The Insurance Act, 1938 contains important provisions relating to insurance sector/ service in the country. Important provisions are discussed briefly in the following pages.
Eligibility. Any class of insurers can carryon insurance business in India unless he is
a public company
a society registered under the Co-operative Societies Act. 1912
a body corporate incorporated outside India other than a private company.
Registration. (i) Every person who is desirous of doing particular class of insurance business shall obtain a certificate of registration from the Authority.
(ii) A person who is carrying on any class of insurance business in India, on or before the commencement of the IRDA Act. 1999 shall make an application for such resgistration within 3 months from the date of commencement of such Act.
Documents to be filed. Every application for registration shall be accompanied by the following documents.
A certified copy of the memorandum and articles of association.
Name and address of the directors and their occupation.
A statement of the class or classes of insurance business done or to be done. A certificate from RBI showing that the requisite amount required to be deposited u/s 7 has been deposited.
In case of life insurance business a sum equal to I % of his total gross premium written in India not exceeding 10 crores.
In case of general insurance business a sum equal to 3 % of his total gross premium written in India not exceeding Rs. 10 crores.
In case of re-insurance business a sum of Rs. 20 crores.
In case of marine insurance Rs. 100,000 only.
A declaration verified by on affidavit made by the principal officer of insurer authorised in that behalf that the requirement as to paid up equity capital or working capital have been complied with.
In case of life insurance or general insurance paid up capital required is Rs. 100 crore.
In case reinsurance business. Rs. 200 crore.
A certified copy of published prospectus and standard policy forms of the insurer, terms and conditions offered in connection with insurance policies, statements of the assured rates along with a certificate from the actuary certifying that such rates, terms and conditions are workable and sound. But in case of general insurance business other than motor car insurance and workman compensation, the above requirement should be complied with only if they are available.
The receipt showing payment of fee of Rs. 50,000 for each class of business.
Grant of Certificate. After satisfying itself as to the soundness of the management of the applicant, volume of its business, adequacy of the earning prospects and that the interest of the public would be served and all other requirements of registration are complied with the Authority may register the applicant and grant a certificate of registration.
Cancellation of Registration. The Authority may cancel the registration of an insurer if he fails to comply with requirements of deposits with RBI, transfer his business, contravenes any requirement of the Insurance Act, do not pay any claim within 3 months of final court judgment or defaults in complying any of the provisions of UC Act/GIC Act/ Companies Act/FEMA.
Renewal of Registration. The insurer has to file an application for renewal before 31st December of preceding year along with evidence of payment of requisite fee.
Fee. Fees may vary according to total gross premium written direct in India during the proceeding year of application subject to 1/4th percent of such premium income or