BACK HOME NEXT
Regulation for
Distribution of
Surplus
1.
Short title and commencement
2.
Definitions
3.
Life funds
4.
Procedure for distribution of surplus
In
exercise of the powers conferred by sections 49 and 114A of the
Insurance Act, 1938 (4 of 1938), the Authority, in consultation with
the Insurance Advisory Committee, hereby makes the following
regulations, namely:--
1.
Short title and commencement
(1)
These regulations may be called the Insurance Regulatory and
Development Authority (Distribution of Surplus) Regulations, 2002.
(2)
They shall come into force from the date of their publication in the
Official Gazette.
2.
Definitions
(1)
In these regulations, unless the context otherwise requires--
(a)
"Act" means the Insurance Act, 1938 (4 of 1938);
(b)
"Authority" means Insurance Regulatory and
Development Authority established under the provisions of section 3
of the Insurance Regulatory and Development Authority Act, 1999 (41
of 1999);
(c)
"participating policyholders" means the holders of
`par policies' and `policies with deferred participation in
profits', which are defined in the Insurance Regulatory and
Development Authority (Actuarial Report and Abstract) Regulations,
2000;
(d)
"non-participating policyholders" means the holders
of `non-par policies' which is defined in the Insurance Regulatory
and Development Authority (Actuarial Report and Abstract)
Regulations, 2000; and
(e)
all words and expressions used herein and not defined herein
but defined in the Insurance Act, 1938 (4 of 1938), or in the
Insurance Regulatory and Development Authority Act, 1999 (41 of
1999), or in any Rules or Regulations made thereunder shall have the
meanings respectively assigned to them in those Acts or Rules or
Regulations.
3.
Life funds
For
the purpose of these regulations, with effect from 1st April,
2003,--
(1)
A life insurer registered under section 3 of the Insurance Act, 1938
shall be required to maintain separately:
(a)
a life fund for participating policyholders, and
(b)
a life fund for non-participating policyholders.
(2)
A failure to comply with the requirements of sub-regulation (1)
above shall mean that the life fund maintained by the insurer shall
be for the benefit of the participating policyholders only.
4.
Procedure for distribution of surplus
A
life insurer may, on the advice of his appointed actuary, reserve a
part of the actuarial surplus (also referred to as valuation
surplus) arising out of a valuation of assets and liabilities made
for a financial year in accordance with Insurance Regulatory and
Development Authority (Actuarial Report and Abstract) Regulations,
2000, to its shareholders, which shall be,--
(a)
one hundred per cent, in case of a life fund maintained for
non-participating policyholders;
(b)
one-ninth of the surplus allocated to policyholders in case of a
life fund maintained for participating policyholders:
PROVIDED
that an insurer shall, however, be required to obtain prior approval
of the Authority in cases where the said allocation is not the
one-ninth of the surplus:
PROVIDED
FURTHER that an insurer shall not allocate or reserve exceeding ten
per cent, of the said actuarial surplus to its shareholders.
|