of mid-wives or nurses and who should certify on the medical reports that they have been so assisted in the medical examination;
(iv) A Medical Officer who is related to the proposer by blood or by marriage shall not examine him; in such a case the proposers, as directed by his Official Superior, shall be examined by the nearest Medical Officer empowered to examine him but not related to the proposer.
Medical Fee
12. The Examining Medical Officers will receive such fee from the Department for detailed Medical Certificates in respect of the first and further Insurance and for Ordinary Medical Certificates in respect of further insurance as may be fixed by the Government from time to time.
7 Acceptance and disposal of proposal and proposer’s Responsibility
13. A proposal for a first insurance shall be accepted on a detailed Medical Certificate and for further insurance, on an Ordinary Medical Certificate in the form prescribed, if examined within two years form the date of last detailed Medical examination, by the Officers of the Department delegated with the required powers under orders issued from time to time.
14. Whenever a proposal does not result in a policy or does not become operative for any reason within two years of the date of the Medical Certificate on which it is based, a fresh Medical Certificate in the form prescribed in necessary before its acceptance by the Department could be considered. If for such a contingency the proposer is, in the main, responsible. He will have to pay the prescribed medical fee for the Medical Certificate to be newly issued.
Acceptance Notice-cum-First Premium Receipt
15. (1) The proposer shall remit to the Government Treasury/Bank an amount equal to Six and a quarter per cent of the average pay in case of First Insurance and difference of amount in case of further insurance and enclose the Treasury/Bank Receipt to the proposal for Insurance. Risk is not assumed on the submission of a Proposal for Insurance with a Treasury/Bank Receipt. When the proposal for Insurance is accepted by the Director, the Risk is assumed and the amount so deposited in Treasury/Bank is adjusted towards the First Premium.
Note:-1. If any change in the Proposer’s occupation or general health of his/her or that of his/her family however unimportant he/she considers the same, occurs between the date of Medical Examination and the Date of Acceptance of the Proposal by the Director, the Assurance will be invalid and all moneys paid in respect thereof will be forfeited unless intimation of such events be made in writing to the Director, Karnataka Government Insurance Department and the Acceptance of the Proposal be reapproved by him.
8 Note:-2. (1) The Insurance contract under these rules shall have effect from the date of acceptance of the proposal for insurance by the Director, notwithstanding the issue of a policy on a different date.
(2) When the proposal is rejected or postponed the amount so remitted shall be refunded to the Proposer.
Payment of Subsequent Premia
16. Subsequent premia shall be payable in advance and be recovered monthly by deduction from the pay of the insured. But when the insured is absent from duty on leave with allowance or when his salary is held over for future payment, the premia shall be realized when the leave allowance or salary is drawn. If he should obtain leave without allowance or be suspended from service or in any other case of nonrecovery or non-payment of premium it should be paid in cash and if not so paid, shall be debt on his policy carrying simple interest at Nine per cent per annum and be recovered as arrears from his future pay if any in installments of not less than five per cent thereof.
Cessation of Service (Options open to the Insured)
17. When an insured under these rules ceases to be in the service of Government before completing the age of fifty-five years, he may elect within twelve months of such cessation or date of order of the competent authority terminating his services, whichever is later, any of the following courses:-
(i) He may continue to pay the premia due on his policy or policies until they mature on attainment of the age of fifty-five years.
(ii) He may take a paid-up policy for a reduced sum assured, bearing the same proportion to the original sum assured as the total premia paid under the policy bears to the total premia which would have been paid if the original policy continued to be in force until the assured attained the age of fifty-five years subject to the condition that the minimum amount for which a paid-up policy could be issued under these rules shall be Rs.50/-.
(iii) He may take the cash surrender value of the policy in accordance with the appropriate table appended to these rules:
9
Provided that when such an insured does not elect to deal with his policy as above, he would be entitled only to the third alternative, noted above, and the surrender value would be paid to him or to his nominee or to his nominees as laid down in Rule 25 or, in their absence, to his heirs producing authority from a competent Court of Law to receive the said amount.
Reduction of Pay
18. If in consequence of his pay being reduced for any reason, an insured is unable to pay the full premium the assurance covered by the policy shall be proportionately continued for the premium which the insured is able to pay but which in any case shall not be less than Six and a quarter per cent of the average pay, the remainder being converted into a paid-up policy as prescribed in Rule 17(ii).
Cessation of Service under Government of Karnataka
19. An insured who holds a policy issued under these Rules and who ceases to hold service under Government may discontinue payment of premia, either wholly or in part, and may obtain either a paid-up policy or take the surrender value, calculated in the manner laid down under these rules. If, however, the amount of a paid-up policy is less than Rs.50/- the case will be disposed of as for payment of surrender value.
Note:- When an officer however, is on deputation outside Government to the Government of India or to a State Government or to a Quasi Government Institution, he may contine to pay the premium in cash till he reverts to the Parent State.
Head of Account and issue of Statement of Accounts
20. Sub-Rule (1) All receipts and disbursements on account of Life Insurance under these rules shall be carried to a separate Budget Head or Heads of Accounts to be prescribed by Government from time to time and all funds under this account shall be invested in such manner as Government may deem fit.
(2) As soon as may be after the close of each year the Director shall send to each insured a statement of his account showing the opening balance as on the 1st April of the year, the total amount credited or deducted during the year and the total amount of reversionary bonus that has accrued till end of the previous valuation.
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(3) The Director shall correct any error brought to his notice by the insured within two months from the date of receipt of the statement by the insured.
Annual Audit and Report
21. The accounts of the department shall be audited in such manner and a report submitted to Government in such form and in such manner as may be prescribed by Government from time to time.
Valuation
22. An Actuarial Valuation of the assets and liabilities of the funds of the Official Branch Life Insurance Scheme, conducted under these rules, shall be made once in two years as from 1st April, 1986.
Settlement of Claims
23. (a) Subject to its surrender in Original or Duplicate obtained under Rule 28, the sum assured by a policy which has matured on the insured attaining the age of fifty five years will be paid to the insured.
(b) If the insured is reported to be dead the sum assured by the policy will be paid to the person or persons whom the insured has, as under these rules nominated during his life time and such nomination is registered in the Department, subject to the production of satisfactory proof of death and of matters incidental thereto as required by the Director.
(c) If no such nomination has been made and registered, as noted above, the sum secured by the policy will be paid to the person or persons declared by a Competent Court of Law to be entitled to receive it.
Provided that if the sum secured by the policy does not exceed Rupees ten thousand the Director may, if he is satisfied about the right and title of the claimant and considers that undue delay or hardship will be caused by insisting on the 11 production of legal authority, order payment on such claimant executing an Indemnity Bond in Form-C appended to these rules with two sureties acceptable to the Director.
24. Omitted.
Amount Due to Government
1. (a) Payment under Rule 23 shall be subject to the deduction of any amount due to Government in respect of :-
(i) House Building Advance
(ii) House Purchase Advance
(iii) House Repair Advance
(iv) Advance of purchase of a conveyance
(v) Festival Advance.
(b) A notice of the amount due to the Government shall be furnished in the prescribed form to the Director by the Head of the Office in the case of Non-Gazetted Officers and by the Accountant General, Karnataka in the case of Gazetted Officers;
(i) Within thirty days from the date of death in the case of a claim for payment of the assured sum arising out of death of insured.
(ii) Sixty days prior to the insured attaining the age of superannuation in the case of claims of payment of the assured sum arising on account of maturity of the policy.
(c) If a notice is not received within the period specified in sub-rule (b), the Director shall send a reminder to the Head of the Office or the Accountant General, as the case may be and if within three months from the date of receipt of such reminder, no notice from the Head of the Office or the Accountant General, specifying the amount due to Government from the insured is received. The Director shall on the basis of the information available with him and after giving a reasonable opportunity to the person or persons entitled to the payment of the amount assured to make any representation, determine the amount due to Government.
12 Nominations
25. (i) An insured may, at any time before the policy matures for payment nominate any person or persons from among his relatives by blood or marriage or who is/are a dependent/dependents to whom the money secured by the Policy/Policies shall be paid in the event of his/her death.
Provided that when any nominee is a minor it shall be lawful for the insured to appoint in the manner prescribed any person to receive the money secured by the Policy/Policies in the event of his/her death during the minority of the nominees:
Provided further that any nomination to the exclusion of wife or husband (in the case of a female Government Servant), or children shall be null and void. If subsequent to nomination the insured gets married and leaves behind wife and/or children in the case of male insured and husband and/or children in the case of a female insured, such a nomination also shall be null and void.
Where the insured has no near relative the insured may nominate any other relative or any Religious or Charitable or Social or Educational Institution or the Head of any such Institution.
Explanation- “For purpose of this Clause, near relative means wife/husband, children (including step-children and adopted children) father, mother, brothers or sisters and a deceased son’s widow and children dependent on the Insured”.
(ii) Any such nomination, in order to be effectual, shall unless it is incorporated in the text of the policy itself, be made by an endorsement on the policy communicated to the Department in the manner prescribed and registered in the records of the department relating to the policy and any such nomination may at any time before the policy matures for payment, be cancelled or changed by an endorsement or a further endorsement or a will, as the case may be, but, unless notice in writing of any such cancellation or change has been delivered to it, the department shall not be liable for any payment under the policy made bona fide by it to a nominee of the insured mentioned in the text of the policy or registered in its records.
(iii) The Department shall furnish to the insured a written acknowledgement of having registered nomination or a cancellation thereof or a change therein and may charge a fee not exceeding Rupees Five for registering such cancellation or change.
13
(iv) Where the policy matures for payment during the life time of the insured or where the nominee or, if there be more nominees than one, all the nominees die before the policy matures for payment, the amount secured by the policy shall be payable to the insured.
(v) Where the nominee or, if there be more nominees than one, a nominee or nominees survive the insured, the amount secured by the policy or policies shall be payable to such nominee or nominees who survive the insured.
Non-Assignability of Policies
26. Policies issued under these rules are non-assignable, except as provided in these rules.
Payment of premium in Cash and Automatic non forfeiture Benefits
27. Payment of premium in cash –
(1) (a) When an insured who has ceased to be in the service of Government elects under Rule 17(1) to continue to pay premia till his policy matures, he may be allowed to pay in cash such premia monthly, quarterly, half-yearly or yearly, as will be fixed by the Director into a Treasury of the Karnataka Government or the Bank of Mysore or its branches or its agents in the State of Karnataka; Likewise, an insured officer of the Government who is transferred to Foreign Service may be permitted by the Director to pay his premia monthly, quarterly, half-yearly or yearly provided he communicates his election to do so within three months from the date of such transfer and in the absence of such an election he will be considered to have agreed to pay the premia monthly. A grace of fifteen days shall be allowed when the premium is payable monthly and of one month when it is payable otherwise.
(b) When an Insured who has ceased to be in the service of the Government elects under Rule 17(i) to continue to pay premium in cash, as laid down in sub-clause (1)(a) of this Rule, the Director may, on requisition, supply to the insured a premium receipt book for facilitating the recording of such cash payments of premiums by the authorities of the receiving treasury or Bank.
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(2) If the insured fails to pay the premia within the days of grace the Automatic Non-forfeiture provisions (a) or (b) detailed in sub-clause (3) of this Rules, will apply.
Automatic Non-Forfeiture Benefits
(3) A policy shall not lapse by reason of non-payment of further premia but shall be kept in force in the manner and subject to the provisions set forth below:
(a) The net cash surrender value of the policy available as on the due date of the first unpaid premium or installment, after deduction of outstanding premium and interest thereon, will be automatically applied to maintain the policy in force for such period as the net cash surrender value is sufficient to cover the overdue premia or installments thereof, with interest accrued thereon, the minimum period for which premia will be so advanced being one quarter. The Department shall have a first charge on the policy for the premia advanced, with interest therein, calculated in the above manner. In case of the policy becoming a claim while it is maintained in force under this Rule, such claim shall be considered valid subject to the deduction from the sum assured of the arrear premia with interest thereon. The insured has the option, at any time during the operation of this non-forfeiture provision, to pay up the amount advanced with interest thereon without evidence of health, or to pay one or more of the unpaid premia and thus, further extend the period for which the policy could be kept in force. In default of doing so, the policy will cease and all liability of the Department there under will terminate except to the extent of any balance of surrender value left in favour of the insured on the date of termination after adjustment of all unpaid premia with interest thereon and other amounts due to the Department. The policy, may, however be revived at any time during its currency as laid down in sub-clause (4) of this rule.
(b) A policy shall not lapse by reason of non-payment of further premia but shall, notwithstanding such non-payment be kept alive to the extent of its paid-up value calculated in accordance with the procedure to be approved by the Director from time to time.
A policy kept alive to the extent of its paid-up value as above shall not participate in any bonus that may be declared after its conversion into a paidup policy.
15 Note:- (i) This rule does not apply when the paid-up value is less than Rs.50/-.
(iii) The option to elect to have the benefit under this rule is exercisable either at the time of the insured comes under the provisions of sub-clause (1) of this Rule or at any time there after but during the currency of the Policy, but such option is available only once in respect of a policy and the insured may revert to sub-clause (3)(a) of this Rule after the revival. If no option is exercised the policy will be deemed to come under the Automatic Non-forfeiture provision in sub-clause (3) of this Rule.
(4) A policy which has lapsed after the application of Automatic Non-forfeiture provision, as provides for in sub-clause (3) of this Rule, may be revived within six months from the date of its lapse by payment of all the arrears of premia and interest thereon and the production of a Declaration of Good Health in the form prescribed and signed by the insured before a Magistrate or the Chairman of a Village Panchayat or an Officer of Government, drawing a pay not less than Rs.50/- per mensem. If the insured is in foreign service he may sign such a declaration before his official superior or a Sub-Registrar of Assurances.
(5) If the period of lapse of a policy is more than Six months but less than one year it may be revived by the Director on production of an Ordinary Medical Certificate in the form prescribed and obtained from either a Surgeon or an Assistant Surgeon (Class I) or a Medical Probationer or an Assistant Surgeon (Class II) of not less than one year’s service in the Medical department. If the period of lapse exceeds one year a detailed medical certificate in the form Prescribed may be obtained, from either a Surgeon or an Assistant Surgeon, (Class I) or a Medical Probationer of not less than one year’s service in the Medical Department of the Government.
In a case where the monthly premium in respect of the lapsed policy or policies is Rs.10/- or less, an Assistant Surgeon (Class III) of not less than one year’s service in the Medical Department of the Government may also issue the Detailed Medical Certificate in the form prescribed.
(6) In the case of lapse of policies held by the insured retiring or being discharged on medical grounds the production of a Detailed Medical Certificate in the form prescribed is necessary to determine the question of revival.
(7) The Insured who is living outside the State of Karnataka may obtain an ordinary Medical Certificate in the from prescribed from Private Medical Practitioners 16 whose names are on the Register of the Indian Medical Council or Medical Council of Local Department for over three years in the case of Medical Graduates or for over five years in the case of Licentiates. Detailed Medical Certificates in the form prescribed may also be obtained from such Medical Graduates or Licentiates in cases where the monthly premium is Rs.10/- or less. In cases where the monthly premia exceeds Rs.15/- the Detailed Medical Certificate in the form prescribed should be obtained only from a Medical Officer of or above the rank of a Surgeon in the regular service of the Government.
(8) In all cases of lapse of policies the arrears of premia together with interest accrued thereon, shall be paid by the insured, failing which the payment of premia shall be deemed to have been discontinued and the insured shall be permitted to obtain a paid-up policy or take the surrender value as on the date of lapse, subject to deductions of all arrears of premia and interest due thereon.
27A. Non-medical Insurance:
(1) Not withstanding anything contained in these rules (a) a male Government servant who has studied upto Eight Standard and who has not completed forty years of age may be eligible to get himself insured without undergoing medical examination if the monthly premium payable is less than Five hundred and ten rupees.
(b) And subject to sub-rule (2), the provisions of rules 1 to 43 shall matatis mutandis be applicable to insurance without undergoing medical examination under Clause (a).
(2) (i) A Government servant who desired to get himself insured without undergoing medical examination, under sub-rule (1), shall submit his proposal through his official superior who shall forward it to the Director with his remarks, if any.
(ii) The Director shall for reasons to be recorded in writing, have the power to reject any such proposal.
(iii) such a proposal which does not result in a policy within two years from the date of the proposal shall stand cancelled.
Duplicate Policies 17
28. (a) If a policy or paid-up policy is lost or damaged rendering its identification difficult, a duplicate thereof may be obtained on an application to the Director provided satisfactory proof of the loss of the policy or mutilation of or damage thereto and of the right to obtain a duplicate is furnished. Applications for duplicate policies shall be generally sent through the official superior of the insured to the Director. A fee of Rs.10/- shall be charged for issuing a duplicate.
(b) If a premium receipt book issued to the insured is lost or damaged or otherwise becomes unfit for use, a duplicate thereof may be issued to him on application made to the Director in that behalf, on payment of a fee of Rupees Five.
Miscellaneous Issue of Certified Copies
29. Certified copies of the proposals for Insurance and of the personal statements made before the Medical Examiner will be supplied to the insured on payment of a fee of Rupees Five per copy.
False Information
30. Subject to the provisions contained in Rule 37, any statement or representation made, or information furnished by an insured or evidence produced by him, which is false to his knowledge or could have known to be so after due normal diligence, on inquiry in respect of any material fact relating to the insurance of his life under these rules shall render the policy null and void and the premia paid by him shall be forfeited to Government.
Female Lives
31. Omitted.
Lives exposed to Extra Risk
32. In the case of lives exposed to extra risk either on account of employment in hazardous occupation or defects in the personal or family history of the proposer, the 18 Director reserves to himself the right to accept the proposal on such special terms and conditions as he considers fit.
Reduced Premia for Residences in Healthy Climate
33. Omitted.
34. Rules applicable to payment of claims on policies shall as for as may also be apply to payment of claims for refund of excess premia and other sums.
Alteration in the Policy
35. Director may accept application on payment of Rs.2/- in each case for offering alterations in the terms and conditions subject to which policies have already been issued and pass suitable orders on the merits in each case.
Good Faith
36. No suit or other legal proceedings shall lie against any officer in respect of anything in good faith done or intended to be done in pursuance of these rules.
Indisputability of Policies
37. No policy effected after the coming into force of these rules shall, after the expiry of two years from the date on which it was effected, be called in question by the Department on the ground that a statement made in the proposal for insurance or on any report of a Medical Officer, or referee, or a friend of the Insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the Department shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the insured and that he knew at the time of making it that the statement was false or that it was based on suppressed facts which it was material to disclose:
Provided that nothing in this Rule shall prevent the Department or Government from calling for proof of age at any time during the currency of the policy or at the stage of proposal and no policy shall be deemed to be called in question merely 19 because the terms thereof are adjusted on subsequent proof that the age of the Insured was incorrectly stated at the beginning.
Suicide
38. Policies which have been in force for at least one year are not rendered void by the death of the insured by suicide.
Insurance in respect of officers allotted from integrated areas
39. Insurance by certain Government Servants allotted to the State of Karnataka the provisions of the rules shall be applicable with effect from the first day of April, 1959, to all Government Servants allotted or deemed to be allotted to the State of Karnataka, under Section 115 of the States Re-organization Act, 1956 (Central Act 37 of 1956) subject to the following conditions namely:-
(1) Government Servants who have been making payments in accordance with the provisions of the Madras Contributory Provident Pension-Insurance Rules, 1950 shall so long as they are governed by the said Rules, not be liable to insure under these rules;
(2) Government Servants who immediately before the 1st day of April, 1959, have been making payments.
(i) As subscription to a Government Provident Fund;
(ii) As premium in respect of Insurance Policies of the Life Insurance Corporation of India;
(iii) As premium in respect of Insurance Policies under the Hyderabad State Life Insurance Fund Rules;
(iv) As premium in respect of Insurance Policies under the Postal Life Insurance and Endowment Assurance Rules; shall
(a) If the total amount so paid as on 15th April, 1971 is equal to or more than Six and a quarter per cent of their average pay as on 15th April, 1971, not be liable to insure under these rules as long as the amount so paid does not fall short of Six and a quarter per cent of their average pay;
(b) If the total amount so paid as on 15th April, 1971 is less than Six and a quarter per cent of their average pay, be liable to insure under these rules to the extent of the difference between Six and a quarter per cent of their average pay and the total amount so paid;
(c) If at any time after the 15th April, 1971, the total amount in Clause (a) or (b) falls short of Six and a quarter per cent of their average pay either;
(i) By lapse of policies of insurance; or 20
(ii) By the taking of paid-up policies; or
(iii) By obtaining surrender value in respect of policies;
be liable to insure under these rules to the extent of the difference between Six and a quarter per cent of their pay at that time and total amount, if any, then so paid.
Savings Notwithstanding the amendments made to be said rules by these rules, a Government Servant who has at his option insured on a higher stage of his time scale of pay under Note 1 to Rule 8 of the said rules, shall be entitled to continue to pay the premium every month at the rate of Six and a quarter per cent of his pay and shall not be liable to make further Insurance as the amount paid by him as premium does not fall short of Six and a quarter per cent of his average.
39-A. Insurance by certain Central Government Employees transferred to the State of Karnataka. The provisions of rule 39 mutatis mutandis, apply to Central Government Employees who have been transferred to the services of the State Government, with effect from the 1st November 1956.
Loans on Policies