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Report No. 190 1.5 Legislative developments after 1999 The Insurance (Amendment) Act, 2002 which came to force on August 9, 2002 permitted, by way of insertion of section 2 (8A) in the Insurance Act, 1938 insurance co-operative societies, registered under the Co-operative Societies Act, 1912 or Multi-State Co-operative Societies Act, 1984 or under any state law relating to co-operative society, to carry on any class of insurance business. However, the IRDA has been empowered to exempt an insurance co-operative society from the application of any of the provisions of the Insurance Act or application of its provisions with exceptions, modifications or adaptations [see proviso to Section 94A(2)]. The Insurance (Amendment) Act, 2002 provided for insurance intermediaries, including insurance brokers and consultants, and provisions for the payment of commission, brokerage or fee to them, thereby introducing in this country the business practice adopted the world over in this area. Further, section 49 of the Act has been modified to provide shareholders an entitlement of actuarial surplus. By virtue of amendment to section 64 VB of the Act, the IRDA has been authorized to prescribe the mode of payment of premium, i.e., through credit cards or through the internet which in turn might result in an increase in the insurance business. Moreover, the General Insurance Business (Nationalisation) Amendment Act, 2002 which came into force on August 7, 2002 made the General Insurance Corporation the only reinsurer to carry on exclusively reinsurance business in India. It ceased to carry on general insurance business as also to control the four subsidiaries. The Central Government was authorised to discharge its functions in respect of these subsidiaries in future.    |
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