 Came into force July 1938

 There were six amendments till 1945

 1945 a committee constituted under the
chairman ship of Sri Kavas Ji Johagir
 To investigate misconduct of insurance
companies.
Upon the recommendations and discussions under
different committees, An amendment was
enacted on 18th April ,1950.
 Total control vested with the central govt.
 Govt. control the insurance sector through
the Controller of Insurance.
 Insurance co's are required to abide the
provisions of the Act, violations will result in
penalty.
Salient features:-
1. Wide scope
2. Requirement as to Capital
3. Deposits
4. Registration
5. Submission of Returns
6. Prohibition on Rebate and Restriction on Commission
7. Licensing of Insurance agents
8. Investments
9. Prohibition on loan
10. Investigation
11. Duties and Powers of controller of Insurance
 Applicable to all types of Insurance business.
 It includes Life and non-life insurance like fire, marine etc
 Sec. 2 defines
 Marine Insurance sec 2(13)
 Life Insurance sec 2(II)
 Fire Insurance sec 2[(6) (a)]
 Miscellaneous Insurance Business sec 2 (13) (b)
 General Insurance Business sec 2 (6) (b)
Who are allowed to carry insurance business in India:-
a. Registered co-operative societies
b. Public companies
c. Companies registered under any foreign Act
 Paid-up equity capital of rupees one hundred crores - For
business of life insurance or general insurance
 paid-up equity capital of rupees two hundred crores – For
reinsurance business
 For business of life insurance - a sum equivalent to one per
cent of his total gross premium written direct in India; not
exceeding rupees ten crores
 In the case of general insurance - a sum equivalent to three
per cent of his total gross premium written in India, not
exceeding rupees ten crores;
 In the case of re-insurance business - a sum of rupees twenty
crores;
 In case the business done or to be done is marine insurance
only and relates exclusively to country craft or its cargo or both,
the amount shall be one hundred thousand rupees only
 Obtain a certificate of registration from “The
controller of Insurance”
 It is valid for one year
 Application for registration
 Apply to controller of Insurance with relevant
documents
 Upon the satisfaction on the requirement of certain
criteria, the authority shall grant certificate of
registration
 Authority can cancel the registration either wholly or
in relate to a particular insurance; if certain
compliances are not done.
 u/s the post of superintendent of insurance
was created.
 Insurance companies have the Obligation to
submit quinquennial returns in prescribed
format within a prescribed time limit.
 u/s 14 :- the audited accounts and balance
sheet and actuarial report and abstract and
four copies thereof shall be furnished as
returns to the controller.
 A . Restriction of payment by way of
Commission (u/s 40(1))
 No person shall pay or contract to pay any
remuneration or reward by way of
commission or otherwise for soliciting or
procuring insurance business in India , except
an insurance agent or a principal ,chief or
special agent.
 B. Prohibition on Rebate (sec. 41)
No person shall allow or offer either directly or
indirectly as an inducement to any person to take
out or renew or continue an insurance in respect
of any kind of risk, relating to lives or property in
India, any rebate of the whole or part of the
commission payable.
1.The authority or controller or an officer authorized by this
in this behalf shall, in the prescribed manner and on
payment of the prescribed fee, can issue license to act an
insurance agent for the purpose of soliciting or procuring
insurance business. It can be
A. An individual (subject to the satisfaction of certain
conditions)
B. A company or firm
2. The holder of the license
3. The license shall be valid for three years from the date of
issue. It can be renewed at least thirty days before the
expiry without penalty, by paying prescribed fee not more
than Rs. 250.
 Every insurer shall invest and at all times keep invested assets equivalent
to not less than the sum of –
a. The amount of his liabilities to holders of life insurance policies in
India on account of matured claims; and
b. The amount required to meet the liability on policies of life
insurance maturing for payment in India less
a. Matured policies but not the days of grace have not expired; and
b. amount due to the insurer for loans granted on and Surrender
value of policies maturing for payment issued by him or by an
insurer whose business he has acquired and in respect of which
he has assumed liability,
 in the manner following, namely,
(a) twenty-five per cent of the said sum in Government securities,
(b) further sum equal to not less than twenty-five per cent of the said sum in
Government securities or other approved securities and
(c) the balance in any of the approved investments specified in any over
investment.
Every insurer carrying on the business of life insurance, shall every year, within
thirty-one days from the beginning of the year submit to the authority a return
showing as at 31st day of December of the preceding year the assets held
invested in accordance with section 27 and 27A and all other particulars necessary
to establish that the requirements of that section have been complied with, and
such return shall be certified by a principal officer of the insurer. Every such
insurer shall also furnish, within fifteen days from the last day of March , June and
September , a return certified as aforesaid showing as at the end of each of the
said months the assets held invested in accordance with section 27.
 Insurance companies cannot grant loans
upon the hypothecation of any insurance
except on life insurance.
 Director, manager, managing agent, actuary,
auditor or officer of the insurance company,
any other partner, or any other companies
are not eligible to get loan by hypothecation.
 The authority may direct any investigating
authority to investigate the affairs of any
insurance company and to report to the
authority.
 The authority may employ any auditor or
actuary or both for assisting him in any
investigation
 Supreme authority of the insurance
 Possess knowledge of insurance business and
actuarial business.
 Appointed by Central govt.
 For controlling, organizing and empowering
the works of insurance companies.
1. Registration, renewal and cancellation of
registration of insurance companies and
issue certificate of registration. (Sec 3 and
3A)
2. Power to check security deposits and calling
information on investments(sec 7).
3. Power to receive periodicals
4. Power to issue licenses (u/s 42 and 64)
5. Power to sanction the schemes.(sec 34)
6. Power to delegate authorities to
subordinates
7. Power to solve the disputes of settlement.
(sec47 A)
Special powers
1. Powers relating to returns
2. Powers regarding appointments
3. Powers to issue directions
4. Other rights/ Powers