amount 'which a single insurér would have, een required to deposit under sub-section, (1)+ provided that the deposit made by each insurer in the group is not less than that proportion of the total deposit required to be made under sub-section (1) as the propel 3 tion of his share of the risk on each policy issued by the group bears to the total risk om that policy, explanation—for the purposes of this section, a group" shall be deemed to be operating as such in indie if the following conditions are fulfilled, namely: - 70 (@) no insurer in the group hag commenced car rying on insurance business in india after the com mencement of the insurance (amendment) act, 1968; (2) all the insurers in the group ate registered for the same class o classes of insurance business; 15 (©) there is an agreement between all the insur ers in the group to function as a group and such agreement provides that the proportionate share of each insurer in the total risk on every policy ssuéd by the group shall be such as may be mentioned therein and 20 that such proportion shall be the same for all policies in all the classes of insurance policiés issued by the group; () the agreement referred to in clause (c) _ bas been fled with the controller within thirty days from the date of its execution: 25 provided that if the controller is satisfied that any insurer was prevented by sufficient cause from filing suich agreement within the specified time, he may, by order, allow the insurer 16 file such agreement within a period of thirty days from the date of his order; 30 (e) every policy issued by the insurers in the group mentions, on the face of the policy, the names of all the members of the group'and the proportion of the risk for which each member is liable; (the insurers im the group function with com: 35 mon offices, common officers, not being directors or members of any board of management, and common staff within india; {g) all the expenses in india of the insurance bust ness (but excluding expenses solely relating to any board of management, whether set up for the purpose ot managing the insurance business or not,) ate shared by-the instirers in the group in the proportion in which the risks are shared by and between them! 10 (@c) when a group of insurers ceases to be''a group, every insurer in that group who continues tocarry on any class of insurance business in intlia shall comply with the requirements of sub-section (1) as if he had not been an insurerin any group af any time and he shall pay, within 1s a perfod of six months from the date of cessation of the group, in a lump sum, the amount of the instalments of deposit which he would have been required to rake under sub-section (1a) before the date of cessation of the group had he not been an insurer in any group at any time, reduced by the amount of deposit, if any, made by him after the commencement of the insurance (amendment) act, 1968, : 20 (ld) the central government may, at its discretion, extend the time for making any deposit or instalment of deposit required to be made by any insurer under the provisions of sub-sections (1), (14), (ib) and (10), by a period of not more than' six months at a time: a5 provided that not more than two'extensions shall be given in respect of any deposit or instalment of deposit required to be made by an insurer" (c) in sub-section (2), the words "any class of' and the words "as the deposit for that class of insurance business" shall 30 - he 'omitted; t { (d) for sub-sections (3), (4), (6) and (6) the following sub-sections shall be: substituted, namely:— 35 "(3) where the deposit is to be made by ant insurer not cartying on insurance business in, india: immediately before the commencement of the insurance" (amendment) act, 1868,the deposit shall be made, in full before the application fot registration is made, (®) an insurer 'shall not'be registéred for-any class of insurance business in addition to the class or classes for which hé is aléeady registéréd until the full deposit requitéd-whder sub-section (1) has béen rade 10 ts (5) where on insurer who intendes to become a member of a group, does not carry on all the clases of insurance businéss carried on by the other insurérs in' such group, or, where out of the several insurers who desire to form themselves into a group, any irisurer dots not carry on all the classes of insurance business carried on by the other insuéers who desire to fom themselves into the group, such ingurer may be régistered for that class or those classes of insurance busines' which is or are carried on by all the members of the group, arid where arly applicatidn for registration is made by any such insurer, the controller may, notwithstahding anything contained in subsection (4), tegister such insurer for one or more additional classes of insurance, if the following conditions are fufilled namely: - 20 (q) the controller is satisfied that registration for the proposed one or more additional classes of insurance business would qualify the insurer to become a member of a group; 25 (b) agreements have been executed by ali the insurers in the group or proposed group, as thé cise may be, and such agreements, in the opinion of the controller, satisfy the requirements of the haplanation to subsection (1b); and (e) the insurer has, after the commencement of the insurance (amendment) act, 1968, made deposit of 30 a sum not less than the total of all the instalments of deposit which he would have been required to make after such commencementtill the date of his becoviing a merober of the group, had he been a member of the group from such comméhcement (6), the controller shall cancel the registration made in pursuance of 'the provisions of sub-section (5), if the insurer referted to therein falls to bécome, within a period of three months froni the date of such registration, a member of the grotip or proposed group, as the case may be, and, where such registratiofi has been cancelled, the provisions of this act shall apply fo thé insurer'as if he had not been registered for the class or classes of insurance business in relation to which his registration has been cancalled" 4, for section 9 of the principal act, the following section shall substi i aly tution ¢ substituted, namely: ot new section for section 9, "9 where on insurer has ceased to carry onin india all refund ot a classes of insurance business, and his liabilities in india in res pos pect of all classes of insurance business have been satisfied or are otherwise provided for, the court may, on the application of the insurer, order the return to thé insurer of the deposit made by him under this act", 8 in section 10 of the principal act, in sub-section (1) - amend ment of section 10 10 () for the words, brackets, letters and figures "classes specified in clauses (@), (b), (¢) and (d) of sub-section (1) of section 7", the words "following classes, namely, life insurance, fire insurance, marine insurance or miscellaneous insurance" shall be substituted: 15 (4) for the words, brackets and letter "the class specified in clause (d) of that sub-section", the words "miscellaneous insurance" shall be substituted; (ii) for the words, brackets and letter "each such sub-class of the class specified in clause (d)", the words "each of such sub- 20 classes of miscellaneous insurance business" shall be substituted e (iw) in the proviso, for the words, brackets, letter and a hgures "the, class of insurance business specified in clause (4) of sub-section (1) of section 7", the words "miscellaneous insurance business" shail be substituted, 25 9 tn section 11 of the principal act, in sub-section (1), im clause amondi: (b),for the words, brackets, letters and figures "the classes speci- ment of fled in clauses (a), (b) and (c) of sub-section (1) of section 7, setcion 11 [the words "the following classes, namely, life insurance, fire insurance ox marine insurance" shall he substituted 3010 in section 21 of the principal act, in sub-section (1), in aimena clause (¢), after the words, figures and letter "or segtion 28a", the mont of words, figures and letters"or section 28b or, section 6£va? shall be section 21 inserted, hl, "attet section 27a' of the principal act, the following 'éebtisn shall be inserted, namely: - insertion, of new section 7b 278 (1) noinsurer carrying on' general insitrance business shall, after the commencement of the insurance (amendment) ast, 1968, invest or keep invested any part of his assals other: 5 : mise than in any' of the' following approved invesiments, nemely:— further provialong regarding investments, (a) the investments specified in clauses (a) to (f), (i) to (nm), (q) and (s) of sub-section (1) of section 27; (b) debentutes secured by a first charge on any ime 1° movable property, plant or equipment of any company where either the book value or the market value, whichever is less, of such property, plant or equipment is iore than twice the value of such debentures; (c) first debentures secured by a floating charge on all its assets or by a fixed charge on fixed-assets ang floating charge on all other assets of any company which has paid dividends on its equity shares for the five years immediately preceding or for at least five out of the six or seven years immediately preceding the date of the investment; (@) such other investments as the central government may, by notification in the official gazette, declare'to be approved investments for the purposes of this section (2) any prescribed assets shall, subject to such conditions, if any, as may be prescribed, be deemed to be assets invested or kept invested in approved investments - specified in' subsection (2), (3) notwithstanding anything contained in sub-section (1), an insurer being a company may, subject to the provisions contained in the next succeeding sub-sections, invest ot keep invested any part of his assets otherwise than in an approved in vestinent, if,— @ alter such investment, the total amounts of all such investments of the insurer de not exceed twenty-five per cent of his assets, and 3 () the investment is made, or, in the case of any_investment already made, the' continuance of such investment is with the consent of all the dircctors present at a meeting and eligible to vote, special notice of which has been gives to all the directors then in india, and all such investments, including investments in which any director is interested, are reported without delay to the controller with full de tails of the investments and the extent of the director's ine terest in any such investment, (@ an insurer shall not invest or keep invested any part of his assets in the shares of any one banking compatiy or investment company more than— (a) ton per cent, of his assets, or (b) two per cent, of the subscribed share capital and debentures of the banking company-or investment company concerned, whichever fs less () an insurer shall not invest or keep, invested any part of his assets in the shares or debentures of any one company other than a banking company or investment company more than— (@) ten per cent of his assets, or (b) ten per cent of the subscribed share capital and debentures of the company, whichever fs less: provided that nothing in this sth-section shall apply to any investment made with the previous consent of the controller by an insurer, being a company, with a view to forming a subsidiary company carrying on insurance business, (6) an insurer shall not invest or keep invested any part of his assets in the shares or debentures of any private company, (7) where an investment is in partly paid-up shares, the jo uncalled uabllity'on such shares shall be added to the amount invested for the purpose of computing the percentages referred to in clause (a) of sub-section (4) and clause (a) of subsection (5) (8) notwithstanding anything contained in sub-seetions (4) 35 and (5), where new shares are issued to the existing sharcholk ders by a company, the existing shares of which are covered by clause (i) or clause (k) or clause (1) of sub-section (1) end of which an insurer is already' a shareholder, the insurer may subscribe to stich néw shares: 1760 ls—2 provided' tildt! the' proportion of new shares, subscribed by fiim does not extéed' the proportion which, the, paid-up amount on the shares held by bim immediately before such subscription beat's to the total paid-up' capital of the company at the time of such subscription 5 (9): if, onan application submitted to the controller, he is setisfied that special grounds exist warranting such exemption, he may, for such period, to such-extent and in relation to suck particular investments and subject to such conditions as may be' specified by'him in this-behalf, exempt om insurer from all 10 or any of the' provisions' of sub-séctions: (4), (5) and: (8) 15 zof 19% (20) an insurer shall not keep more than ten per centof his assets in fixed depasit or outrent deposit, or partly in fixed deposit and partly in'current deposit, with any one' banking: company or with any co-operative: society registered under 'the cooperative societies act, 191% or under any other law' for the time being in force and doing banking business: provided that in applying this sub-section to the amount in deposit with a banking company' on any day; all the premiums collected by that company on behalf of the ingurer-duriiig the 20 preceding thirty days shall be excluded (11) (atl assots shall (except for a part theteof not exceed- mg one-tenth of the total assets in value which may, 'subject to such cotiditions and restrictions as nay be prescribed, be offered as security for any loan taken for purposes of' any investment) be held frce of any encumbraniée, chargé, hypotheeation or lien (12) if at any time the controller considers any one or more of the investments constituting an insuror's assets to be unsuitable or tndesirable, he may, after giving the insurer an oppor- 30 tunity of being heard, ditect the insurer to realise the investment or investments, and the insurer shall comply with the direction within such time as may be specified inthis behalf by the controller (18) every insurer inéxistence st the commencement of the 35 tasurance (amendment) act, 1968, whos¢ investments or any part thercof at such commencement do or docs not fulfil 'the requizements of this section, shall, within mihcty days from such com- shencemont, submit to the contcoller a report specifying all such investments, and, if the controller is satisfied that it will not be in the interest-of the insurer or any-class of insurers generally to realise any such investmonts, ho may, by arder, direct that the provisions of this section, other than the provi sions contained in sub-section (12), shall not apply in relation to any such investments or to any class of investments genovally for such period or periods as may be specified in the order (4) without prejudice to the powers conferred on the cone troller by sub-section (12), nothing contained'in this section shall be decmed to require any insurer to realise any investment made in conformity 'with' the: provisions of sub-section (j) after the "commencement of thé insurance (amendment) act, 1968, which, after the making thereof, has ceased to be an approved investment within thé meaning of 'this section, (15) nothing contained in this section shall be deemed to affect in any way the manner in which any moncys relating to the provident fund of any employes or to any security taken from any employee or other moneys of a like nature are roquired to be held by or under any central, provincialor state act (26) in this section, unless the context otherwise requires, "assets" means— (a) in the case of an insurer carrying on life insurance business in india, all his assets required to be shown under the column "other classes of business" in the balenee-shoct in form a, in part il of the first schedule, but excluding any items against the head "other accounts (to he specified)"; 30 (b) in the case of an insurer specified in sub-clause (a) (i) or sub-clause (6) of clause (9) of section 2, who is not carrying on life insuranee business in india, all his assets re~ quired to be shown in the balance-sheet in form a in part u of the first schedule but excluding any items against the head "other accounts (to -be specified)"; and 35 (c) in the case of any other insurer, the assets required to be shown in'the' statement'in form aa, in partii of the first schedule, put excluding office' furniture; but, does not include any assets, specifically held against any fund or portion thereof in respect of which the controner is satisfied that such fund or portion thereof, as the case may be, is regula~ ted by the law of any country outside india or in respect of which the controller is satisfied that it would not be in the in terest of the insurerto apply the provisions of thig section' 12, after section 28a of the principal act, thé following section 5 shall be inserted, namely:—- insertion ofnew section 288, returns of investments relating tothe ussets and changes therein "988, (1) every insurer carrying on general insurance = | business, shall every year, within thirty-one days from the beginning of the year, submit to the controller a return in the prescribed form showing as at the 3ist day of december of the 10 preceding year the investmionts made out of his assets referred to in section 27b, and every sich return shall be ¢ertified by a principal officer of the insurer (2) every insurer referred to in sub-section (1) shall also submit to the controller a return in the preseribed form showing all the changes that occurred in the investments aforesaid during cach of the quarters ending 'on the last day of march, june, september and december within thirty-one days from the close of the quarter to which it relates, and every such return shall be certified by a principal officer of the insurer 20 (8) every insurer shall submit, slong with the returns referred to in sub-sections (1) and (2), a statement, where any part of the assets are in the custody of a banking company, from that company, and in any other case, from the chairman, two directors and @ principal officer, if the insurer is a company, or 75 from a principal officer of the insurer, if the insurer is not a company, specifying the assets, which are subjected to a charge and certifying that the other assets are held frée of any encumbrance, charge, hypothecation or lien, and every such statement after the first shall also specify the charges ereated in respect 3° of any of those assets since the date of the statement immediately preceding,'and, if any such charges have been hquidated, the date on which they were so liquidated" amend~ ment of 48, in section 30 of the principal act, after the word, figures and jelter "section 27a", the word, figures and letter ", section 27b" shall be, inserted section 30 44, in section 314 of the principal act, in clause (vit) of the amend: proviso to sub-section (1) the words "such bonus, in the case of any mentot employce, not exceeding in amount the equivalent of his salary tor a section period which, in the opinion of the central government, is season 2 5 able having regard to the circumstances of the case" shell be omitted 15 in section 33 of the principal act,— amend- (@ after sub-section (1), the following sub-section shall be ment of inserted, namely:— section 93 56 10 "ga) notwithstanding anything to the contrary contained in section 235 of the companies act, 1956 the control lor may, at any time, and shall, on heing dirceted so to do by the central government, cause an inspection to he made by one or more of his officers of any insurer and his books and accounts; and the controlier shall supply to the insurer a copy of his report on such inspection"; () in sub-section (2), after the words, brackets and figure "under sub-section (1)", the words, brackets, figure and letter ", of inspection under sub-section (1a)," shall be inserted; (ii) in sub-section (3), after the words, brackets and figure junder sub-section (1), the words, brackets, figure' and letter "or inspection under sub-section (14)" shall be inserted; (i) after sub-section (8), the fmllowing sub-seetion shall be inserted, namely: - "(8a) the controller shall, if he has been directed by the central government to cause an inspection to be made, and may, in any other case, report to the central government on any inspection made under this section"; (2) in sub-section (4), after the words, brackets and figure 30 "under sub-section (1)", the words, brackets, figure and letter "or under sub-section (34)" shall be inserted; (vi) after sub-section (4), the following sitb-sections shall be inserted, namely:— (ga) the central government may, after giving rea 35 sonable notice to the insurer, publish the report submitted by the controlier under sub-section ga) or such portion thereof as may appear to it to be necessary, (4b) the central government hay prescribe the minimim information "to be maintained by insaver in their pooks, the manmer in which such jnformation should be jnaittamed, the cheeks and other verifications to be adopted by insurers in that connection and all other matters ineidental theretd as are, in its opinion, necessary to enable the controller to discharge satisfactorily his functions under this section  hhpiaitatiow fer the' purposes 'of 'this section, the expression +ingurer" shall iniclude—  gy "inl'the dise"of ani insuret inodirporated 'outside india, all fis braiaches in india, and (i) in the case of an insuker tndorpofated in india— (@) sil his subsitiiaries formed for the purpee" of carry: jag on the business of msukarice exclusively outside india; and (b) all his 'branches whether situated inindia or outside india' inser 46, after section 33 of the principal act, the following headings tion at and sections shall be inserted: - é new scetions 34, 384a, 345, b4c, 34d, 348, 347, 34g and 34h power of 34, (2) where the controller is satisfied that— g the con- | troller to (a) in the public interest; or issue directions (b): to prevent the affairs of eny insuset being condueted-inr weiter getrimetital to fhe jnterests of the policy: insiver; or 'holders or in a manner prejudicial to the interests of the (e) generally to secure the proper management of any insurer, 'ons to insurers generally or to any he may, from time ta time, issue such it is necessary to issue direct amsurer in particular, "dirgetions as he decom the case may be, shall as s fit, and the insurers or the insurer, be bound to comply with such directions, (2) the controfter nay, on representation ma: on his own motion, maditiy op sub-section (1), and in may impose such co modification er cane de to him or direction issued under 50 modifying or cancelling any direction, nditions as he thinks fit, subject to which the ellation shall have effect, cowonpt, oven manaceneny 34a (2) in the case'of an insurer - amend ment of rt nade after the commencement, of provithe insurance: (amendm: ent) act, 1968, of any provision re- ting ee ppointment, termination of 8 director o» any ments of therw other director, whole-time or o: ise, or of a manager of managing 8 chief executi atever name called, op sete secrétary, acon, iter, whether that provision °> subject to morandum or articles of previous tered into by him, oy in epproval bny resolution passed by -the insur shall have sect unless or termingtion of 'ap 'vious approval of the con explanation fo, vision conferring'any benéft oe providing 'an: quisite, in wii tion of the term of officer, by whatever name called, or secretary, accountant or underwriter or the managing director, or any other director, 'whole-tinne or othetwise, shall be deemed to be a provision rélating to his remuncration, (2) nothing contained in sections 268 ond 269, the proviso to sub-section (2) of section 809, sections 310 and 311, the provieo to section 387, and section 388 (in eo fax as section 988 takes the provisions of sections 310 and 311 apply in relation to the manager of a company) of the componies act, 1956, shall apply to any matter in respect of which the approval of the controller has to be obtained under sub-section (1) (3) no act done by a person as a managing or whole-time director or a director not liable to retire by rotation or a manager or a chief executive officer, by whatever name talled, or by a secretary, accountant or underwriter shall be deemed to be invalid on the ground that if is subsequently discovered that his appointment had not taken effect by reason of any of the provi- sions of this act; but nothing in this sub-section shall be consfeued as rendering valid any act done by such person after his appointment has been shown to the insurer not to have had effect power of controt- yer to remove managerial and other persons from office 343, (1) where the controller is satisfied that in the public interest ot for preventing the affairs of an insurer being condueted in a manner detrimental to the interests of the policy-holders or for securing the proper management of any insurer it is necessary so to do, he may, for reasons to be recorded in writing, by order, remove from office, with effect from such date as may be specified in the order, any director, chief executive officer, hy whatever name called, or other officer or employee, of the insurer (2) no order under sub-section (1) shall be made unless | the director or chicf executive officer or other officer or employee concerned has been given a reasonable opportunity of making a representation to the controller against the propased order: provided that if, in the opinion of the controller, any delay would be detrimental fo the interests of the insurer or his policy holders, he may, at the time of giving the opportunity aforesaid or at any time thereafter, by order direct that, pending the consideration of the representation aforesaid, if any, the director s the case may be, chief executive officer or other officer or employee, shall not,, with effect from the date of such order,» (a) act as such ditector or chief executive officer ox other officer or employee of the insurer; (0) in any way, whether directly or indirectly, be cone cerned with, or take part in, the managemont of the insurer (3) (@ any person against whom an order of removal has been made under sub-scetion (1) may, within thirty days from the date of communication to him of the order, prefer an appeal to the central government, (6) the decision of the central government on such appeal, and subject thereto, the order made by the controller under sub-section (1), shall be final and shall not be called into question in any court, (4) whero any order is made in respect of a director or chief executive officer or other officer or employee of an insurer under sub-section (1), he shall coase to be a director or, as the case may be, chief exccutive officer or other officer or employee of the insurer and shall not, in any way, whether divectly or indirectly, be concerned with, or take part in, the management of any msurer for such period not exceeding five years ay may be specified in the order (5) if any person in respect of whom an order is made by the controller under sub-section (2) or under the proviso to subsection (2) contravenes the provisions of this section, he shall be punishable with fine which may extend to two hundred and fifty rupees for each day during which such contrevention continues, 30 (6) where an order under sub-section (1) has been made, the controller may, by order in writing, appoint a suitable person in place of the director or chief executive officer or other officer or eraployce who has heen removed from his office under that sub-section, with effect from such date as may he specified 35 __ in the order, (7) any person appointed as director or chiof executive offcer or other officer or employee under this section shall (a) hold office during the pleasure of the controller and subject thereto for a period not excestling three years or such-fintber periods-not exceeding three years-at-a time-as the céntroller may specify; (b) not incur-any obligation or liability -by-reason only of his being a director or chief executive officero other officer or employee or for anything dome ov omittedsto be done § in good faithin the execution of the duties; ofhisoffice or in relation thereto 10 (8) notwithstanding anything contained in any-lawor in any contvact,memorandumi or articles of, assosiation;on the removal of a person from office under thissection, thatpetson shall not be entitled to claim any compensation for-theloss-or termination of office 34c (2) if the controller is of opinion' that-in the interests of an insurer, or hispolicy-holders it is necessary so to do;he : may, from time to time, by order-in- writing, appoint, with effect '5 from, such date asmay be specified ,inthe order, oneof moré persons to hold office as additional directors of the insurer: power of controiler to appoint additional directore, 'provided that thé titimber of additional directors so appoint ed shall not, at any time, exceed five or oné-third'of the maximum strength fixed for the board by 'the articles of associa- 20 'tion of the insurer, whichever is less (2) any person appointed as additional director 'ig pursuance of-this section, - (a) shallhold office during the pleasure of the control: ter, and subject thereto for a period not exceeding three 25 years or stich further peviotls not-exceeding three years-ata time as the controller 'may specify; (b) shall not incur any ¢bligation or liability by reason only of his béing a director or for anything done or omitted to 'be done in good yaith in'the execution: of the duties of 3¢ his office or in relation thereto; and (c) shall not be required to hold qualification shares-af the insurer (3) for-the purpose of reckoning any proportion'of the total number of directors of the insurer, any additional director ap- 3s pointed under this section shal] mot be taken into account, (34d "any 'appointinent-or removal of a dixector, chief exe gecriong cutive officer or other officer or employee in pursuance of section 34b and 34b or section" 34c shal! have effect notwithstanding anything ¥c to tothe contrary contained in-the companies act, 1956, or any other other law' {or the time being in force or in any contract or any 5 other instrument 34, (1) the controller may,— further powers ot con, 10 (@ caution or 'probibit insurers generally or any insu- trofler rer in partictilar-against entering into any particular transac~ aa en tion or class of 'transactions, and geneally give advice to ment, be any insurer; 15 (b) at sny time, if he is satisfied 'that in'the public interest or in' the interests of the insurer or for preventing the affaits of the insurer being conducted in a manner detrimental to the: interests of the insurer or his policyholders, it is necessary so to do, by order in writing and on such terms and: conditions as may he specified thereih,— @-require the insurer to call-a meeting of his directors for the purpose of considering any matter relating to of arising out of the affairs of the insurer; 20 (hi) depute one or more of his officers to watch the proceedings at any: meeting of the board of directors of the insurer or ofany committee or of any other body constituted by-it; require the insurer to give an oppor- ' tunity to the officers so deputed to be heard at such meetings and also require such officers to send a report of such proceedings to the controller; (iii) require the board of directoys of the insurer or any cominittee or any other body constituted by it to give in writing to any officer specified by the controller in this behalf at his usual address all notices of, and other communications telating-to, any meeting-of the board; committee or other body coristituted by it;  (i) appoint one or more of his officers to observe the manner in which the affairs of the insurer or of his offices 'or branches are being conducted and make a report theré= on; (v) require the insurer to make, within such time as may be specified in the order, such changes in the management as the controller may consider necessary 10 (2) the central government or the controller may appoint such staff and at such places as it or he may consider necessary for the serutiny of the returns, statements and information furnished by insurers under this act, and generally to ensure the efficient performance of the functions of the controller under this act | power     | of    ||-----------|-------|| controll- |       || er        | to    || issue     |       || diree-    |       || tions     | re    || garding   |       || re-insur- |       || ance      | trea- || ties,     | ete,  || 20        |       |34f, (1) without prejudice to the generality of the powers conferred by sub-section (1) of section 34, the controller may, if he is of opinion that the terms or conditions of any re-insurance treaty or other re-insurance contract entered into by an insurer are not favourable to the insurer or are detrimental to the public inlerest, he may, by order, require the insurer to make, at the time when the renewal of such ireaty or contract becomes next due, such modifications in the terms and conditions of such treaty or contract as he may specify in the order or not to renew such treaty: or contract, and, if the insurer fails to comply 'with such order, he shall be deemed to'have failed to comply with the provisions of this act 30 (2) the controller may, if he has reason to believe that an insurer is entering into or is likely to enter into reinsurance treaties or other re-insurance contracts which are not favourable to the insurer or are detrimental to the public interest, he may, by order, direct that the insurer shall not enter into such re-insurance treaty or other re-insurance contract unless a copy of such treaty or conéract has heen furnished to him in advance and the terms and conditions thereof have becn approved by him and if the insurer fails to comply with such order he shall be deemed to have failed to comply with the requirements of this act 35 power of controller 34g, (1) without prejudice to the generality of the powers conferred hy sub-section (1) of section 84, the controller may, if he has reason to believe that the working of any branch outside india of an insurer: being an insurer specified in sub-clause (b) of clause (9) of section 2, is generally resulting in a loss or that the to order elosure 6f foreign branches, affairs of that branch are being conducted in a manner prejudician to the interests of the policy-holders or the public interest, he may, alter giving an opportunity io the insurer of being heard, direct that the insurer shall cease, within such period, not being less than one year, as may be specified in the order, to carry on insurance business in the country in which such branch is situated and if the insurer fails to comply with such order he shall be deemed to have failed to comply with the provisions of this act 10 (2) any insurer aggrieved by an order made by the controller under sub-section (/} may, within a period of two months from the date of receipt by him of the order, prefer an appeal to the central government and the decision of the central government thereon shall be final, 15 34h (1) where the controller, in consequence of information in his possession, has reason to believe that,— searck: and seizasy 20 (a) any person who has been required under sub-seetion (2) of section 88 to produce, or catise to be produced, any books, accounts or other documents in his custody or power has omitted or failed to produce, or cause to he produced, such books, accounts or other documents, ot 25 (®) any person to whom a requisition to produce any books, accounts or other documents as aforesaid has been or might he issued will not, or would not, produce or cause to be produced, any books, accounts or other documents which will be useful for, or relevant to, an inspection under that sub-section, or (c) a contravention of any provision of this act has been committed or is likely to be committed by an insurer, or 30 (@) any claim which is due to be settled by an insurer, has been or is likely to be settled al a figure higher then a reasonable amount, or bs (e) any claim which is due to be settled by an insur- (es, has been or is likely to be rejected or setiled at a sgure lower than a reasonable amount, or (dany illegal rebate or commission has been paid or is likely to be paid by an insurer, or 49 (g} sny books, accounts, receipts, vouchers, survey reports or other documents, belonging to an insurer are likely to be tampered with, falsified or manufactured, 'he may authorise any subordinate officer' of 'his, not lower in-rank than an 'assistant controller of insurance - (hereafter referred to as the authorised officer) -to— (i enter and searéh "any building or 'place where he has reason to suspéct that 'such books, acconhts or 3 other documents, 'or-any 'books 'or 'papers 'relating to any claim, rebate or comiriigsion' or any 'reebipts; vou _chers, reports or other dooimbnts"are rept; gi) break open the lock of apy door, box, locker, safe, almirah or other receptacle for exercising the 10 powers conferred by clause (@) where the keys thetéot 'axe not available; " _ (ii) seize all or-any such books, accounts or other documents, found as a result of such search;  (jv) place marks of identifigation on: such 'books, 15 accounts or other documents or make or "cause to be made extracts or copies therefrom " (2)the authorised officer may requisition the services of any police-officer or of any officer of the central government, or "of both, to assist him for all or any of the purpoiies specified in 20 sub-section (1) and it shall be the duty of every such officer to comply with such requisition (3) the authorised officer may, where it is not practicable to 'ssizc| any such book, account or other document, specified in sub-section (1), serve an order on the per- 25 son who is in immediate possession or eontrel ° thereof that he shall not remove, part'with or otherwise deal, with' it axcépt, with the previous permission of such officer and auch offi- _ cer may take sueh steps as may be necessary for ensuiing com~ pliance with this sub-section   30 (2 the authorised officer spay, during the course of the search or seizure, examine on oath any person who is found to hein possession or control of any books, accounts or other docitments, and any statement made by such person during such examination may thereafter be used in evidence in any proceeding 34 under this act (5) the books, accounts, papers, receipts, vouchers, reports, or other documents scized under sub-section (1) shall not be retained by the authorised officer for a period exceeding one jnmded and cighty days from the date of the seizure unless the yo reasons for retaining the same ate recorded by him- in writing and the approval of the controller for such retention is obtained: provided that the controller shall not authorise the retention of the books, accounts, papers, receipts, vouchers, reports, or other documents for a period exceeding thirty days after all the proceedings imder this act lor which the books, accounts, papers, receipts, vouchers, reports, of other documents are relevant are completed (6) the person from whose custody any books, accounts, papers, receipts, vouchers, reports, or other documents are seized under sub-section (1) may make copies thereof, or take extraci¥ therefrom, in the presence of the authorised: officer or any other person empowered by him in this belialf at such place and time as the authcrised office: may appoivii in thig behalf (7) ifa person legally entitled to the books, accounts, papsi, receipts, vouchers, reporis, or other documients seized under subs section (1) objects for any reason to the approval given by the controller unde sub-section: (5), he may make an application to the: caitral government stating therein the reasons for such objection and requésting for the return of the hocks, accounts, papers, receipts, vouchers, reports, or other documents (8) omwreceipt of the application under sub-section (7), the 'ceniral governnient may, after giving the applicant an oppor tunity of being-heard, pass such orders as it thinks fit, (9) the provisions ofthe code of criminal procedure, 1898, telating to searches and seizures-shall apply, go far as, may be, to every search and scizure made under sub-section (1) (0) 'the central 'government may make rules-'in-relation to anyséarch orseizure under this section; in particular, and without prejudicetothe generality of the foregoing power, such tules:mayiprovide for the procedure to'be followed by-the -autherised officer,— (@ for obtaining, ingress 'into such building or plave 'to be searched «where free ingress thereto is tiot available; gi) for ensuring safe custody of any books, accounts, papers, reeeipts, vouchers, reports, on other documents seized annder this section", 47, after section 37 of the principal act, the following section shall be inserted, namely:— "37a, (2) it the controller fs satisfied that— () in the public interest; or (ii) in the interests of the policy-holders; or insertion of new section 374, power of contralter to prepare scheme of pmalgamation, (ii) m order to secure the proper management of an insurer} or (iv) in the interests of the insurance business of the country as a whole, it is necessary so to do, he may prepare a scheme for the amal- 10 (hereatter gamation of that insuxer with any other insurer teferred,to in this section as the transferee insurer) \ (2) 'the scheme aforesaid may contain provisions for all or any of the following matters, namely:— (a) the constitution, name and registered offices, the 15 capital, assets, powers, rights, interests, authorities and privileges, and the liabilities, duties and obligations of the transferec insurer} (b) the transfer to the transferee insurer of the business, properties, assets and abilities of the insurer on such terms 20 and conditions as may be specified in the scheme} (c) any change in the bo ard of directors, or the appointtransferee insuret ment of a new board of directors of the and the authority by whom, the manner in which, and the sther terms and conditions on which, such change or appoint- 25 ment shall be made and, in the case of appointment of a new board of directors or of any director, the period for which such appointment shall be made; (a) the alteration of the memorandum and articles of association of the transferee insurer for the purpose of alter- 3° ing the capital thereof or for such other purposes as may be necessary to give effect to the amalgamation: (e) subject to the provisions of the scheme, the cont nuation by ot against the transferee insurer, of any aclions or proceedings pending against the insurer; 35 (f) the veduction of the interest or rights which the shareholders, policy-holders and other creditors have in of against the insurer before the amalgamation to such exteat as the controller considers necessary in the public interest or in the interos's of the shareholders, policy-holders and other creditors or for the maintenance of the business of the insurer; (g) the payment in cash or atherwise to poticy-holders and other creditors in full satisfaction of their claim,— (@) in respect of their interest of rights in or against the insurer before the amalgamation; or 10 (ii) where their interest or rights aforesaid im or against the insurer has or have been reduced under clause (f), in respect of such interest oy rights -as so reduced; 1s 20 (h) the allotment to the shareholders of the insurer for shares held by them therein before the amalgamation {whether their interest in such shares has been reduced under clause (f) or not} of shares in the transferee insurer and where any sharehdlders claim payment in cash and not allotment of shares, or where it is not possible to allot shares to any shareholders the payment in cash to those share holders in full satisfaction of their claim— (@ in respect of their interest in shares in the ine surer before the amalgamation; or 25 (ii) where such interest has been reduced under clause (f} in respect of their interest in shares as so reduced; of 1047, 30 (® the continuance of the services of all the employees of the insurer (excepting such of them as not being workmen within the meaning of the industrial disputes act, 1947, are specifically mentioned in the scheme) in the transferee insurer at the same remuneration and on the same terms and conditions of service, which they were getting or, as the case may be, by which they were being governed, immediately before the date of the amalgamation: 40 provided that the, scheme shall contain a provision that the transferee insurer shall pay or grant not later than the expiry of the period of throe years, from the date ot the amalgamation, to the said employees the same retune: ration and the same terms and conditions of service ey are applicable to the other employees of corresponding rant or status of the transferee insurer subject to the quatlfications (b) ls—4 and experience of the aid employees being the same as or equivalerit to these of such other employces of the (ransferce insurer provided further that if in any case any doubt or diffexence arises as to whether the qualification and experience 5 of any of the said employees are the same as or are equiva- jent fo the qualifications and experience of the other employees of corresponding rank or status of the transferee insurer, the doubt or difference shall be referred to the controller whose decision thereoi shall be final; 10 () notwithstanding anything contained in clause (i), where any of the employees of the insurer not being workmen within the meaning of the industrial disputes act, 1947, are specifically mentioned in the scheme under clause (é) or where any employees of the insurer have by notice in 15 writing given to the insurer or, as the case may be, the transferce insurer at any time before the expiry of one month nex! folowing the date on which the scheme is tioned by the central government, intimated their intention of not becoming employees of the transferee insurer, the 29 payment to such employees of compensation, if any, to which they are entitled under the industrial disputes act, 1947, and such pension, gratuity, provident fund or other retirement benefits ordinarily admissible to thent under the rules or authorisations of the insurer immediately hefore the 25 date of the amalgamation: (k) any other terms and conditions for the amalgamation of the insurer; () such incidental, consequential and supplemental matters asare nectssry to secure thet the amalgamati shall be fully and effectively carried out, (3) (a) a copy of the scheme prepared by the controller shall be sent in draft io tho insurer and also to the transferee insurer and any other insurer concerned in the amalgamation, for suggestions end objections, if any, within such period as the 3s controller may specify fur this purps (b) the controler may make such modifications, if any, in the draft scherne as he may consider necessary in the light of the the draft o ay he may consider necessary in the light of the from the transfcrea insurer, and any other insurer concerned in yo the amalgamation and from any shareholder, poliey-holder or other creditor of each af those insurers and the transferee insurer (4) the scheme shall thereafter be placed before the centrat government for its sanction and the central government may sanction the scheme without any modification or with stich modifications as it may consider necessary; and the scheme as sanotloned by the central government shall come into force on such date as the central government may specify in this behalf: provided that different dates may he specified for different provisions of the scheme 10 is (5) the sanction accorded by the central government under sub-section (4) shall be coriclusive evidence that all 'the fequirements of this section relating to amalgamation have been complied with and a copy of the sanctioned scheme ceriified in writing by an officer of the central government to be a true copy thereof, shall, in all legal proceedings (whether in apneai or otherwise) be admitted as evidence to the same extent az the original scheme  20 (6) the controller may, in like manner, add to, amend or vary any scheme made ynder this section 25 @) on and from the date of the coming into operation of the scheme or any provision thereof, the scheme or such provls sion shall be binding on the insurer or, as the case may be, on the transferee insurer and any other insurer concerned in the amalgamation and also on all the shareholders, policy-holders and other creditors and employees of each of those insurers and of the transferee insurer, and on any other person having any tight or liability in relation to any of those insurers or the transferee insurer 30 35 (8) on and from such date as may be specified by the central government in this behalf, the properties and assets of the insurer shall, by virtue of and to the extent provided in the scheme, stand transferred to, and vest in, and the habilities of the insurer shall, by virtue of and to the extent provided in the scheme, stand transferred to and hecome the liabilities of, the transferee insurer 40 (9) if any difficulty arises in giving effect to the provisions af the scheme the central government may by order'do anything not inconsistent with such provisions which appears to it necessary or expedient for the purpose of removing the diffi culty {10} copies of every scheme made under this section and of every order made under sub-section (9) shall be laid before each house of parliament, as soon as may be, after the scheme has been'sanctioned by the central government, or, as the case may be, the order has been made 5 (11) nothing in this section shall be deemed to prevent the amalgamation with an insurer by a single scheme of several insurers,  (12) the provisions of this section and of any scheme made under it shall have effect notwithstanding anything to the ro contrary contained in any other provisions of this act or im any other jaw or any agreement, award or other instrument for the time being in force : (13) the provisions of section 37 shall not apply to an amalgamation given effoct to under the provisions of this sec- y5 tion", 18, in section 40a of the principal aét,— (2) in sub-section' (3)— amendment of section a (1 for the words, brackets and figures "insurance f 1g (amendment) act, 1950", the words, brackets and figures 20 47 © "sngurance (amendment) act, 1968" shall bé substituted; (2) for clauses (a) and (0), the following clauses shall - be substituted, namely: - "(a) where the policy relates to fire instirance— (® if the poticy relates to a period of a year, 25 ten per cent, of the first fifty thousand rupees, five per cent, of the next one hundred thousand rupecs and ni) thereafter of the premium payable on the policy; (i) if the policy (hereafter in this clause 30 referred to as the relevant policy) relates to a period other than a year, such percentage of the premium payable on the relevant policy as the commission computed in accordance with sub-clause (i) on a corresponding annual policy would bear to the premium on such annual policy (the premium on the annual policy being taken as the same pro- 3 portion of the premium on the relevant policy as the period of one year bears to the period of the relevant policy); : (b) where the policy relates to miscellaneous insurance, fifteen per cont of the premium payable on 10 the policy, and (c) where the policy relates to marine isurance, ten per cent, of the premium payable on the policy"; ( after sub-section (3), the following sub-sections and explanation shal) b> inserted, aamely:— mb "(34) where any person applies for a policy relating to, fire insurance 'in respect of any property, he shall deelare in the proposal form whether any other policy has been taken by him in respect of such property br any part thereof in relation to any part of the period to which the 20 proposal relates, and if he has taken out any such policy, he shall state the particulars thereof in the proposal form, ' (8b) where it appears from the proposal form that there is already in existence one or more policies relating to fire msurance in respect of the property, or any part 25 thereof, the insuror shall take into account the total amount of the premium relating to all-such policies for the period or-any part thereof for which the proposal has been made for the purpose of determining the amount of commission on the premium payable on the policy proposed to be taken 30 out from him explanation—for the purposes of clause (a) of subsection (2), all the policies relating to a single property comprising building, machinery, goods and contents therein a and to all other buildings and goods appertaining to that pro- : 35 perty and under the satae ownership shall be deemed to be a single policy notwithstanding that such property might be insured in parts under more than one policy or insured with different insurers", 19, in section 40c of the principal act, in clause (b) of the explanation, afler the words "in india during the year", the following shall be inserted, namely: amend ment of sevtion 40c, "| but in computing the expenses of management in india the following, and only the following, expenses may be excluded, namely:— 10 (@) in the case of an insurer having his principal place of business in india, a share of head office expenses in respect of general insurance business transacted by him outside india not exceeding such percentage of his gross direct premium written outside india as may be prescribed, 15 (i) any expenses debited to profit and loss account relating exclusively to the management of capital, and dealings with shareholders and a proper share of managerial expenses calculated in such manner as may be prescribed, and 20 (i) any expenses debited to claims in the revenue account in form f of part ii of the third schedule" 20, in section 42 of the principal act,— amends ment of soction 42 (a) in sub-section (j), for the words "ten rupees", the words "twenty-five rupees" shall he substituted; 25 (b) in sub-section (3), for the words "ten rupees", the words "twenty-five rupees" and for the words "three rupees", the words "ten rupees" shall be substituted; (c) in'the proviso to sub-section (34), for the words "thirty rupees", the words "seventy-five rupces" shall be substituted 21, section 48c of the principal aet shall be omitted omission of section, aac, 22 after section 62g of the principal act, the following heading inserand sections shall be inserted, namely:— tion of new see tiong 52h, $21, 52j, 52k, 52l and 52m,  'acquisitign of thy undertakings of insurers in certain casy's52h (1) hf, upon receipt of a report from the controller, the power _ § central goverament is satisfied that an insurer,— of con : tral (a) has persistently failed to comply with— govern peat { (@ any direction given to him under section 34 76011? section 44f or section mg, or under takings (ii) any order made under seation 342; ot of in surers 10 (0) is being managed in a manner detrimental to the 7o" public interest or to the interests of his policy-balders, or lain shareholders, cases, and that— - g) in the public interest, or 15 () in the interests of the policy-holticcs ux shareholders of such insurer, it is necessary to acquive the undertaking of such insurer, the central government may, by notified order, acquire the under taking of such instirer (hereafter in this section and in see 20 tions 52 and 527 and in the eighth schedule referred te as the acquired insurer) with effect from such date as may be specified in the order (hereafter in this section and in sections 521 and 52] and in the kighth schedute referréd to as the appdintsd day); day); : 25 provided that no undestaking of am insurer shall be so acquired unless such insurer has been given a reasonable oppertunity of showing cause against the proposed uction explanation— for the puxpeses of this section and of seetious 521 to 52m— 3° (a) "notified order" means an ordlex published in the a official gazettg, (b) "undertaking", in relation te an insurer incorperated outside india, nieans the widertaking of the insurer in india (2) subject, to the other provisions contained in this section and in seétions 524 to 52m,-on the appointed day, the undertaking of the acquired insurer and all the assets and liabilities of the acquired insurer shall stand transferred to, and vest in, the central government 10 (3) the underiaking of the acquired insurer and its assets and liahilities shall be deemed ty tuclude all rights, powers, authorities and privileges and all property, whether movable or immovable, including, in particular, cash balances, reserve funds, jnivestments, deposits wd all other interests and rights i, or arising out of, such property, as may be in the possession of, or held by, the acquired insurer immeriiately before the appointed day and all books, aeccunts' and documents relating thereto, and 1s shall also be deomed ta include all debts, habilities and ebligations, of whatever kind, then existing of the acquired insurer (4) notwithstanding anything contained in sub-section (2), the centra! government tay, if it is satisfied that the under taling of the acquired insurer and all his agsets and labilities should, instead of vesting in the ceniral government, or contining te so vest, vest in a corporation or company, whethor established under the scheme or not (hereafter in this scetion and in sections 25 { to s2m aud in the bighth schedule referred to ay the acquiring insarer), that government may, hy srder, diccet that the said undertaking, including the assets and habiities thereof shall vest in the acquiting insurer, cither on the publication of the notified order or on such other date as may be specified in this behalf in the direction, 30 (5) where the undertaking of the acquired insurer end the assets and habilitiey thereof vest in an acquiring insurer under sub-section (4), the acquiring insures shall, on and from the date 35 of such vesting, he deemed fe have hevome the transferee of the acquired insurer and all the rights aud habilities in relation to the acquired insurer shall, on apd from the date of such vesti he deemed fo have heen the rights and liabilities of sveh acqui ing instres otherwise exprassty provided by or under this os 52h fa, doods, bons, agree: af attorney, grants of jegal representation and gov having effec! (6) untes: section ar se ments, pow other fustraments of imarnodt fae appointed day xnd te which the acquired in favour of the acatived insurer shafl be of as full force and effect against or in favour of the central government or, as the case may be, of the acquiring insurer, and may be enforced ar acted upon as fully and effectually as if in the place of the acquired insurer the central government or the acquiring insurex had heen a party thereto or as if they had heen issued in favour of the central guvermnent or the acquiring insurer, as the ease may be 10 (7) if, on the appointed day, any swit, appeal or other proceeding, of whatever nature, is pending by or against the acquired insurer, the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertaking of the acquired insueer or of anything contained in this section or in sections 521 to 52m, but the suit, appeal or other proceeding may be continued, prosecuted and enforced by or against the central government or the acquiring iasurer, as the case may be 5 521, (1) the central government may make a scheme for carrying out the purposes of sections 52h and 523 to 52m (both inclusive) in relation to the acquired insurer power of cene tral govern ment to male scheme, 20 (2) in particular, and without prejudice to the generality of the foregoing power, the said scheme may provide for all or any of the following matters, namely:— (a) transfer of the undertaking, including the 'property, assets and mabilities of the 'acquired insurer to an acquiring insurer, and the capital, constitution, name and office of the acquiring insurer; a4 (b) the constitution of the first board of management (by whatever name called) of the acquiring insurer and all such matters in connection therewith or incidental thereto as the central government may consider to be necessary or expedient; a0 35 (c) the continuance of the setvices of all the employees of the acquired insurer (excepting such of them as, not being workmen within the meaning of the industrial disputes act, 1947, are specifically mentioned in the scheme) in the central government or in the acquiring insurer, as the case may be, on the same terms and conditions, so far as may be, as are specified in slause (i) and (j) of sub-section (2) of section 37a so far as they may apply; theccintiiiuance of the'rights-of'any person who, or the nitedl day, ig" enititled' to, or is in receipt of, a pensioti-ot 'othiet siperarintiation or 'compassionate allowance or penefit'from thé' acquired insurer or any provident, pension or other fund or any authority administering such fund 5 to be paid by, and to receive from the central government or the acquiring insurer, as the case may be, or any provident; pension or other fund or any authority administering such fund, the same pension, allowance or benefit so iong as he' observes the conditions on which the pension, allowance 10 of benefit'was granted, and if-any question arises whether he has-so observed such conditions, thequestion shall be determinedby the central government and the decision of the central government thereon shall be final; (e) the manner of payment to the shareholders of the 15 acquired insurer in full satisfaction of their claim of the compensation payable in accordance with the provisions of section 523; (f) the provision, if any, for completing the offectual transfer to the central government or the acquiring insurer 20 of any asset or tiability which forms part of the undertaking of the acquired insurer in ny country outside tndin; 25 (g) such incidental, conscquential and supplemental matters asmay be necessary to secure that the transfer of the undertaking, property, assets and liabilities of the acqutred: insurer to the central government or the acquiring insurer, as the case may be, is effectual and complete (3), the central government may, by notification in the official gazette, add to, amend or vary any scheme made under this section se (4) every scheme made under this section shall be published in the official gazette (5) copies of every scheme made under: this section shall be laid before each house of parliament as soon as may be after it is made 38 (6) the provisions of sections 52h and 52j to 52m and of any scheme made under this section shall have effect notwithstanding anything to the contrary contained in any other provisions of this act or in any other jaw or any agreement, award or other instrument for the time being in force, 52, (1) every person, who, immediately, hefore the appointed doina day, is registered as a holder of shares in the acqua pensashall be given by the central gevernment ur the acquiring fon to insurer, as the ease may be, sch compensation in respect of po fv" 3 the transfer of the undertaking of the acquired insurer as is share determined in accordance with the principles contained in the holders highth schedule, of the acquir~ ed insurer (2) nothing contained in sub-section (1) shall affect tho rights inter se between the holder of any shares jn tho, acquired io insurer and any other person who may have any intorest in such sharesand such other-person shall, he entitled to enforce his interest against the eompeusution awarded to the holder of, such shares, but not against the central government or the acquiring insurer, 5 (3) 'the amount of compensation to be given in accordance with the principles contained in the eighth schedule shall be determined, in the first instance, by the ceniral government or the acquiring instrer, as the case may be, in consuliation with the 'controlicr, and shall be offered by it to all these to whom 20°  compensétion is:payable under sub-section (£) in fill siitisfaetion thereof (4) if the amount of compensation offered in terms of sub« section (3) is not acceptable to any sharebolder of the acquired insurer, such shareholder muy, before such date -as maybe notified by the contral government in the official gazette, request the central government in writing to have the maticr referred te the tribunal constituted under section 52k (5) if before the date notified under sub-section (4) the central government 'receives requests in terms of that sub-sdetion ce 3o from not less thin one-fourth in ndmber of all sharekiqlders, heing shareholders holding not less than one-fourth in value of the paid-up share capital of the acquired insurer, the central + government shall, have the matter referred to the tyibumal for decision 35 (6) if before the date notified under sub-section (4) the ceniral "govertiment does not receive requests as provided in sub-section (5), the amourit of compensation offered under subsection (3), or where a reference has been made 'to the tribunal, the amount-determined by it, shall be the compensation  'payable 'gib'section '(1) ind shall be final and binding ow all thé parties vonceined (7) where the central government does not receive requests as provided in sub-section (5), the compensation payable in puréuauce of the provisions of this section shall become due 5 for payment on the expiry of one year fram the appointed day, and where a reference has been made to the tribunal under subsection (5), the amount determined by the tribunal as compensation shall become due for payment on the expiry of one year from the appointed day or on the date of decision ef the 10 tribunal, whichever is earlier (8) ii between the appointed day and the date an which the compensation becomes due in pursuance of sub-section (7), any facts come to light which call for revision of the amount of the compensation, the necessary modification of the amount f of the compensation shill be made and the amount of the com: pensation so determined shall be the compensation payable in pursuance of sub-section (1) (9) there shall also be paid simple interest at the rate of ihree per cent, per annum on the amount of the compensation 20 for the period from the appointed day to the date on which payment of the compensation becomes due 52k (1) phe central government may, for the purposes of sections 82h to 52j, constitute a tribunal which shall consist of a chairman and two other members, 25 constitution of the tribunal, 3p of is (2) the chairman shall be a person who is, or has been, a judge of a high court or of the supreme court and of the two other members, one shall be x person who, in the opinion of the central government, has had experience of matters conneeted with general insurance and the other shall be a person who is a 3° chariered accountant within the meaning of the chartered accountants act, 1949 (3) if, for any reason, a vacancy oceurs in the office af the chairman ar any other member of the tribunal, the central gevernment may fill the vacancy by appointing another person there- 35 fo in accordance with the provisions of sob-section (2), and any proceeding may be continued before the tribunal so constituted from the stage at which the vacancy oecurred: (4) the tribunal may, for the purpose of determining any compensation payable under section 525, choose one ok more go persons having special knowledge or experience of any relevant malter to ussist it in the determination of such compensation, 52l (1) 'the 'tribunal shali have the powers of a civil court, tribu while trying a suit, under the code of civil procedure, 1908, nal to i 3 , have 5 in respect of the following matters, namely:— tee (a) summoning and enforeing the attendance of uny o ; amini ath: civil person and examining him on oath; cat (0) requiring the discovery and production of documents; 10 (e) receiving evidence on affidavits; s for ihe examination of witnes- (@) issuing commis: ses or documents, @) notwithstanding anything contained in sub-section (1) ot in any other law for the time being in force, the 'fribunal ts shall not compel the central government or the controller (a) to produce any books of account, or other documents which the central government or the controller claims to be of a confidential nature; (©) to make any such books or documents a part of the 20 record of the proceedings belore the 'tribunal; (©) to give inspection of any such books or documents to any party before it and to any other person, @) any proceeding before the tribunal shall be deemed to be a judicial procecding within the meaning of sections 193 and 228 of the indian pen] code and the tribunal shall be deemed to be a civil court for the purposes of section 195 and chapter xcxxyv of the code of criminal procedure, 1898, 52m (1) the tribunal shail have power to regulate its own procedure proce: dure of thi 30 @) the tribunal may held the whole or any part of its °° tribu inquiry in camera, nal, (3) any clerical or arithmetical error in auy order of the tribunal or any error arising therein from any accidenta] slip or omission may, at any time, be corrected by the tribunal either 3s of its own motion or on the application of any of the parties' 23 tn section 58 of the principal act, in sub-section (2},— amend (a) in sub-clause (ii) of clause (b)~ ment of section 58, @ for the words "the returns", the words "any returns or' statements" shall be substituted; gi), fox the words, "company is insolvent", the words "ponipanyis, 6r is deemed to be, insolvent" shall be substi- "tated; (b) in sub-clause (fv) of danse (b), after the words "ixtterests of the policy-holders", the words "or to public interest § generally" shall be inserted 24, in section 58 of the prineipal act, sub-section (5) shall bé omitted, 25, in section 64e of the principal act, the words ", the tariff committee and the other committee thereof" shall «be omitted, 4? ameéndment of seetion 68, amendment of scction 64e amendment of section 641 26, in section 64l of the principal act, to sub'ection (2), the following provigo shall be, and shall be deemedalways to have been, added, namely:—  "provided that if the general insurance council thinks fit, it may, by a resolution passed by it, waive the collection of the 15 presctibed fees for any year and where-any such resolution has been approved by the central government, the executive committee of the general ingurance council shall not collect eny fees tin relation to that year" ~ 27, sections 640 to 64q of the principal act shall be omitted 20 omisgion of ave tions 640 to 64q 28, in section 648 of the principal -act, in sub-section (2), the words "or the tariff committee appointed under section 640" shall be omitted 25 29 alter part ila of the principal act, the following parts shall be inserted, namely:— amendment of sete dion 64b, ingertion of « new parts tib and 1c  'part hb 'taptrr advisory committes and control of tarimf rates64u (1) with effect from the commencement of the insurance (amendment) act, 1968, there shall be established a committee, to be ealled the tariff advisory committee (hereafter in this part referred tu as the advisory committee) to control" and regtilate the rates, advantages, terms and conditions that establish ment of tarift advisory com mittee may: he offered by insurers im respect of general instrance bustness, (2) the advisory committee shall be a bedy corporate hav ing perpetual succession and a common seal, with power, subfeet to the provisions of this act, to acquire, hold and dispose of property, both movahte and immovable, and to con(ract, and may, by the said name, sue and he sued g4ua (1) the advisory committee shall consist of the following members, namely:—- ee 10 (a) the controller of insurance, ex-officio, who shali be advithe chairman; or (b) a senior officer of the office of the controller nomi- mittee nated by the controller, who shall he the vice-chairman; 5 (c): not more than eight representatives of indian insu rers, elected (in their individual capacities) by such insurers in-such' menner, from such areas and from among such in surers or groups of insurers as may be prescribed; 20 (@) not more than six representatives of insurers incorporated or domiciled elsewhere than in india but registered in india, elected (in their individual capacities) by such in~ surers in such manner, and from among such insurers or groups of insurers as may be prescribed (2), the secretary to the advisory committee shall be an 25 officer of the central government, nominated by that govern ment, 64ub (1) the central government may make rules to earry power out of the purposes of this part to make (2) in-particular; and:-without prejudice to the generality of rues i 30 the: foregomg power, such rules may provide for all or any of the following matters, namely:— of matters in a this (a) the functions to be discharged by the advisory com- srv mittee; 35 (b) the torm of office of the members of the advisory committee, the procedure for their election and: the manner of filling casual vacancies in the advisory commitice; (c) the travelling and other allowances payable to the members of the advisory committee; (@) the procedure for holding the meetings of the advisory committee and for transaction of: business thereat (3): the advisory: committee-may, with the previous approval of the central government, make fegulations for ali or any of the following matters, namely: - (a) the constitution, powers and duties of regional committees and of sub-cornmittees constituted thereunder; (b) the method of election of candidates for regional committees and sub-committees thereunder, their eligibility, term of office and method of siling casual vacancies; 10 (e) the procedure for convening meetings and transaction of business by regional committees and sub-committees thereunder; 5 (a) the appointment of officers and other einployees of the advisory committee' and of regional committees or sub-committees constituted by or under the advisory committee or any regional committee and the terms and condifjons of their service including travelling and other allowances; 20 (e) such other matters pertaining to procedure as are not inconsistent with the provisions of this act or of rules made thereunder, and may, from time to time, with the previous approval of the central government, add to, amend or vary any such regula tions (4) the vegulations made by the tariff committee of the general insurance council under section 640 as they were in force immediately before the commencement of the insurance (amendment) act, 1968, shall, after such commencement, continue {o be in force until ules are made by the central government under sub-section (1) and immediately after such rules have come into effect, the regulations aforesaid shall cease to be valid (8) the controller of insurance shall be in direct charge of the establishment of the advisory committee and the secretary of the advisory committee shall worl: under his direction and control 64uc (1) the advisory committee may, from time to time and to the extent it deems expedient, control and regulate the rates, advantages, terms and conditions that may be offered by power of the advisory committee to instirers in resbbor of any risk or of any class or category of reguiaié risks, the rales, advantages, terms ang conditions of which, in "ates, ad- mb 'spiion, it 18 proper fo contro] and regulate, and any such camlaees, yates, advantages, terms and conditions shall be binding on all " subtovided 'that the advisory committee may, with the bre fous approval of the central government, permit any nsunrey t, during such period (being nol more than two jess dut whieh may be extended by periods of not more than two ing any rates, advantages, risk, the advisory commit as far as possible, that there ig no unfair tisks of essentially the same hazard fluctuations and may also, at ite discretion, make suitable allow- cae aot future fluctuations and untoreseen future contingencles; inelidiiy héaards of confiagration or catastrophe or hoth, aul), very decision of the advisory committee shail be valid on ly after and to the extent it is ratified by the controlier, and zo evely slich' decision shall take! effect trom the date on which it ig so tatified by the controlier, or, if the controller so orders in any case, from such earlier date as he may specify in the order, 1g, (,the doeitions of the aavidory committee in pursttance of the provisions of this section shall be final 35) where an insirer ds guilty of breach of any rats, ade 'transitional pro- © visions, 84ud (1) notwithstanding anything contained in this part, "antil thé nanies of the members of the advisory comeniitee elected for'the first' tite alter the commencement of the insurance (amendment) aci, 1968, are nottlied, the tariff commitiee of the general insurance couneil appointed under regulations made 5 under sub-section (2) of section 640: as it was in force immediately before the commencement of the insurance _(amendment) act, 1968, and in existence on such commencement (hereafter in this part referred to as the tariff committee) shall continue to funetion and shall be deemed to be the advisory 16 committec duly elected under this part and the controller of insurance shall become the chaitman of that comtnittee with eflect irom the commencement of the insurance (amendment) act, 1968, and function as such, and any chairman of the tariff committes holding office immediately before such commencement 15 shall cease to be the chairman thereof from the date of such commencement but shall continue to be an ordinary "member of the advisory committee (@) notwithstanding anything contained in this part, the coustitutions of the regional councils established under section 20 64p, as in force immediately before the commencement 6f the insurance (amendment) act, 1968 (hereatter referred to as the regional councils), and of the sectional committees formed thereunder, existing immediately before such commencement, shall continue to be in full force and be of full effect until the regulations made by the advisory commities for the frst time under section 64ub come into effect and as soon as such regulations have come into effect such constitutions shall cease to have effect, (3) notwithstanding anything contained in this part, until 30 the secretary to the committee is nominated under sub-section (2) of section 64ua, the secrotary to the tariff committee holding office immediately before the commencement of the insutance (armendment) act, 1968, shall function as the secretary and shall be deemed to have been duly nominated under this 35 part (2) all retes, advantages, terms and conditions fixed by the tartit committee or the regional councils prior to the commencement of tho insurance (amendment; act, 1968 and in force immediately before such commencement shall continue, go except to such extent as they may be altered, replaced or abolish ed by the advisory committee, to be valid and fully in foree as he they were rates, advantages, terms and conditions fixed by the advisory commuitee, @4ue (1) phe advisory committee may require, by notice power in writing, any insurer to supply to it such information or state- of the ments, periodical or ad hoc, ay it may consider necessary to en avie able it to discharge {ts functions under this part and every in- gon 5 surer shall comply with such requirements within such period mittee as thay be specified by the advisury committee m this behall, to re+ failing which the insurer shall be deemed to have contravened 'ule in a infor the provisions of this act into (2) any information supplied under this section shall be " to certified by a principal officer of the insurer and if the notice so requires, also by an auditor,  (3) the controller roay, at any time, in writing, depate any subordinate of his, to make a personal inspection af the books of account, ledgers, policy-registers and other books or doeu- 14 ments of any insurer to verify the accuracy of any return or statement furnished by him under sub-section (1), or to verity that full particulars have been supplied by him in respect of all policies issued by him, and the insurer shall provide all facilities for such inspection, and mske available to such porson all the 20 books of account, ledgers, policy-registers and other 'books or documents of the insurer which might be needed by him for such verification and the person deputed may himself extract from out of the books and records of the insurer such information  as may be needed to fill up or complete the returns required 25 to' be submitted to the advisory committee under this section, (4) the advisory 'committee may, at any time, on the fp ' applieation of an insurer, make arrangements for the inspection joc of att organisation which is concerned with' the inspection of "hs iskd adjtigtment of lésées'or"are fighting appliances, and may, "30,  "whenever 'hecéssary, advisé insurers about the adequacy: of the "arvagements for the inspection of risks and adjusiznent of josses or the suitability of sueh appliances: provided that no such inspection shall be made without the written permission of the concerncd organisation 40 35 g64uf (1) on the commencement af the tasurance (amend- assets ment) act, 1963, all the assets and habilitics of the general snd insurance council appertaining to its tariff committee and to toe its regional councils and their sectional committees exisling om ing that day shall be transferred to, and vest in, the advisory com- genemittee ral insurance (2) 'the assets appertaining to the tariff committee, the goan regional councils, and their sectional comsnittees shall be oat i fs and powers apd all property, whe- ble" of" inimavalle, "including, in particular, cash vest in the ade visory committee, 5 ds, investments, deposits' and, all, other intebests ahd tights in," or arising out of, such, prop be'in the possession of the tariff committee, regio cils and' theft sectional' committees and all books at account or doctiments thereat; and mapilities shall be deemed, to, include all debts, liabilities and obligations' of whatéver kind existing and appertaining to the work of ite tariff committee, the re- signal councils and, their sectional committees, (3) where the general insurance council: has established a provident or superannuation fund or any other flind for the bencfit of the employees of its tariff committee or regional councils and constituted a trust of (hereafter in this section refeivéd' to as an existiny true » the monies 15 standing to the credif of' any such find af the commencement of the insurance {amentinient) act, 1968, shall, subject to, the prow visions of sub-section '(4) "stand transferted to, and, vest in, on such commencemént, the advisory commitiee, @ where any employee of, the 'tariff committee, or the 20 regional, councils, of the general insuraace council 'does not become an émployee of the advisory committee, the monies and other assets appertaining to any, fund referred to in sub- section (3) shall be apportioned hetween, the trustess of the fund and, the advisory committee in the presaribed, manner: 25 in case of, any dispute regarding such apportionment, the, decision of 'the central government thereon shall be final, ay be, after (5) the, advisory committee shall, assoon, as the commencement of, the, ins ie, (amendment), act- 1968, astifute in respect of, the, mapnies, and other, assets, which dre, 30 frangferted to, and vested im, it;imder subsseetion, (3), one on, more trusts having, as far as practicable, objects similar to the objects of the existing trust (6) where all the monies and other assets belonging to an ing trust are transferred to, and vested in, the advisory committee under sub-section (3), the trustees of such trust,35 shall, on the commencement of the tnsurancé (amendment) act, 1968, be discharged from the trust except as reg ecis things done or omitted to be done by them before such commencement con tracts, 84ug (1) unless otherwise expressly provided by or, under 4° this act, all contracts, agreements and other instruments of whitever nature subsisting or having effect immediately before the commencement of ube insurance (amendment) act, 1968, and to which the tariff committee, or any regional council is a party or which is in favour of that committee or that council, shall be of as full foreo and effect against or in favour of the advisory committee or that regional counoil, as the case may be, and may be enforced or acted upon as fully and effectually be effec tive by or against the advisory com mittee, 19 as if, instead of the tariff committee, or the regional couneil, the advisory committee had becn a party thereto or as if they had: heen entered into or issued in favour of the advisory committee, be) 20 @) if, at, the commencement of the insurance (amendment) act, 1968; any suit, appeal or other legal proceeding of whatever nature is pending by or against the tariff committee, or any regional council then it shall not abate, be discontinued or in any way be prejudicially affected hy reason of the transfer to, the advisory committee of, the assets and liabilities of the tariff, commitige, and the regional councils or of anything done undgrthis act, but the suit, appeal, or other proceeding may be sontinued, prosecuted or enforced: by or against the advisory committee, ' s4uh, (d, every, whole:time, omplpyen, of the tariff corn mittee, or the regional councils who was-employed, by that, commaittee or those councils wholly: or mainly-in connection with its emploees, ete, to continue  theinstatutouy duties immediately before the commence! ofthe insurance, (amendment) act, 1968, shall, on and from sonimenremant, become a emploxee of the adw{sory committee fashshall hold: his office in it-by the same tenure, at the, same re- miuneration, apd upon, the, same, terms and conditions, and-with _ the same rates and privileges as ta: pension, gratuity and other taatters-a5 he woul have held: on such: commencement if 'this hartihad' not been enacted; and shall continue todosountit his employment under the advisory committee is terminated) or until his, remuneration, terms and: conditions, are duly altered by the advisory committee: 40 provided that nothing contained in this sub-section shall apply to any employee who has given notice to the central government in writing either prior to of within two months from the commencement of the insurance (amendment) act; 1968, intimating his intention of not becoming an employee of the: advisory committee  @) where the central: government, is, satisfied; that for the urpose of securing uniformity, in the scales, of, pay, remuneration and other terms, and: conditions of service applicable to employees: of the: tariff committee, or the regional councils, |     | 5    |   3  ||-----|------|------|| 14  | of   |  10  || 10  |      |      |ft is necessary'sé to do, or that a reduction in the remuneration payable or revision of the other terms and conditions of service applicable to employees or any' class of them is called for, the central government may, notwithstanding anything contained in subsection (1), or in the industrial disputes act, 1947, or in any other jaw for the time being in force or im any award, settlement, or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and other terms and conditions of service éo such extent and in such manner as it thinks fit; and if the alteration is not acceptable to any employee, the advisory committes may terminate his employment by giving him compensation equivalent to three retmneration, unless the contract of service with such ment] 5 35 _ employee provides for a shorter notice of termination enplanation—the compensation payable to an employee under this sub-section shall be in addition to, and shalt not affect any pension, gratuity, provident fund money or any other benefit to which the employee may be entitled under his contract of service 20 (8) if any question arises as to whether any person was & whole-time employee of the tariff committee, or the regional council, on the commencement of the insurance (amendment) 'act; 1968, or as to whether any employee was employed wholly  gr mainly in connection with the statutory duties of the tariff cominittee, or any' regional council, immediately, before' strch ~ gbndiehicement, the question shall~be referred to the» central 'governinent wise decision thereon shallbesfinal: "gye notwithstanding anythihg contained in' the industrial disputes act, 1947, or in-any-other, law forthe," time being in foree, the transfor of the services of any employee, of the tarift committee, or the regional councils, to the advisory commitice shall not entitle any such employee to any compensation under that act or other law, and no such claim shall be entertained by any court, tribunal or other authority 5 64ul (1) where any property of the tariff committee, or the regional councils (appertaining to its or their statutory duties) has been tranaferred to, and vested in, the advisory committee, then,— duty of person having custody or con: srolof property of delt- 'ver such, (a) every person in whose possession, cluslody or on 4o teol any such property may be, shall deliver the property to the advisory committee forthwith: property to the advisory com miifee, (©) any person, who, on the commencement of the ins iuance (amendinent) act, 1968, has in his possession, cu tody or control any books, documents and ¢ther papers relating to the 'aril commitiec, or tho regional councils, shall be hable to account for the seid hooks, documents ama mhpers to the advisory committee and shall deliver them to the advisory committee or to such person as thet committee may direct, @) without prejudice to the provisions contamed-in this section, it shall be lawful for the advisory committee to take all necessary steps for securing possession of - all properties which have been transferred to, and vesied in, it under this act s103 (1) the advisory, committee may constitute such regional commitiees as and when it deems at for one or more of the prescribed regions (2) bach regional committee shall consist of not more than seven persons elected by such groups of insurers carrying on beneral insurance business in the region as may be prescribed power of the advisory com mittee to constitute regional commite tees, (5) for the purpose of enabling it eflectively to discharge its duties, any regional committee may constitute, in the prescribed manner, such sub-eommittecs as it may thinie fit, whether consisting of members of the regional committes or not, (®) it shall be the duty of every regional committee to advise the advisory committee on any question connected with the axation of rates, advanteges, terms and conditions ter risks in its' region which muy be referred to it 'by the advisory committee for adviee, and in' addition, every regional committee shall perform such other functions as may be delegated to it by the' advisory committee by regulations made by it with the previous approval of the central government (5) where, in the exercise of any functions delegated to it uuder this section, any regional committee or any sub-conimittee thereof restrains "an insurance agent from procuring or causing to be procured general insurance business in any area, such agent may prefer an appeal to the' central government ageinst such order within thirty days from the date of service of that order on him and the central government may, after giviig such agent an opportunity, of being heard, pass such orcers thereor'as it may think fit and the orders made by the central government on such appeal shall be final, (6) notwithstanding: anything contained in this section, ever) regional council and every sectional or othé committee of sugh régiémal council, in existence immediately before the eoniméncemeht of the insurance (amendniciit) atct; 1068, shall until-it is abolishéd by the advisory corhmittee, be deeiied to be 10 15 a regional committee ot sub-committee as the cid thay be, established in accordance with the provisins of this séction and shal] function as such and shall have all thé powers ahd responsibilities which it had immediately before such eommencenitni, aid if the tern of ay suey council or colntaittee expires befor' régional cormiilttéds colistituted u h suid 'yub-dombliittees conftituted wider sub' editehe®, aith telths shéll dé détniéd to have desh vélidly extended up to the time when such regional committees and sub- goiniittiees axe' ébtablidtied | fees           ||----------------|| miltee        || 20             || 64uk          || (1)            || every          || insurer        || shall          || annually       || before         || the            || preserib-      || ed             || date           || make           || payment        || to             || the            || advisory       || committee      || in             || the            || pres-          || eribed         || manner         || of             || sitch          || fées,          || not            || exedelliig     || one-third      || of             || one            || per            || cent:          || of             || the            || prémiiuin      || inte,          || net            || of             || fe-ifisurancés || of             || the            || irigurer,      || i              || the            || préceding      || year,          || ag             || tisy           || be             || specified      || by             || the            || advitory       || committee      || for            || the            || purposes       || of             || this           || part          || 25             |@) if ah insuiter falls to make payment within the preseriba adté of bily fee réquired to be paid under slib-section (2) he ghall bé déémed to have failed to comply with the provisions of this ast, (8) the: controlléi may, so long as an application to the court! under sub-section (5d) of séction 3 has not bedn thade, revive the registration which might have béen caticélled for failure to make payment of the fee required to be madé under 30 "sub-section (1), if the insurer makes payment of stich fe8 to- 35 gether with such penalty not exceeding the actual ariount of fee payable as the controller may require 64ul, if any difficulty ariges in giving effect to the plovisions of this part, the central government may, by order, make suth® provisions or give such directions not invonsistent with the provisions of this act as may appear to it to be necesvary power to temove difficule ties or expedient for the removal of the difficulty: providéd that no such powér shall be éifettised after' the -y of a péviod of four years frotli the comméhééniéit' of 40 power of cone troller to this part ém (@) the coniroiter shall, after cofsultation with the adiiigéry comimiitice, pfepate ahd maintain a iist of perddis who ar' approved by him to fimetion as surveyors and loss assessors (hereinatter referred to ax approved surveyors or loss assessors) prepare and shall publish the lis, of approved survoyors and loss asses sng sors, as on the ist day of january of each year, in the official maintain gazette (2) no claim requiring to be paid or settled ia india equal to or exceeding twenty thousand rupees in value on any policy loss asses» of insurance, arising or intimated to an insurer at any time after 807% qo 'the expiry of a period of one year from the commencement of the insurance (amendment) act, 1968, shall, unless otherwise directed by the controller, be admitted for payment or settled by the insurer unless it has been certified by an approved surveyor or loss assessor 5 20 (3) the controller may, at any time, in respect of any claim of the nature referred to in sub-section (2), call for an independent certificate from any other approved surveyor or joss assessor specified by him and such surveyor or loss assessor shall furnish such certificate to the controller within such time as may be specified by the controller or if no time limit has been specified by him within a reasonable time and the cost of, or incidental ¢o, such certificate shall be borne by the insurer (4) the controller may, on receipt of a certifleate referred to in sub-section (3), issue such directions as he may' consider necessary with regard to the settlement of the claim including any direction to settle a claim at a figure jess than, or more than, that at which it is proposed to settle it ot it was settled and the insurer shall he bound to comply with such directions: 30 provided that where the controller issues a direction for setfling a claim at a figure lower than that at which it has already been settled, the insurer shall be deemed to comply with such direction if he satisfies the controller that all reasonable steps, with due regard to the question whether the expenditure involv ed is not disproportionate to the amount required to be recovered, have been taken with due despatch by him: 35 provided further that no ditection for the payment of a lesser sum shall be made where the amount of the claim has already been paid and the controller is of opinion that the recovery of the amount paid'in excess would cause undue hardship to the insured; 4o provided also that nothing in this section shall relieve the insurer from any hability, eivil-orcriminal, to: which he would have been subject but for the provisions of this: stib-seation, (8) any insurer aggrieved by any direction made by the controller under sub-section (4) may, within thirty days from fhe date of such direction, prefer an appeal to the central government against such direction and the central government may after giving the insprer a reasonable opportunity of being heard, 3 confirm, modify or reverse the direction made by the controller (6) no insurer shall, after the expity of a period of one year from the commencement of the insurance (amendment) act, 1988, pay to any person any feeor remuneration for surveying, verifying or certifying a claim of loss under a policy of insurance 10 unless the personmaking such survey, verification or certification is an approved surveyor or loss assessor, () if the controller is satisfied that an approved surveyor ot loss assessor has been guilty of wilfully making a false stale-~ ment knowing it to be false or of being knowingly a party to the 35 settlement of claim in a fraudulent manner, he may, after giving such surveyor or loss assessor an opportunity of being heard, remove his name from the list of approved surveyors and joss assessors with effect from such date as may be specified by him and shall notify such removal in the official gazette 20 (8) any surveyor or toss assessor whose name has been removed under sub-section (7) from the list of approved surveyors and joss assessors shall not be eligible for the inclusion of his name in the list of approved surveyors and loss assessors for a period of three years from the date on which the removal of 25 his name is notified in the offical gazette, (6) 'the controller may in respect of any claim of value of less than twenty thousand rupees on an insurance policy, if the claim has not been or is not proposed to be certified by 8 surveyor or lass assessor, direct that such elaim shall be certified 30 by an approved surveyor or loss assessor and where the controller makes such direction, the provisions af sub-sections (3) and (4) shall apply in respect of such claim  part hc solvency margin, advance payment of premium and restrictions on 35 thr opening of a new place of business8¢va, (1) an insurer shall, at all times, maintain an excess sufficiency of assets of the velua of his assets over the amount of his tiahilities of not less than two million rupees ar twenty per cent, of his total premium ineame, less re-insurances, dating the preceding 4o twelve months, whichever ig greater! provided that where a number of insurers occupying the status of-parent-and subsidiary companies prepare, under the laws of origin of the parent company, a consolidated balancesheet, the prévisiotis of this sub-section shall apply to such of them as até tot members of any group as if they constituted a single insurer, with the modification that the attiount of two million rupeés shall bé construéd ag a sum éqiial te the nuraber of such instrets friultiplied by two million rupees: provided further that if in respect of any insurer the central government is satisfied that cither by reason of an unfavourable claim experience or bedause of a sharp increase in the volume of new business, or for any other réason, compliance with the ptovisions of this sub-section would cause undue hardship to the insurer, it may direct that for such period and subject to such conditions as it may specify, the provisions of this sub-section shall apply to that insurer with the modification that instead of the proportion of twenty per cent mentioned herein, such other percentage being not less than ten per cent as rhay be specified by that government shall be applicable to that insuret: provided also that ih the case of an insurer carrying on insurance business at the commencement of the insurance (amendment) act, 1968, it shall be sufficient compliance with the provisions of this sub-section until the sist december, 1972 or until such subsequent date, riot being later 'than 3ist december, 1976, as the central government may, af its discretion, allow for any particular insurer, if he progressively brings up the excess of the value of his assets over the amount of his liabilities, in such manner as may be prescribed, to the required amount or percentage, as the case may be 2) an tnsurér who does not comply with the provisions of sub-section (1) shall be deemed to bo insolvent and may be wound up by the court (3) if at any time the value of the assets of an insurer does not exceed the amount of his liabilities by the amount or percentage, as the case may be, specified in sub-section (1), the controller, shall, after giving the insurer a reasonable opportunity of being heard, cancel, without prejudice to his tight to apply to court under clause (b)-of sub-section (2) of section 53, for the winding of the insurer, the registration of such insurer (4) the provisions of this séction shall not apply to an insurer specified insub-clause (c) of clause' (9) of section 2 (5) the: provisions of sub-section' (i) shall apply to any insurer who-is a member of a group subject to the modification that the amount of two million rupees specified in that subsection shall be construed as a sum equal to that proportion of two million rupees as the share of the risk on each poliey borne by such insurer bears to the total risk on the policy, (6) the central government may, by rules, reduce the sum of two million rupees referred to in sub-section (1) to a lower figure not jess than one hundred thousand rupees in respect of a country craft insurer or in respect of an insurer not 10 having a share capital and operating only among a restricted portion of, and not with, the general public (7) for the purpose of ascertaining compliance with the provisions of this section,— () assets shall be valued subject to any, reserves or 55 depreciation funds relating thereto, at values not exceeding their market or realisable value and the assets hereafter mentioned shall be excluded to the extent indicated, namely: (a) agents' balances and outstanding premiums in 25 india, to the extent they are not realised within a period of thirty days; (®) agents' balances and outstanding premiums outside india, to the extent they are not realisable, unless they are adequately covered by bad or doubtful 2 debts reserves; (c) sundry debts, to the extent they are not reali: able unless they are adequately covered by bad or doubtful debts reserves; (@) advances of an unrealisable character; 30 (e) furniture, fixtures, dead stock and stationery; (f) deferred expenses; (9) profit and loss account balance and any fctitious assets other than prepaid expenses; (ii) a proper value shall be placed on every item of ha- 35 bility and liabilities in respect af share capital, general roserve; and investment reserve, reserve for bad and doubtful debts, and depreciation fund except in respect of such ineluded items which are taken credit for as "assets" shall be excluded and habilities hereafter mentioned to the extent indicated, namely:— (a) provision for dividends and unpaid dividends (b) reserves for unexpired risks im respect of— {) fire and miscellaneous business, 40 per 10 () marine cargo business, 40 per cent, and (i) marine hull business, 100 per cent, of the premium, net of re-insurances, during the preceding twelve months; (c) outstanding claims in full; 15 (4) amount due to insurance companies carrying on insurance business in full; (e) emounts due to sundry creditors, in full; (/) proviston for taxation, in full, in respect of marine insurance 20 the marine insurance 25 buplanation,—i business an insurer prepares business account on a three year basis and the provisions for unexpired risks and outstanding claims are included in the marine insurance business account, it shall be sufficient compliance with the provisions of sub-clauses (b) and (¢) of clause (i) in respect of if the marine insurance bustpremium income, marine insurance business, ness account is more than the total less re-insurances, during the preceding twelve months in respect of marine insurance business, 30 liabilities (8) every insurer shall furnish to the controller with his returns under section 15 or 'section 16, as the case may be, statement, certified by an auditor, of his assets and assessed in the manner required by this section as on the 8ist day of december of the preceding year, 35 s4vb (1) no insurer shall assume any risk in india in respect of any insurance business on which premium is not ordinarily payable outside india unless and until the premium assumed payable is received by him or ay be pres- ed in aa is guaranteed to be paid by such person in such'manner and within such time ag may be preseri ? ed or unless and until deposit' of such amount as m: eribed, is made in advance in the' prescribed manner (2) for the purposes of this: section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the' insurer, explanation--where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the daté on which the money order is booked or the cheque is posted; as the case may be 10 45 @) any refund of premium which may becore due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or hy postal money order and a proper receipt shail be obtained hy the insurer from the insured, and such refund shall in no case be credited to the account of the agent (4) where an insurance agent collects a premium on a poliey of insurance on behalf of an insurer, he shall deposit with, or despatch by post to, the insurer, the premium so collected in full without deduction of his commission within twenty-four hours of the collection excluding bank and postal holidays (5) the central government may, by rules, relax the requirements of sub-section (1) in respect of particular categories of insurance policies 25 avc (1) no insurer shall, after the commencement of the insurance (amendment) act, 1968, open a new place of business fn india or change otherwise than within the same city, town or village, the location of an existing place of business situated in india without obtaining the prior permission of the controller testric~ tions on the opening ofa new place of busi ness (2) the controller may grant permission under sub-section (1) subject to such conditions as he may think ft te impose either generally ot with reference to any particular case, 38 (3) where, in the opinion of the controller, an insurer has, at any time, failed to comply with any of the conditions imposed on him under this section, the controller may, by order in writing and after affording reasonable opportunity to the insurer for showing cause against the action proposed to be taken against him, revoke any permission granted under this section heplanation—for the purposes of this section, "place of pusiness" includes a branch, sub-branch, inspectorate, organisaton office end any other office, by whatever name catled 80 in section 96 of the principal act, the- words "mutual insur- amendance companies and" shall be omitted, ment of section 96 31 in section 97 of the principal act, for the words and figures amend- "no mutual insurance company incorporated after the oéth day of ment of section ly ed after that date", the words and figures "no co-operative life " insurance society registered after the 26th day of january, 1937" shall be substituted, 42, in section 98 of the principal act,— amend nient of: 10 @) in sub-section (1), the words "mutual tnsurance com section 98, pany and every" shall be omitted; (®) in sub-section (3), the words "a mutual insurance : company and" shall be omitted 33, after section 101b of the principal act, the following section insection 15 shall be inserted, namely:— of new section 191¢, "101c the controtler may, at any time,— bxamina tion of (2) call upon an insurer to submit for his examination @insurat the principal place of business of the insurer in india {fee eax all re-insurance treaties and other re-insutauce contracts 20 entered into by the insurer; (6) examine any officer of the insurer on cath in relation to any such documetit as is referred to in clause (a) above; or (©) by notice in writing, require any irisurer to supply : 25 him with copies of any of the documents referred te in : clause (a), certified by a principal officer of the insurer", 34, in section 102 af the principal act, after sub-section (1), amend the following sub-section shall be inserted, namely: - ment of see: "(@a) if any person fails to produce any book, account or tion 102 : 3e other document or to furnish any statement or information j which, under sulrsection (2) of section 938a ot under sulb-sec- ton (8) of section 64ue, it is his duty to produce or furnish, or fo answer any question relating to the business of an insurer which he is asked by an officer making an inspection under either 35 of those sections, he shall be punishable with fine which may extend to two thousand rupees in respect of each failure and if the failure continues, to a further fine which may extend to one hundred rupees for each day after the first, during which such failure continues" insertion 95 after section 107 of the principal act, the following section 5 of new shail be inserted, namely:— section 2 107a, chatr- "107a, every chairman, director, auditor, liquidator, manman, ee, ager and any other employee of an insurer shall be deemed to to aw be a public servant for the purposes of chapter ix of the indian q public " c setvants, penal code" 10 40ft amend 86 section 109 of the principal act shall be ve-numbered as sub- : ment of section (1) thereof, and after sub-section (1) as so renumbered, seen the following sub-section shalf be inserted, namely:— (2) no court shall take cognizance of any offence punishable under sub-section (5) of section 34b or sub-séction (ia) 15 of section 102 except upon complaint in writing made by an officer of the central government generally or specially authorised in writing, in this behalf by the controller, and no court inferior to that of a presidency magistrate or a magistrate of the first class shall try any stch offence", 20 insertion 37, after soction 110c of the principal act, the following sections a of new shall be inserted, namely:— e sections 110d, 1108 and 110f q certain "10d, no person shall have any right, whether in contract claims or otherwise, to any compensation for any loss incurred by for comreason of the operation of any of the provisions contained in 25 pensation section 34 or 34a or 34h or 37a or by reason of the compliance  by an insurer with any order or direction given to him under this act sections 1108, notwithstanding anything contained in the life 5) 9% ae ae, insurance corporation act, 1956, the provisions of sections 27b, 30 : tooo 28b, 38a, 34, clauses (a) and (b) of sub-section (1) of section to gene- 34e, section 34f, sections 64u to 64um (both imelusive), "secval insur tions 64va, $4vb, 6ivc and section 101c, shall also apply, ance busigo far as thay be, to and in relation to the general insurance tele business carried on by the life insurance corporation of india 35 1s and the provisions of section' 37a shall also apply to that corporation if-it bs comes an acquiring insurer b, 8b, 334, 34, clauses provisions hof 'the provisions of sections ition, s41", vee appecshle () and (b) of sub-section (£) of seclion opie tions 64u to @5umt (both molusive), sections 64va, 64vb, bavc catr and section 101c shall, notwithstanding any exemption grant- ments, ed under section l18, also apply, so far as may be, to and in rela- ete tion to the general insurance business carried on by the central government or a state government or a government company as defined in section 617 of lhe companies act, 1856" 10 88 [n section h1ga of the principal act, for the word, figures amendand iciter "section 28a", the words, figures and letters "section 28a ment of or seetion 28b" shall he substituted section j16a, 39 for clause (a) under notes, below form f of part i of the amend- 15 third schedule, the following shali be substituted, namely: - zoe in 'chive "(a) this itor must include all expenses dircetly inewrred ginequic on to assessment of claims of the nature of survey fees, for pelice reports, legal court expenses and other similar charges, but should not include any establishment ot administration expenses" 49, afier the seventh schedule to the principal act, the follow- insertion ing schedule shall he inserted, namely: - ol eighth scheduie  'the eighth schedule (see section 523) principals of compersationthe compensalion to be given under section' 523 shall be an amount equal to the value o! the assets of the acquired insurer as on the day immediately before the appointed day, computed in accofdance with the » of part 1 of this schedule less the total amount of liabilities thereof -as on that day, computed in atcordance with the provisions of part 1f of this schedule  parr i assetsfor the purposes of this part "assets" means the tolal of the following:— (@) the market value of any land or buildings; @) the market valie of any securities, shares, deben« tures, bonds and other investments, held by the acquired in« surer explination—¥or the purposes of this clause, g) securities of the central and state governtients [other than the securities specified in sub-clauses gi) and (iii) of this explanation] maturing for redemption within five years from the appointed day shall be valued at the face yalue or the market value, whichever is higher; ii) securities of the central government, such as post office certificates and treasury savings deposit certificates and any other securilies or certificates issued or to be issued under the small savings scheme of the central government, shall be valued at their face value or the encashable value as on the appointed day, whichever is higher; 25 (ii) where the market value of any government security such as the zamindart abolition bonds or other similar security, in respect of which the, principal is payable in instalments, is not ascertainable or is, for any reason, not considered as reflecting the fair value thereof or as otherwise appropriate, the security shall be valued at such an amount ax is considered reasonable, having regard to the instalments of principal and 30 interest remaining to be paid, the period during which investments are payable, the yield of any security, issued by the government to which the security pertains and having the same ov approximately the same maturity, and other relevant factors; (ip) where the market value of any security, share debenture, bond or other investment is not considered reasonable by reason of its having been affected by abnormal factors, the investment may be valued on the average market value over any teasonable basis of period; (») where the market value of any security, shane debenture, bond or other investment is not ascertainable, only such value, if any, shall be taken into account as is considered reasonable, having regard to the financial position of the issuing concern, the dividend paid by it during the preceding five years and othor relevant factors; (c) the total amount of the premiums paid by the acquired insurer in respect ot all leasehold properties, reduced in the case of each such premium by an amount which bears to such premium the same proportion as the expired term of the lease in respect of which such premium shall have been paid bears to the total term of the lease; (a) the written down value as per books, er the realise able value, as may be considered reasonable, of all furniture, fixtures and fittings; (e) the amount of debts due to the insurer, whether secured ox unsecured, to the extent to which they are reasonably considered to be recoverable; (f) the amount of cash held by the insurer whether in deposit with-a bank or otherwise; (g) the market or realisable value, as may be appropriate, of other assets appearing on the books of the insurer, no value being allowed for capitalised expenses, such as share selling commission, organisational expenses and brokerage, losses incurred and similar other items  part i liabilitiesthe total amount of the liabilities of the insurer shalt inelude— () reserves for unexpired tisk being not less than 50 per cent of the premiums, less re-insurances received duzing the period of twelve months, immediately preceding ' (i) the -tolal aitiéttiv of alf other liabilities of the insurer cxising on the appointed day, "including all contingent liabilities wnich the central government or the aequiring insurer inay reasonably be éxpeeted to be required io méct-out of its own reources on'or aller the appointed day  comprneation payable 10 'shareholuprsevery shitehotdcr of thé acquired isisurer shall be given such emount as corapensation as bears fo the tolal eompensation calculated in accordance with the provisions of paragraph 1¢ 1 the same proportion as the amount of paid-up eapital of the shares held by that shareholder bears to tbe total paid-up capital of the acquired insuter  cértain dividends nov po be taken into" accountno separate compensation shall be payable for any 15 profits op any dividend in vespect of any period immediately preceding the appointed day, for which, in the ordinary course, profits would have been transferred, or dividend declared after the appointed day' amend- 4 in section 82 of the payment 6f bomis "act, 1965, in clause 20 meni of (i), the words' "omployeés employed by any 'insurer carrying on act21 - geneval insurance business and the" shall be omitted, of 1985,  tement of objects and reasons| with a view to promoting the development of general insurance business on cound lies and to eliminate undesirable practices «1m this bill provides for more effective supervision and control over insurers the main provisions are: (a) restriction on shareholding and voting rights (4) regulation of investments, (e} increase in the deposit to rs, 20 lakhs ior one or more classes of insurance business, (d) maintenance by insurers of minimum solvency margin (e) power to the controller of insurance to carry out routine or surptise inspections and issue directions (j) power to the controller of insurance to appoint directors on the board of direztors or observers (g) pewer to the controtier of insurance to enforce amalgamations of insurers, {k) power to the central government {o take over an insuret (power to the controller of insurance to regulale and fix premium rates and for that purpose placing the tariff committee of the general insurance council under him (j) requirement that all claims above a certain limit should be surveyed by approved surveyors, (x) requirement that the appointment or removal of principal officers should be approved by the controller of insurance (@) reduction of ageuts' corbmission in fire business a few other amendments of an urgent nature are also incidentally included the notes on clauses explain briefly the reasons for the various provisions in the bill new deut; morarji desal the 1ith march, 1968  president's recommendation under article 117 of the constitution of india{copy of letter no 51(23)-ins, 1/67 dated the 11th march, 1968 from shri morarji desai, deputy prime minister and minister of finance to the secretary, lok sabha] 'the president having been informed of the subject of the proposed insurance (amendment) bill, 1968, recommends the introduction of the bill in the lok sabha under clause (1) of article 117 and its consideration under clause (3) of article 117 of the const tution,  notes on clausesclause 2 is consequential to the amendments proposed under slauses 6 and 15, lause 8 provides for increase of dhe fee for renewal of regise tration so as to cover part of the increased cost of administration consequent ta the implementation of the proposals contained in this bill clauses 4 and 5 provide for the application of sections 6a and 6b relating to restrictions on shareholding and voting rights to insurers varrying on general insurance business also clause 6 seeks to increase the deposit to be made by an ine surer to rupees two millions for one or more classes of generat insurance business and permits existing insurers to make the deposit ja instalments, tt also provides that insurety operating in a group need only make the deposit as a single insurer the conditions to he fulfilled by a group for this purpose are also set out, clauses 7, 8 and 9 are conscquential to the changes proposed to be made in section 7 under which the deposit will be the same for one or more classes of insurance business,  clause 10—consequential,clause 11—the new section 27b is on the same lines as the existing section 27a with appropriate modifications and seeks to make the provisions of that section applicable to insurers, carrying on general insurance business the new section provides that the investments of the assets of general insurers carrying on general insurance business should be made only in approved investments except for 25 per cent or in certain special cases: clouse 12 is consequential to clause 11 and provides for the furnishing of returns by insurers to the controller of tasurance to enable the laticr to verify compliance with the requirements of that section, clause 13—consequential clause 14 seeks to omit, from the seventh proviso to sub-section (1) of section s1a, the discretion now vested in the central government to decide the maximum bonus which an insurer can give to his employees the object is to bring the matter of bonus within the jurisdiction of industrial tribunals this amendment hag been necessitated by a decision of the supreme court in 3960, clause 16 insorty provisions in the existing section 33 to empower the controller {o carry out inspections of insurers whether on his own initiative or on the direction of the central government with provision for cancellation of the registration or applying for winding up in certain circumstances clause 16 inserts new provisions, these are— (i) power to the controller to give diréetions to an insurer is the public interest or ' the interests of better management (8) restrictions on appointment, rernoval or on remuneration of rer, certain officers and directors of an (iti) power to the controller to remove managerial and cther perrons from office in certain circumstances, (iv) power to the controller to appoint additional a:rectors on the board of an insurer,  (v) power fo the controller to cautiun insurers, to prohibit particular transactions or to render advice to insurers, to appoirt ebservers to watch the proceedings at board mectings and to require the insurer to take certain steps considered necessary, (wi) power to the controller to issue certain directions regarding re-insurance treaties, (wii) power lo the controller to order closure of uneonom prejudicially operating foreign branches, and (wi) power to the controller to search premises and seize books of accounts and other records belonging to an insuree in certain special circumstances cluuse 17 inserts provisions to 'empower the controller if he is satislied that it is necessary to do so on certain grounds, to prepare a scheme for the amalgamation of an insurer with another insurer and after scctiring the suggestions or cbjections from both the ine gurers concerned, to place the scheme before the central government, when the centrel government approves the scheme it shall be final and legelly binding:and shall take effect from the date speci- ged by the central government (lage 18 seeks to reduce the commission payable to an inagent on a fire insurance policy to 10 per cent, on the first suraned papers 4p200 of the premiura, $ p cert on xi rupees t takk and nil thereafter, safeguards are incorporated to ensure that this provisinn is not got round by splitting a single policy between different agents or between differeni insurers he inter 2 more pre clwuse 19 is intended to clarify a doubt in regard ¢ pretation af section 4%c; the amendment seeks to + tisely the experises which need not be treated as expenses of management for the purposes of the limitations imposed by the section, clause 20 raises the fees fur licence of an' insurance agent ta rupees 25 for a period of 8 years the increase is intended to cover part of the additionalcost of administration which will resultas a consequence of the implementation of the proposals contained in this bill, the other changes made by the clause are minor "clase 21 secks to delete' section 48c of the printipal act which has been rendered superflidus by the provisions 'now being enacted through clause 16, : clause 22 empowers the central government to acquire the businéss of an insurer on payment of compensation the circumstances in which the business may be acquired, the basis on  which coinpensation shall be paid, and provisions for setting up a tribunal to resolve any dispute in regard to the amount of compensation are also set out, : - clauge23 adds "the public interest generally" dg a grotihd "for the controller to apply for winding up an insurer also the controtler is being empowered to apply for winding up if the 'required solvency margin is jot maintained , clause 24—consequential fo the provisions of clause 6 , 'clause 25conscquential to the provisions in clause 29, clouse 26 is intended to clarify a doubt es to whether the xecutive committee of the general insurance council has the power to waive the collection of-iees the provision is being given retrospective effect, a clauses 27 and 28—consequential clouse 29—two now parts iib-and iic are now being inserted, the former makes provisions for the setting up of a statutory body by the name of the tariff advisory committee and for transférting "théteto'all the' assets and liabilities of the existing tariff committee of 'the "general insurance council" the: new coramittee will, conthiue the work whichthé "tariff committee has been doing, but the controller," as the chairman, will now have the, decidingvoige in 'yegard to the rato-finally fixed' fees will becollected for, zunhing the advisory committee as the tariff committee has'so far"been doing the factors to be given weight in fixing the rates are liad down provisions are also included to sinpower the controller to wee a jmaintain a pannel of approvel surveyors and loss 'assessors every claim over rupees twenty thousand in value will have to be valued by a surveyor or loss assessor in the panel the new part iic séeks to give statutory effect to certain salutary provisions now being observed by the insurers on a voluntary basis under a code of conduct, 'the most important provision being inserted in this part is the requirement that every insurer shall maintain an excess of assets over liabilities to the extent of two million rupees or twenty per cent of the net premium income, whichever is higher, failing which the insurer will be deemed to be insolvent, existing insurers are, however, given time to make up the required excess progressively, it jg also being provided that the premium should be received in advance before a risk is undertaken another provision is that the opening of a new branch will now require the prior permission of the controller, clauses 30, $1 and 32 contain formal amendments of a verbal nature only the references to mutual insurance companies in sections 96, 97 and 98 are being omitted, with the object of making quite clear, what is even now true, that such companies carrying on general insurance business have to comply with the deposit requirements under section 7 clause 33 empowers the controller to collect information about re-insurance treaties clause 34 lays down the penalty for certain offences commited in respect of the new provisions being inserted under this bill clause 35 seeks to make the employees of insurers public servants for the purposes of chapter ix of the indian penal code clause 36 makes provision in regard to cognizance of offences and competency of courts  clause 87—a new section which is being added disallows come pensation for the operation of some of the newly added provisions 'two other sections are added 'which make some of the main provi sions now being inserted applicable to the general insurance busi ness carried on by the life insurance corporation of india and by the state governments, : clause 38—consequential clause 39 makes an amendment to the revenue accotint form f for the same reason as that mentioned in clause 18, cluuse 40 inserts a new schedule which sets out the method of arriving at the amount of compensation payable to thé shareholders of an acquired insurer clause 41 secks to make an amendinent to section 32 of the payment of bonus act, 1963 whereby the provisions of that act are made applicable to the employees of general 'insurance companies this is consequential ta the 'provisions contained in clause 14,  tos vn penancial memorandum'the proposed amendments, particularly those relating to inspecdyons'and' regulation of the premfurn structure in clauses18 and 29 graata throw considerable additional burden on the controller of insuranee 'wihioge office will have to be substantially augmented, the fnancial iniplication 'of the augmentation of the office of the control- ter of insurance would be finalised later, but the additional cost may pe about rupees 25 lakhs per annum 2 the additional cost is proposed to 'be met as under: (a) 'the maximum fee leviable on an insurance agent is 'now bs, 10 for three years it is proposed to increase the maxiwown ty rs, 25 having regard to the number of active agents of the life insurance corporation and those in general insurance usiness elsewhere, this is expected to yield an additional amount of about rupees 10 lakhs per annum (b) the maximum fee now leviable on insurers for renewal of registration is rupees 1,000 for each class of business tt is proposed to increase this to one quarter pet cent, of the net premium incomé, which is expected to yield an-additional amount of rupees 17 lakiis per annum 3 clause 92 of the bill seeks to empower the central government to acquire the undertaking of an insurer jn certain circumstoncen on payment of compensation, these provisions are however only permissive and not mandatory tt ts not possible to indicate at this stage the recurring and non-recurring expenditure arising out of these provisions according to tentative estimates based on avail- | ahle information relating to the existing indian insurers, the total - sramint of compensation payable in accordance with the principles net out in the schedule in the event of all these insurevé peing taken over will be approximately rupees 30 crores 'as regards the expel giture on the setting up of a tribunal, this 's hikely to be incurred only if such a 'tribunal is sot up tn the event af a specified percentage of shareholders of the acquired insurer not accepting the com pensation if the tribunal is set op in respect of an acquired tng surer, and is able to fish the work, within about six months, the non-teeurring expenditure may ot be in excess of rupees 7,50,000 and no recurring expenditure will be involved 4, tt is not possible at this stage to indicate when any insurer will be taken over under the provisions of the bi tt will be necessary to watch, after the bill has been passed into jaw, how far the insurers are working in accordance with the directions issued there~ uhder, and' it will also be necessary to give to any individual insurer adequate opportunity to show cause before it is taken over tt ig therefore unlikely that any insurer will be taken over in'the cur~ rent financial year, or during the year 1968-69 and no recurring and "non-recurring expenditure on this account is therefcre anticipated during the current financial year or during 1968-69 thé provisions which will have to be made in any of the financial yeats 1969-70 onwards cannot also be settled or shticlpated, in any case, rio such expenditure will be incurred by the central governinent 'without due appropriation made by parliament from time to titme'in this behalf,  memorandum regarding delegated legislationclause 11 seeks to empower the central government to pres eribe the assets which, subject to such conditions: as may' be prescribed, will be deemed to be approved investments clause 12 seeks to give power to the central government to prescribe the form in which the returns of investments made tmder section 27b are to be furnished clause 1h seeks to give discretion to the controller of insurance to inspect insurers and also power to the central government to order an inspection by the controller in special cases the min!- mum information to be maintained by insurers for the purpose of facilitating sch inspections may be prescribed by the central government y clause 16 inter alia seeks to ompower the controller to search premises and seize records rclating to the transactions of an insurer in certain cfreumstances in this connection power is sought to be vested in the central government to make rules with regard to the procedure for entering into any premises and for the safe custody of seized records a clause 17 seeks to empower the controller to make a scheme with the approval of the central government for amalgamation of one insurer with another clause 19 seeks to clarify the items of expenses which may be excluded for the purpose of ascertaining compliance with the provisions of section 40c of the act in that context it seeks to provide that the percentage of gross direct premium which may be excluded on account of head office expenses and the method of caleu- jating the proper share of managerial expenses to be excluded may pe prescribed by the central government clouse 22 seeks to insert provisions for the acquisition of the undertakings of insurers in certain cases and for the transfer of the undertaling of the acquired insurer to any corporation or company 'the clause also seeks to empower the central government to make a scheme for carrying out the purposes of such acquisition, and transfer the acquired insurer, if necessary, to a corporation or comipany i clause 29 seeks to provide for the formation of a tariff advisery committee which will take over ali the functions of the existing tariff committee of the central insurance council for this purpose, power is sought to be vested in the central government to make rules with regard to a number of matters of procedural detail phe clause also secks to empower the tariff advisory committee to make rules, with the previous approval of the central government on certain matters of procedural detail 'the clause further secks inter alia to enact provisions for maintenance of a minimum solvericy margin and for advance payment of premiums before risks are assumed and to empower the 'central government to make rules with regard to these matters all these are matters of procedural detail, the delegation of legislative power is, therefore, of a normal character annexure exrract from tue ivsunanor act, 1938 (4or 1988) «   3 u)     regisira< tion (4) the controller shall cancel the registration of an insurer either, wholly-on in so far-as if relates to a particular clags of jnsit!- ance business, as the case may be— 7 ae ee ie +    (@) if the whole of the deposit made in respectof @ class of insurance business has been returned to theinsurpr ander section 9, of " ae     ® a ba  +   (2) 'an appligation for the rmewal of a registration for any yea renewal of registration shall be made by the insurer to the controller before the  31st: day of december of the preceding year, and shall be accompanied as provided in sub-section (@) by evidence of payment of thé -prestribed fee which shall not exceed one thousand rupees for each, glass of insurance business, but may vary according to the volume of business done by the insurer in india in each class of insurance pusiness to which the registration relates +      deposits 7 (1) every insurer not beng an insurer specified in sub-clause (0) of clause (9) of section 2 shall, in respect of the msurance business carried on by him in india, deposit and keep deposited with the teserve 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 tnarket value of the securities on the day of deposit, or partly in cash and partly in approved securities so estimated,— (a) where the business done or to be done is life msurance only, two hundred thousand rupees; (b) where the business done or to be done is fire insurance only, one hundred and fifty thousand rupecs, (©) whete the business done or to be done is marine insurance only, one hundred and fifty thousand rupees; (@) where the business done or to be done is miscellaneous insurance only, one hundred and filty thousand rupees; (e) where the business done or to be done is life insu: rance and my one of the three classes specified in clauses (b), (¢) and (@), three hundred thousand rupees of which two hundred thousand rupees shall be the deposit for life insurance business; @) where the business done or to he done ts life insurance and any two of the three classes specified in clauses (b), (ce) and (d), four hundved thousand rupees of which two hundred thousand rupees shall be the deposit for life insurance bust ness; (g) where the business done or to be done is life jnsuvance and all three classes' specified in clauses (b) , (ce) and (@), four hundred and fifty thousand rupees of which two hundred thousand rupecs shall be the deposit for life insurance business; (h) where the business done of to be done does not include life insurance but is any two of the classes specified in clauses (©), (©) and (4), two humdred and fifty thousand rupees; {i) where the businces done or to be done does not inelude life insurance but is all three classes specified in clauses {b), (c) and (4), three hundred and fifty thousand rupees: provided that, where the business done or to be done is matine insurance only and relates exclustvely to country craft or its cargo or both, the amount to be deposited under this sub-section shall be ten thousatid: rupees only (2) where the insurer is an insurer specified in sub-clause (c) of clause (9) of scction 2, he shall be deemed to have complied with the provistons of this section as to deposits, if in respect nf any class of "insurance business carried on by him in india under a stand ing contract of the nature referred to in sub-clause (c) of clause (9) of section 2 a deposit of an amount one-and-a-half times that specified in sub-section (1) as the deposit for that class of insittanes business has been made in the reserve bank of india in one of the offices in india of the bank for and on behalf of the central gove eriment in cash or approved securities estimated st the market value of the securities on the day of deposit by or on behalf of the underwriters who are members of the society of lloyd's with whom he has his standing contract, (3) where the deposit is to he made by an insurer incorporated before, or carrying on the business of insurance in india before, the 27th day of january, 1987, the deposit referred to in sub-section (1) may be made in not more than seven instalments, of:whieh the first shall be not less than one-fourth of the total amount f the deposit and shall be paid before the application for registration is taade, the second shall be not less than one-sixth of the balance of the deposit and stall be paid before the expiry of four months trom the commencement of this act, and the subsequent instalments shall be of not less than the minimum amount required as the second int and shall be paid before the first day of january 0! stalment rf each succeeding year: provided that in the case of insurers earrying on life insurance business only, the depastt may be made in not more than ten instalments, of which the first shall be not less than one-fourth of the total amount of the deposit, and shall be paid before the applicatio® for registration is made, the second shall be not iess then one-ninth of the balance of the deposit, and shall be paid before the expiry of four months from the commencement of this act, and the subseqaent instalments shall be of not jess than the minimum amount re quired as the second instalment, and shall be paid before the 1st day of january of each succeeding year- (4) notwithstanding anything contained in sub-section @, in the ease of an insurer to whom that sub-section applies, not being an ingurey specified in sub-clause (a) (fi) or stth-clause (6) of cause, (9) of section 2, the deposit roferzed to in sub-section (1) shal] be made in two instalments of which the first shall be not less than one half of the total amount of the deposit and shall be made before the application for registration is made, and the second shall be made before the expiry of one year from the date of registration (5) where the deposit is to be made by an insurer neither ineorporated before, nor carrying on insurance business in india before, the 27th day of january, 1937 the deposit may be made in instalments of not less than one-fourth the total amount before the application for registration is made, not less than one-third the ta lance before the expity of une ycar from the commencement of business in india, and not legs than one-half the residue before the expiry of two years from the commencement of business in india, and the balance before the expiry of three years from the com mencement of business in india: provided that in the case of any insurer not being an insurer specified in sub-clause (a) (i) 'or' sub-clause  (b) of clause (9) of section 2, the deposit shall be made in full before the application for registration js made (6) no class of insurance business in addition to the class or classes in respect of which an insurer is already viable to make a deposit under sub-section (1) or sub-section (2) shall he undertaken by the iseurer until the deposit to which he is already hable has been zande in full, and the additional deposit required in respect of wees tional class of business or go much thereof as under the pros of sub-section (3}, (4) or (5) is to be made before the application for registration, has alsa been made in full  ® 2   : 9 (1) where an insurer has ceased to carty on in india any class of insurance business in-respect of which a deposit has heen i) miade under section 7 or section 98 and his liabilities in india in respect of business of that class have been satisfied or are otherwise provided for, the court may, on the application of the insurer, order the return to the insurer of so much of the deposit as does not relate to the classes of insurance, if any, which he continues tu carry on,      « separation of aecounts and funds, 10, (1) where the insurer carries on business of more than one of the clauses specified in clauses (a), (b), (c) and (a) of subsection (2) of section 7, he shall keep a separate account of all receipts and payments in respect of each such class of insurance business and where the insurer carries on business of the class specified in clause (d) of that sub-section whether alone or in conjunetion with business of another class, he shall, unless the controller waives this requiremet in writing, keep a separate account of all receipts and payments in respect of each such sub-class of the class specified in clause (d) as may be prescribed in this behalf provided that no sub-class of the class of insurance business specified in clause (d) of sub-section (2) of section 7 shall be preseribad under this sub-section if the insurance business comprised in the sub-class consists of insurance contracts which are terminable by the insurer at intervals not exeeotling twelve months and under which, if a claim arises, the insurer's lability to pay benefit ceases within one year of the date on which the claim arose  + ¥ + % accounts and balancesheet, 41, (f) byery insurer; in the case of an insurer specified in subclause (a) (i) or sub-clause (b) of clause (9) of section 2 in respect of all insurance business transacted by itn; and in the case of any other insurer in vespect of the insurance business transacted by bim in india, shall at the expiration of each calendar year prepare with reference to that year--      +     (b) in accordance with the regulations contained im part lof the second schedule, a profit and loss account in the forms set forth in part ii of that schedule, except where the insurer carries on business of ono class only of the classes specified in clauses (a), (b) and (e) of sub-section (1) of section 7 and no other business:   powers of controller regarding returns,  21, (2) if it appears to the controller that any teturn furnished to him under the provisions of thia act is inaccurate or defective in any respect, he may—    x  (@) decline to acecpt any such return unless the inaccu racy has been corrected or 'the deficiency has been supplied before the expiry of one month from the date on which the requi: sition asking for correction of the inaccuracy or supply of the deficiency was delivered to the insurer or of such further time as the controller may specify in the requisition and if he de: clines to accept any such return, the insurer shall be deemed to have failed to comply with the provisions of section 18 or seetion 16 or section 28 or section 284 relating to the fumishing of returns,  » ey   s liability of direc- 30 tf, by reason of a contravention of any of the provisions of section 27, section 27a or section 29, any loss is sustained by the insurer or by the policy-holders, every director, manager, managing agent, officer or partner who is knowingly a party to such conira vention shail, without prejudice to any other penalty to which he may be liable under this act, be jointly and severally liable to make good the amount of such loss tof 1913 3 contraventions of sections 27, 278 and 29, provisions relating to managers, ete      + 31, (1) notwithstanding anything to the contrary contained in the indian companies act, 1913, or inthe articles of association of the insurer, if'a company, or in any contract or agreement, no ine suter shall aiter the expizy of one year from the commencement of the insurance (amendment) act, 1950— (© be managed by a company or a firm, or  "  + b + provided that nothing in this sub-section shail be deemed to prohibit      = (vit) the payment of boius in any year on a uniform basis to all salaried employces or any class of them by way of additional remuneration, such bonus, in the case of any employee, not exceeding in amount the equivalent of his salary for a period whieh, in the opinion of the central government, is reasonable having regard to the circumstances of the case,     7   iuvrsergation   power of investigation, 33 (1)    (2) it shall be the duty other officer of the insurer meke the investigation und count, registers and of of every manager, managing director or io produce before the person directed to ce sub-section (1) all such books of acher documents in his custody or power and affaits of the insurer a, s the said person may such time as the said person may specity, (3) any person, directed to make an invesligalioa under yubs bection (1), may examine on oath, any manager, managing director or other officer of the insuror in relation to his business and may administer oaths accordingly, (4 on receipt of any report under sub-scetion (1), the central government may, after giving such opportunity to the jusurer to make a representation in connection with the report as, in the opinion 'of the central government, seems reasonable, by order in writing - (@) require the insurer to take such action in respect of any matter arising out of the report as the central government may think fit; or (b) direct the controller to cancel the registration of the insurer; or {c) direct the controller to apply to tho court for the winding up of the insurer, if a company, whether the registra tion of the insurer has been cancelled under clause () or not    + 4a, (1)     +  an instirance act to receive, limitation ef expenditure on commission , in respect of a by an insurer after @) no person shalt pay or contract to pay te agent, and no insurance agent shall receive or contn by way of commission ov remuneration in any torm any policy of general insurance issued in indi the commencement of the insurance (amendment) act, 1950 and effected through an insurance agent, an amount exceeding— lates to fire or miscellaneous inihe premium payable on the policy, (a) where the policy rel: surance, fifteen per cent of t and ten per (b) where the policy relates to marine insurance, cent of the premium payable on the policy,    7 him in india, spend in any calendar year as ment including commission op renune an amount in excess of the prescribed such limits regard shall be had to the expenses af munageration for pracaring business umits and in prescribing any size-and age of the insurer: limitation of expenses of management in, general insurans business provided that where an insurer has spent as such expenses in tb committee of the general insurtion 64", by which the actual ex penses permissible under this donsultation with the executive ance council constituted under sect penses incurred may excced the ex sub-section (@) every insurer as aforesaid shall incorporate in the revenue account a certificate signed by the chairman and two directors and by the principal officer of the insurer, and by an auditor certifying that all expenses of management wherever incurred, whether directly or indirectly, in respect of the business referred to in this section, have been fully debited in the revenue account as expenses replanation—in this section—       a (b) "expenses of management" means all charges, wherever incurred whether directly or indirectly, including com mission payments of all kinds and, in the case of an insurbl having his principal place of business outside india, a propet shave of head office expenses, which shall not be less than such pereentage as taay be preseribed, of his gross premium income (that is to say, the premium income without taking ito account premiums on re-insurance ceded or accepted) written direct in india during the year;    = bs 4 42, (£) the controller or an officer authorised by him in this be- licensing of insurance agents, elf shall, in the prescribed manner and on payment of the prescaibed fee which shall not be more than ten rupees, issue fo any person making an application in the presertbed mater & licence to act ag an insurance agent for the purpose of soliciting or procul ing insurance business:  ® « =  a 1 of 194 (3) a ticence issued tinder this section, after the commencement of the tosurance (amendment) act, 1950, sball remain in force for a period of three years only from the date of isme, but shall, if the applicant, being' av individusl does not, or being a company & firm, any of its directors or partners does not, suffer from, any of the disqualifications mentioned in clauses (b), (e) and (a) of sub-section (2) andthe application for renewal of the meence reaches the issu" ing authority at least thirty days before the date on which the licence ceases to remain in force, be renewed for a period of threé years at any ofte time on payment of the prescribed fee which shall hot be more than ten rupees, and an additional fee of a prescribed - ce) amount, not exceeding thtee tupees by way of penalty, if the application for renewal of the licence does not reach the issuing authority at least thirty days before the date on which the licence ceases to remain in force, (ba) no application for the renewal of'a licence under this, section shall be entertained if the application does not teach the is ing authority before the licence ceases to remain in force: provided that the controller may, if satisfied that undue hardship would be caused otherwise, aceopt any application in contray vention of this sih-seetion on payment by the applicant of a penalty of thirty ripees, -   &    appoint ment of additional directors asc, the central government may, in the case of an insurer specified in sub-clause (b) of clause (9) of section 2, appoint for such period and subject to such terms and conditions as it thinks fit, not more than two persons to be directors in addition to the directors already existing and the insurer shall pay to such additional director or directots the same fees and allowances as are payable to the other directors   =    wrpine up53)   +  winding up by the court, (2) tn addition to the grounds on which such an order msy be based, the court may order the winding up of an insurance company—    +  + () it the controller, who is hereby authorised to do so, applies in this behalf to the court on any of the following grounds, nainely:—     ¥  (ia) that, it appears from, the returns furnished under the provisions of this act or from, the results of any inves tigation made thereunder that the company is insolvent, or (i) that the continuance of the company is prejudicial to the interests of the policy-holders ®      ba  a)    x    :   schemes for par~ tial winding up of insurance campanies, (8) when making an order confirming a scheme under this seetion, the court may make such orders as it considers necessary fo¥ the disposal of so much af the deposit made by the company under section 7 or section 98 as does not relate fo the classes of insurance business, if any, which the company continues to carry on       ae, the authorities of the life insurance council and the general insurance council shall be the hxecutive cormmittees; the tariff committee and the other committees thereof constituted inthe manner provided in this part   4  a  authorities of lhe life insurance cavncil and the general insurance council o4l, (1)   &   a (2) for the purpose of enabling it effectively to discharge ' its funetions, the executive committee of the general insurance councit may collect such fees as may be prescribed from all insurer' cartying on general insurance business functions of executive committee af general insuraace council,      power of general insurance counci? to regulate rates of insuranve, 640, (1) the genevel insurance council may, by regulations made in this behalf and approved by the central government, control and regulate the rates, advantages, terms and coziditions that may be offered by its members and associate members, in uespect of general insurance business, and all such regulations shall be bind ing on all its members, ete (2) any regulations made under sub-section (2) may delegate to a tariff committee, appointed for such peridd and consisting of such persons as-may be specified in such regulations, any power of control and regulation vested in the general insurance couneil (3) where an insurer is guilty of contravening any regulation made under sub-section (1) by which he is bound, the tariff committee, if any, appointed under sub-section (2) may take such disciplinary action against liim as may be prescribed (4) 'the central government may prescribe the cases in which an appeel shall he in respect of any action taken under sub-section (3), ond' any such' sppeal shall be preferred to the central governmont within thitty days of the date on which such action was taken, "s(g) 'the general insurance coumeil shall meet at least once a year to review the ,work-done by the tariffcommittee appointed under sub-section, (2)+ "(@) for the parposo 'of enabling the 'tarif' conimiitee to effectively discharge its functions under this section, the general insurance couneil may, by regulations made in this behalf and approved by the central government, fix the amount of fees payable by insurers carrying on general insurance business, and the tariff committee appointed under sub-section (2) may collect such fees either directly or through regional councils constituted as hereinafter provided, : " explanation—for the purposes of section 640, section 64p and section 64q, the central government may, by notification in the official gazette, specify that any insurer or class of insurers, shall not be deemed to be included amongst insurers carrying on general insurance business, and any insurer so specified shall not take part in any meeting of the general insurance council in which any discussion of atiy matter deslt' with in the said séctiond takes place regional councils 64p (i) 'the general insurance council may constitute such regional councils as and when it deems fit for one or more of the preséribed regions: "    (@) each' regional council shall consist of seven persons elected by such groups of insurers carrying on general insurance business in the region as may be prescribed €4q (1) 'the regional counciis-shall 'perform such functions as may -be, delegated: to them: by-¢he general-insurance council functions of the regional councils(2) for the purpose of enabling it effectively to discharge i ditties, any regional council may in the prescribed manner coustitute such committees thereof as it may think fit, whether consisting of members of the regional council or otherwise (2) where in thé exercise of any hinctions delegated to it under this section, any regional council or any committee thereof restrains a ptincipal agent or an insurance agent from procuring or causing tohe procuréd gencral insurgice business from any area, any such principal agent or insurance agent may appeal to the central government within such time as may be prescribed and the central government may pass such orders thereon as it thinks ft 6ar (1)       genoral powers of life insurance counei and general tasurance council, (2) 'the life insurance council' or the general insurance council may authorise the executive committee concerned or the tariff committee appointed under section 640 to cxercise any of thé powers conferred on the life insurance couneil or the general insuvance council, as the case may be, under clause (a), clause (b) or clause (c) of sub-section (1) '   &   9%, the provisions of sections g and 7 and of sub-section (2) of section 20, so far as those provisions ate inconsistent with the provisions of this part, shall not apply, and the, provisions of this pait shall apply, to mutual insurance companies and co-operative life insurance societies : applica« tion of act to mutual insurance cornpanies and co-operative life insurance societies 97 no mutual insurance company incorporated after the 26th day of january, 1037, and no co-operative life insurance society registered after that date under the co-operative societies act, 1913, or under an act of a state legislature governing the registration of co-operative socictics shall be registered under this act, unless working capital of mutual insurance companic and cooperative life insurance societies, it has as working capital a sum of fifteen thousand rupees, exclusive of the deposit to be made before or at the time of application for registration in accordance with sub-section (2) of section 98 of this act and of the preliminary expenses, if any, incutred in the formation of the company or society deposits 98 (1) every mutual insurance company and every co-operative life insurance society shall, in respect of the life insurance business carried on by it in india deposit and keep deposited with one of the offices in india of the reserve bank of india, for end on behalf of the contral government, a sum of two hundred thousand rupees in cash or in approved secutities estimated at the market value of the securities on the day of deposit +   +  + to be made by mutual insurance co-opera- companies and tive life insurance (3) the provisions of sub-section (?) of section 7 shall apply in respect of a mutual insurance company and a co-operative life insurance society as if for the words "under the foregaing provisions of this section" the words and figures "imder the provisions of section 98" were substituted e e a a e a summary of returns to be published, h6a, the central government shall every year cause ty be published, in such manner as it may direct, a summary of the accounis, balance-shects, statements, abstracts and other returns under this act or purporting to be under this act which have been furnished im pursuance of the provisions of this act to the control- jer during the year precoding the year of publication, and may append to such surnmary any note of the controller or of the central government and any correspondence: provided that nothing in this soction shall require the publica ton of the statement referred to in sub-section (2) of section 10 or the returns referred to in sub-section (1) of section 28 or section 28a, or the statements referred to in sub-section (2) of section 31b or section 40b ®     ea  tha, third, schedule  (see section 11)requiavions and forms for the preparalion of revenue accounts        part it—forms       form f «form of revenue account applicable to fire insurance business, marine insurance business and miscelleneous insurance bustness       norss (@ this heading must include all expenses directly incurred in settling claims 4      exmmact from th payment or bonus act, 1985 @1 or 1965)  +   + 32, nothing in this act shall apply to— () employees employed by any insurer carrying on genezal insurance business and the employees employed by the life insurance corporation of india; :       act not to apply to certain classes of employees 