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An
Act to provide for the establishment of an Authority to protect the
interests of holders of insurance policies, to regulate, promote and
ensure orderly growth of the insurance industry and for matters
connected therewith or incidental thereto and further to amend the
Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and
the General Insurance Business (Nationalisation) Act, 1972.
BE it
enacted by Parliament in the Fiftieth Year of the Republic of India
as follows:--
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement
(1) This Act may be called the Insurance Regulatory and Development
Authority Act, 1999.
(2) It extends to the whole of India.
(3) It shall come into force on such date* as the Central Government
may, by notification in the Official Gazette, appoint :
PROVIDED that different dates may be appointed for different
provisions of this Act and any reference in any such provision to
the commencement of this Act shall be construed as a reference to
the coming into force of that provision.
2. Definitions
(1) In this Act, unless the context otherwise requires,--
(a)
"appointed day" means the date on which the Authority is
established under sub-section (1) of section 3;
(b)
"Authority" means the Insurance Regulatory and Development
Authority established under sub-section (1) of section 3;
(c)
"Chairperson" means the Chairperson of the Authority;
(d)
"Fund" means the Insurance Regulatory and Development
Authority Fund constituted under sub-section (1) of section 16;
(e)
"Interim Insurance Regulatory Authority" means the Insurance
Regulatory Authority set up by the Central Government through
Resolution No. 17(2)/94-Ins.-V, dated the 23rd January, 1996;
(f)
"intermediary or insurance intermediary" includes insurance
brokers, re-insurance brokers, insurance consultants, surveyors and
loss assessors;
(g)
"member" means a whole-time or a part-time member of the
Authority and includes the Chairperson;
(h)
"notification" means a notification published in the Official
Gazette;
(i)
"prescribed" means prescribed by rules made under this Act;
(j)
"regulations" means the regulations made by the Authority.
(2) Words and expressions used and not defined in this Act but
defined in the Insurance Act, 1938 or the Life Insurance Corporation
Act, 1956 or the General Insurance Business (Nationalisation) Act,
1972 shall have the meanings respectively assigned to them in those
Acts.
COMMENTS
Appointed day
Appointed day is the date as the Central Government may, by
notification, shall appoint an authority to be called "the Insurance
Regulatory and Development Authority".
Insurance
The act of providing against a possible loss, by entering into a
contract with one who is willing to give assurance--that is to bind
himself to make good such loss should it occur.
In this contract the chances of benefit are equal to the
insurer and the insured.
The first actually pays a certain sum and the latter undertakes to
pay a larger if an accident should happen.
The one renders his property secure; the other receives money
with the probability that it is a clear gain.
The instrument by which he contract is made is called a
policy, the stipulated consideration a premium.--Wharton's
Law Lexicon
Insurer
`Insurer' means--
(a)
any individual or unincorporated body of individuals or body
corporate incorporated under the law of any country other than
India, carrying on insurance business (not being a person specified
in sub-cl. (c) of this clause) which--
(i) carries on that business in India, or
(ii) has his or its principal place of business or is domiciled in
India, or
(iii) with the object of obtaining insurance business employs a
representative or maintains a place of business in India;
(b)
any body corporate (not being a person specified in sub-cl.
(c) of this clause) carrying on the business of insurance, which is
a body corporate incorporated under any law for the time being in
force in India; or stands to such body corporate in the relation of
a subsidiary company with the meaning of the Indian Companies Act,
1913, as defined by sub-s. (2) of s. 2 of that Act; and
(c)
any person who in India has a standing contract with
under-writers who are members of the Society of Lloyd's whereby such
person is authorised within the terms of such contract to issue
protection notes, cover notes or other documents granting insurance
cover to others on behalf of the underwriters, but does not include
a principal agent, special agent or an insurance agent or a
provident society as defined in Part III.--Insurance
Act, 1938, s. 2(9)
`Insurer' means an insurer as defined in the Insurance Act who
carries on life insurance business in India and includes the
government and a provident society as defined in s. 65 of the
Insurance Act.--Life Insurance
Corporation Act, 1956, s. 2(6)
Insurance company
A company which carries on the business of insurance either solely
or in conjunction with any other business or businesses.--Companies Act, 1956, s. 2(21)
Insurance company means any insurer being a company, association or
partnership which may be wound up under the Indian Companies Act,
1913, or to which the Indian Partnership Act, 1932, applies.--Insurance
Act 1938, s. 2(8)
Insurance company means an insurance company as defined in s. 2 of
the Insurance Act 1938 (4 of 1938), having branches or other
establishments in more than one State.--Industrial
Disputes Act, 1947, s. 2(KK)
Insurance policy
The word `policy' of insurance' in s. 6 of the Married Women's
Property Act, 1874, means a document or documents evidencing the
contract between the parties.
If the document known as the policy stands alone and does not
incorporate in it any other document, only that document can be
looked at, but if it does expressly incorporate another document,
the document must be deemed to be part of the policy.--Krishnan Chettiar v. Velayee Ammal, AIR 1938 Mad 604; ILR 1938 Mad 909
Insurance agent
An insurance agent licensed under s. 32, who receives or agrees to
receive payment by way of commission or other remuneration in
consideration of his soliciting or procuring insurance business
(including business relating to the continuance, renewal or revival
of policies of insurance).--Insurance
Act, 1938, s. 2(10)
Where a person otherwise comes within the definition of an
`insurance agent' in s. 2(10) he does not cease to be one merely
because he is also a person acting on behalf of an insurer who for
the purposes of insurance business employs insurance agents within
the meaning of s. 40(1).--Sohrabji v. Oriental Government Security Life Insurance Co. Ltd., AIR
1946 PC 6 : ILR 1946 Bom 159
Fund
Under s. 16, there shall be constituted a fund to be called "the
Insurance Regulatory and Development Authority Fund" and there shall
be credited thereto--
(a)
all government grants, fees and charges received by the
authority;
(b)
all sums received by the authority from such other source as
may be decided upon by the Central Government;
(c)
the percentage of prescribed premium income received from the
insurer.
The Fund
shall be applied for meeting--
(a)
the salaries, allowances and other remuneration
of the members, officers and other employees of the
authority;
(b)
the other expenses of the authority in connection with the
discharge of its functions and for the purposes of this Act.
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