Amendment of section 28

Section 140 of the Finance Act, 2021 deals with amendment of section 28. Amendment of section 28. 140. For section 28 of the principal Act, the following section shall be substituted, namely:— "28.

Amendment of section 28.

140. For section 28 of the principal Act, the following section shall be substituted, namely:—

"28. Surplus from life insurance business, how to be utilised.—(1) If as a result of any investigation undertaken by the Board under section 26, any surplus emerges,—

(a)

for every financial year previous to the financial year for which the funds referred to in sub-section (2) of section 24 are to be maintained, and for any subsequent financial year for which members may exempt the maintenance of such funds,—

(I)		ninety per cent., or such higher percentage as the Board may approve, of such surplus shall be allocated to or reserved for the life insurance policyholders of the Corporation; and
(II)		such percentage of the remaining surplus as the Board may approve, shall be allocated to or reserved for members and may either be credited to a separate account maintained by the Corporation or be transferred to such reserve or reserves as the Board may specify;

(b)

for every financial year other than that referred to in clause (a),—

(i)

in respect of participating policyholders,—

(I)		ninety per cent., or such higher percentage as the Board may approve, of surplus relating to such policyholders, shall be transferred to the participating policyholders fund, and shall be allocated to or reserved for the life insurance participating policyholders of the Corporation; and
(II)		such percentage of the remaining surplus as the Board may approve, shall be allocated to or reserved for members and may either be credited to a separate account maintained by the Corporation or be transferred to such reserve or reserves as the Board may specify;

(ii)

in respect of non-participating policyholders, one hundred per cent. of surplus relating to such policyholders shall be allocated to or reserved for members and may either be credited to a separate account maintained by the Corporation or be transferred to such reserve or reserves as the Board may specify.

(2) The remaining surplus referred to in sub-clause (ii) of clause (a) of sub-section (1) or in item (ii) of sub-clause (i) of clause (b) of sub-section (1), as the case may be, and the surplus referred to in sub-clause (ii) of clause (b) of sub-section (1), and the profits allocated to or reserved for the members under section 28A, shall be utilised for such purposes as the Board may approve, including for the purpose of declaration or payment of dividend, the issue of fully paid-up bonus shares to members and crediting any of the reserves that the Board may create for any purpose.

(3) The Corporation shall, with the approval of the Board, publish on its website its surplus distribution policy at least once in five years, or such shorter period not less than three years as the Board may deem fit, and such policy shall specify, among other things, the percentages referred to in sub-section (1).".

Section 140, The Finance Act, 2021.