 the insurance (amendment) bill, 1957 (as introduced in lok sabka) bill further to amend the insurance act, 1938be it enacted by parliament in the eighth year of the republic of india as follows:-1 (1) this act may be called the insurance (amendment) act, short titk 1957 and commencement (2) it shall come int'? force on the 1st day of september, 1957 4 of 1938 5 z in section 2 of the insurance act, 1938 (hereinafter referred ~:~e~~ to as the principal act), in clause (10), the words "being an individual" shall be omitted 10 3 in section 42 of the principal act-amendment (i) for sub-section (1), the following lub-section shall be o(lectiad <po liubsututed, namely:-is "(1) the controller or an ofbcer authorised by him in this behalf shall, in the prescribed manner and on payment of the prescribed fee which shall not be more than ten rupees, issue to any person making an application in the prescribed manner a licence to act as an insurance agent for the purpose of soliciting or procuring insurance bu5iness:  provided thai-20 (a) in the case of an individual, he does not suffer from any of the disqualifications mentioned in sub-section (4) and (b) in the case of a company or firm, any of its directors or partners does not suffer from any of the said disqualifications, and the company or firm was immediately before the 1st day of august, 1957, holding a certificate issued under section 42a entitling it to act 5 as a principal agent for the purpose of procuring insurance business: provided further that in the case of a company or firm, the licence under thls sub-section shall be issued only for the purpose of soliciting or procuring general insurance 10 business" ; (u) in sub-section (3), for the words, letters, figure and brackets "if the applicant does not suffer from any of the disqualifications mentioned in items (b) i (c) and (d) of subsection (4) ", the following shall be substituted, namely: -15 "if the applicant, being an individual does not, or being a company or firm any of its directors or partners does not, suffer from any of the disqualifications mentioned in clauses (b), (c) and (d) of sub-section (4) "; (iii) for sub-section (5), the following sub-section shall be 20 substituted, namely:-"(5) if it be found that an insurance agent being an individual is, or being a company or firm contains a director or partner who is, suffering from any of the disqualifications mentioned in sub-section (4), then, without prejudice to any other penalty to which he may be liable, the controller 25  shall, and if the insurance agent has knowingly contravened any of the provisions of this act may, cancel the licence issued to the agent under this section"; (iv) after sub-section (6), the following sub  sections shall 30 be inserted, namely:-"(7) any person who acts as an insurance agent without holding a licence issued under this section to act as such  shall "be punishable with fine which may extend to fifty rupees, and any insurer or any person acting on behalf of 35 an insurer, who appoints as an insurance agent any person not licensed to act as such or transacts any insurance business in india through any such person, shall be punishable with fine which may extend to one hundred rupees (8) where the person contravening" sub-section (7) is 40 a compaj)y, or a firm, then, without prejudice to any other procee<ifngs which may be taken against the company or firm, "every director, manager, secretary,:or other officer of" the company, and every partner of the firm who is knowingly a party to such contravention shall be punishable with fine which may extend to fifty rupees" amendment of section 43 4: in section 43 of the principal act, sub-sections (2) and (3) 5 shall be omitted 5 for section 118 of the principal act, the following section shall be substituted, namely:-substitution of new icc-tion for sectiod ub exemptions "118 nothing in this act shall apply-(a) to any trade union registered under the indian 16 of 1926• 10 tra~e unions act, 1926; or (b) to any provident fund to which the provisions of the p;ovident funds act, 1925, apply; or 19 of 1925 (c)' if the central government so orders in any case, and to such extent or subject to such conditions or modifications as may be specified in the order, to any insurance business carried on by the centr~l government or a state government or a government company as defined in section 617 of the companies act, 1956; or 15 i of 195'i 20 (d) if the controller so orders in any case, and to such extent or subject to such conditions or modifications as may be specified in the order, to-(i) any approved superannuation fund as defined in clause (a) of section58n of the indian income-tax act, 1922; or h of '" 25 ~ (ii) any fund in existence and officially recognised by the central government before the 27th day of january, 1937, maintained by or on behalf of government servants or government pensioners for the mutual benefit of contributors to the fund and of their dependants; or 30 (iii) any mutual or provident insurance society composed wholly of government servants or of railway servants which has been exempted from any or all of the provisions of the provident insurance societies act, 1912"  ~~s of 1912, 35  statement of objects and reasonsunder section 42b of the insurance act, 1938, no insurer can appoint or transact any insurance business in india through a principal agent after the 31st august, 1957 individuals who have been working 'as principal agents hitherto can, however, continue in business as ordinary insu!ance agents the general insurance industry has suggested that the knowledge and experience of the business acquired by the companies and firms who were working as principal agents should not be lost to it\ it is, therefore, prop'osed that principal agents at present in business may, if they so desire, continue to play their part in the industry by acting as ordinary' insurance agents clause 3 of the bill seeks to amend the insurance act for the purpose section 118 of the insurance act, which exempts certain categories of business' from the provisions of the act, does not cover the case of a business carried on by a government company as defined in section 617 of the companies act, 1956 clause 5 of the bill seeks to amend section 118 in this behalf t t krishnamachari new !>elm; the 9th august, 1957  annexure extracts from the insurance act, 1938(4 of 1938) - - - z - - - (10) "insurance agent" means an insurance agent licensed under section 42 being an individual who receives or agrees to receive payment by way of commission or other remuneration in consideration of his soliciting or procuring insurance business including business relating to the continuance, renewal or revival of policies of insurance;  - - - licensing of insurance agents 42 (1) the controller or an officer authorised by him in this behalf shall, in the prescribed manner and on payment of the prescribed fee which shall not be more than ten rupees, issue to any individual making an application in the prescribed manner and not suffering from any of the disqualifications hereinafter mej?-tioned a licence to act as an insurance agent for the purpose of soliciting or procuring insurance business - - - (3) a licence issued under this section, after the commence-47 of 1950 ment of the insurance (amendment) act, 1950, shall remain in force for a period of three years only from the date of issue, but shall, if ~he applicant does not suffer from any of the disqualifications mentioned in items (b), (c) and (d) of sub-section (4) and the application for renewal of the licence reaches the issuing authority at least thirty days before the date on which the licence ceases to remain in force, be renewed for a period of three years at anyone time on ·payment of the prescribed fee which shall not be more than ten rupees, and an additional fee of a prescribed amount, not exceeding three rupees by way of penalty, if the application for renewal of the licence does n·ot reach the issuing authority at least _, ; thirty days before the date on which the licence ceases to remain in force i llepterof ~ qedti -   (5) if it be found that an insurance agent suffers from any of the foregoing disqualifications, without prejudice to any other penalty to which he may be liable, the controller shall, and if the agent has knowingly contravened any provision of this act may, cancel the licence issued to the agent under this section - -  43 -  (2) any individual not holding a licence issued under section 42 who acts as an insurance agent shall be punishable with fine which may extend to fifty rupees, and any insurer who, or any person acting on behalf of an insurer who, appoints as an insurance agent any individual not so licensed, or transacts any insurance business in india through any such individual, shall be punishable with fine which may extend to one hundred rupees (3) the provisions of sub-section (2) shall not take effect until the expiry of six months from the commencement of this act -  - exemptiom 118 nothing in this act shall apply to any trade union registered under the indian trade unions act, 1926, or to any provi-16 of 1926 dent fund to which the provisions of the provident funds act, 1925, 19 of 1925 apply, or, except to such extent as the central government may by order specify, to any insurance business carried on by the central government, or, if the controller so orders in any case, and to such extent or subject to such conditions or modifications as he specifies in such order, ~ (a) any fund in existence and officially recognised by the central government before the 27th day of january, 1937, maintained by or on behalf of government servants or government peluioners for the mutual benefit of contributors to the fund and of their dependants, or (b) any mutual or provident insurance· society composed wholly of government servants or of railway servants which has been exempted from any or all of the provisions of the provident insurance societies act 1912, or 5 of 1912 (c) any approved superannuation fund as defined in clause (a) of section 58n of the indian income-tax act, 1922, 11 of 19%2 or, if the central government so orders in any case, and to such extent or subject to such conditions or modifications as are specified in such order, to any insurance business carried on by a state government or to any insurance c0¥1pany more than fifty-one per cent of whose shares is held by a state government - a bill further to amend the insurance act, 1938 (shri t t krishnamachari, minister of finance) 