Prohibition of loans
Section 29 of the Insurance Act, 1938 deals with prohibition of loans. No insurer shall grant loans or temporary advances either on hypothecation of property or on personal security or otherwise, except loans on life insurance policies issued by him within their surrender value, to any director, manager, actuary, auditor or officer of the insurer, if a company or to an The Act came into force on 01 Jul 1939.
1[29. Prohibition of loans.--(1) No insurer shall grant loans or temporary advances either on hypothecation of property or on personal security or otherwise, except loans on life insurance policies issued by him within their surrender value, to any director, manager, actuary, auditor or officer of the insurer, if a company or to any other company or firm in which any such director, manager, actuary or officer holds the position of a director, manager, actuary, officer or partner:
Provided that nothing contained in this sub-section shall apply to such loans, made by an insurer to a banking company, as may be specified by the Authority:
Provided further that nothing in this section shall prohibit a company from granting such loans or advances to a subsidiary company or to any other company of which the company granting the loan or advance is a subsidiary company if the previous approval of the Authority is obtained for such loan or advance.
(2) The provisions of section 185 of the Companies Act, 2013 (18 of 2013) shall not apply to a loan granted to a director of an insurer being a company, if the loan is one granted on the security of a policy on which the insurer bears the risk and the policy was issued to the director on his own life, and the loan is within the surrender value of the policy.
(3) Subject to the provisions of sub-section (1), no insurer shall grant--
(a) any loans or temporary advances either on hypothecation of property or on personal security or otherwise, except such loans as may be specified by the regulations including the loans sanctioned as part of their salary package to the full-time employees of the insurer as per the scheme duly approved by its Board of Directors;
(b) temporary advances to any insurance agent to facilitate the carrying out of his functions as such except in cases where such advances do not exceed in the aggregate the renewal commission earned by him during the immediately preceding year.
(4) Where any event occurs giving rise to circumstances, the existence of which at the time of grant of any subsisting loan or advance would have made such grant a contravention of this section, such loan or advance shall, notwithstanding anything in any contract to the contrary, be repaid within three months from the occurrence of such event.
(5) In case of default in complying with the provisions of sub-section (4), the director, manager, auditor, actuary, officer or insurance agent concerned shall, without prejudice to any other penalty which he may incur, cease to hold office under, or to act for, the insurer granting the loan on the expiry of three months.]
Section 29, The Insurance Act, 1938 (Act 4 of 1938).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Made under this section, and citing it
1 instrument states that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Another 1 instrument names this provision in its title or its text without being made under it.
Questions about Section 29
What does Section 29 of the Insurance Act deal with?
Section 29 of the Insurance Act is headed "Prohibition of loans". [29. Prohibition of loans.--(1) No insurer shall grant loans or temporary advances either on hypothecation of property or on personal security or otherwise, except loans on life insurance policies issued by him within their surrender value, to any director, manager, actuary, auditor or officer of th
How do I find court cases under Section 29 of the Insurance Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Insurance Act 1938 29, section 29 Insurance Act 1938, section 29 of the Insurance Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.
What should I read with Section 29 of the Insurance Act, and has it changed?
Its own text turns on Companies Act 185 (Loan to directors, etc), so none of them can safely be read on its own. 2 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there is one: most recently Insurance Regulatory and Development Authority of India (Loans or Temporary advances to the Full-time Employees of the Insurers) Regulations, 2016 (2016).
When did Section 29 of the Insurance Act come into force?
Section 29 of the Insurance Act, cited as Insurance Act 1938 29, came into force on 01 Jul 1939, having been enacted on 26 Feb 1938. It is in force as at the date shown on this page.
Other sections of this Act
- 37A. Power of Authority to prepare Scheme of Amalgamation1733 words
- 3. Registration1612 words
- 2. Definitions1604 words
- 106. Power of Court to order restoration of property of insurer or compensation in certain cases1514 words
- 114A. Power of Authority to make regulations1275 words
- 6A. Requirements as to capital structure and voting rights and maintenance of registers beneficial owners of shares1136 words
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. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.