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Act4
Enacted 1938

The Insurance Act, 1938

In force 260 sections Finance

An Act to consolidate and amend the law relating to the business of insurance.

Act 4 of 1938 Enacted 26 Feb 1938 In force 01 Jul 1939 Department Department of Financial Services

Administered by. Ministry of Finance, Department of Financial Services · Other Acts of 1938

Preamble

*THE INSURANCE ACT, 1938

ACT NO. 4 OF 19381

[26th February, 1938.] An Act to consolidate and amend the law relating to the 2[insurance business].

WHEREAS it is expedient to consolidate and amend the law relating to the 2[insurance business]; It is hereby enacted as follows: ---

What this Act covers

Summary of the Insurance Act, 1938

Key Features

• Regulation of Insurance Business: Provides a legal framework for the conduct and regulation of life, general, and other classes of insurance business.

• Registration of Insurers: Prescribes the conditions and procedures for the registration and operation of insurance companies.

• Protection of Policyholders: Contains provisions to safeguard the interests of policyholders through regulatory oversight and compliance requirements.

• Financial and Solvency Requirements: Prescribes capital adequacy, solvency margins, and investment norms to ensure the financial stability of insurers.

• Management and Administration: Regulates the governance, management, accounts, audit, and reporting obligations of insurance companies.

• Inspection and Investigation: Empowers the competent regulatory authority to inspect, investigate, and supervise insurers and ensure compliance with the Act.

• Regulatory Enforcement: Provides for penalties and other enforcement measures for contraventions of the Act and the rules or regulations made thereunder.

Sections

Type to filter. 260 sections.

  1. 1Short title, extent and commencement
  2. 2Definitions
  3. 2AInterpretation of certain words and expressions
  4. 2BAppointment of Controller of Insurance
  5. 2CProhibition of transaction of insurance business by certain persons
  6. 2CAPower of Central Government to apply provisions of this Act to Special Economic Zones and International Financial Services Centres set up in Special Economic Zones
  7. 2CBProperties in India not to be insured with foreign insurers except with the permission of Authority
  8. 2DInsurers to be subject to this Act while liabilities remain unsatisfied
  9. 2E[Omitted.]
  10. 3Registration
  11. 3APayment of annual fee by insurer
  12. 3AAForeign investment in equity
  13. 3BCertification of soundness of terms of life insurance business
  14. 4Minimum limits for annuities and other benefits secured by policies of life insurance
  15. 5Restriction on name of insurer
  16. 6Requirements as to capital
  17. 6ARequirements as to capital structure and voting rights and maintenance of registers beneficial owners of shares
  18. 6AA[Omitted.]
  19. 6BProvision for securing compliance with requirements relating to capital structure
  20. 6C[Omitted.]
  21. 7[Omitted.]
  22. 8[Omitted.]
  23. 9[Omitted.]
  24. 10Separation of accounts and funds
  25. 11Accounts and balance-sheet
  26. 12Audit
  27. 12AAppointment of Actuary by insurer
  28. 13Actuary Report
  29. 14Record of policies and claims
  30. 15Submission of returns
  31. 16[Omitted.]
  32. 17[Omitted.]
  33. 17A[Omitted.]
  34. 18Furnishing reports
  35. 19Abstract of proceedings of general meetings
  36. 20Custody and inspection of documents and supply of copies
  37. 21Powers of Authority regarding returns
  38. 22Powers of Authority to order revaluation
  39. 23Evidence of documents
  40. 24[Omitted.]
  41. 25Returns to be published in statutory forms
  42. 26Alterations in the particulars furnished with application for registration to be reported
  43. 27Investment of assets
  44. 27AOmitted
  45. 27BOmitted
  46. 27COmitted
  47. 27DOmitted
  48. 27EProhibition for investment of funds outside India
  49. 28Statement and return of investment of assets
  50. 29Prohibition of loans
  51. 30Liability of directors, etc.,for loss due to contravention of section 27,27A,27B,27C,27D or section 29
  52. 31Assets of insurer how to be kept
  53. 31AProvisions relating to managers, etc
  54. 31BPower to restrict payment of excessive remuneration
  55. 32[Omitted.]
  56. 32AProhibition of common officers and requirement as to whole-time officers
  57. 32BInsurance business in rural and social sectors
  58. 32CObligations of insurer in respect of rural or unorganised sector and backward classes
  59. 32DObligation of insurer in respect of insurance business in third party risks of motor vehicles
  60. 33Power of investigation and inspection by Authority
  61. 33APower to appoint staff
  62. 34Power of the Authority to issue directions
  63. 34AAmendment of provisions relating to appointments of managing directors, etc., to be subject to previous approval of the Controller
  64. 34BPower of Authority to remove managerial persons from office
  65. 34CPower of Authority to appoint additional directors
  66. 34DSections 34B and 34C to override other laws
  67. 34EFurther powers
  68. 34FPower of Authority to issue directions regarding re-insurance treaties, etc
  69. 34GOmitted
  70. 34HSearch and seizure
  71. 35Amalgamation and transfer of insurance business
  72. 36Sanction of amalgamation and transfer by Controller
  73. 37Statements required after amalgamation and transfer
  74. 37APower of Authority to prepare Scheme of Amalgamation
  75. 38Assignment and transfer of insurance policies
  76. 39Nomination by policy-holder
  77. 40Prohibition of payment by way of commission or otherwise for procuring business
  78. 40A[Omitted.]
  79. 40BLimitation of expenses of management in life insurance business
  80. 40CLimitation of expenses of management in general insurance business
  81. 41Prohibition of rebates
  82. 42Appointment of insurance agents
  83. 42AProhibition of insurance business through principal agent, special agent and multilevel marketing
  84. 42DIssue of registration to intermediary or insurance intermediary
  85. 42ECommission, brokerage or fee payable to intermediary or insurance intermediary
  86. 43Register of insurance agents
  87. 44[Omitted.]
  88. 44APower to call for information
  89. 45Policy not to be called in question on ground of mis-statement after two years
  90. 46Application of the law in force in India to policies issued in India
  91. 47Payment of money into Court
  92. 47A[Omitted.]
  93. 48[Omitted.]
  94. 48A. Insurance agent or intermediary or insurance intermediary not to be director in insurance company
  95. 48BFurther provision regarding directors
  96. 48C[Omitted.]
  97. 49Restriction On dividends and bonuses
  98. 50Notice of options available to the assured on the lapsing of a policy
  99. 51Supply of copies of proposals and medical reports
  100. 52Prohibition of business of dividing principle
  101. 52AWhen Administrator for management of insurance business may be appointed
  102. 52BPowers and duties of the Administrator
  103. 52BBPowers of Administrator respecting property liable to attachment under section 106
  104. 52CCancellation of contracts and agreements
  105. 52DTermination of appointment of Administrator
  106. 52EFinality of decision appointing Administrator
  107. 52FPenalty for withholding documents or property from Administrator
  108. 52GProtection of action taken under sections 52A to 52D
  109. 52H[Omitted.]
  110. 52-IOmitted
  111. 52J[Omitted.]
  112. 52K[Omitted.]
  113. 52L[Omitted.]
  114. 52M[Omitted.]
  115. 52N[Omitted.]
  116. 53Winding up by the Court
  117. 53AUnpaid-up share capital
  118. 54Voluntary winding up
  119. 55Valuation of liabilities
  120. 56Application of surplus assets of life insurance fund in liquidation or insolvency
  121. 57Winding up of secondary companies
  122. 58Schemes for partial winding up of insurance companies
  123. 59[Omitted.]
  124. 60Notice of policy values
  125. 61Power of Court to reduce contracts of insurance
  126. 61AAppeal to National Company Law Appellate Tribunal
  127. 62Power of Central Government to impose reciprocal disabilities on non-Indian companies
  128. 63Particulars to be filed by insurers established outside India
  129. 64Books to be kept by insurers established outside India
  130. 64A[Omitted.]
  131. 64B[Omitted.]
  132. 64CCouncils of Life Insurance and General Insurance
  133. 64DAuthorisation to represent in Councils
  134. 64EAuthorities of the Life Insurance Council and the General Insurance Council
  135. 64FExecutive Committees of the Life Insurance Council and the General Insurance Council
  136. 64GResignation and filling up of casual vacancies
  137. 64HDuration and dissolution of Executive Committees
  138. 64-IOmitted
  139. 64JOmitted
  140. 64KOmitted
  141. 64LFunctions of Executive Committee of General Insurance Council
  142. 64MExecutive Committee of General Insurance Council may advise in controlling expenses
  143. 64NPower of the Executive Committees to act together in certain cases
  144. 64-OOmitted
  145. 64P[Omitted.]
  146. 64Q[Omitted.]
  147. 64RGeneral power of Life Insurance Council and General Insurance Council
  148. 64S[Omitted.]
  149. 64T[Omitted.]
  150. 64UOmitted
  151. 64UAOmitted
  152. 64UBOmitted
  153. 64UCOmitted
  154. 64UDOmitted
  155. 64UEOmitted
  156. 64UFOmitted
  157. 64UGOmitted
  158. 64UHOmitted
  159. 64U-IOmitted
  160. 64UJOmitted
  161. 64UKOmitted
  162. 64ULOmitted
  163. 64ULAOmitted
  164. 64UMSurveyors and loss assessors
  165. 64VAssets and liabilities how to be valued
  166. 64VASufficiency of assets
  167. 64VBNo risk to be assumed unless premium is received in advance
  168. 64VCRestrictions on the opening of a new place of business
  169. 65[Omitted.]
  170. 65A[Omitted.]
  171. 66[Omitted.]
  172. 67[Omitted.]
  173. 68[Omitted.]
  174. 69[Omitted.]
  175. 70[Omitted.]
  176. 70A[Omitted.]
  177. 70B[Omitted.]
  178. 71[Omitted.]
  179. 72[Omitted.]
  180. 73[Omitted.]
  181. 73A[Omitted.]
  182. 74[Omitted.]
  183. 75[Omitted.]
  184. 76[Omitted.]
  185. 77[Omitted.]
  186. 78[Omitted.]
  187. 79[Omitted.]
  188. 80[Omitted.]
  189. 81[Omitted.]
  190. 82[Omitted.]
  191. 83[Omitted.]
  192. 84[Omitted.]
  193. 85[Omitted.]
  194. 86[Omitted.]
  195. 87[Omitted.]
  196. 87A[Omitted.]
  197. 88[Omitted.]
  198. 89[Omitted.]
  199. 90[Omitted.]
  200. 90A[Omitted.]
  201. 91[Omitted.]
  202. 92[Omitted.]
  203. 93[Omitted.]
  204. 94[Omitted.]
  205. 94AOmitted
  206. 95[Omitted.]
  207. 96[Omitted.]
  208. 97[Omitted.]
  209. 98[Omitted.]
  210. 98A[Omitted.]
  211. 99[Omitted.]
  212. 100[Omitted.]
  213. 101[Omitted.]
  214. 101ARe-insurance with Indian re-insurers
  215. 101BAdvisory Committee
  216. 101CExamination of re-insurance treaties
  217. 102Penalty for default in complying with, or act in contravention of this Act
  218. 103Penalty for carrying on insurance business in contravention of sections 3
  219. 104Penalty for contravention of sections 27, 27A, 27B, 27D and 27E
  220. 105Wrongfully obtaining or withholding property
  221. 105AOffences by companies
  222. 105BPenalty for failure to comply with sections 32B, 32C and 32D
  223. 10BAPenalty for Contravention of section 42D
  224. 105CPower to adjudicate
  225. 105DFactors to be taken into account by the adjudicating officer
  226. 105EFactors to be taken into account before imposing penalty
  227. 106Power of Court to order restoration of property of insurer or compensation in certain cases
  228. 106ANotice to and hearing of Authority
  229. 107[Omitted.]
  230. 107AChairman, etc., to be public servants
  231. 108Power of Court to grant relief
  232. 109Cognizance of offences
  233. 110Appeal to Securities Appellate Tribunal
  234. 110ADelegation of powers and duties of Chairperson of the Authority
  235. 110BSignature of documents
  236. 110CPower to call for information
  237. 110DCertain claims for compensation barred
  238. 110E[Omitted.]
  239. 110FProvisions applicable to state Governments, etc
  240. 110G[Omitted.]
  241. 110H[Omitted.]
  242. 110HAPenalty to be recoverable as arrear of land revenue
  243. 111Service of notices
  244. 112Declaration of interium bonuses
  245. 113Acquisition of surrender value by policy
  246. 114Power of Central Government to make rules
  247. 114APower of Authority to make regulations
  248. 114BSubsidiary instructions
  249. 114CConsultative Committee
  250. 115Omitted
  251. 116Power to exempt from certain requirements
  252. 116ASummary of returns to be published
  253. 117Saving of provisions of Indian Companies Act, 2013
  254. 118Exemptions
  255. 118APowers of Authority not to apply to International Financial Services Centre
  256. 119Inspection and supply of copies of published prospectus, etc
  257. 120Omitted
  258. 121Repealed
  259. 122Repealed
  260. 123Repealed

Schedules

This Act has 8 schedules. A schedule is published as a document of its own; the text is reproduced on its page where it has been read, and the document is mirrored here either way.

Rules made under this Act

40 sets of Rules. India Code publishes Rules as a record and a document rather than as text, so these are indexed here and not reproduced. All Rules.

  • Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting General or Health Insurance business) Regulations, 20232023
  • Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting life insurance business) Regulations, 20232023
  • Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 20232023
  • Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 20022022
  • Insurance Regulatory and Development Authority of India (Appointed Actuary) Regulations 20222022
  • Insurance Regulatory and Development Authority of India (Other Forms of Capital) Regulations, 20222022
  • Insurance Regulatory and Development Authority of India (Registration of Indian Insurance Companies) Regulations, 20222022
  • Notification on applicability of certain provisions of the Insurance Act in SEZ and IFSC2022
  • Insurance Regulatory and Development Authority of India (Insurance Advertisements and Disclosure) Regulations, 20212021
  • Insurance Regulatory and Development Authority of India (Manner of assessment of compensation to shareholders or members on amalgamation) Regulations, 20212021
  • Insurance Regulatory and Development Authority of India (Minimum Information Required for Investigation and Inspection) Regulations, 20202021
  • The Indian Insurance Companies (Foreign Investment) Rules, 20152021
  • The Insurance (Appeal to Securities Appellate Tribunal) Rules, 20162021
  • Gazette Notification dated 27.12.20192019
  • Indian Insurance Companies (Foreign Investment) Amendment Rules, 20192019
  • Insurance Regulatory and Development Authority of India (Insurance Services by Common Public Service Centers) Regulations, 20192019
  • Insurance Regulatory and Development Authority of India (Non-linked Insurance Products) Regulations, 20192019
  • Insurance Regulatory and Development Authority of India (Re-insurance Advisory Committee) Regulations, 20192019
  • Insurance Regulatory and Development Authority of India (Regulatory Sandbox) Regulations, 20192019
  • Insurance Regulatory and Development Authority of India (Unit linked Insurance Products) Regulations, 20192019
  • Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 20182018
  • Insurance Regulatory and Development Authority of India (Re-insurance) Regulations, 20182018
  • Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 20172017
  • Insurance Regulatory and Development Authority of India (Outsourcing of Activities by Indian Insurers) Regulations, 20172017
  • Insurance Regulatory and Development Authority of India (Protection of Policyholders' Interests) Regulations, 20172017
  • Indian Insurance Companies (Foreign Investment) Amendment Rules, 20162016
  • Insurance (Appeal to Securities Appellate Tribunal) Rules, 20162016
  • Insurance (Procedure for Holding Inquiry by Adjucating Officer) Rules, 20162016
  • Insurance Regulatory and Development Authority of India (Actuarial Report and Abstract for Life Insurance business) Regulations,2016
  • Insurance Regulatory and Development Authority of India (Assets, Liabilities and Solvency Margin of General Insurance) regulations, 20162016
  • Insurance Regulatory and Development Authority of India (Assets, Liabilities, and Solvency Margin of Life Insurance Business) Regulations, 20162016
  • Insurance Regulatory and Development Authority of India (Health Insurance) Regulations, 20162016
  • Insurance Regulatory and Development Authority of India (Issuance of e-Insurance Policies) Regulations, 20162016
  • Insurance Regulatory and Development Authority of India (Lloyd’s India) Regulations, 20162016
  • Insurance Regulatory and Development Authority of India (Loans or Temporary advances to the Full-time Employees of the Insurers) Regulations, 20162016
  • Insurance Regulatory and Development Authority of India (Registration of Corporate Agents) Regulations, 20152016
  • Insurance Regulatory and Development Authority of India (TPA- Health Services) Regulations, 20162016
  • Insurance Regulatory and Development Authority of India(Appointment of Insurance Agents) Regulations, 20162016
  • Insurance Regulatory and Development Authority of India(Inspection and Fee for Supply of Copies of Returns) Regulations, 20152016
  • Insurance Regulatory and Development Authority of India(Investment) Regulations, 20162016

Related Acts

Ordinances

India Code records no parent Act for an ordinance, so these are tied to this Act by their own titles and their dates rather than by anything the source states. An ordinance is made when Parliament is not sitting and lapses six weeks into the next session unless it is enacted.

  • Insurance (Amendment) Ordinance, 1955amended this Act · 1955

All Ordinances

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. 254 of 260 sections have their own page; for the remaining 6 the source gave us a heading and no text, so their pages carry the heading and say so rather than showing words we do not hold. This page is not a substitute for legal advice.