## Policy Analysis Report: Amendment to the Insurance Act, 1938 Regarding Special Economic Zones and International Financial Services Centres
**1. Executive Summary:**
This report analyzes an amendment to the Insurance Act, 1938, specifically concerning the application of certain provisions to insurers operating within Special Economic Zones (SEZs) and International Financial Services Centres (IFSCs). The amendment aims to provide a differentiated regulatory approach for insurers in these zones, exempting them from certain sections of the Act while applying other sections with specific exceptions, modifications, and adaptations. This is likely intended to promote the insurance business within these zones by tailoring regulations to their unique operational environment. Key changes relate to investment of assets, premium collection, and regulatory powers, impacting Indian Insurance Companies, insurance cooperative societies, and body corporates carrying on the business of insurance in SEZs and IFSCs.
**2. Introduction:**
The purpose of this report is to provide an informative analysis of the amendment to the Insurance Act, 1938, as detailed in the provided government notification. This analysis focuses on understanding the core changes, their implications, and the likely impact on the insurance industry operating within Special Economic Zones and International Financial Services Centres. The analysis is based solely on the text provided.
**3. Policy Overview:**
* This report analyzes an *amendment* to the Insurance Act, 1938.
* **Core Objective(s):** Based on the provided text, the core objective of this amendment is to create a specific regulatory environment for insurance companies operating within Special Economic Zones and International Financial Services Centres. This is achieved by selectively exempting insurers in SEZs from certain provisions of the Insurance Act and adapting the application of other provisions for insurers in IFSCs. This likely aims to foster the growth of the insurance sector within these specialized economic zones.
**4. Background and Rationale:**
This amendment appears to address the need for a more tailored regulatory approach for insurance companies operating in SEZs and IFSCs. The general Insurance Act might be considered too rigid or unsuitable for the specific operational context of these zones. By exempting specific provisions and modifying others, the amendment likely aims to reduce regulatory burden, enhance operational flexibility, and ultimately encourage insurance business within these zones, potentially attracting investment and fostering economic growth. The existence of the International Financial Services Centres Authority Act, 2019 is referenced, suggesting an alignment with broader regulatory frameworks for these specialized zones.
**5. Key Provisions / Changes:**
This amendment introduces significant changes relating to the applicability of the Insurance Act, 1938 within SEZs and IFSCs.
* **SEZs:** The amendment states that certain sections of the Insurance Act (sections 29, 32B, 32C, 32D, 64C, 64D, 64E, 64F, 64G, 64H, 64J, 64K, 64L, 64M, 64N, 64O, 64R, subsection 2 of section 64 ULA, sections 101A, 101B, 105B, 110F, 118 and section 120) will *not* apply to Indian Insurance Companies, insurance cooperative societies, or body corporates carrying on insurance business in SEZs. This represents a significant exemption from standard insurance regulations for these entities.
* **IFSCs:** The amendment modifies the application of the Insurance Act in IFSCs in the following key areas:
* **Section 2A (Definition):** The amendment adds a reference to the "International Financial Services Centres Authority Act, 2019" to the definition section of the Insurance Act, specifically for IFSCs.
* **Change/Effect:** This ensures legal consistency and alignment between the Insurance Act and the regulatory framework governing IFSCs.
* **Sections 27, 27A, 27B, 27C, 27D and 27E (Investment of Assets):** These sections are *replaced* entirely by a new section 27.
* **New Rule:** The new section 27 mandates that insurers earmark and invest assets equal to their liabilities. It allows investment of up to 5% of these assets in companies owned or controlled by the promoters, subject to regulatory conditions. It also stipulates that assets should be held free of encumbrances, charges, hypothecation or lien and are subject to Authority regulations.
* **Difference/Effect:** The new rule replaces previous, likely more detailed, investment restrictions with a more flexible framework tailored for IFSCs. The allowance of investment in promoter-related companies, subject to conditions, introduces potential benefits but also requires careful regulatory oversight to prevent conflicts of interest. The requirement for assets to be free of encumbrances likely aims to ensure the financial stability of insurers.
* **Section 64VB (Premium Collection):** Subsections 1, 2, and 3 are replaced with new subsections.
* **New Rule:** The new rule allows insurers to assume risk if the premium is received, guaranteed, or a deposit is made. It also allows for payment of premium to be made in other forms if agreed upon between the insurer and policyholder, subject to Authority regulations. It mandates refunds be paid directly to the insured.
* **Difference/Effect:** This modification appears to provide greater flexibility in premium collection and refund methods for insurers in IFSCs, potentially facilitating business transactions. It also appears to emphasize transparency and direct dealings with policyholders regarding premium refunds, moving away from agent-based crediting.
* **Section 114A (Regulation-Making Powers):** Subsection 2 is amended to reflect the changes made in sections 27 and 64VB.
* **Change/Effect:** This ensures that the regulatory body has the power to create regulations regarding the new provisions related to investment of assets and premium collection.
**6. Target Audience and Stakeholders:**
The primary target audience and stakeholders are:
* Indian Insurance Companies operating within Special Economic Zones (SEZs).
* Indian Insurance Companies, insurance cooperative societies, and body corporates operating within International Financial Services Centres (IFSCs).
* The International Financial Services Centres Authority.
* Prospective policyholders and investors in insurance products within SEZs and IFSCs.
* The regulatory authority responsible for overseeing the insurance sector.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency/Bodies:** The Department of Financial Services (Ministry of Finance) is the issuing authority. The "Authority" referenced in the text likely refers to the Insurance Regulatory and Development Authority of India (IRDAI) or the International Financial Services Centres Authority (IFSCA), depending on the context.
* **Timelines/Procedures:** The notification is effective from the date of publication (July 4, 2022). Specific timelines and procedures related to investment and premium collection will likely be detailed in subsequent regulations issued by the relevant authority (IRDAI or IFSCA) as inferred by language such as "subject to such conditions as the Authority may specify by regulations".
* The amendment supersedes previous notifications (S.O. 870 E, dated the 27th March, 2015 and notification number S.O. 4644 E, dated the 27th December, 2019), except for actions already taken under those prior notifications. This suggests an immediate transition to the new regulatory framework.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these amendments are:
* **Enhanced Competitiveness:** By reducing regulatory burden and providing greater flexibility in investment and premium collection, the amendment aims to make insurance companies operating in SEZs and IFSCs more competitive.
* **Increased Investment:** The allowance of investment in promoter-related companies, subject to regulation, could potentially attract more investment into these zones.
* **Streamlined Operations:** The changes in premium collection and refund procedures could simplify operational processes for insurers and improve customer service.
* **Growth of Insurance Sector:** Ultimately, the amendment is expected to contribute to the growth and development of the insurance sector within SEZs and IFSCs, fostering economic activity in these specialized zones.
* **Improved Regulatory Clarity:** By aligning the Insurance Act with the specific regulations governing IFSCs, the amendment should improve regulatory clarity and reduce ambiguity for insurers operating in these zones.
**9. Conclusion:**
The amendment to the Insurance Act, 1938 represents a significant step towards creating a more tailored regulatory environment for insurance companies operating in Special Economic Zones and International Financial Services Centres. By exempting specific provisions for SEZs and adapting others for IFSCs, particularly in areas of investment and premium collection, the amendment aims to promote the growth and competitiveness of the insurance sector within these specialized economic zones. This targeted approach to regulation is likely to have a positive impact on the insurance industry in SEZs and IFSCs, encouraging investment, streamlining operations, and ultimately contributing to economic development. Subsequent regulations from the relevant authorities will be crucial in defining the specific implementation details and ensuring the effective execution of these changes.
Key Entities Referenced
Insurance Act, 1938: An Indian law governing the insurance industry, cited as the basis for the notification.
Special Economic Zone: A designated area within a country with special economic regulations different from other areas of the same country.
Special Economic Zones Act, 2005: An Indian law related to Special Economic Zones.
International Financial Services Centre: A jurisdiction that provides financial services to non-residents and residents, often with special regulatory frameworks.
International Financial Services Centres Authority Act, 2019: An Indian law related to the International Financial Services Centres Authority.
Ministry of Finance: The Ministry of Finance of the Government of India.
Department of Financial Services: A department within the Ministry of Finance.
Central Government: The Government of India.
Saurabh Mishra: Jt. Secy. of Ministry of Finance
New Delhi: Capital of India
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-04072022-237034
xxxGIDHxxx
CG-DL-E-04072022-237034
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असाधारण
EXTRAORDINARY
भाग II—खण् ड 3—उप-खण्ड (ii)
PART II—Section 3—Sub-section (ii)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 2887] नई दिल्ली, स ंिार, िुलाई 4, 2022/आषाढ़ 13, 1944
No. 2887] NEW DELHI, MONDAY, JULY 4, 2022/ASHADHA 13, 1944
जित्त ं्ं ाल
(जित्त ी सिे ाएं जिभाग)
अजधसचू ना
नई दिल् ली, 4 िुलाई, 2022
का.आ. 3035(अ).— केन्द री सरकार, बींा अजधजन ं 1938 (1938 का 4) (जिसे इसं ें इसके पश् चातब बींा
अजधजन ं कहा ग ा ह)ै की धारा 2गक द्वारा प्रित् त िजतत क का प्र ग करते ए ए र जित् त ंं्ाल , जित् ती सेिाएं
जिभाग, भारत के रािप्, असाधारण, भाग II, खंड 3, उपखंड (ii), तारीख 27 ंाचच, 2015 की अजधसूचना
संख ांक का.आ. 870(अ) तारीख 27 ंाचच, 2015 र भारत के रािप्, असाधारण, भाग II, खंड 3, उपखंड (ii) तारीख
27 दिसम् बर, 2019, ंें प्रकाजित अजधसूचना संख ांक का.आ. 4(44(अ) तारीख 27 दिसम् बर, 2019 क , उन बातक के
जसिा अजधक्ांत करते ए ए जिन्द ह ें स े अजधक्ंण स े पहले दक ा ग ा ह ै ा करने का ल प दक ा ग ा ह,ै जनिेि िते ी ह,ै
अर्ाचत:ब—
(क) बींा अजधजन ं के कजतप उपबधं क का जििषे आर्र्कच ि न र अतं राष्टच र ी जित्त ी सेिा केन्दर ं ें लाग ू न
ह ना:— बींा अजधजन ं की धारा 29, 32ख, 32ग, 32घ, (4ग, (4घ, (4ङ, (4च, (4छ, (4ि, (4ञ, (4ट, (4ठ,
(4ड, (4ढ, (4ण, (4ि, धारा (4पठक की उपधारा (2), धारा 101क, 101ख, 105ख, 110च, 118 र धारा 120 ं ें
अंतर्िचष्टट उपबंध, जििेष आर्र्कच ि न अजधजन ं, 2005 (2005 का 28) की धारा 2 के खंड ( क) ं ें र्ापररभाजषत
दकसी जििेष अर्र्चक ि न जिसके अतं गतच अंतराचष्टर ी जित् ती सेिा केन्द र भी ह,ै ंें बींा कर बार करन े िाली क ई भारती
बींा कंपनी, बींा सहकारी स साइटी ा धारा 2ग की उपधारा (1) के खंड (ग) ं ें जनर्िष्टच ट जनगजंत जनका ह न े के
कारण बींाकर्त्ाच पर लाग ूनहीं हकगे ।
4463GI/2022 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
(ख) बींा अजधजन ं के कजतप उपबधं क का अपिािक, उपातं रणक र अनकु ूलनक सजहत अतं राष्टच र ी जित्त ी
सेिा केंन्दर ं ें लाग ू ह ना:— तद्धीन जिजनर्िष्टच ट बींा अजधजन ं के उपबंध, भारती बींा कंपनी, बींा सहकारी स साइटी
ा बींा अजधजन ं की धारा 2ग की उपधारा (1) के खंड (ग) ं ें जनर्िष्टच ट जनगजंत जनका ह र अतंराचष्टर ी जित् ती
सेिा केन्द र ं ें बींा कार बार करन े िाली ह , जनम्न जलजखत अपिािक, उपातरणक र अनुकूलनक सजहत बींाकर्त्ाच पर लाग ू
हकगे, अर्ाचत ब:—
(क) बींा अजधजन ं की धारा 2 क ं ें ‘’ं ें पररभाजषत’’ िब्ि क के पहल े ‘’अतं राष्टच र ी जित्त ी सिे ा केन्दर
प्राजधकरण अजधजन ं, 2019 (2019 का 50),’’ िब् ि, अंक र क ष्टठ क रख ेिाएंग;े
(ख) बींा अजधजन ं की धारा 27, धारा 27क, धारा 27ख, धारा 27ग, धारा 27घ र धारा 27ङ के स्ट्र् ान
पर जनम्न जलजखत धारा रखी िाएगी, अर्ातच ब:—
27. आजस्ट्त क का जिजनधान .— (1) प्रत् के बींाकर्त्ाच अपन े िाज त् िक क पूरा करन े के जलए, उन आजस्ट्त क
क जिनका ंूल् उनके िाज त् िक से कं न ह , उदिष्टट करेगा, जिजनधान करेगा र सभी सं पर उदिष्टट
तर्ा जिजनधान रखगे ा ।
(2) क ई बींाकर्त्ाच प्राजधकरण द्वारा जिजनर्िष्टच ट जिजन ंक की सी िततों के अ् धीन, संप्रितचक के स्ट् िाजंत् िाधीन
र उनके द्वारा जन ं्णाधीन कंपनी ा दकसी अन्द जनगजंत जनका ंें उपधारा (1) ंें जनर्िष्टच ट ंूल् की पांच
प्रजतित स ेअजधक आजस्ट्त का जिजनधान नहीं कर सकता ह ै।
(3) उपधारा (1) ंें जनर्िष्टच ट आजस्ट् त क के संपूण च ा दकसी भाग का जिजनधान जनम्न जलजखत के अ् धीन ह गा —
(क) ह ित च दक उतत आजस्ट् त दकसी प्रकार के जिल्ल ंगं, भार, आडंान ा धारणाजधकार स ेंुत त ह गी; र
(ख) स ेसं , रीजत र अन्द ित तें िैसा दक प्राजधकरण जिजन ंक द्वारा जिजनर्िष्टच ट करे ।
स्ट् पष्टट ीकरण .— इस धारा ं,ें पि —
(i) ‘‘िाज त् िक’’ से अंतराचष्टर ी जित् ती सेिा केन्द र ं ें पाजलसीधारकक के प्रजत बींाकर्त्ाच का जनिल िाज त् ि
अजभप्रेत ह;ै
(ii) ‘‘स्ट् िाजंत् िाधीन’’ से दकसी कंपनी के संबंध ं ें संप्रितचकक द्वारा अपन े संाित् त िे र पूंिी के पचास
प्रजतित स ेअजधक धारण करना अजभप्रेत ह ै र इसंें सी कंपनी की संनुषगं ी कंपनी सजम् ंजलत ह;ै
(iii) ‘‘जन ं्णाधीन’’ से दकसी कंपनी ा अन्द जनगजंत जनका के संबंध ंें संप्रितचकक द्वारा ् जतत गत प प स े
ा सहंजत स,े प्रत् क्ष प प स े ा अप्रत् क्ष प प से का च करत े ए ए इसके अंजधकांि जनिेिकक क जन ुतत
करने ा प्रबंधन क जन ंज्त करने ा नीजत जिष क जिजनश्च क जिसके अंतगतच उनकी िे रधाररता ा
प्रबंधन अजधकार ा िे र धारकक के करार ा ंतिान िेन े का करार भी है, क जन ंज्त करने का
अजधकार प्र ज् ह,ै अजभप्रेत ह।ैं
(iv) ‘‘संप्रितचक’’ से एक ् जतत अजभप्रेत ह ै—
(क) जिसक बींाकर्त्ाच की दकसी प्रजतभूजत का अजभिान ा क् करने के जलए ल गक स े प्रस्ट्त ाि आंंज्त
करने की जििरण पज्का ंें नाजंत दक ा ग ा ह , ा जिसे बींाकर्त्ाच द्वारा िाजखल िार्षचक जििरणी ं ें
से ् जतत के प प ंें पररलजक्ष त दक ा ग ा ह जिसका का च कंपनी का रजिस्ट् रीकरण कराना ह ; ा
(ख) जिसका बींाकर्त्ाच के का तों पर िे र धारक, जनिेिक ा दकसी अन्द ूपप ं ें प्रत् क्ष प प ं ें ा अप्रत् क्ष
प प ं ेंजन ं्ण ह ; ा
(ग) जिसकी सलाह, जनिेि ा अनुििे के अनुसार बींाकर्त्ाच का जनिेिक ब डच का च करता ह :
परन्द त ु ि ् जतत केिल ि्जत् तक क्ष ंता स ेही का च कर रहा ह पर उपखण् ड (ग) लाग ूनहीं ह गा;
(घ) उतत अजधजन ं की धारा (4खख ंें उपधारा (1), उपधारा (2) र उपधारा (3) के स्ट् र्ान पर
जनम्न जलजखत उपधाराएं रखी िाएंगी :—
‘‘(1) क ई बींाकर्त्ाच दकसी बींा कार बार की बाबत क ई ि जखं तब तक नहीं ग्रहण करेगा िब तक
दक —
(क) िे प्रीजं ं उसे प्राप् त न ह िाए; ा[भाग II—खण् ड 3(ii)] भारत का रािप् : असाधारण 3
(ख) िे प्रीजं ं का संिा स े ् जतत द्वारा सी रीजत ं ें र इतने सं के भीतर दकए िान े के
जलए गारण् टी न िे िी िाए, िैसा दक प्राजधकरण जिजन ंक द्वारा जिजनर्िष्टच ट करे; ा
(ग) सी रकं का जनक्ष पे , िैसा दक प्राजधकरण जिजन ंक द्वारा जिजनर्िष्टच ट करे, प्रीजं ं के प्रजत
संा िन के जलए अजग्रं तौर पर न कर दि ा िाए; ा
(घ) पूिेजक्ष त पाजलसीधारक द्वारा दकसी अन्द प्रूपप ंें दकए गए प्रीजं ं के संिा के जलए उनके
र बींाकर्त्ाच के बीच, सी रीजत ंें िैसा प्राजधकरण जिजन ंक द्वारा जिजनर्िष्टच ट करे, सहंजत
न ह ।
(2) दि बींाक्त क पाजलसी के रद्द दकए िाने ा उसके जनबंधनक र िततों ंें पररितचन दकए िाने के
कारण ा अन्द र्ा प्रीजं ं का प्राजतिा ि ् ह िाए त िह बींाकर्त्ाच द्वारा बींाक्त क क्ास दकए
ए ए ा आिेिी चैक द्वारा ा डाक ंनीआडचर द्वारा ा दकसी अन्द प्रकार से िैसा दक प्राजधकरण
जिजन ंक द्वारा जिजनर्िष्टच ट करे, सीधे ि े दि ा िाएगा र इसजलए बींाक्त स े बींाकर्त्ाच संुजचत
रसीि अजभप्राप् त कर लगे ा र सा प्रजतिा दकसी भी ििा ं ें अजभकता च के खात े ं ें िंा न दक ा
िाएगा।’’;
(घ) बींा अजधजन ं की धारा 114(क) की उपधारा (2) ंें :—
(I) खंड (i) के स्ट् र्ान पर जनम्न जलजखत खडं रखा िाएगा, अर्ातच ब:-
‘‘(i) धारा 27 की उपधारा 2 के अ् धीन िे ित तें जिसके अधीन जिजनधान कर सकता ह ै र उपधारा (3) के खंड (ख) के
अधीन बींाकर्त्ाच द्वारा आजस्ट् त क के जिजनधान का सं , रीजत र अन्द ित;तें ’’;
(II) खंड ( कक) के स्ट् र्ान पर जनम्न जलजखत खंड रखा िाएगा, अर्ाचतब:—
‘‘ ( कक) धारा (4 ख ख की उपधारा (1) के खडं (ख) के अधीन संिा के जलए रीजत र सं , खंड (ग) के अधीन
जनक्ष ेजपत की िान े िाली रकं र खंड (घ) के अधीन प्रीजं ं के संिा की रीजत, उपधारा (2) के अधीन बींाक्त क
प्रजतिा के संिा के अन्द साधन र उपधारा (() के अधीन प्रीजं ं की प्राजप् त की रीजत; ’’।
स्ट्प ष्टट ीकरण.— इस अजधसूचना ं ें ‘‘अंतराचष्टर ी जित् ती सेिा केन्द र’’ पि का िही अर् च ह ै ि अतं राष्टच र ी जित्त ी सिे ा केन्दर
प्राजधकरण अजधजन ं, 2019 (2019 का 50) की धारा 3 की उपधारा (1) के खंड (छ) ंें र्ा संनुिेजित दक ा ग ा ह ै।
[खा.स. 14017/3/2022–बींा.-II]
सौरभ जंश्रा, सं ुक्त सजचि
MINISTRY OF FINANCE
(Department of Financial Services)
NOTIFICATION
New Delhi, the 4th July, 2022
S.O. 3035(E).—In exercise of the powers conferred by section 2CA of the Insurance Act, 1938
(4 of 1938) (hereinafter referred to as the Insurance Act) and in supersession of the Ministry of Finance,
Department of Financial Services, notification number S.O. 870 (E), dated the 27th March, 2015 published
in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 27th March, 2015 and
notification number S.O. 4644 (E), dated the 27th December, 2019 published in the Gazette of India,
Extraordinary, Part II, Section 3, Sub-section (ii) dated the 27th December, 2019, except as respects things
done or omitted to be done before such supersession, the Central Government hereby directs as under,
namely:—
(A) Certain provisions of Insurance Act not to apply in Special Economic Zone and
International Financial Services Centre.- The provisions contained in sections 29, 32B, 32C, 32D, 64C,4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
64D, 64E, 64F, 64G, 64H, 64J, 64K, 64L, 64M, 64N, 64-O, 64R, sub-section (2) of section 64 ULA,
sections 101A, 101B, 105B, 110F, 118 and section 120 of the Insurance Act shall not apply to an insurer,
being an Indian Insurance Company, insurance co-operative society or a body corporate referred to in
clause (c) of sub-section (1) of section 2C of the Insurance Act, carrying on the business of insurance, in a
Special Economic Zone as defined in clause (za) of section 2 of the Special Economic Zones Act, 2005
(28 of 2005), including International Financial Services Centre.
(B) Certain provisions of Insurance Act to apply in International Financial Services Centre
with exceptions, modifications and adaptations.—The provisions of the Insurance Act specified
hereunder, shall apply to an insurer, being an Indian Insurance Company, insurance cooperative society or a
body corporate referred to in clause (c) of sub-section (1) of section 2C of the Insurance Act and carrying
on the business of insurance in an International Financial Services Centre, with the following exceptions,
modifications and adaptations, namely:—
(a) in section 2A of the Insurance Act, after the words “defined in”, the words, figures and
brackets “the International Financial Services Centres Authority Act, 2019 (50 of 2019),”
shall be inserted;
(b) for sections 27, 27A, 27B, 27C, 27D and 27E of the Insurance Act, the following section
shall be substituted, namely:—
‘27. Investment of assets.—(1) Every insurer, in order to meet its liabilities, shall
earmark, invest and at all times keep earmarked and invested, assets of value not less than
that of the liabilities.
(2) An insurer may invest not more than five per cent. of the assets referred to in sub-
section (1), by value, in a company or other body corporate which is owned or controlled
by the promoters, subject to such conditions as the Authority may specify by regulations.
(3) Investment of the whole or any part of the assets referred to in sub-section (1) shall be
subject to—
(a) the condition that the assets shall be held free of any encumbrance, charge,
hypothecation or lien; and
(b) such time, manner and other conditions as the Authority may specify by
regulations.
Explanation. -In this section, the expression—
(i) “liabilities” means the net liabilities of the insurer to the holders of policies in the
International Financial Services Centre;
(ii) “owned” in relation to a company means the holding of more than fifty per cent. of
its paid-up share capital by the promoters, and includes a subsidiary company of
such a company;
(iii) “controlled” in relation to a company or other body corporate means the right to
appoint majority of its directors or to control its management or policy decisions
exercisable by the promoters acting individually or in concert, directly or
indirectly, including by virtue of shareholding or management rights or
shareholders agreements or voting agreements;
(iv) “promoter” means a person—
(a) who has been named as such in a prospectus inviting offers from the public
for the subscription or purchase of any securities of an insurer, or is
identified as such by the insurer in its annual returns filed with the person
having the duty of registering companies; or[भाग II—खण् ड 3(ii)] भारत का रािप् : असाधारण 5
(b) who has control over the affairs of the insurer, directly or indirectly
whether as a shareholder, director or otherwise; or
(c) in accordance with whose advice, directions or instructions the board of
directors of the insurer is accustomed to act:
Provided that nothing in sub-clause (c) shall apply to a person who is
acting merely in a professional capacity.’;
(c) in section 64VB of the Insurance Act, for sub-sections (1), (2) and (3), the following sub-
sections shall be substituted, namely: —
“(1) No insurer shall assume any risk in respect of any insurance business until and
unless—
(a) the premium payable is received by him; or
(b) the premium payable is guaranteed to be paid by such person, in such manner
and within such time as the Authority may specify by regulations; or
(c) the deposit of such amount as the Authority may specify by regulations is made
in advance for adjustment towards premium; or
(d) payment of premium to be made in any other form by the prospective
policyholder is agreed upon between him and the insurer, in such manner as the
Authority may specify by regulations.
(2) Any refund of premium which may become due to an insured on account of
cancellation of a policy or alteration in its terms and conditions or otherwise, shall be paid
by the insurer directly to the insured by a crossed or order cheque or by postal money
order or by such other means as may be specified by the Authority by regulations, and a
proper receipt therefor shall be obtained by the insurer from the insured, and such refund
shall in no case be credited to the account of the agent.”;
(d) in section 114A of the Insurance Act, in sub-section (2),—
(I) for clause (i), the following clause shall be substituted, namely:—
“(i) the conditions subject to which an insurer who may invest under sub-section (2)
and the time, manner and other conditions of investment of assets by an insurer
under clause (b) of sub-section (3), of section 27;”;
(II) for clause (zaa), the following clause shall be substituted, namely:—
“(zaa) the manner and time for payment under clause (b), the amount to be
deposited under clause (c) and the manner of payment of premium under clause
(d), of sub-section (1), other means of payment of refund to the insured under sub-
section (2) and the manner of receipt of premium under sub-sections (6), of section
64VB;”.
Explanation.—In this notification, the expression “International Financial Services Centre” shall
have the same meaning as assigned to it in clause (g) of sub-section (1) of section 3 of the
International Financial Services Centres Authority Act, 2019 (50 of 2019).
[F. No. 14017/3/2022-Ins.-II]
SAURABH MISHRA, Jt. Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.