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Report No. 190 Responses to the Consultation Paper 7.1.7 As far as FICCI is concerned, they have made a suggestion that "the proposed amendment to section 39 should retain the provision of nomination for unassigned portion of the policy." Birla Sun Life Insurance Co. Ltd., has pointed out that it is desirable to amend section 39 to bring it on par with that under section 45ZA of the Banking Regulation Act, 1949 so that the insurer gets a valid discharge for the policy monies upon payment to the nominee without the insurer getting embroiled in a litigation between the legal heirs of the policyholder. They have however pointed out that there is a difference between nomination under section 39 and that under section 45ZA of the Banking Regulation Act, 1949 in as much as the right under a life insurance contract is the right to a debt, which is more in the nature of an actionable claim. Thus, the nominee's right is only to receive the policy monies subject to all liabilities and equities to which the policyholder himself was subject. 7.1.8 The Punjab State Law Commission has communicated its support to bringing section 39 on par with section 45ZA of the Banking Regulation Act, 1949. 7.1.9 Om Kotak points out that there is a need for clarification in regard to the concept of 'absolute nominee'. They also suggest that there should be a full discharge of the insurer once the amount is paid to the nominee. The National Insurance Academy has suggested that the law be made clear that a nominee does not have ownership rights to money. This suggestion has been concurred with by the HDFC. 7.1.10 The Government of West Bengal has suggested that the provision be amended to bring out the distinction between collector nominee and beneficial nominee. 7.1.11 Life Insurance Corporation of India has recommended that section 39 be retained as it is. The General Insurers Public Sector Association has agreed to the proposal of the Law Commission in its Consultation Paper.    |
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