Provided that no order under this sub-section shall be made unless the person concerned has been given a reasonable opportunity of being heard.
(7) The Authority may, on payment of the prescribed fee, not exceeding five rupees, issue a duplicate certificate of registration to replace a certificate lost, destroyed or mutilated, or in any other case where he is of opinion that the issue of a duplicate certificate is necessary.
Renewal of registration
3A. (1) An insurer who has been granted a certificate of registration under section 3 shall have the registration renewed annually for each year after that ending on the 4[31st day of March, after the commencement of the Insurance Regulatory and Development Authority Act, 1999.
(2) An application for the renewal of a registration for any year shall be made by the insurer to the Authority before the 31st day of December of the preceding year, and shall be accompanied as provided in sub section
(3) by evidence of payment of the fee as determined by the regulations made by the Authority which may vary according to the total gross premium written direct in India, during the year preceding the year in which the application is required to be made under this section, by the insurer in the class of insurance business to which the registration relates but shall not—
(i) exceed one fourth of one per cent. of such premium income or rupees five crores, whichever is less;
(ii) be less, in any case, than five hundred rupees for each class of insurance business:
Provided that in the case of an insurer carrying on solely re insurance business, the provisions of this sub section shall apply with the modification that instead of the total gross premium written direct in India, the total premiums in respect of facultative re insurances accepted by him in India shall be taken into account.
(3) The fee as determined by the regulations made by the Authority for the renewal of a registration for any year shall, be paid into the Reserve Bank of India, or where there is no office of that Bank, into the Imperial Bank of India acting as the agent of that Bank, or into any Government treasury, and the receipt shall be sent along with the application for renewal of the registration.
(4) If an insurer fails to apply for renewal of registration before the date specified in sub-section (2) the Authority may, so long as an application to the Court under sub-section (5 D) of section 3 has not been made, accept an application for renewal of the registration on receipt from the insurer of the fee payable with the application and such penalty, not exceeding the fee as determined by the regulations made by the Authority, and payable by him, as the Authority may require:
Provided that an appeal shall lie to the Central Government from an order passed by the Authority imposing a penalty on the insurer
(5) The Authority shall, on fulfillment by the insurer of the requirements of this section, renew the registration and grant him a certificate of renewal of registration.
Certification of soundness of terms of life insurance business
(3B) If, when considering an application for registration under section 3 or at any other time, it appears to the Authority that the Assured rates, advantages, terms and conditions offered or to be offered in connection with life insurance business are in any respect not workable or sound, he may require that a statement thereof shall be submitted to an actuary appointed by the insurer for the purpose and approved by the Authority, and may by order in writing further require the insurer to make within such time as may be specified in the order such modifications in the said rates, advantages, terms, or conditions, as the case may be, as the said actuary may report to be necessary to enable him to certify that the said rates, advantages, terms and conditions are workable and sound.
Minimum limits for annuities and other benefits secured by policies of life Insurance
4. (I) No insurer, not being a Co operative Life Insurance Society to which Part IV of this Act applies, shall pay or undertake to pay on any policy of life insurance issued after the commencement of the Insurance (Amendment) Act, 1946 (6 of 1946), an annuity of less than one hundred rupees or a gross sum of less than one thousand rupees, exclusive of any profit or bonus provided that this shall not prevent an insurer from converting any policy into a paid up policy of any value or payment of surrender value of any amount.
(2) Nothing contained in this section shall apply to any policy of the description known as a group policy, where the number of persons covered by the policy is not less than fifty or such smaller number as may be approved by the Authority and a standard form of the policy has bean certified in writing by the Authority to be a policy of such description or to any policy undertaking to pay a gross sum of more than five hundred rupees or an annuity of more than fifty rupee, issued-
(a) by an insurer to any person in his permanent employed respect of the life of that person, or
(b) under any scheme, approved by the Authority and complying with such conditions, if any, as he may think fit to impose, whereby premiums due from persons employed under any employer are collected by or under the supervision of the employer,
or to any policy issued by a Mutual insurance Company to which Part lV applies and which the Authority may by order in writing exempt from the provisions of this section, for so long as the company complies with such conditions, if any, as may be prescribed.
Restriction on name of insurer
5. (l) An insurer shall not be registered by a name identical with that by which an insurer in existence is already registered, or so nearly resembling that name as to be calculated to deceive except when the insurer in existence is in the course of being dissolved and signifies his consent to the Authority.
(2) If an insurer, through inadvertence or otherwise is without such consent as aforesaid registered by a name identical with that by which an insurer already in existence whether previously registered or not is carrying on business or so nearly resembling it as to be calculated to deceive, the first mentioned insurer shall, if called upon to do so by the Authority on the application of the second mentioned insurer, change his name within a time to be fixed by the Authority:
Provided that nothing in this section shall apply to any insurer carrying on business before the 27th day of January, 1937, under the Indian Life Assurance Companies Act, 1912 (6 of 1912):
Provided further that in the application of this section to any insurer who begins to carry on insurance business after the commencement of the Insurance (Amendment) Act, 1946 (6 of 1946), the references to an insurer in existence in sub-section (1) and this sub section shall be construed as including references to a provident society (as defined in Part III in existence, whether or not the society is in course of being dissolved.
(3) No insurer other than a provident society as defined in Part III, who begins to carry on insurance business after the commencement of this Act, shall adopt as its name and no such insurer carrying on business before the commencement of this Act shall continue after the expiry of six months from the commencement thereof to use as its name any combination of words which includes the word "provident".
Requirements as to capital
6. No insurer carrying on the business of life insurance, general insurance or re-insurance in India on or after the commencement of the Insurance Regulatory and Development authority Act, 199, shall be registered unless he has,-
a paid-up equity capital of rupees one hundred crores, in case of a person carrying on the business of life insurance or general insurance; or
a paid-up equity capital of rupees two hundred crores, in case of a person carrying on exclusively the business as a reinsurer :
Provided that in determining the paid-up equity capital specified under clause (i) or clause (ii), the deposit to be made under section 7 and any preliminary expenses incurred in the formation and registration of the company shall be excluded:
Provided further that an insurer carrying on business of life insurance, general insurance or re-insurance in India before the commencement of the Insurance Regulatory and Development Authority Act, 1999 and who is required to be registered under this Act, shall have a paid-up equity capital in accordance with clause (i) and clause (ii), as the case may be, within sex months of the commencement of that Act.
Requirements as to capital structure and voting rights and maintenance of registers of beneficial owners of shares
6A. (1) No public company limited by shares having its registered office in India, shall carry no life insurance business, unless it satisfies all the following conditions, namely:
(i) that the capital of the company consists only of ordinary shares each of which have a single face value;
(ii) that, except during any period not exceeding one year allowed by the company for payment of calls on shares, the paid up amount is the same for all shares, whether existing or new:
Provided that the conditions specified in this sub section shall not apply to a public company which has, before the commencement of the Insurance (Amendment) Act, 1950 (47 of 1950), issued any shares other than ordinary shares each of which has a single face value or any shares paid up amount whereof is not the same for all of them for a period of three years from such commencement.
(2) Notwithstanding anything to the contrary contained in any law for the time being in force or in the memorandum or articles of association but subject to the other provisions contained in this section the voting right of every shareholder of any public company as aforesaid shall in all cases be strictly proportionate to the paid up amount of the shares held by him.
(3) No public company as aforesaid which carries on life insurance business shall, after the commencement of the Insurance (Amendment) Act, 1950 (47 of 1950), issue any shares other than ordinary shares of the nature specified in sub-section (l).
(4) A public company as aforesaid which carries on life insurance business-
(a) shall maintain, in addition to the register of members to be maintained under the Indian Companies Act, 1913 (7 of 1913~3 a register of shares in which shall be entered the name, occupation and address of the beneficial owner of each share, and shall incorporate therein any change of beneficial owner declared to it within fourteen days from the receipt of such declaration;
(b) shall not register any transfer of its shares
(i) unless, in addition to compliance being made with the provisions of section 34 of the Indian Companies Act, 1913 (7 of 1913), the transferee furnishes a declaration in the prescribed form as to whether he proposes to hold the shares for his own benefit or as a nominee, whether jointly or severally, on behalf of others and in the latter case giving the name, occupation and address of the beneficial owner or owners, and the extent of the beneficial interest of each;
(ii) where, after the transfer, the total paid up holding of the transferee in the shares of the company is likely to exceed five per cent. of its paid up capital or where the transferee is a banking or an investment company, is likely to exceed two and a half per cent of such paid up capital, unless the previous 2[approval of the Authority] has been obtained to the transfer;
(iii) where, the nominal value of the shares intended to be transferred by any individual, firm, group, constituents of a group, or body corporate under the same management, jointly or severally exceeds one per cent of the paid-up equity capital of the insurer, unless the previous approval of the Authority has been obtained for the transfer.
Explanation.- For the purposes of this sub-clause, the expressions “group” and “same management” shall have the same meanings respectively assigned to them in the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969);
(5) Every person who has any interest in any share of a company referred to in sub-section (4) which stands in the name of another person in the register of members of the company, shall, within thirty days from the commencement of the Insurance (Amendment) Act, 1950 (47 of l950), or from the date on which he acquires such interest, whichever is later, make a declaration in the prescribed form (which shall be countersigned by the person in whose name the share is registered) to the company declaring his interest in such share, and notwithstanding anything contained in any other law or in any contract to the contrary, a person who fails to make a declaration as aforesaid in respect of any share shall be deemed to have no right or title whatsoever in that share:
Provided that nothing in this sub-section shall affect the right of a person who has an interest in any such share to establish in a court his right thereto, if the person, in whose name the share is registered, refuses to countersign the declaration as required by this sub section:
Provided further that where any share, belonging to an individual who has made any such declaration as is referred to in this sub section, is held by a company in its name in pursuance of any trust or for the purpose of safe custody or collection or realization of dividend, such individual shall, notwithstanding anything contained in the Indian Companies Act, 1913 (7 of 1913), or in the memorandum or articles of association of the company which has issued the share, be deemed to be the holder of the said share for the purpose of exercising any voting rights under this section to the exclusion of any other person.
(6) If the total paid up holding of any person in the shares of a company referred to in sub section (1) on the commencement of the Insurance (Amendment) Act 1950 (47 of 1950), exceeds two and a half per cent of its paid-up capital where that person is a banking company or an investment company, or five per cent of its paid up capital in any other case, he shall not be entitled to any vote as a shareholder of the company in respect of such excess holding of shares.
(7) Where the total paid up holding of any person in the shares of a company referred to sub section (1) on the date of the commencement of the Insurance (Amendment) Act, 1950 (47 of 1950), exceeds five per cent of its paid up capital where that person is a banking company or an investment company, or ten per cent of its paid up capital in any other case, he shall dispose of the excess holding of shares within three years from such commencement or such further period not exceeding two years as may be allowed to him by the Central Government.
(8) If, after the expiry of three years or of such further period as may be allowed to any person under sub section (7), the total paid up holding of any such person has not been reduced to the limits specified in that sub-section, any shares in excess of the limits specified in that sub section shall vest in the Administrator General of the State in which the registered office of the company concerned is situate and the Administrator General shall take such steps as may be necessary for taking charge of any property which has so vested in him and shall dispose of the said shares and the proceeds thereof in such manner as may be prescribed.
(9) Subject to the other provisions contained in this section, but notwithstanding anything contained in the Indian Companies Act, 1913 (7 of 1913), or in the memorandum or articles of association of any such company as is referred to in sub section (1), no such company shall refuse to register the transfer of any shares where the transfer is for the purpose of securing compliance with the provisions of sub sections (7) and (8).
(10) The Central Government may, subject to such restrictions as it may think fit to impose, exempt from the operation of sub sections (6), (7) and (8) any insurance company, in any case where the total paid up holding of such insurance company in the shares of any other insurance company exceeds the limits specified in the said sub sections, if the other insurance company is or is to be made a subsidiary company of the insurance company.
(11) The provisions of this section, except those of sub sections (7), (8) and (9), shall, on and from the commencement of the Insurance (Amendment) Act, 1968, also apply to insurers carrying on general insurance business subject to the following notifications, namely:-
(i) that references in sub sections (1), (3), (5) and (6) to the Insurance (Amendment)
Act, 1950, (47 of 1950), shall be construed as reference to the Insurance (Amendment) Act, 1968; and
(ii) references in sub section (10) to sub sections (7) and (8) shall be omitted.
Explanation -For the purposes of this section, the holding of a person in the shares of a company shall be deemed to include
(i) the total paid up holding in such shares held by such person in the name of others; and
(ii) if any shares of the company are held -
(a) by a public limited company, of which such person is a member holding more than ten per cent. of the paid up capital, or
(b) by a private limited company, of which such person is a member, or
(c) by a company, of which such person is a managing director, manager, managing agent or in which he has a controlling interest, or
(d) by a firm in which such person is a partner, or
(e) by such person jointly with others,
such part of the total paid up holding of the company or firm or of the total joint holding in those shares, as is proportionate to the contribution made by such person to the paid up capital of the company, the paid up capital of the firm or the joint holding, as the case may be.
Manner of divesting excess shareholding by promoter in certain cases
6AA. (1) No promoter shall at any time hold more than twenty-six per cent or such other percentage as may be prescribed, of the paid-up equity capital in an Indian insurance company:
Provided that in a case where an Indian insurance company begins the business of life insurance, general insurance or re-insurance in which the promoters hold more than twenty-six per cent of the paid-up equity capital or such other excess percentage as may be prescribed, the promoters shall divest in a phased manner the share capital in excess of the twenty-six per cent of the paid-up equity capital or such excess paid-up equity capital as may be prescribed, after a period of ten years from the date of the commencement of the said business by such Indian insurance company or with such period as may be prescribed by the Central Government.
Explanation.- For the removal of doubts, it is hereby declared that nothing contained in the proviso shall apply to the promoters being foreign company, referred to in sub-clause (b) of clause (7A) of section 2.
(2) The manner and procedure for divesting the excess share capital under sub-section (1) shall be specified by the regulations made by the Authority.
Provision for securing compliance with requirements relating to capital structure
6B.(1) For the purpose of enabling any public company carrying on life insurance business to bring its capital structure into conformity with the requirements of section 6A, an officer appointed in this behalf by the Central Government may, notwithstanding anything contained in the Indian Companies Act, 1913 (7 of 1913),—
(a) examine any scheme proposed for the purpose aforesaid by the directors of the company:
(i) the scheme has been placed before a meeting of the shareholders for their opinion and has been forwarded to the officer together with the opinion of the shareholders thereon, and
(ii) the scheme does not involve any diminution of the liability of the shareholders in respect of unpaid up share capital;
(b) invite objections and suggestions in respect of the scheme so proposed; and
(c) after considering such objections and suggestions to the scheme so proposed,
sanction it with such modifications as he may consider necessary or desirable.
(2) Any shareholder or other person aggrieved by the decision of the officer sanctioning a scheme under sub section (1) may, within ninety days of the date of the order sanctioning the scheme, prefer an appeal to the High Court within whose jurisdiction the registered office of the insurer is situate for the purpose of modifying or correcting any such scheme for the purpose specified in sub section (1).
(3) The decision of the High Court where an appeal has been preferred to it under sub section (2), or of the officer aforesaid where no such appeal has been preferred, shall be final and binding on all the shareholders and other persons concerned.
(4) The provisions of this section shall, on and from the commencement of the Insurance (Amendment) Act, 1968, also apply to insurers carrying on general insurance business.
Conversion of company limited by shares into company limited by guarantee
6C. (1) Where a public company limited by shares carrying on insurance business has passed a special resolution for converting itself into a public company limited by guarantee, it may apply to the Central Government with a scheme for putting the special resolution into effect, including any provision for the alteration of the memorandum or articles of association insofar as it may be necessary for this purpose.
(2) If the Central Government, after giving such notice to any person concerned as it thinks fit, is satisfied-
(a) that the scheme makes suitable provision with respect to the repayment, conversion or liquidation of the paid up capital of the company,
(b) that the consent of the creditors to the conversion of the company limited by shares into a company limited by guarantee has been obtained, or that suitable provisions have been made for discharging, determining or securing the debts or claims of such creditors, and
(c) that the scheme is otherwise reasonable, it may sanction the scheme and thereupon the scheme shall become binding on the company and on all the persons concerned.
(3) Against the decision of the Central Government, sanctioning a scheme under sub section (2), any person aggrieved thereby may, within ninety days of the date of the order sanctioning the scheme, prefer an appeal to the High Court within whose jurisdiction the registered office of the insurer is situate.
(4) The decision of the High Court where an appeal has been preferred to it under sub section (3) or of the Central Government where no such appeal has been preferred, shall be final and binding on all the persons concerned.
(5) Where a scheme has been sanctioned under this section, the company shall file with the Registrar of Companies a certified copy of the scheme as sanctioned, and thereupon the provisions of the Indian Companies Act, 1913 (7 of 1913), relating to companies limited by guarantee shall become applicable to the company.
7. (1) Every insurer shall, in respect of the insurance business carried on by him in India, deposit and keep deposited with the Reserve Bank of India in one of the offices in India of the Bank for and on behalf of the Central Government the amount hereafter specified, either in cash or in approved securities estimated at the market value of the securities on the day of deposit, or partly in cash and partly in approved securities so estimated:-
(a) in the case of life insurance business, a sum equivalent to one per cent of his total gross premium written direct in India in any financial year commencing after the 31st day of March, 2000, not exceeding rupees ten crores;
(b) in the case of general insurance business, a sum equivalent to three per cent of his total gross premium written in India, in any financial year commencing after the 31st day of March, 2000, not exceeding rupees ten crores;
(c) in the case of re-insurance business, a sum of rupees twenty crores