 bill no 5s of i"s· the life insurance corporation (amendment) bill, 1965 a billfurther to amend the life insurance corporation act, 1956 be it enacted iby parliament in the sixteenth year of the republic of india as follows:-1 this act may be called the life (amendment) act, 1965 insurance corporation short title 31 of 1956 5 2 in the life insurance corporation act, 1956 (hereinafter referred to as the principal act), in section 2~, far the words "business ::::t!i' , of the corporation, including a valuation of the liabilities of the section 26 corporation", the words "life insurance business of the corporation, including a valuation of the liabilities of the corpora-10 tion in respect thereto" shall be substituted 3 for section 28 of the principal act, the following--s-ection shall-----be substituted and shall be deemed always to have been so substituted, namely:-substitution of new section for section 28 surplus from lite insurance business how to be utilized "28 u as a result of ally investi,ation undertaken by the corporation under section 26 any surplus emer~, ninety-five 5 per cent of such surplus or such hi,her percentace thereuf rs the central governmedt may approve shall be adocated to or reserved for the life insurance policy-holders of the-::'corporation and after meetinl the liabilities of the corporation, if any, which may arise under section 9, the remainder shall be paid to 10 the centrbl government or, if that government so directs, be utilized for such purposes and in such manner as that government may determine" 4 after section 28 of the principal act, the following shall be inserted, namely:-section insertion of new section 28a 1c28a if for any financial year profits accrue from any business (other than life insurance business) carried on by the corporation, then, after making provision for reserves and other matters for which provision is necessary or expedient, the balance_ of such proftts shall be paid to the central government" is profits from any business (other than life insurance business) how to be utilized  statement of objects and reasonssection 28 of the life insurance corporation act, 1956, provides that where an actuarial valuation under section 26 discloses a surplus, the remainder of the surplus after allocation of not less than 95 per cent thereof to policy-holders, "may be utilized for such purposes and in such manner as the central government may determine" this provision was intended to eoeii1e: government to appropriate this portion of the surplus to the central government revenue, if they so desired accordingly, during each of the last four valuations, a part of the surplus was appropriated to central revenues in a recent case, the supreme court observed that while the central government may determine the manner in which tile remainder of the surplus may be utilized, it could not appropriate it as revenue the amendmedt, which is retrospective, is designed to give ii!ftect to the orfljnal intention, while making it clear that the liabilities which devolved on the corporation under section 9 of the act but which were not payable out of the life insurance fund would constitute a first charge on the surplus remaining after allocation to policy-holders 2 opportunity is taken to clarify that the profits of any insurance business, other than life insurance business, carried on by the corporation would be payable to government 3 the bill seeks to achieve the above objects new delhi; t t krishnamacharr the 30th august, 1965  president's recommendation unde&- article 117 of the constitution of india[copy of letter dated september 3, 1965 from shri t t krishnamachari minister of finance to the secretary, lok sabha] , the president having been informed of the subject matter of the bill further to amend the life insurance corporation act, 1956  recommends, under clauses (1) and (3) of article 117 of the constitution, the introduction and f>nsideration of the said bill in the lok sabba during its current session  financial memorandumclause 3 of the bill amends with retrospective e1fect section 28 of the act to regularise payments hitherto made under the section to the central government to the extent that such payments are in excess of the liabilities of the corporation under section 9 the liabilities under section 9 relate to certain deposits which some erstwhile insurers had collected and whicb·~ repayable only out of surpluses disclosed at future valuations in a recent case, the supreme court has held that such deposits will have to be repaid out of the balances left over after payment to the policy-holders of not less than ninety-five per cent of the surpluses disclosed at the valuations of the corporation such deposits together with interest amount to about rs '18 lakhs and will' have to be repaid out of the consolidated fund of india as, in the past, the balances were appropriated to central revenues without meeting such liabilities  extracts --om the lu'i insultance corporation act, 1958 (31 of 1956)28 the corporation shall, once at least in every two years, cause actuaan -investigation to be made by actuaries into the financial condition rial of the 'business of the corp&r8tion; including a valuation of the iiabi- v:alua lities of the corporation, and submit:""d-:!\ltport of the actuaries to tiona the central government surplua how to be utlllhd 28 if as a result of any investigation undertaken by the corp~ ration under section 28 any surplus emerges, not less than 96 per cent of such surplus shall be allocated to or reserved for the policyholders of the corporation and the remainder may be utilised for such purposes and in such m8luler as the central government may determine a bill further to amend the life insurance corporation act, 1956  - (shri t t krishnamat:hari, minister of finimt:s) 