Rule, 1939

Text

Reproduced from the document India Code holds for this instrument. The Gazette prints Hindi and English side by side and this is the English; the Department's own PDF remains the authority.

Insurance Rules 1939 Preliminary

1. Short title.-These rules may be called the Insurance Rules,1939.

2. Definitions.- In these rules, -

(i) "the Act" means the Insurance Act, 1938 (4 of 1938);

(ii) "the Bank" means the Reserve Bank of India;

(iii)"Bombay area" means the area comprising the Statesof Maharashtra, Gujarat and Madhya Pradesh and the Union Territoriesof Goa, Daman and Diu, and Dadra and Nagar Haveli; (iv) "Calcuttaarea" means the area comprising the States of Assam, Bihar,Manipur, Meghalaya, Orissa, West Bengal, Sikkim and Tripura and theTuensang district in the State of Nagaland and Union Territories ofArunachal Pradesh, Mizoram and Andaman and Nicobar Islands; (v)"Delhi area" means the area comprising the States of Jammuand Kashmir, Haryana, Himachal Pradesh, Punjab, Rajasthan and UttarPradesh and the Union Territories of Delhi and Chandigarh; (vi)"Madras area" means the area comprising the States ofAndhra Pradesh, Karnataka, Kerala, and Tamil Nadu, and the UnionTerritories of Pondicherry and Lakshadweep; and (vii) words used butnot defined in these rules have the meanings respectively assigned tothem in the Act.

Actuaries

3. Qualifications of actuaries.- Any person signing as actuaryunder the Act shall be a Fellow of the Institute of Actuaries,London, or a Fellow of the Faculty of Actuaries in Scotland or aFellow of Actuarial Society of India: Provided that where application is made to the Controller ofInsurance and it is shown to his satisfaction that the employment ofan Associate of such institute of actuaries or of such Faculty ofActuaries 6[ or of such Actuarial society] or of any other personhaving actuarial knowledge for any specified purpose is expedient inorder to enable an insurer or a provident society to carry out any ofhis or its obligations under the Act, the Controller of Insurance maygrant the application and permit such person to sign as actuary forthe specified purpose, subject to such conditions and restrictions asthe Controller of Insurance thinks fit to impose.

Deposits with the Bank

5. Deposits with the Bank.-(1) Deposits made in pursuance of theAct shall be held by that office of the Bank (hereinafter referred toas the appropriate Indian office) in whose area of administration theprincipal office in the State of the depositor is situated:

Provided that deposits in sterling securities shall be held by theLondon office of the Bank on behalf of the appropriate Indian office.

(2) Deposits in sterling securities shall be sent by the depositorwith a covering letter to the Manager of the London office of theBank, and shall not be brought on the books of the appropriate Indianoffice until the receipt of an intimation in Form I from the Londonoffice.

(3) Deposits, other than deposits in sterling securities, shall besent by the depositor with a covering letter to the manager of theappropriate Indian office of the Bank.

(4) Securities shall be duly transferred to the Bank of thedepositor.

(5) Upon receipt of the intimation referred to in sub-rule (2) orof a deposit under sub-rule (3) the appropriate Indian office of theBank shall send -

(a) a certificate in Form II to the depositor; and

(b) a statement in Form III to the Controller of Insurance:

Provided that, if the Bank is not satisfied as to the validity ofthe title of the depositor to the securities, it may return them tohim with the request that they shall first be renewed or that suchother measures as may be necessary shall be taken to clear the title.

(6) The market value of sterling securities held by the Bank shallbe converted at 1s.6d. to the rupee.

6. Changes in deposits.-When the form or amount of a deposit ischanged by reason of a subsequent deposit, a substitution or apayment under sub- section (9) or subsection (10) of Sec. 7 of the Actor a sale or investment under sub-section (9-A) of the said section,the Bank shall, send a fresh certificate and a fresh statement of thenature, and in the manner, described in Cls. (a) and (b) to sub-rule(5) of rule 5.

7. Maturing of deposits.- When a security in deposit matures, orwhen any yield on such security ceases to accrue, the Bank shall notbe bound to inform the depositor; but, upon receipt of a requisitionfrom the depositor made in writing and in accordance with theprovision of the Act, the Bank shall, within six weeks of such areceipt, collect the discharge value and hold the amount in cash tothe credit of the depositor or invest it in securities specified bythe depositor.

8. Interest and dividends on deposits.-(1) No interest shall bepaid on cash deposits.

(2) Interest or dividends on sterling securities shall, at theoption of the depositor, be either paid in London by the Londonoffice of the Bank after deduction of a commission of 5s. on everysum of £100 or part thereof, or remitted by the London officeof the Bank to the appropriate Indian office of the Bank at thetelegraphic transfer rate on India prevailing on the date ofrealisation of the interest or dividends.

(3) The appropriate Indian office of the Bank shall remit interestor dividends on securities other than sterling securities, andamounts if any, received from the London office of the Bank undersub-rule (2) without delay to the depositor at an office in India tobe specified by the depositor,-

(a) if the office so specified is at a place where there is anoffice of a Bank or a branch of the Imperial Bank of India, by meansof a Government draft; and

(b) in other cases, by a Security Deposit Interest Payment Drafton the nearest Government Treasury;

after deduction of a commission of annas four on every sum of Rs.100 or part thereof.

9. Withdrawals, etc. from deposits.- ( 1) Withdrawals and paymentsfrom deposits and purchases of securities shall not be made save inaccordance with the provisions of the Act and on receipt by the Bankof a requisition in writing and in accordance with the provisions ofthe Act from the depositor, a liquidator acting in accordance withlaw or a Court of competent jurisdiction, as the case may be.

(2) The Bank shall not be bound, in pursuance of sub-rule (1), toreturn securities actually deposited, but may substitute therefor newscrip of securities of the same description and amount.

(3) The Bank shall be entitled to charge, for the purchase or saleof securities, any brokerage payable by the Bank in respect of suchpurchase or sale.

10. Information as regards deposits.- (1) The Controller ofInsurance shall be entitled, free of any fee to inspect or to requirefrom the Bank any information relating to any security deposited withthe Bank under the Act.

(2) The Bank shall, if so required, furnish the Controller ofInsurance, or any person authorized by him in that behalf in writingwith a copy of any entry in any register or book maintained by theBank relating to any deposit made with the Bank under the Act.

(3) The Bank shall publish as soon as may be after the 1St Januaryin each year in such manner as the Central Government may direct alist in Form IV of deposits made with it under the Act. as at 31StDecember of the preceding year.

Securities and Investments 10 -A. Pakistan securities.- Securities guaranteed fully asregards principal and interest by a Provincial Government in Pakistanor charged on the revenues of any part of that Dominion anddebentures or other securities for money issued by or on behalf ofthe trustees of the Port of Karachi shall be recognized, in the caseof insurers incorporated or domiciled in India, as approvedsecurities-

(a) for the purposes of Sec. 7, 68 or 73, if such securities hadbeen deposited with the Bank in pursuance of the Act before the 15thday of August. 1947. and continue to be so deposited with the Banksince that date, and

(b) for the purposes of Sec. 27 and 27-A, if such securities hadbeen acquired by an insurer or a provident society before the 15thday of August. and continue to be held since that date by the insurer or theprovident society.

10 -B. Assets deemed to be approved investments.-

(i) For the purposes of subsection (1) of See. 27 of the Act, thefollowing assets shall be deemed to be assets invested in approvedinvestment specified in sub-section (1) of Sec. 27-A of the Act-

(a) interest, dividend and rents (outstanding and accrued);

(b) cash in hand and with banks (other than banks in liquidationin current and collection accounts;

(d) value of furniture, fittings, machinery, stationery andlibrary but not exceeding Rs. 10,000 or one per cent. of the sumreferred to in sub-section

(1) of Sec. 27 of the Act, whichever isgreater;

(e) value of motor cars but not exceeding Rs. 20,000 or one halfper cent of the sum referred to in sub-section (1) of Sec. 27 of theAct whichever is greater;

(f) stamps on hand;

(g) amount of income-tax directed by the income-tax authority, tobe refunded; (h) temporary advances granted to chief, special andinsurance agents to the extent permitted under Cl. (b) of sub-section(3) of See. 29 of the Act. (2) (i) For the purposes of sub-section(2) of Sec. 27-B of the Act, the following assets shall be deemed tobe assets invested or kept invested in approved investments specifiedin sub-section (1) of that section, namely:

(a) interest, dividends and rents (outstanding and accrued);

(b) cash in hand and with banks (other than banks in liquidation)in current and collection accounts;

(d) amounts due from other insurers in respect of reinsurancerecoveries and deposits or reserves with other insurers in respect oftreaties for reinsurances as to be accepted.

(ii) In respect of insurance specified in Cl. (c) of sub-section(16) of Sec. 27- B of the Act, three-fourths of the value of thefollowing assets shall also be deemed to be approved investmentsspecified in sub-section (1) of Sec, 27- B of the Act, namely:

(a) motor cars,

(b) stamps on hand,

(c) amounts of income-tax directed by the income-tax authoritiesto be refunded.

10 -C. Returns of investments and changes in investments.-(1) Thereturn to be furnished under sub-section (1) of Sec. 28-A of the Actshall show all the investments made out of the controlled fund andsubsisting as at the 31st day of December of the preceding year andshall be in Form IV-A: Provided that in the case of the Life Insurance Corporation ofIndia, the aforesaid return shall show the said investmentssubsisting as at the last day of the preceding financial year andshall be in Form IV-AAA.

(2) The return to be furnished under sub-section (2) of Sec. 28-Aof the Act shall be in Form IV-B and in the case of the LifeInsurance Corporation of India the said return shall be in FormIV-BBB.

(3) The return to be furnished under sub-section (1) of Sec. 28-Bof the Act shall show all the investments made out of the assets andsubsisting as at the 31st day of December of the preceding year shallbe in Form IV-AA.

(4) The return to be furnished under sub-section (2) of Sec. 28-Bof the Act shall be in Form IV-BB.

10-D. Charging assets.- (1) An insurer may subject the assetsforming his controlled fund, not being securities kept invested inpursuance of sub- section (1) of Sec. 27, to a charge in favour of abanking company for the purpose of raising an over-draft, andinvesting the money so raised: Provided that the assets charged do not exceed in value ten percent of the controlled fund and the charge is created for a periodnot exceeding six months.

(2) For the purpose of sub-section (11) of Sec. 27-B the chargecreated in favour of one or more banking companies in respect ofassets offered as security for any loan taken for purposes of anyinvestment or for payment of claims shall be subject to the conditionthat any loan taken against such assets shall be repaid within aperiod of three months.

Prospectuses, Tables and Proposal Forms

11. Prospectuses and tables.-(1) No person shall supply or exhibitany prospectus or table of premium rates to any other person with aview to the issue of a policy of insurance unless such prospectus ortable includes, -

(a) a description of the contingency or contingencies to becovered by insurance and the class or classes of lives or propertyeligible for insurance under the terms of such prospectus or table;

(b) a full statement of the circumstances, if any, in whichrebates of the premiums quoted in the prospectus or table shall beallowed on the effecting or renewal of a policy, together with therates of rebate applicable to each case; and

(c) a copy of Sec. 41 of the Act but not including the proviso tosub-section

(1) thereof.

(2) The provisions of sub-rule (1) shall be deemed to have beencomplied with if to every such prospectus or table of premium ratesupplied or exhibited after the date of commencement of the Act isattached in the form of an addendum a statement containing so much ofthe matters referred to in sub-rule (1) as is not already included inthe said prospectuses or tables, but every prospectus and table ofpremium rates printed after the coming into force of the Act shallhave the matters referred to in said clauses incoiporated therein.

12. Proposal Forms.-(l) It shall be clearly indicated -(a) inevery proposal form in the case of life insurance; or (b) in thedocument, if any, forming the basis of the contract in the case ofany other form of insurance, that rebate of premiums shall be allowedonly in accordance with the details given in the prospectus or tableof premium rates or, as the case may be. the relevant document, andthat an offer or acceptance of any other rebate shall be an offenceunder Sec. 41 of the Act. (2) The provisions of sub-rule (2) of rule11 shall apply mutatis mutandis to proposal forms, except that, wherean addendum is attached to a proposal form, it shall also be signedby the person who signs the proposal form.

Committees of the Insurance councils 12 -A. List of insurers.- The Controller shall cause to bepublished in the Gazette of India a list of the members and associatemembers of the life Insurance and General Insurance Councils of theInsurance Association of India once every year in the month ofJanuary.

12 -B. Constituencies of insurers.-(1) Members of the InsuranceAssociation of India who are insurers carrying on life insurancebusiness and having, a premium income in such business of more thanthree lakhs of rupees in the preceding year shall elect fourindividuals as members of the Executive Committee of the LifeInsurance Council of the Insurance Association of India in thefollowing manner:

(a) one individual by such members as have their head offices inthe Calcutta area;

(b) two individuals by such members as have their head offices inthe Bombay area;

(c) one individual by such members as have their head offices inthe Delhi and Madras areas, the members in each area alternatelyelecting the individual, the first election being held in the Delhiarea.

(2) Members of the Insurance Association of India who are insurerscarrying on life insurance business and having a premium income insuch business of less than three lakhs of rupees in the precedingyear shall elect four individuals as members of the ExecutiveCommittee of the Life Insurance Council of the Insurance Associationof India in the following manner;

(a) one individual by such members as have their head offices inthe Calcutta area;

(b) one individual by such members as have their head offices inthe Bombay-area:

(c) one individual by such members as have their head offices inthe Madras area;

(d) one individual by such members as have their head offices inthe Delhi area;

(3) Members of the Insurance Association of India who are insurerscarrying on general insurance business shall elect individuals asmembers of the Executive Committee of the General Insurance Councilof the Insurance Association of India in the following manner:

(a) one individual authorised to stand as a candidate by a memberhaving his head office in the Calcutta area and whose premium incomein such business in the preceding year exceeding ten lakhs of rupeesand elected to the Committee by such members as have their headoffices in the Calcutta area;

(b) one individual authorised to stand as a candidate by a memberhaving his head office in the Calcutta area and whose premium incomein such business in the preceding year did not exceed ten lakhs ofrupees and elected to the Committee by such members as have theirhead offices in the Calcutta area;

(c) two individuals each of whom is authorised to stand as acandidate by a member having his head office in the Bombay area andwhose premium in such business in the preceding year exceeded fivelakhs of rupees and elected to the Committee by such members as havetheir head offices in the Bombay area;

(d) two individuals each of whom is authorised to stand as acandidate by a member having his head office in the Bombay area andwhose premium in such business in the preceding year did not exceedfive lakhs of rupees and elected to the Committee by such members ashave their head offices in the Bombay area;

(e) one individual elected to the Committee by such member, ashave their head offices in the Madras area;

(f) one individual elected to the Committee by such members ashave their head offices in the Delhi area.

(4) For the purpose of this rule if any dispute arises as to whicharea an insurer belongs, or as to the premium income of an insurer,the Controller shall decide the question and his decision shall befinal.

Explanation. -In this rule.-

(i) "preceding year" means the calendar year precedingthe calendar year in which the election takes place; (ii) "Premiumincome" means the gross direct premium income of the insurerwithout taking into account premium income on re-insurances acceptedor ceded.

12 -C. Duties of Dissolved Executive Committees.- When theExecutive Committee of the Life Insurance Council or of the GeneralInsurance Council is dissolved, the outgoing members thereof whocontinue to hold office until a new Executive Committee isconstituted, shall be entitled to discharge the following duties inthe meantime -

(a) keep and maintain up-to-date a copy of the list of all membersand associate members of the Life Insurance Council or the GeneralInsurance Council, as the case may be;

(b) supervise the work of officers and servants employed by theCommittee;

(c) collect the prescribed fees; and

(d) help the Chairman and the secretary to conduct the necessaryelections to the new Executive Committee, 12 -D. Joint Meetings of Executive Committees.-( 1) When a requestis received by the Central Government from-

(a) the Controller of Insurance, or

(b) six individuals who are members of either or both of theExecutive Committees of the Life Insurance Council and the GeneralInsurance Council, or that a joint meeting of the Executive Committees should consider amatter specified in the'request, the Central Government may, on beingsatisfied that the matter is one of common interest to the twoExecutive Committees, direct that a joint meeting of the twoExecutive Committees be convened to consider the matter.

(2) It shall be the duty of the Chairman of the two ExecutiveCommittees to convene, as soon as may be after the issue of thedirection under preceding sub-rule a joint meeting of all the membersof the two Executive Committees at such place and at such time anddate as the two Chairmen may decide.

(3) At such meeting, one of the two Chairmen shall be elected bythe members present to preside and the matter referred to and noother matter shall be considered.

(4) The meeting may be adjourned from time to time to be held notnecessarily at the same place, with the consent of the memberspresent for further consideration of the matter or for considering areport from any sub-committee appointed for the purpose by themembers present, but minutes of each meeting shall be kept and a copythereof shall be furnished to the Controller of Insurance immediatelyafter the meeting. Election of Directors by policy-holders

13. Qualifications of elected directors of insurance companies.-(1) A person shall be eligible for election as a director of aninsurance company under Sec. 48 of the Act, if he holds one or morepolicies of life insurance issued by the company and satisfies theprovisions of the said section and both the following requirements,namely:

(a) the policies shall insure either a total sum, including anybonuses that may have attached to them before the date of election,of not less than Rs. 3,000, where the company has at that date beencarrying on life insurance business for not less than five years, orof not less than Rs. 1,000 in other cases, or annuities on human lifeof a total amount of not less than Rs. 250 per annum without regardto the age of the company, and

(b) where the company has been carrying on life insurance businessfor more than two years, all the policies held in compliance with Cl.(a) shall have been in force for not less than one, two or threeyears, according as the company has at the date of election beencarrying on life insurance business for not more than five years, formore than five but no more than eight years, or for more than eightyears;

Provided that the Central Government may, in respect of anyinsurer after taking into account the maximum sum assured permissibleaccording to constitution or rules and regulations and otherconditions, modify the above qualifications by fixing (i) for the suminsured or annuity, an amount lower than the corresponding amountmentioned in Cl. (a) or Cl. (ii) for the period, a period shorterthan the one mentioned in Cl. (b) or both.

(2) If at any date after election as a director, a person ceasesto be a person holding one or more policies of life insurancesatisfying the provisions of Sec. 48 and both the requirementsspecified in sub-rule (1) he shall forthwith cease to be an electedof the company.

14. Election of directors under Sec. 48.- (l) The election ofdirectors under Sec. 48 of the Act shall take place at a meeting (tobe held at the place where the principal office of the company issituated or, with the prior consent and approval in writing of theController of Insurance, at any other place) of the holders ofpolicies of life insurance issued by the company, who are eligible tovote at such election and the first such election shall be held assoon as possible after the said section becomes applicable acceptoffice.

(2) Not less than three months before the meeting is to be held,there shall be inserted in a newspaper published in the Englishlanguage and in a newspaper published in an Indian languagecirculating in the place where the principal office of the company issituated and, if there are policy-holders of the company residing ina State other than that in which the principal office is situated, ina newspaper published in the English language and, if the company sodesires, in a newspaper published in the principal language of theState, both being papers circulating in that State, a notice statingthe number, which shall be fixed with a view to affording votes thefullest opportunities for attending, and informing policy-holders howto obtain admission to the meeting according to the mannerhereinafter described. Such notice shall also set forth thequalifications which a person must possess in order to be eligiblefor election as a director, and shall invite applications fromeligible persons prepared to accept office: Provided that, where a company prints on its policies thequalifications of elected directors as Set forth in rule 13, andissues, at least six months before the election, to all existingpolicy-holders whose policies do not contain a statement of thosequalifications as modified up to date, a notice setting forth suchmodified qualifications, the notice to be published in newspapers inaccordance with this sub-rule need not set forth thosequalifications:

Provided further that a company may, in respect of one or moreStates instead of publishing the notice in newspapers, send it bypost to every policy-holder residing therein.

(3) The applications from eligible persons prepared to acceptoffice as elected directions of the company shall be sent byregistered post to the principal office of the company so as to reachit not less than two months before the date of the meeting. Suchapplications shall be made in the English language or in a principallanguage of the State in which the principal office of the company issituated. If the number of such applicants does not exceed the numberof directors to be elected, all such applicants shall be deemed tohave been elected as directors and it shall not be necessary to holdthe meeting of policy-holders as previously announced. The companyshall in that event inform the policy-holders forthwith by noticeinserted in newspapers as in sub-rule (2). or by notice sentindividually by post to those policy-holders who are eligible to voteand who apply for a certificate of admission under sub-rule (4) or byboth methods of the names of persons elected as directors and of thecancellation of the meeting.

(3-A) An application sent under sub-rule (3) shall give theapplicant's name and address and the numbers of and amounts of thesums insured by the policies by virtue of which he claims to beeligible for election.

(4) Every policy-holder who desires to attend the meeting shallapply to the company for a certificate of admission, such applicationto reach the company not less than two months before the date of themeeting, and the company on being satisfied that the applicant holdsa policy of life insurance issued by the company not less than sixmonths before the date of election shall issue a certificate at leastone month before the date of the meeting. Such certificate shall, ifapplied for by post, be sent only to the address of the policy-holderor if applied for in person be delivered only on production of therelevant policy and shall, in any case, be accompanied by a statementof the names and addresses of the eligible persons prepared to acceptoffice whose applicants have been received by the company undersub-rule (3). A certificate of admission shall not be transferable.

(5) No person other than those whose presence is, in the opinionof the chairman necessary for the conduct of the meeting shall beadmitted to the meeting unless he produces the certificate ofadmission granted to him under sub-rule (4).

(6) The meeting shall be presided over by the Chairman for thetime being of the Board of Directors of the company, or in hisabsence by any director nominated by him, or in the absence of anysuch director by a Chairman elected by the policy-holders present atthe meeting.

(7) Votes for the election of directors may be given at themeeting either personally or by proxy and in the manner hereinafterprovided in this rule. The instrument appointing a proxy shall be inwriting in Form IV-C under the hand of the appointer in favour of apolicy-holder, and shall be presented at the principal office of thecompany not less than one month before the date of the meeting. Nopolicy-holder shall appoint more than one proxy irrespective ofpolicies he holds.

(8) Every policy-holder present at the meeting shall be given onevoting paper on his own behalf irrespective of the number of policieshe holds and one voting paper in respect of each proxy, if any, whichhe holds. The number of votes to be given on each voting paper shallnot exceed the number of directors to be elected and not more thanone vote shall be given on each voting paper to any one candidate:

Provided that a policy-holder may, if he prefers, vote on onevoting paper in respect of all the proxies he holds. In that event,the number of votes to be given on the voting paper shall not exceedthe number of directors to be elected multiplied by the number ofproxies held and the number of votes given to any one candidate onthat paper shall not exceed the number of proxies held.

(8-A) If any policy-holder is a lunatic or an idiot, he may voteby his legal representative: and if any policy-holder is a minor hemay vote by his legally appointed guardian, or any of such guardians,if more than one. (8-B) If a policy has been proposed for, and taken out jointly by,more than one person having insurable interest between them, eachsuch person shall be entitled to vote as a holder of that policy.

(9) The votes shall be counted by the company's auditors ifpresent in that capacity, or failing them by scrutineers appointed bythe meeting, and working under the supervision of the Chairman. Theresult of the ballot shall be announced at the meeting and in theevent of an equality of votes the election shall be decided by lot:

Provided that if the counting of votes is not likely to becompleted by 7 p.m. on the date of the meeting, the Chairman maylock, seal and take charge of the ballot box in the presence of themeeting and postpone the counting of votes by not more than 48 hours.The opening of the ballot box shall be done by the Chairman and thecounting shall be carried out by the same persons as are specified inthis sub-rule for this purpose within the said 48 hours afterreasonable notice of the time and place where the counting is to takeplace has been given to the candidates but no others except thosewhose presence is necessary for the purpose of making the countingand the declaration. Each candidate or in his absence his authorizedrepresentative shall be allowed to be present to witness the openingand the counting. The result of the ballot shall then be communicatedby notice published in newspapers as in sub-rule (2) or individuallyby post to all policy-holders who were present in person at theelection or by both methods.

(10) For the purpose; of sub-rule (3) of rule 15, a list shall beprepared of those of the unsuccessful candidates in whose favour anyvalid votes are cast in descending order of the number of such votescast for each. If two or more such candidates have an equal number ofsuch votes cast for them, they shall be placed in the list in thealphabetical order of their signatures in their applications undersub-rule (3). For the purposes of this sub-rule, no valid vote shallbe deemed to be cast for a candidate if his own vote is the only votecast for him.

(10-A) No election shall be held at any meeting convened underthese rules unless a quorum of policy-holders holding certificatesissued under sub-rule

(4) is personally present at the time when themeeting proceeds to business. The number of such certificate holderswho must personally be present to constitute a quorum shall be fivetimes the number of directors to be elected at that meeting.

(10-B) If within half an hour from the time appointed for themeeting a quorum is not present, the meeting shall stand adjourned tothe same day in the next week at the same time and place, and it atthe adjourned meeting a quorum is not present within half an hourfrom the time appointed for the meeting, the policy-holders presentand holding certificates issued under sub-rule (4) shall be a quorum.

(11) An election held in accordance with this rule shall not beinvalid merely by reason of the accidental omission to send anynotice or other document to, or the non-receipt of any notice orother document by, any policy-holder, or of any other accidentalirregularity or informality in the observance of the provisions ofthis rule.

15. Period of office of directors and filling of vacancies.- (1)An election of directors under these rules (other than the first suchelection) shall be held not later than three years from the date ofthe last such election: Provided that an election for the holding of which the latest dateotherwise permissible under this sub-rule is a date in the year 1943may be postponed to a date not later than the 31st December, 1944.

(2) At every meeting of policy holders held in pursuance ofsub-rule (1), all the directors elected or appointed under these rulesshall retire, but any director so retiring shall, if he remainseligible under rule 13, be eligible for re-election.

(3) In the event of casual vacancy arising among the directorselected or appointed under these rules, the vacancy shall be filledby appointing the person highest in the list prepared under sub-rule(10) of rule 14, who remains eligible under rule 13 and is willing toact as a director.

(4) Any person in the said list who is not appointed in his turnunder sub- rule (3), either because he has ceased to be eligible underrule 13 or because of his unwillingness to act shall be removed fromthe list.

(5) In the event of there being no person available forappointment under sub-rule (3), the casual vacancy shall be filled bythe remaining directors (if not less than two in number) elected orappointed under these rules by appointing a person eligible underrule 13, or if such directors (or a majority of them) are unable toagree upon a person to be appointed, the appointment shall be decidedby lot from amongst the persons eligible under rule 13 who have beenconsidered for the appointment by the said remaining directors.

(6) In the event of there being only one or no such remainingdirector, the casual vacancy shall be filled by an election inaccordance with these rules to be held not later than six months fromthe date on which the vacancy occurred, unless the company securesfrom the Central Government within two months from the said date anexemption for that purpose from the provisions of Sec. 48 of the Actunder Cl. (b) of sub-section (3) thereof.

(7) Any person appointed or elected to fill a casual vacancy shallbe subject to retirement at the same time as would have been thedirector in whose place he is appointed or elected.

(8) An election held in pursuance of sub-rule (6) to fill a casualvacancy shall not be reckoned as an election for the purpose ofsub-rule (1).

(9) Nothing in the rule shall be deemed to affect the applicationof Regulations 78 and 79 in Table A of the First Schedule to theIndian Companies Act, 1913 (7 of 1913), to directors elected orappointed otherwise than under these rules.

Licences and Certificates

16. Licence fee for insurance agents and collection thereof.- Thefee for obtaining or renewing a licence to act as an insurance agentshall Rs.15 provided that an additional of Rs. 7 shall be paid if theapplication for the renewal of the licence does not reach theController at least thirty days before the date on which the licenceceases to remain in force. 16-A. Issue of licences to insurance agents.-An applicant whodesires to obtain or renew a licence to act as an insurance agentshall proceed as follows:

(a) the applicant shall obtain from the Controller of Insurance aform of application for a licence which shall be,-

(i) in the case of an individual, Form V, or Form V-A, if heapplies for the grant of a licence for the first time or for therenewal of the licence held by him, as the case may be;

(ii) in the case of a company or firm, Form V-P, or Form V-PA, ifit applies for the grant of a licence for the first time or for therenewal of the licence held by it, as the case may be;

(iii) in the case of a co-operative society or a Panchayat, FormV-S, or Form V-SA, if it applies for the grant of a licence for thefirst time or for the renewal of the licence held by it, as the casemay be;

(iv)in the case of a society registered under the Societiesregistration Act, 1860 (21 of 1860), Form V-SS or Form V-SSA, if itapplies for the grant of a licence for the first time or for therenewal of the licence held by him, as the case may be.

(b) He shall then send to the Controller of Insurance thecompleted application form with the fee which shall be paid in theform of stamps to the value of Rs. 15 or Rs. 22, as the case may be,and the stamp shall be affixed to the application in the properplace.

(c) The Controller of Insurance or the officer authorized by himunder subsection (1) of sec. 42 of the Act, shall issue a licenceafter taking all reasonable steps to satisfy himself that theapplication is in order and that the applicant is not disqualifiedfrom holding a licence. No application shall be considered by theController of Insurance unless the particulars in Form V-B, FormV-PB, Form V-SB or Form V-SSB] as the case may be, have been filledin by the applicant.

In the case of -

(i) an individual, the licence shall be in Form V-B;

(ii) a company or firm, shall be in form V-PB;

(iii) a co-operative society or a Panchayat, it shall be in FormV-SB; (iv) a society registered under the Societies Registration Act,1860 (21 of 1860), it shall be in Form V-SSB; (d) No application forthe renewal of licence will be accepted if it reaches the Controller on or after the date on which the licence ceases to bein force: Provided, however, that if an applicant desires that hisapplication should be considered under the proviso to sub-section(3-A) of Sec. 42 of the Act, he shall forward along with suchapplication a request to that effect, with stamps to the value of Rs.75 affixed thereon and a statement of all the facts and particularswhich are to be taken into consideration by the Controller for thepurpose of examining whether undue hardship would be caused if norenewal of licence is granted:

Provided further that the applicant, if required to do so by theController, shall furnish documentary proof of any of the particularsor facts mentioned in the statement referred to above.

16-B. Bona fide insurance agents for the purposes of Sec. 41.- Theconditions to be satisfied by an insurance agent to establish that heis a bona fide insurance agent employed by the insurer for thepurposes of the proviso to sub-section (1) of Sec. 41 of the Actshall be the following namely-

(a) He must have secured policies on six different lives excludinghis own.

(b) He must have been an insurance agent continuously from thetime of his soliciting or procuring the first policy on each of suchsix lives or proposing for the policy on his own life, whichever isearlier till the time when the policies on those six lives and thepolicy on his own life have all been issued. 16-C. Fee for principal, chief and special agents.- The fee forobtaining or renewing a certificate to act as a principal agent orchief agent shall be Rs. 25 and the fee for obtaining or renewing acertificate to act as a special agent shall be Rs. 10:

Provided that an additional fee of Rs. 5 in the case of aprincipal agent or a chief agent, and Rs. 3 in the case of a specialagent, shall be paid, if the application for renewal of thecertificate reaches the Controller on or after the date on which thecertificate ceases to be in force but within 12 months of theaforesaid date.

16-D. Issue of certificates to principal, chief and specialagents.-A person, who desires to obtain or renew a certificate to actas a principal agent, or chief agent or special agent, shall proceedas follows-

(a) He shall obtain from the Controller a form of application fora certificate which form shall be as prescribed in Form V-C or FormV-D Form V-C shall be used when an applicant applies for acertificate for the first time, or for a fresh certificate, whileForm V-D shall be used when an applicant applies for the renewal ofcertificate already held by him. No application for the renewal of acertificate will be accepted if it reaches the Controller after aperiod of twelve months from the date on which the certificateceasesto be in force.

(b) He shall then send to the Controller the completed applicationform with stamps to the value of Rs. 25 or Rs. 30 or Rs. 10 or Rs.13, as the case may be, affixed thereon in the proper place.

(c) The Controller or the officer authorized by him undersub-section (1) of Sec. 42-A of the Act shall, after taking allreasonable steps to satisfy himself that the application is in orderand that the applicant is not disqualified from holding acertificate, issue a certificate in Form V-E.

16-E. Issue of duplicate licences and certificates.- (a) A personto whom a licence or a certificate has been issued under Sec. 42 orSec. 42-A of the Act shall, if such licence or certificate has beenlost, destroyed or mutilated, submit to the Controller an applicationrequesting the issue of a duplicate licence or certificate with a feeof Re. 1 in the case of a licence, and Rs. 2 in the case of acertificate, paid in the form of stamp duly affixed thereon and witha declaration giving full details regarding the issue and loss,destruction or mutilation of the licence or certificate, and themutilated pieces, if any, shall be returned to the Controller withthe said application.

(b) The Controller, after satisfying himself that the originallicence or certificate has been lost, destroyed, or mutilated, issuea duplicate licence in Form V-B or Form V-PB or Form V-SB or FormV-SSB or a certificate in Form V-E, as the case may be, with anendorsement thereon that it is a duplicate. 16-F. Description of stamp.- Any fee specified in rules 16, 16-A,16-C, 16-D and 16-E shall be paid in the form of "Government ofIndia Insurance" stamps available from a Government treasury.

16-G. Allowance for unused stamps.- Where an applicant for licenceor a certificate has inadvertently used "Government of IndiaInsurance" stamp of a greater value than is necessary or whereno licence or certificate in respect of an application bearing suchstamp has been issued, refund may be made of the excess of thenecessary fee or of the value of the stamp, as the case may be, onsuch application.

16-H. Cancellation of licences or certificates.-Where theController cancels the licence of an insurance agent undersub-section (5) of Sec. 42 or the certificate of a principal or chiefor special agent under sub-section (4) of Sec. 42-A, he shall -

(a) inform all the officers authorized by him under sub-sectional)of Sec. 42 or Sec. 42-A that the licence or the certificate, as thecase may be, has been cancelled;

(b) require the person concerned to return the licence orcertificate issued to him; and

(c) cause the fact of cancellation to be published in the Gazetteof India and in such State Gazette or Gazettes as he deems fit.

Shares, Ownership and Disposal

17. Declaration as to the nature of ownership of shares.- Thedeclaration to be furnished by a transferee in pursuance of Cl. (b)(i) of sub-section (4) of Sec. 6-A of the Act to a public companylimited by shares having its registered office in the States andcarrying on any class of insurance business shall be in Form V-F.

17-A. Declaration as to beneficial interest in shares.- Thedeclaration to be made in pursuance of sub-section (5) of Sec. 6-A ofthe Act to a public company limited by shares having its registeredoffice in the States and carrying on life-insurance business by aperson who has any interest in any of its shares standing in the nameof another person shall be in Form V-G. 17-AA. Form for declaration.- The declaration to be made inpursuance of subsection (5) of Sec. 6-A of the Act to a publiccompany limited by shares having its registered office in India andcarrying on general insurance business by a person who has anyinterest in any of its shares standing in the name of another personshall be in Form V-GG.

17-B. Disposal of shares by Administrator-General.- As soon as theAdministrator-General of a State has taken charge of any shares of apublic company vesting in him under sub-sections (8) of Sec. 6-A ofthe Act. he shall furnish full details of the shares to theController and he shall try, as soon as may be, to sell the shares,whether as a whole or in part or whether in the open market or byprivate sale, at a price not lower than the price fixed by theController who may vary the price fixed from time to time. Theproceeds shall be handed over to such person as in the opinion of theAdministrator-General, is by law entitled thereto.

Limitation of Expenses of Management 17-C. Statement of the bases of premiums.- (1) The Statement ofthe bases of premiums under sub-section (1) of Sec. 40-B of the Actshall be in Form

V-H.

(2) In respect of premiums currently used by an insurer at thecommencement of the Insurance (Amendment) Act, 1950, the statement ofthe bases of premiums certified by an actuary shall be furnished tothe Controller within six months from such commencement.

(3) A statement on the bases of premiums to be newly used aftersuch commencement certified by an actuary shall be furnished to theController before such premiums, are offered by the insurer toprospective policy- holders.

17-D. Limitation of expenses of management in life-insurancebusiness.- After the 31st day of December, 1950, no insurer shall, inrespect of the life- insurance business transacted by him in India,spend as expenses of management in any calendar year an amountexceeding the aggregate sum of-

(i) five per cent of all premiums received during the year onpolicies granting an immediate annuity or a deferred annuity inconsideration of a single premium, and five per cent of all premiumsreceived on other single premium policies during the year;

(ii) ten per cent of all first year's premiums and four per centof all renewal premiums, received during the year on policiesgranting deferred annuity in consideration of more than one premium;

(iii) one-twentieth of one per cent of the average of the totalsums assured by policies on which no further premiums are payable(less reinsurances) at the beginning and end of the year.

(iv) one per cent of all annuities paid during the year; (v) anamount computed on the basis of the percentages for the time beingappropriate to the duration, of the insurer's life-insurance businessspecified in the following table, namely:

Duration of insurer's life insurance business Percentage of premiums (less re-Duration of insurer's life- insurance business insurances) received during the year other than premiums referred to in items (i) and (ii)above of first year's premiums of renewal premiums First four years Fifth to seventh years Eighth to tenth years After the tenth year, if the insurer's business in force-(a) is less than two crores of rupees

(b) is less than five crores of rupees but not less than two crores of rupees

(c) is less than ten crores of rupees but not less than five crores of rupees

(d) is not less than ten crores of rupees Provided that the percentages specified in the above tableshall, in respect of any first year's premium where the maximumpremiums paying period under the policy is not throughout life notmore than eleven years, be reduced to a number equal to seven and ahalf times the number of whole years in that period.

Explanation I.- In this rule, "business in force" meansin relation to any expense incurred, the total sum assured, withbonuses, without taking into account re-insurances ceded or accepted,by an insurer in respect of the whole of his life-insurance businesson the last working day of the year preceding the calendar year inwhich the expense is incurred. Explanation II.- The duration of an insurer's life-insurancebusiness shall be reckoned from the beginning of the calendar year ofcommencement of the business if the date of commencement is in thefirst half of the year and from the end of the calendar year of suchcommencement if the date of commencement is in the second half of theyear.

17-E. Limitation of expenses of management in general insurancebusiness.- After the 31st day of December, 1949, no insurer shall, in respectof general insurance business transacted him in India other thanmarine insurance business, spend in any calendar year as expenses ofmanagement, including commission or remuneration for procuringbusiness an amount exceeding the sum of-

1. the amount of commission or other remuneration paid toinsurance agents and principal agents in respect of that businesstransacted in the year but not exceeding in respect of fire-insurancebusiness 5 per cent and in respect of miscellaneous insurance 10 percent of the gross premium income written direct in India in respectof that business in the year; and

2. an amount computed on the basis of percentages appropriate tothe various parts of his total gross premium income written direct inIndia during the year.

Part of the total gross premium of the insurer written direct in India (Fire and Miscellaneous business combined) Percentage of premiums First 10 lakhs of rupees Next 5 lakhs of rupees Next 5 lakhs rupees Next 71/2 lakhs rupees Next 71/2 lakhs of rupees Next 10 lakhs of rupees The balance

(2) After the 31st day of December, 1949, no insurer shall, inrespect of marine insurance business transacted by him in India,spend in any calendar year as expenses of management, includingcommission or remuneration for procuring business an amount exceedingthe sum of-

(i) the amount of commission or other remuneration paid toinsurance agents and principal agents in respect of that businesstransacted in the year but not exceeding in amount five per cent ofthe gross premium income written direct in India in respect of thebusiness in the year; and (ii) an amount computed on the basis ofpercentages appropriate to the various parts of his total grosspremium income written direct in India during the year.

Part of total gross premium income of the insurer written direct in India Percentage of premiums First 5 lakhs of rupees Next 5 lakhs of rupees Next 5 lakhs of rupees Next 7 '/2 lakhs of rupees The Balance

(3) Notwithstanding anything contained in sub-rules (1) and(2), an insurer may, during the first ten years of his generalinsurance business, spend in any calendar year as expenses ofmanagement, including commission or remuneration for procuringbusiness an additional amount, in respect of his general insurancebusiness, not exceeding-

(i) during the first three years, the interest earned on thepaid-up capital in that year;

(ii) during the second period of three years, an amount equal to10 per cent of the gross premium income written direct in India, orto the interest earned on the paid-up capital in that year, whicheveris less;

(iii) during the seventh and eighth years an amount equal to 5 percent of the gross premium income written direct in India, orthree-fourths of the interest earned on the paid-up capital in thatyear whichever is less: Provided that nothing in this clause shallapply to regulate the expenses of an insurer in any such year if hisgross premium income in that year exceeds twenty-five lakhs ofrupees;

(iv) during the ninth and tenth years an amount equal to 3 percent of the gross premium income written direct in India, or to halfof the interest earned on the paid-up capital in that year whicheveris less: Provided that nothing in this clause shall apply to regulate theexpenses of an insurer in any such year if his gross premium incomein that year exceeds twenty-five lakhs of rupees.

Explanation.-- [****] 17-F. Head Office expenses.- (l) The share of the Head Officeexpenses in the case of an insurer having his principal place ofbusiness outside India for the purposes of Secs. 40-B and 40-C of theact shall not be less than -

(i) in respect of life-insurance business 10 per cent of the firstyear's premium as shown in the revenue account, and 1 per cent of therenewal premiums as shown in the revenue account in respect of thatbusiness transacted in India during the year; and

(ii) in respect of general insurance business 5 per cent of thegross premium income written direct in India during the year inrespect of that business. (2) The share of the Head Office expensesin the case of an insurer having his principal place of business inIndia for the purposes of sub-clause (i) of Cl.

(b) of theexplanation to sec. 40-C of the. Act, shall not exceed 5 per cent ofthe gross premium income written direct outside India during theyear. 17-FA. Principal office expenses.- For the purposes of sub-clause(ii) of Cl.

(b) of the Explanation to Sec. 40-C of the Act, the shareof the expenses in the case of an insurer having his principal placeof business outside India in respect of general-insurance businesstransacted by him outside India through his office in India shall notexceed 5 per cent of the gross premium income written direct outsideIndia through his office in India during the year.

17-FB. Calculation of proper share of managerial expenses.- Forthe purposes of sub-clause (iii) of Cl. (b) of the explanation toSec. 40-Cof the Act the proper share of managerial expenses, that maybe excluded in computing the expenses of management in India, shallbe computed in the following manner, namely:

(a) in the case of an insurer having his principal place ofbusiness in India, the same proportion of the total remunerationreceived by the Chief Executive Officer of the insurer (by whatevername called) as 15 per cent of the paid-up capital of the insurerbears to the total gross premium written direct in India by theinsurer;

(b) in the case of an insurer having his principal place ofbusiness outside India, nil Contravention of Limitation of Expenses and Tariff Regulations 17-G. Action against Extravagant Life Insurers.- (l) If it appearsfrom the report of an actuarial valuation under sub-section (3) ofSec. 64-K of the Act read with the statutory returns relating toaccounts that the insurer concerned is insolvent, the Controller maycancel the registration of such insurer and request the ExecutiveCommittee of the Life Insurance Council to consider whether in thecircumstances of the case it is possible to have the business of theinsurer reconstructed or whether some other insurer is willing totake over the business.

(2) When such a request is received, the Executive Committee ofthe Life Insurance Council shall meet not later than one month of thereceipt of such request to consider the matter and within seven daysof such meeting shall communicate its decision to the Controller.

(3) If the Executive Committee is unable to meet within the timespecified in sub-rule (2) or is unable to suggest any practical stepsfor the reconstruction or transfer, the Controller may, as soon asmay be, apply to the Court for the winding up of that insurer.

(4) If the valuation under sub-section (3) of Sec. (3) of Sec.64-K does not disclose the insurer to be insolvent, the actuarymaking the investigation shall append to his report a statementwhether an encroachment on the bonus loadings contained in thepremium has occurred and whether such encroachment is due eitherpartly or wholly to heavy-expenses incurred by the insurer aftergiving credit for any profits made in other directions. TheController may request the Executive Committee of the Life InsuranceCouncil for advice so that such encroachment may neither continue norrecur and the Executive Committee shall meet within a month of thereceipt of such request and make such recommendations as it deemsfit.

(5) On receipt of the recommendations referred to in sub-rule (3)or sub- rule (4), the Controller may issue such directions to theinsurer concerned as he deems fit and if the insurer complies withsuch directions, the cancelled registration may be revived whereverpossible or where it is not so possible, the insurer may beregistered afresh.

(6) If the directions are not complied with, the Controller mayapply to the Court for the winding up of the insurer.

17-H. Action against Extravagant General Insurers.- (1) Inpursuance of subsection (3) of Sec. 64-M of the Act the Controllermay-

(a) cancel the registration of the insurer under the Act, and

(b) request the Executive Committee of the General InsuranceCouncil to consider practical steps for the reconstruction of theinsurer concerned or for transferring its business to some otherinsurer.

(2) When such a request as is referred to in the precedingsub-rule is received by the Executive Committee of the GeneralInsurance Council, it shall meet not later than one month of thereceipt of such request to consider the request and within seven daysof such meeting shall communicate its decision to the Controller.

(3) The Controller may, after considering the recommendations ofthe Executive Committee in this behalf apply to the Court for thewinding up of the insurer concerned if he thinks fit.

Provident Societies

18. Transaction of bond investment business. (l) Providentsocieties which immediately before the commencement of the Act weretransacting bond investment business may continue to receive premiumsor contributions and to make payments in respect of such business butshall not undertake any new business of that class.

(2) For the purpose of sub-rule (1), "bond investmentbusiness" means the business of effecting contracts by the issueof bonds, endowment certificates or other documents, whereby inreturn for one or more premiums paid to the provident society, thepayment is insured of a sum o: series of sums, at a future date ordates, whether fixed before hand or determined by chance..

19. Rules of Provident Societies.- ( 1) Every provident societyshall in addition to the matter specified in Cls. (a) to (o) ofsub-section (1) of Sec. 74 of the Act set forth in its rules -

(i) that where a policy is applied for on the life of a personother than the person paying the premiums on such policy, the name ofthe person paying the premiums and his relationship to the lifeinsured shall be inserted in the policy, the policy shall not beissued till the life insured (or if he be not of age his legalguardian) has given his consent in writing to the insurance beingeffected, and the amount secured shall not be excessive having regardto the interest of the person paying the premiums in the lifeinsured;

(ii) the disqualifications, if any, due to change of occupation,residence, or other specified cause;

(iii) the terms upon which any policy may be kept in force for areduced benefit without liability to payment of further premiums;

(iv) a statement to the effect that all policies issued after thecommencement of the act shall have clearly set out therein thematters referred to in Cls. (f), (g), (h), (i) and (j) of sub-section(1) of Sec. 74 of the Act and those referred to in Cls. (ii) and(iii) above;

(v) the method of voting at the meeting of the managing body andthe number constituting a quorum;

(vi) a statement that no dividend shall be declared except as aresult of a valuation under sub-section (1) of Sec. 81;

(vii) a statement that no bonus other than an interim bonus shallbe declared except as a result of a valuation made in accordance withsub- section (1) of Sec. 81, that the rate of such bonus shall notexceed that recommended by the actuary, and that no interim bonusshall be declared at a rate exceeding that approved by an actuary;and

(viii) a statement that the paid-up capital shall not be treatedas part of the society's assets for the purpose of showing adivisible surplus at the time of any investigation made undersub-section (1) of Sec. 81, and that where assets of the nature oforganisation or preliminary expenses exceed the paid-up capital thefund shall be diminished by the amount of such excess for the purposeof ascertaining the financial condition of the society. (2) All rulesmade by a Local or Provincial Government under Sec. 24 of theProvident Insurance Societies Act, 1912, are hereby repealed. 19-A. Provident Society to maintain registers.- Every providentsociety shall, commencing from a date not later than the 1st January,1943, maintain at its principal office in the State the followingregisters in the forms specified below or as near thereto as possibleprovided the information to be shown is not reduced thereby inrespect of all its transactions subsisting on or after that date,namely.-

(i) A register of members (but not including membership merely byvirtue of being policy-holder), proprietors andshareholders..................in Form VI-A.

(ii) A register of directors, manager, secretary and

(iii) A proposal register....................in Form VI-C.

(iv) A register of policies...................in Form VI-D inrespect of all policies issued from a date not later than lstJanuary, 1943, (Separate registers shall be maintained for eachcontingency specified in or prescribed under subsection (1) of Sec.65 of the Act in respect of which the society carries on business).

(v) A premium register..................in Form. VI-E.

(vi) A lapse register showing the details in respect of eachpolicy which is treated by the society as havinglapsed..................in Form VI-F.

(vii) A register of claims not includingannuities................in Form VI-G.

(viii) A register of annuity payments...................in FormVI-H.

(ix) A register of agents............in Form VIII:

Provided that -

(a) any register printed after this rule is made and purporting tocontain the information specified in any of the registers prescribedby this rule shall be in the Form prescribed therefor;

(b) if any of the register required to be kept in accordance withSec. 79 of the Act, as it stood before the commencement of theInsurance (Amendment) Act, 1941, is not kept, or if any of theregisters so kept is exhausted, the society shall maintain forthwiththe corresponding register or registers prescribed by this rule;

(c) if no registers are maintained corresponding to the registersprescribed by Cls. (iii), (v) and (vi) of this rule, the societyshall, commencing from a date not later than lst April, 1942,maintain the registers prescribed by these clauses;

(d) it shall not be necessary to show the name of the life insuredin addition to the policy-number in the register in Form VI-D, VI-E,VI-F, VI-G or VI-H. the register concerned is prepared by mechanicalmeans.

20. Forms of accounts and statements.-(1) The revenue account andbalance-sheet of a provident society shall be prepared in accordancewith Forms VII and VIII. respectively and in their completion regardshall be had to the notes appended thereto.

(2) If it so desires a provident society may submit a profit andloss account in addition to a revenue account and balance-sheet.

(3) The statements required under Cls. (a) (i) and (b) ofsub-section (2) of Sec. 80 of the Act shall be prepared in accordancewith Forms IX and X, respectively.

21. Actuarial reports.-(l) Whenever an investigation is made intothe financial condition of a provident society under Sec. 81 of theAct the report of the actuary-

(a) shall, so far as practicable, be prepared in accordance withthe regulations, and requirements contained in the Fourth Schedule tothe Act except that it shall not be necessary to supply aconsolidated revenue account in Form G, a statement in Form DDD ofadditions to and deductions from policies and a statement in FormDDDD of particulars of policies forfeited or lapsed;

(b) shall contain in the appropriate places the informationrequired in Cls.

(a) to (e) of sub-section (2) of Sec. 81;

(c) shall state the proportion of the renewal premium income spentin payment of commission and other expenses in each year during theperiod since the last investigation after allowing as the cost of thenew business of the year, 71/2 per cent, of single premiums and 90per cent of first year's premiums, falling due in the year afterdeduction of those unpaid under policies allowed to lapse in theyear;

(d) shall state whether the actuary has taken steps to prevent thepolicy reserve values from being less than the minimum surrendervalues;

(e) shall have appended to it a certificate as prescribed insub-section (2) of sec. 81; and

(f) shall contain a statement that in no case where a policy hasbeen written off as a lapse does there exist any further liabilityactual or contingent.

(2) Where an investigation into the financial condition of aprovident society is made as at a date other than the expiration ofthe year of account, the accounts for the period since the expirationof the last year of account and the balance-sheet as at the date atwhich the investigation is made shall be prepared and audited in themanner provided by the act and these rules.

22. Signatures on returns furnished by provident societies.-Everyreturn furnished to the Controller of Insurance under sub-section (2)of sec. 82 of the Act shall be signed in accordance with theprovisions of sub-section (2) of Sec. 15 of the Act.

23. Notices under Sec. 92 (6).- The notices referred to insub-section (6) of Sec. 92 of the Act shall be sent by post to thelast known addresses of the persons concerned as recorded in thesociety's books and certificates of posting shall be obtainedtherefor:

Provided that the liquidator may at his discretion send all or anyof the notices by registered post.

23 -A. Security from liquidator.- Where a liquidator is appointedby the Controller under the provisions of sub-section (1) of Sec. 90of the Act, the Controller may demand from the liquidator suchsecurity and in such form as he may determine.

Fees

24. Fees under the Act and the manner of collections.- (1) The feefor registration under Sec. 3 of the Act shall be five hundred rupeesfor each of the following classes of insurance business done or to bedone by the insurer, namely:

(i) life insurance;

(iii) marine insurance;

Provided that where the business done or to be done is marineinsurance only and relates exclusively to country craft or cargo ofcountry craft or both the fee for registration shall be two hundredand fifty rupees; Provided further that where an insurer who is already registeredfor carrying on marine insurance business relating exclusively tocountry craft or cargo of country craft or both and no other class ofinsurance business, subsequently, applies for registration forcarrying on the entire class of marine insurance or any other classof insurance business specified above, the fee for such registrationshall be two hundred and fifty rupees plus the fee for registrationof the class, if any, of insurance business other than marineinsurance business for which registration is sought, (1-A) The fee for issue of a duplicate certificate of registrationunder sub- section (7) of Sec. 3 shall be ten rupees.

(2) The fee for renewal of registration under Sec. 3-A of the Actfor each class of insurance business for which the insurer isregistered shall be -

(a) in the case of an insurer not carrying on solely re-insurance,business, one-fourth of one per cent. of the total gross premiumwritten direct in India in that class of insurance business duringthe year preceding the year in which the application for renewal ofregistration is required to be made by insurer, (the amount of fee soarrived at, if not an integral number of rupees, being rounded off tothe next lower integral rupee), or five hundred rupees whichever isgreater;

(b) in the case of an insurer carrying on solely re-insurancebusiness one- fourth of one per cent of the total premiums in respectof facultative re- insurances accepted by the insurer in that class ofinsurance business during the year preceding the year in which theapplication for renewal of registration is required to be made (theamount of fees so arrived at, if not an integral number of rupees,being rounded off to the next lower integral rupee) or five hundredrupees whichever is greater.

(3) The fee for registration under Sec. 70 the Act shall be twohundred rupees. (3-A) The fee for issue of duplicate certificate ofregistration under sub-section (7) of Sec. 70 shall be three aipees.

(4) The fee for renewal of registration under Sec. 70-A of the Actshall be fifty rupees where the total gross premium income includingannuity considerations, admission fees and other fees, if any, asshown in the revenue account last furnished under the Act was lessthan fifty thousand rupees per annum or one hundred rupees in allother cases.

(5) The fee payable for obtaining copies under Sec. 119 of the Actshall be two rupees for each fullscap page or part of a page of thecopy, the copy being prepared with reasonable margin and spacing.

(6) Any fee specified in this rale or payable under sub-section(1) of Sec. 20 of the Act shall be paid into the Bank or where thereis no office of the Bank, into the Imperial Bank of India acting asthe agent of that Bank or into any Government treasury for creditunder the head "XXI-Miscellaneous Department-Fees realised underthe Insurance Act, 1938, and the receipt shall be sent along with therelevant application.

24-A. Fees payable on referring disputed claims to Controller.-(1) The fee payable at the time of referring to the Controller adispute relating to the settlement of a claim on a policy of lifeinsurance under sub-section (1) of Sec.47-A of the Act is rupees tenor rupees for each hundred rupees or part thereof of the amount ofthe claim (including any profit or bonus), whichever is greater.

(2) Any fee specified in this rule shall be paid in the form of"Government of India Insurance" stamps available on paymentfrom a Government Treasury and the stamp shall be affixed on theapplication or letter referring the dispute to the controller andsuperscribed with the signature of the claimant.

(3) Where in respect of any fee specified in this rule "Governmentof India Insurance" stamps of a greater value than is necessaryhave been inadvertently used or where the application or letterreferring a dispute to the controller bearing such stamps is notentertained by the Controller under Sec.47-A of the Act for anyreason, refund may be made of the excess over the necessary fee. orof the value of the stamps affixed, as the case may be. 24-B. Fees payable to the Councils.- (1) The fees payable by amember or associate member who is an insurer carrying onlife-insurance business to the Life Insurance Council in eachcalendar year shall be fifty rupees for every lakh of rupees or partthereof of his gross direct premium income from life-insurancebusiness in India in the last but one preceding calendar year subjectto a maximum of one thousand and two hundred and fifty rupees.

(2) The fees payable by a member or associate member who is aninsurer carrying on general insurance business to the GeneralInsurance Council in each calendar year shall be twenty-five rupeesfor every ten thousand rupees or part thereof of his gross directpremium income in India in general insurance business in the last butone preceding calendar year.

(3) Any fee specified in this rule shall be paid by means of acrossed bank draft on the Simla Branch of the Imperial Bank of Indiadrawn in favour of the Secretary of the Council concerned.

Miscellaneous

25. Additional particulars to be given by actuary.- An actuaryinvesting the financial condition of an insurer shall, in addition tothe reports, statements and abstracts, required to be furnished underSec. 13 or Cl. (c) of sub- section (2) of Sec. 16 of the Act, furnishstatement with regard to the following matters:

(a) whether he has taken steps to prevent the policy reservevalues from being less than the minimum surrender values;

(b) the proportion of renewal premium income spent in payment ofcommission and other expenses in each year during the period sincethe last investigation after allowing, as the cost of the newbusiness of the year, seven and a half per cent of single premiumsincluding consideration for annuities granted and seven and a halfper cent for each year of the maximum premiums-paying period, but notexceeding ninety per cent in all, of first year's premium falling duein the year after deduction of those unpaid under policies allowed tolapse in the year:

Provided that in respect of any year or accounting period endingon a date earlier than the 31st day of December, 1946, the allowanceout of first year's premiums as the cost of the new business shall beninety per cent irrespective of the premium-paying period.

Explanation 1.- Where the maximum premiums-paying period includesa fraction of a year, such fraction shall be ignored.

Explanation 2.- In the case of a whole life policy with premiumpayable throughout the duration of the policy the maximumpremiums-paying period shall be assumed to be twelve years.

25-A. Conditions to be complied.- The conditions with which aMutual Insurance company shall comply for the purposes of sub-section(2) of Sec, 4 are that such company shall confine its activities tomembers of any one profession only or to employees under one employeronly and that if any question arises whether or not a particulargroup of persons belongs to any one profession or is employed underany one employer, the Controller of Insurance shall decide thequestion and his decision shall be final.

26. Form of declaration under Sec.l6(2) (d).- The declarationreferred to in Cl. (d) of sub-section (2) of Sec. 16 of the Act shallbe in Form XI and one copy of the declaration shall be singed in themanner described in sub- section (2) of Sec. 15 of the Act.

27. Returns in respect of dividing insurance business.- Everyinsurer, so long as he has policies on the dividing principalremaining in force, shall submit all returns required under the Actor these rules in respect of such business separately from thecorresponding returns in respect of other insurance business, andalong with the revenue account shall also furnish in respect of suchbusiness returns in Forms XII, XIII and XIV, respectively. Fourcopies shall be submitted of each of these three last-mentionedreturns, of which one of each shall be signed in the manner descriedin sub-section (2) of sec. 15 of the Act.

28. Account of receipts and payments.- The sub-clauses ofmiscellaneous insurance business in respect of each of which aseparate account of receipts and payments is to be kept as requiredunder sub-section (1) Sec. 10 of the Act on and after the 1stJanuary, 1943, shall be-.

(1) Capital Redemption insurance business.

(2) Continuous Disability insurance business.

(3) Employer's Liability insurance business.

(4) The business of insuring the payment on the happening of eachof the contingencies (a) birth, (b) marriage, and (c) failure ofissue, each contingency to constitute a separate business unless thecontingencies are combined in a single contract, but not beingbusiness comprising insurance contracts which are terminable by theinsurer at intervals not exceeding twelve months and under which if aclaim arises, the insurer's liability to pay benefit ceases withinone year from the date on which the claim arose.

29. Business of an insurer.- For the purpose of the Act, thebusiness of an insurer shall be deemed to be transacted-

(c) in India, if the insurance business, wherever effected,relates to any property situate in India or to any vessel or aircraftregistered in India;

(d) in India or the States, according as the premiums in respectof those transactions are ordinarily paid in India or the States, asthe case may be: Provided that if any question arises whether any premiums areordinarily paid inside or outside the States of India, the Controllershall decide the question and his decision shall be final.

30. Activities of insurers.- (1) An insurer may do all actsnecessary for making investments permissible under the Act for theprotection of such investments and for the realisation of suchinvestments and may in that connection take over and administermortgaged property until a suitable occasion arises for its disposal.

(2) An insurer carrying on general insurance business may act asthe manager in charge of a branch office of another insurer inrespect of general insurance business.

31. Statement of emoluments.- The statement of emolumentsexceeding Rs.5,000 to be furnished under sub-section (2) of Sec. 31shall be in Form XV.

32. Payment where nominee is a minor.- (1) The holder of a policyof life insurance may, in any case where the nominee is a minor,appoint any person to receive the money secured by the policy in theevent of his death during the minority of the nominee, communicatesuch appointment to the insurer concerned by forwarding the documentsrelating to such appointment which should be endorsed by theappointee to show his consent thereto.

(2) Any such appointment in order to be effectual shall unlessincorporated in the text of the policy itself, be made by anendorsement on the policy.

(3) Any such appointment may at any time before the policy maturesfor payment be cancelled or changed by an endorsement or furtherendorsement, as the case may be, and communicated to the insurer.

33. Summary of balance-sheet and revenue account.-The summary tobe published in pursuance of Sec. 100 of the Act shall be in FormXVI. [Re-insurance] Advisory Committee

34. Term of office.- The term of office of the non-officialmembers of the Advisory Committee constituted under sub-section (1)of Sec. 101-B of the Act (hereafter in this rule and rules 35 to 38referred to as the Committee) shall be two years from the date oftheir nomination. The official members of the Committee shall holdoffice during the pleasure of the Central Government. All outgoingmembers shall be eligible for re-nomination.

35. Resignation and filling of casual vacancies.- (1) Any memberof the Committee may resign his membership of the Committee by noticein writing addressed to the Secretary to the Government of India,Ministry of Finance Department of Company Affairs and Insurance tothat effect and such resignation shall take effect from the date onwhich it is accepted by the Central Government.

(2) Casual vacancies in the Committee whether caused byresignation death or otherwise, shall be filled by nomination by theCentral Government and any person, other than an official, sonominated to fill the vacancy shall hold office until the expiry ofthe term of office of the member in whose place he is nominated.

36. Secretary.- The Central Government may appoint a secretary tothe Committee for the purpose of performing such functions as areassigned to him by these rules or as may be assigned to him by theChairman of the Committee.

37. Procedure for the conduct of business, etc. of the Committee.-(1) Meetings of the Committee.- Meetings of the Committee may be heldat such places and at such times as may be decided by the chairman ofthe Committee.

(2) Notice of meeting.- Notice of any meeting of the Committeeshall be sent by the Secretary of the Committee to every member atleast seven days before the date of the meeting. The notice shallstate briefly the business to be transacted at the meeting.

(3) Quorum for the meeting.- Three members shall constitute quorumfor a meeting.

(4) Adjournment of a meeting.- If the requisite quorum is notavailable within half an hour of the appointed time for a meeting,the Chairman or in his absence any person nominated by him undersub-rule (5) may adjourn the meeting to such date and time as he maydecide.

(5) Chairman to preside at meeting.- The Chairman shall preside atall meetings of the Committee. If the Chairman is unable to attend,he may nominate a member of the committee to preside in his absence.

(6) Decision at a meeting.- All matters required to be decided bythe Committee shall be decided by the majority of the votes of themembers present. The voting shall be by show of hands.

(7) Decision by circulation.- Any matter for consideration of theCommittee may at the discretion of the chairman be decided bycirculation among the members as an alternative to convening ameeting for the purpose: Provided that the decision arrived at shall not be valid unless atleast three members express an opinion on that matter.

(8) Minutes.- The minutes of the proceedings of every meetingshall be circulated to the members of the Committee. The minutesshall be confirmed at the next meeting of the Committee and shallthereafter be recorded in a Minute Book and signed by the Chairman.

38. Allowances payable to members of the Advisory Committee.- (1)Every non-official member shall be entitled for attending meetings ofthe Committee to travelling and other allowances as under:

(i) Travelling allowance for journeys from the usual place ofresidence or the place of commencement of the journey, to the placeof the meeting and the return journey to the place of commencement ofthe journey or the usual place of residence, whichever is shorter ineach case, at the maximum rate for the time being admissible to aCentral Government servant of the first grade. Subject to theforegoing, the members shall be entitled to travel either byair-conditioned class or by air.,

(ii) Daily allowance at the maximum rate for the time beingadmissible to Central Government servants of the first grade at theplace of the meeting for the days on which the meeting is held and inrespect of one day previous to the commencement of the meeting andone day after the meeting if the member actually arrives on or beforeand leave on or after the respective days.

(2) The travelling allowances and daily allowances of an officialmember shall be governed by the rules for the time being applicableto him for journeys performed on official duty.

39. Minimum information to be maintained and the checks and otherverifications to be adopted.-(1) Every insurer shall maintain at theprincipal place of business of the insurer in India the items ofinformation specified in sub-rules (2) and (3):

Provided that where it is not convenient or practicable tomaintain any item of information in full detail at such principaloffice it may be maintained at the branches or other offices in suchway, however, that each such branch or office maintains the relevantpart of the information application to its working:

Provided further that an insurer carrying on solely re-insurancebusiness shall be deemed to have complied with the provisions ofsub-rules (2) and

(3) if the information required to be maintainedunder those sub-rules is readily available from the records of suchinsurer.

(2) The following items of information shall be maintained inrespect of each class or sub-class of insurance business, namely:

(i) a record of cover-notes issued specifying the identificationnumber, name of party, dates of commencement and where applicableexpiry of risk, type of cover granted or cross-reference to therelevant policy and the amount of premium or other money received:

Provided that if duplicate copies of cover-notes are maintained inserial order, the requirement of the provision shall be deemed tohave been complied with, -

(ii) a record of policies, which should be serially numberedlisting all policies issued, entered in chronological order, statingthe number of policy, dates of commencement and expiry of risk, nameof the insured, premium received, cross-reference to the relevantBank Guarantee or deposit and the nature of risk granted,cross-reference to any cover-note issued prior to the issue of thepolicy and cross - reference to any endorsement passed subsequent tothe issue of the policy:

Provided that a serially filed collection of duplicate copies ofpolicies issued shall be deemed sufficient compliance with therequirement, if they are serially numbered and all the relevantinformation specified in this clause are entered therein;

(iii) a record of premium showing according to chronological orderof receipt of premiums received, date of receipt, the amount, andname of party from whom received and with cross-reference to policynumber or to other document showing the occasion for the payment ofsuch premium: Provided that if this information is readily availableotherwise from the records, a separate record under this head neednot be maintained;

(iv) a record of endorsements mentioning the policy number towhich attached, dates of commencement and expiry of the endorsement,the type of endorsement and the additional premium charged or refundpremium due and cross-reference to the premium register provided thatserially filed duplicate copies of endorsements shall be deemed tocomply with this requirement if they are serially numbered and eachcopy contains information about the policy number of the policy towhich it is attached;

(v) a record of bank guarantees and deposits giving particulars ofthe party, amount and conditions of guarantee or deposit andcross-reference to the relevant policy or policies:

Provided that if this information is readily available otherwisefrom the records, a separate record under this head need not bemaintained.

(vi) a record of claims intimated mentioning name of cliamant,giving reference to policy number, date of intimation of claim,interest covered, nature and cause of the loss or damage, provisionalestimate of loss, amount at which settled, date of settlement ofclaim, recoveries from salvage or otherwise and whether surveyed:

Provided that two separate records, one relating to claimsintimated and the other relating to claims paid, may be maintained ifthere is adequate cross- referencing of information between them andif the information required under this clause is readily availablefrom them taken together.

(3) The following item of information shall be maintained for thebusiness of the insurer as a whole, namely:

(i) a register of agents, giving in respect of each agent, name,address and particulars of agents licence held, date of appointmentand date of termination of appointment, if any:

Provided that a collection of cards or folios shall be deemedsufficient compliance with this requirement if they are filed in asystematic order and contain all the information required under thisclause; (ii) a record of agents giving particulars of businessprocured by each agent, the amount of premium received on suchbusiness and the amount of commission paid thereon; (iii) duplicatecopies of appointment letters issued to the agents, field workers andmembers of the staff and changes therein; (iv) a record of employees,excluding salaries field workers, showing name, date of appointment,present designation, present salary and cross-reference toappointment letter and date of termination, if any; (v) a record offield workers showing name, date of appointment, present designation,and present salary, showing the business expected from and written bythem with cross-reference to appointment letters and date oftermination, if any;

(vi) cash book and disbursement book; (vii) arecord of investments giving separately for immovable property,securities and scrips, loans on mortgages and other loans,particulars of all the investments held showing the changes occurringtherein from time to time; (viii) a record of other assets, such as,deposits, amounts due, sundry debtors, furniture and fixtures,stationery, and cash in hand and with banks: Provided that in respectof cash in hand and with banks the requirements of this clause shallbe deemed to be complied with if the information about the amount ofsuch cash is readily available from the cash book or other records.

(4) every insurer shall obtain and maintain a legally validreceipt for every payment made and shall maintain the receipts fieldin a systematic manner either chronologically or in some otherconvenient order.

(5) Every insurer shall, in respect of any payment made to anemployee or other person on account of travelling expenses, maintaina record showing full details of the journey performed, purpose ofthe journey, details of the fares paid and allowances granted.

(6) Every office of an insurer shall maintain an attendanceregister of clerical and subordinate staff indicating employees whoattend the office each day.

(7) Every office of an insurer issuing any documents used forevidencing of the assumption of risk shall ensure that such documentsare serially numbered, shall maintain a record of the serial numbersof the forms of documents issued to each person, and shall maintain aproper check to verify that all the forms of documents issued areproperly accounted for.

(8) Every insurer shall retain all the documents relating toclaims settled including copies of any survey or loss assessmentreports connected therewith:

(i) in respect of every loss or damage on which a claim of lessthan Rs. 5,000 has been made, for a period of three years:

(ii)in respect of every loss or damage on which a claim of Rs. 5,000 ormore but less than Rs. 20,000 has been made, for a period of fiveyears;

(iii) in respect of every loss or damage on which aclaim of Rs. 20,000 or more but less than rupees one lakh has beenmade, for a period of seven years; and

(iv) in respect of every loss or damage on which a claim of rupeesone lakh or more has been made, for a period of twelve years;

(9) Every insurer shall maintain a record setting out the names ofeach insurance company with which he has entered into any permanentfacultative re-insurance arrangement, and such record shall show theterms on which re-insurance arrangements have been entered into andthe commissions paid or received under each transaction.

(10) Every insurer shall maintain a record setting out particularsof each and every facultative re-insurance ceded or accepted and suchrecord shall show the name of each insurer with whom the transactionhas been entered into.

(11) Every insurer shall maintain a record setting out the namesof each insurer with which he has entered into re-insurance treatiesfrom any of his offices in India, and such record shall include allthe details of the terms of the treaties.

(12) (a) Every insurer shall maintain the following accounts inhis ledgers, namely:

(i) Re-insurance Accepted Account;

(iii) Re Insurance Claims Payable Account;

(vii) Re-insurance Claims Recoverable Account;

(viii) Re-Insurance Claims Recovered Account;

(b) An insurer shall be deemed to have complied with theprovisions of Cl. (a), if the information required is otherwisereadily available from the existing books and accounts of theinsurer.

40. Search and seizure-(l) The powers of search and seizure underSec. 34- H of the Act shall be exercised in accordance with sub-rules(2) to (14).

(2) The Controller may, after recording his reasons for doing soauthorise any officer subordinate to him not lower in rank than anassistant Controller of Insurance (hereinafter in this rule referredto as the authorized officer) for the purposes of Sec. 34-H of theAct: provided that such authorization shall -(i) be in writing underhis signature; (ii) bear his seal; and

(iii) authorize the authorized officer to enter and search anybuilding or place specified therein, and to exercise the powers andperform the functions under sub-section (1) of Sec. 34-H of the Actwith such assistance of police officers or of the officer of theCentral Government, or both, as may be required.

(3) Whenever any building or place authorized to be searched isclosed, any person residing in or being in charge of such building orplace shall, on demand by the authorized officer and on production ofthe authority, allow him free ingress thereto and afford allreasonable facilities for a search therein.

(4) If ingress into such building or place cannot be so obtainedit shall be lawful for the authorized officer executing theauthority, with such assistance of police officers or of officers ofthe Central Government or of both as may be required to enter suchbuilding or place and search therein and in order to effect anentrance into such building or place, to break open any outer orinner door or window of any building or place, whether that of theperson to be searched or of any other persons, if after notificationof his authority and purpose and demand of admittance duly made, hecannot otherwise obtain admittance:

Provided that, if any such building or place is an apartment inactual occupancy of a woman, who according to custom does not appearin public, the authorized officer shall, before entering suchapartment, give notice to such woman that she is at liberty towithdraw and shall afford her every reasonable facility forwithdrawing and may then break open the apartment and enter it.

(5) The authorized officer may require any person who is theowner, or has the immediate possession, or control, of any box,locker, safe, almirah or any other receptacle situate in suchbuilding or place, or open the same and allow access to inspect orexamine its contents, and where the keys thereof are not available orwhere such person fails to comply with any such requirement, maycause any action to be taken including the breaking open of such box,locker, safe, almirah or other receptacle which the authorizedofficer may deem necessary for carrying out all or any of thepurposes -specified in the authority issued under sub-rule (2).

(6) The authorized officer may, where it is not practicable toseize any book, account or document, serve an order on the owner orthe person who is in immediate possession or control thereof that heshall not remove, part with or otherwise deal with it except with theprevious permission of the authorized officer who may take such stepsas may be necessary for ensuring compliance with this sub-rule.

(7) Where any person in or about such building or place isreasonably suspected of concealing about his person any book, accountor document for which search is being made, such person may also besearched by the authorized officer with such assistance as he mayconsider necessary. If such person is a woman, the search shall bemade by another woman with a strict regard to decency.

(8) Before making a search, the authorized officer about to makeit shall call upon two or more respectable inhabitants of thelocality in which the building or place to be searched is situate toattend and witness the search and may issue an order in writing tothem or any of them so to do.

(9) The search shall be made in the presence of the witnessesaforesaid and a list of books, accounts and documents seized in thecourse of such search and of the places in which they wererespectively found shall be prepared by the authorized officer andsigned by such witnesses; but no person witnessing a search shall berequired to attend as a witness of the search in any proceedingsunder the Act unless specially summoned.

(10) The occupant of the building or place searched or some personin his behalf shall be permitted to attend during the search and acopy of the list prepared under sub-rule (9) shall be delivered tosuch occupant or person. A copy shall also be forwarded to theController.

(11) When any person is searched under sub-rule (7) a list of allbooks, accounts and documents taken possession of shall be preparedand a copy thereof shall be delivered to, such person. A copy shallalso be forwarded to the controller.

(12) The authorized officer may convey the books, accounts andother documents, if any, seized by him in the course of the searchmade by him to the office of the Controller or to the office of theauthorized officer or to any other office under the jurisdiction ofthe Controller.

(13) The Controller or the officer in charge of the officementioned in sub- rule (12), as the case may be, shall take such stepsas he may consider necessary for the safe custody of books, accountsand other documents conveyed to him.

(14) The authorization of the Controller referred to in sub-rule(2) shall be in Form No. XVII.

Tariff Advisory Committee

41. Constitution.-(1) The representatives of insurers on thetariff Advisory Committee (hereinafter in this rule and in rules 42to 54 referred to as the Committee) shall be elected as follows,namely:

(a) one member to be elected by insurers registered under the Actin the public sector, that is to say, the Life Insurance Corporationof India and the insurers whose majority shares are held by the LifeInsurance Corporation of India or by the Central Government;

(b) four members to be elected by Indian insurers registered underthe Act other than those specified under Cl. (a) having theirprincipal offices in the Bombay area;

(c) two members to be elected by Indian insurers registered underthe Act other than those specified under Cl. (a) having theirprincipal offices in the Calcutta area;

(d) one member to be elected by Indian insurers registered underthe Act other than those specified under Cl. (a) having theirprincipal office in the Delhi area;

(e) two members to be elected by Indian insurers registered underthe Act other than those specified under Cl. (a) having theirprincipal offices in the Madras area;

(f) three members to be elected by insurers incorporated ordomiciled elsewhere than in India but registered in India, and havingtheir principal place of business i

Other instruments under the same Act

All of the The Insurance Act, 1938