Provision of the Insurance Act, 1938 |
Details |
| Section 2 (12) and 2 (13) |
Definition of Manager, Officer and Managing Agent. These posts are no longer in vogue and therefore not relevant. |
| Section 2 (16) and 2 (17) |
The terms 'Private Company' and 'Public Company' are not relatable any longer to the Companies Act, 1913 as indicated in Section 2 (16) of the Act. Therefore, it is proposed that this definition needs to be deleted. |
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The concept of 'Special Agent' is no longer in vogue. It is therefore, proposed that Section 2 (17) also be deleted. |
| Section 2B (1) |
In view of the proposed merger of the provisions of the IRDA Act with the Insurance Act, section 2B (1) may be deleted even while sub-section (2) providing for appointment of a Controller of Insurance in the event of supersession of the IRDA may be retained. |
| Section 2C |
In respect of persons who can carry on insurance business, by virtue of the third proviso to Section 2C (1), inserted in 1999, only Indian Insurance Companies can carry on insurance business in India. Accordingly, this renders redundant Section 2C (1) and the third and second provisos thereto. |
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Accordingly, it is suggested that Section 2C (1) and its first and second provisos be deleted and further that the third proviso to Section 2C (1) be renumbered as Section 2C. Further, Section 2C (2) will also have to be repealed. |
| Section 3(5) |
The reference to Section 3 (3) in sub section (5) may be deleted in view of the change proposed to s. (3) repealed in view of the third proviso to Section 2C (1). |
| Section 3 (4)(a) |
The mention of the words 'or Section 98' occurring in Section 3 (4) (a) may be deleted in view of the proposed repeal of part IV of the Act which contains Section 98. |
| Section 3 (4)(ee) |
One of the grounds for cancellation of registration is where the central government so directs under Section 33 (4). Since this provision is redundant, it requires to be omitted. |
| Section 3 (5) |
The mention of sub-section (3) of Section 3 in Section 3 (5) is no longer relevant and may be omitted. |
| Section 4 |
References of co-operative life insurance society and mutual insurance company in Section 4 may be omitted as being irrelevant. |
| Section 5(2) and 5(3) First and second proviso |
The first and second proviso to section 5(2) and section 5(3) have became redundant and may be omitted as they provide in respect of insurers who carried on business under the Act of 1912 or business carried on by provident societies. |
| Section 6A(1) |
Proviso The proviso to Section 6A (1) may be omitted as being redundant. |
| Section 7 (7) |
This provision concerning deposits with the Controller of Currency in compliance with the Indian Life Assurance Companies Act, 1912 has become redundant and may be deleted. |
| Section 7 (9B) |
In clause (a) of section 7 (9B), the words "or were sold or where the securities matured or were sold before the 21st day of March, 1940, within a period of four months from the commencement of the Insurance (Amendment) Act 1940" should be deleted as being redundant. |
| Section 10(1) |
Maintaining separate accounts for each class of insurance business: |
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This obligation has become irrelevant as composite business is not allowed. Section 10 (1) can be deleted. |
| Section 10(2) |
In section 10(2) the words "after the expiry of six months from the commencement of Insurance (Amendment) Act, 1946" and the words "under the law of the insurer's country" should be deleted as being redundant. |
| Section 10 (2A) |
The provisions of section 10 (2A) stipulates a requirement to be fulfilled by an insurer carrying on life insurance business if he wants to obtain a registration certificate for any class of insurance business in addition to the life insurance business. The provisions of this sub-section need to be deleted as the composite insurance business is not allowed. |
| Section 11 (1) and (1A) |
Insurers are under an obligation to prepare the balance sheet, profit and loss account, separate account of receipts and payment and revenue account in accordance with the regulations contained in First, Second and Third Schedule of the Act as per the provisions of sub-section (1) of section 11. These schedules have been repealed by Insurance (Amendment) Act 2002. Hence, sub-section (1) is redundant and is required to be repealed. |
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The amendments of 1999 inserted sub-sections (1A) and (1B) in this section which independently take care of the matters relating to the preparation of such documents. Hence, no further insertion/addition is required. Accordingly, the words in sub-s.(1A) "notwithstanding anything contained in subsection (1)" is required to be deleted. |
| Section 12 |
The words "in the case of an insurer specified in sub-clause (a) (ii) or sub-clause (b) of clause (9) of section 2" and the words "and in the case of any other insurer in respect of the insurance business transacted by him in India" should be omitted. |
| Section 13 |
The words "contained in Part I of the Fourth Schedule and in conformity with the requirements of Part II of that Schedule" should be deleted as being redundant in view of the Insurance (Amendment) Act 2002 and Regulations made by the Authority in regard to Actuarial report and Abstract. |
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The second, third and fourth proviso to section 13(1) should be repealed as being redundant. These provisos respectively provide for investigation to be made before the commencement of Insurance Amendment Act 1950 and IRDA Act 1999. |
| Section 13 (3) |
The provisions requiring certificate of the insurer about the particulars of the policy holders to be appended to every abstract (Section 3 (3)) are required to be omitted to avoid duplication as these provisions are in the regulations. |
| Section 13 (4) |
In view of the proposal for recast of sub-section (4), the second proviso to this sub-section would obviously have to become irrelevant and to be deleted. |
| Section 13 (6) |
The provisions of sub-section (6) refer to sub-class of insurance business falling under the class "miscellaneous insurance" as may be prescribed in section 10(1). However, section 10 (1) does not prescribe so. Hence, it is suggested that sub-classes of insurance business may either be specified in the definition of the term miscellaneous insurance or the words "as may be prescribed under sub-section (1) of section 10" may be deleted. |
| Section 14 |
Every insurer is required under section 14 to maintain register or record of policies and claims. The word "register" in clauses (a) and (b) of this section may be omitted because now the records may be kept in the electronic form as well. The term "records" would cover both the register as well as e-record. |
| Section 15 |
Submission of returns: |
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The proviso to section 15(1) is to be deleted as being redundant. |
| Section 15 (2) |
Sub-section (2) talks of signatories to these documents if the insurer is company or a firm or an individual. The references to a partnership firm and an individual are to be deleted as being irrelevant in view of the recent legislative developments. |
| Section 15 (3) |
The provisions of sub-section (3) which provide for insurers who are domiciled outside India or whose principal place of business is outside India, has become redundant because now no such insurer is allowed to transact business in India. Hence, it is required to be repealed. |
| Section 16 |
The provisions of prescribing the manner of furnishing of return by the insurers established outside India, have become obsolete hence is required to be repealed. |
| Section 22 |
The reference of section 16 (2) (c) should be deleted in sub sections (1) and (2) of section 22 should be deleted as section 16 (2) (c) requires submission of valuation report by an insurer domiciled outside India, hence such reference to be omitted. |
| Section 27 (2) (a), (b) & (6) |
The reference of section 98 in clause (a) of section 27 (2) may be omitted. |
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The provisions of section 27 (2) (b) including its proviso may be repealed as being irrelevant. |
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The provisions of section 27 (6) also have become irrelevant and need repeal because they deal with the insurers domiciled outside India. |
| Section 27 A |
Clause (b) of section 27A (1) should be deleted as being irrelevant as providing for securities by the Government of United Kingdom. |
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In section 27A (1) (n), the words "or in any other country" may be deleted as Schedule I and Schedule II of Investment Regulations exclude expressly immovable property situated in other countries for the purpose of approved investments. This would remove inconsistency between the Act and Regulations. Moreover, such a repeal would be in consonance with the tenor of section 27C. |
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The provisions of sub-section (12) should be repealed as it requires the insurer in existence at the commencement of Insurance Act 1950 to submit within 90 days from such commencement report about investments made in contravention of section 27A. Such insurers are no more in existence. |
| Section 27 B |
In sub-section (16), the meaning of the term "assets" has been described for different classes of business referring to assets shown in the forms prescribed in part II of the first schedule. The first schedule has been repealed by the Insurance (Amendment) Act, 2002. Hence provisions of this sub-section have become irrelevant. Moreover, this term has been defined in Para 2 (6a) of the Regulations relating to investments. Therefore, the sub-section is required to be repealed. |
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In section 27B (1) (i), the reference of the words, "or in any other country" may be deleted in view of the provisions of Schedule II of the Investment Regulations which exclude expressly first mortgage on immovable property situated out of India. |
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In clause (i) of sub-section (1), the reference of the words, "or in any other country where the insurer is carrying an insurance business" are to be deleted for the reasons assigned in respect of similar provision in section 27A. |
| Section 28 (4) |
Sub-section (4), which provides for insurers domiciled outside India, is redundant, hence to be repealed. |
| Section 29 |
As the partnership from cannot transact insurance business, the E reference to a firm or partner in sub section (1) should be omitted. |
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References to chief agent or special agent in sub-section (3)(b) and the 'Explanation' may be deleted, so also sub-clauses (i) and (ii) of clause (b) of sub-section (3) dealing exclusively with chief agent and special agent respectively. Similarly, in sub-section (6) reference to chief agent should be omitted. |
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The provisions of sub-section (4) which imposes an obligation on the Authority to notify about the loan or advances at the commencement of the Act of 1950 has obviously become obsolete, hence to be repealed. |
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The provisions of sub-section (4) which imposes an obligation on the Authority to notify about the loan or advances at the commencement of the Act of 1950 has obviously become obsolete, hence to be repealed. |
| Section 31B |
The system of chief agent, principal agent and special is no more in existence. Hence the possibility of remuneration being paid to any person other than insurance agent or intermediary does not arise. Therefore, necessary deletions are required to be made. |
| Section 32 |
The insurers are prohibited from employing the managing agents. Under the provisions of section 32 (1). Subsequent subsections (2) and (3) dealing with their employment and remuneration have, obviously, become redundant as also because of their transitional nature. Hence, sub-sections (2) and (3) need omission. |
| Section 33 (7) |
The publication of the report in sub-section (7) envisages a prior notice to the insurer. Since sub-s.(6) contemplates the availability of the report to the insurer and a reasonable opportunity to respond to it, there is no need to give any further notice. Therefore sub-section (7) can be deleted. |
| Section 35 (1) |
The words "any person or transferred to" in section 35 (1) seem to be redundant and hence should be omitted. |
| Section 35 (3) |
In the proviso to section 35 (3), the reference of the words and figures "or sections 7 and 8 of the Indian Life Assurance Companies Act, 1912)" are required to be omitted as being redundant. |
| Section 40 |
Reference to principal, chief or special agents in sub-section (1) needs deletion. The words "after the expiry of six months from the commencement of this Act." are to be omitted as being irrelevant. |
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The provisions of Sub-section (2) provides the limit of the commission to be paid to an agent in respect of the life insurance policy effected through him before 31st Day of December, 1950 in respect of life insurance policy and of general insurance policy before the commencement of Insurance Amendment Act, 1950. Obviously, the provisions of this sub section have become redundant especially in view of the second proviso with this sub-section, hence to be repealed. |
| Section 40A |
Provisions of sub-sections (2) and (4) providing for payment of commission to special agents of life insurance business and principal agents of general business respectively have become irrelevant and redundant in view of the legislative changes made during the last five decades or so. It is, therefore, suggested that these sub-sections may be deleted. |
| Section 44 (1.- Explanation |
"Explanation" to section 44 (1) has become irrelevant and redundant and may, therefore, be repealed. |
| Section 48 |
Policyholders to elect Directors of Insurers. |
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In view of the changed scenario permitting privatisation, it is proposed that this section be deleted. |
| Section 48A |
The words "and no chief agent or special agent" are required to be omitted. Similarly, the words, "carrying on life insurance business" need deletion, so also the proviso to this section. |
| Section 49 |
In sub-section (1) the words "or to the central government under section 11 of the Indian Life Assurance Companies Act, 1912 (6 of 1912)" require deletion. |
| Section 52 |
The provisions of section 52 which prohibit an insurer to carry on its business on the dividing principle are no more relevant. Moreover, some of its provisions being of transitional nature have become redundant long back. Hence section 52 is required to be repealed. |
| Section 52 H to 52 N |
These pertain to acquisition of undertaking of insurers as contained in section 52 H to section 52 N. These are no longer relevant and required to be deleted. |
| Section 53 |
Clauses (i) to (iii) of sub-section 2 (b) may be omitted. |
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In sub-clause (i) of clause (a) of sub-section (2) of section 53, the words "or section 98" are to be omitted. |
| Section 59 |
The words and digits "or section 98" occurring in this section are to be omitted. |
| Section 62 to 64 |
The special provisions relating to External Companies as contained in section 62 to 64 are also no longer relevant. Since the present scheme is not to permit such External Companies. |
| Section 64 UB (3) and (4) |
Sub-section (3) empowers TAC to make regulations in respect of Regional Committees. As the Regional Committees are not functioning anymore, the provisions of this sub-section maybe deleted. |
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The provisions of sub-section (4) need omission as they are transitional in nature and have become redundant long back. |
| Section 64 UD |
Except proviso to sub-section (1) (inserted by Act of 1999), being transitional in nature, section 64 UD needs to be repealed as it has become redundant long back. |
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Proviso to sub-section (1) may also be repealed because its provisions have been taken care of under clause (a) of Section 64 UA (1). |
| Section 64 UF to UI |
The provisions of Section 64 UF providing for assets and liabilities of General Insurance Council to vest in the Advisory Committee after the commencement of the Amendment Act, 1968 need to be repealed as the assets and liabilities have already been vested in TAC. |
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The provisions of Section 64 UG also need to be repealed because its provisions have become irrelevant as all the contracts/ agreements made by the Tariff Committee before 1968 are dealt by the Advisory committee as also the suits or legal proceedings filed by or against Tariff committee after 1968 Amendment are being dealt by TAC. |
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Similarly, provisions of Section 64UH protecting the interest of the employees of Tariff Committee who were in employment before the Amendment Act 1968 need to be repealed because all those employees are now the employees of the Advisory Committee and others, who could not, should have availed the benefits mentioned under this section. |
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The provisions of Section 64 UI obligates every person, who is in possession or custody of the property of the Tariff Committee or is in possession of documents relating to such property, to deliver those to the Advisory Committee has become redundant and requires to be repealed. |
| Section 64 UJ (2) to (6) |
Since the regional committees constituted by the TAC are not functioning, sub-sections (2) to (6) may be deleted. |
| Section 64 UM |
Section 64 UM (1) needs to be recast. In sub-section (1) (A), the words " after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968 " are to be deleted as being irrelevant. Again, sub-section (1) (B) should be deleted as its provisions have become irrelevant in view of the provisions of sub-section (1) (BA) inserted by the IRDA Act which also takes care of the licenses issued to surveyor before the Act of 1999. |
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Sub-section (5) needs deletion as being irrelevant |
| Section 64 VA |
The provisions of sub-section (1) are now irrelevant as providing for the insurers before the commencement of the IRDA Act, 1999, hence may be deleted. In consequence, subsections (2), (5) and (6) would have to be deleted. |
| Section 65 to 94 |
The whole of Part III pertaining to Provident Societies is no longer relevant and sections 65 to 94 contained in this Part require to be deleted. |
| Section 95 to 101 |
The whole of Part IV relating to Mutual Insurance Companies and Co-operative Life Insurance Societies are also no longer relevant and sections 95 to 101 contained in this Part require to be deleted. |
| Section 114 (f) |
In view of the proposed deletion of section 48 the corresponding rule making power of the central government in section 114 (f) is no longer relevant and accordingly may be deleted. |
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Further, Rules 13, 14 and 15 of the Insurance Rules 1939 may also be deleted. |
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