 the life insurance corporation bill, 1956(as introduced in lolt sabra)  corrigenda to life insurance ccrporation bill, 1956 (as introduced 1n lok salm')(1) pace 4,-in the marginal 'heading 8ia1dat el&a •• 6,-atner "functions of then iji4 corporation" (2) page 18, 11n~ 14,-m "suplus" nag "surplus" (3) page 19, line 9,-m "referenc&" ~ ~lrererenc8s'l (4) page 22, line 't?7,-attar "each" insert "with-profit" (5) page 26, line a trom the bott~,­m "deleted" ~ uftelagatedl new delhi, the 17th february, 1956  corrigenda no 2 to life insurance corporation bill, 19;6 (as introduced in lok sabha)(1 ) page 4,-line 19, after "this act" insert "," (2) page 19, line 9,-atter "ness" insert " it ,  (3) page 20, line 15,-atter "on1y" insert "," ( 4) pe ge 21, -(a) line 9, omit "ac" (b) line 10, tor "count ii -, read "acoount " (c) line 28, ~ft~r "liabilities ot," 111s~rt "the" (d) 11ne 31, omit "which"  -  -"  ____  \,c uui)lness;  (as introduced in lok sabha) a billto prut,ide for the nationalisation of life insurance business in india by transferrring all such business to a corporation established for the purpose and to provide for the regtjjlation and control of the business of the corporation and for matters connected therewithot incidental thereto be it enacted by parliament in the seventh year of the republic of inditt as follows:-1  chapter i preliminarys 1 (1) this act may ibe called the life insurance corporation short title and com-act, 1956 mencemcnt (2) it shall come into force on such date as the central government may, by notification in the official gazette, appoint definitions 10 2 in this act, unless the context otherwise requires,-(1) "appointed day" means the date on which the corporation is established under section 3;  (2) "composite insurer" means an insurer· carrying on in addition to controlled business any other kind of insurance business; is (3) "controlled business" means-(i) in the case of any insurer specified in sub-clause (a)(ii) or sub-clause (b) of clause (9) of sectiqn 2 of the insurance act and carrying on life insurance business-(a) all his business, if he carries on no other class 20 of insurance business; (b) all the business appertaining to his life insurance business, if he carries on any other class of insurance business also; (c) all his business, if his certificate of registration under the insurance act in respect of general insurance s business stands wholly cancelled for a period of more than six months on ,the 19th day of january, 1956; 10 (ii) in the case of any other insurer specified in clause (9) of section 2 of the insurance act and carrying on life insurance business-(a) all his business in india, if he carries on no other class of insllrance business in india; (b) all the business appertaining to his life insurance business in india, if he carries on any other class of insurance business also in india; is (c) all his business in india, if his certificate of registration under the insurance act in respeet of general insurance business in india stands wholly cancelled for a period of more than six months on the 19th day of january, 1956; ao explanation-an insurer is said to carryon no class of insurance business other than life insurance bl1siness, if, in addition to life insurance business he carries on only capital redemption business or annuity certain business or both; and the expression "business appertaining to his life insu- 2s rance business" in sub-clauses (i) and, (u) shall be construed accordingly; (iii) in the case of a provident society, as defined in section 65 of the insurance act, all its business; (iv) in the case of the central government or a state 30 government, all life insurance business carried on by it, subject to the exceptions specified in section 35; (4) "corporation" means the life insurance corporation of india established under section 3; (5) "insurance act" means the insurance act, 1938; 3s (6) "insurer" means an insurer as defined in the insurance act who carries on life insurance business in india and includes the government and a provident society as defined in section 65 of the insurance act; (7) "mem'ber" means a member of the corporation; (8) "prescribed" means prescribed by rules made under this 5 act; (9) "tribunal" means the tribunal constituted under section 14; (10) all other words and expressions used he"::in but not defined and defined in the insurance act shall have tlc meanings 10 respectively assigned to them in that act  chapl'er ii establishment of life insurance corporation of india3 (1) with effect from such date as the central g~vernment may bstablish- by notification in the official gazette, appoint, there shall be estab- =~ lo-is lished a corporation called; the life insurance corporation of india don of ufe idsu~ (2) the corporation shall be a body corporate having perpetual ~rndr:!od succession and a common seal with power, subject to the provisions of this act, to acquire, hold and dispose of property, and may by its name sue and be sued 20 4 (1) the corporation shall consist of such number of persons coostitution not exceeding fifteen as the central government may think fit to ~:::ration appoint thereto and one of them shall be appointed by the central government to be the chairman thereof (2) before appointing a person to be a member, the central gov-25 ernment shall satisfy itself that that person will have no such financial or other interest as is likely to affect prejudicially the exercise or performance by him of his functions as a mem'ber, and the central government shall also satisfy itself from time to time with respect to every member that he has no such interest; and any person who 30 is, 01' whom the central government proposes to appoint and who has consented to be a member shall, whenever required by the central government so to do, furnish to it such information as the central government considers necessary for the performance of its duties under this sub-section 3s (3) a member who is in any way directly or indirectly interested in a contract made or proposed to be made by the corporation shall, as soon as possible after the relevant circumstances have ccme to his knowledge, disclose the nature of his interest to the corporation; and the member shall not take part in any deliberation or discussion 40 of the corporation with respect to that contract capital of the corporation 5 (1) the original capital of the corporation shall be five crores of rupees provided by the central govenunent after due appropriation made by parliameot by law for the purpose, and the terms and conditions relatine to the provision of sueh capital shad be such 1 may be determined by the central government ; (2) the central government may, on the recommendation of the corporation, reduce the capital of the corporation to such extent and in such manner as the central government may df:termine  chapter iii functions of the corporation (0functions 6 (1) subject to the rules, if any, made by the central governof the ment in this behalf, it shall be the general duty of the corporation to carry on life insurance business, whether in or outside india, and the corporation shall so exercise its powers under this act as to secure that life insurance business is developed to the best adv£n- (5 tage (2) without prejudice to the generality of the provisions contained in sub-section (1) but subject to the other provisions contained in this act the corporation shall have power-(a) to carry on capital redemption business, annuity eer- 20 tain business or reinsurance business in so far as such reinsurance business appertains to life insurance business; (b) subject to the rules, if any, made by the central governillent in this behalf, to invest the funds of the corporation in such manner as the corporation may think fit and to take all 2s such steps as may be necessary or expedient for the protection or realisation of any investment; including the taking over of and administering any property offered as security for the investment until a suitable opportunity arises for its disposal; (c) to acquire, hold and dispose of any property for the 30 purpose of its business; (d) to transfer the whole or any part of the life insurance business carried on outside india to any other person, if in the interests of the corporation it is expedient so to do; (e) to advance or lend money upon the security of any_ 3s movable or immovable property; (f) to borrovt or raise any money in such manner and upon such security as the corporation may think fit; (g) to carry on any other pusiness in any case where such other business was being carried on by a subsidiary of an in- 040 surer whose controlled business has been transferred to and vested in the corporation under this act; (h) to carry on any other business which may seem to the corporation to be capable of being conveniently carried on in connection with its business and calculated directly or indirectly to render profitable the life insurance business of the corporation; s (i) to do all such things as may be incidental or conducive to the proper exercise of any of the powers of the corporation (3) in the discharge of any of its functions the corporation shall act so far as may be on business principles  chapter iv 10 transfer of existing life insurance business to the corporation7 (1) on the appointed day there shall be transferred to and tnnafer of vested in the corporation all the assets and liabilities appertaining to :bl6ties u::: the controlled business of all insurers c:liatida la-i (2) the assets appertaining to the controlled business of an in- ~ c:anz; 5 surer shall be deemed to include all rights and powers, and all pro- =~i perty, whether movable or immovaple, appertaining to his controlle4 business, including, in particular, cash balances, reserve funds, investments, deposits and all other interests and rights in or arising out 20 of such property as may be in the possession of the insurer and all books of account or documents relating to the controlled business of the insurer; and liabilities shall be deemed to include all debts, liabilities and obligations of whatever kind then existing and appertaining to the controlled business of the insurer 25 explanation-the expression "assets appertaining to the cod-trolled business of an insurer"-(a) in relation to a composite insurer includes that part of the paid-up capital of the insurer or assets representing such part which has or have been -allocated to the controlled business of the insurer in accordance with the rules made in this behalf; (b) in relation to a government means the amount lying to the credit of that business on the appointed day 8 (1) unless otherwise expressly provided by or under this act, general all contracts, agreements and other instruments of whatever nature df~ of of 35 subsisting or having effect immediately before the appointed day ~ed and to which an insurer whose controlled business has been trans- bulldell ferred to and vested in the corporation is a party or which are in favour of such insurer shall in so far as they relate to the controlled business of the insurer be of as full force and effect against or in 40 favour of the corporation, as the case may be, and maybe enforced or' acted upon as fully and effectually as if, instead of the insurer, the corporation had· been a party thereto or as if they had been entered' into or issued in favour of the corporation (2) if on the appointed day any suit, appeal or other legal proceeding of whatever nature is pending by or against an insurer, 5 then, in so far as it relates to his controlled business, it shall not abate, be discontinued or be in any way prejudicially aftected by reason of the transfer to the corporation of the business of the insurer or of anything done under this act, but the suit, appeal or other proceeding may be continued, prosecuted and enforced by or 10 against the corporation (3) for the persons, if any, who immediately before the appointed day are the trustees of any superannuation or provident fund established by any insurer other than the government for the benefit of his employees employed in connection with his controlled is business, there shall be substituted such persons as the corporation may, by general or special order, specify proviaiodi e (1) for the removal of doubt it is hereby declared that in any ;,: com- case where an insurer whose controlled business has been transferridlurerl ed to and vested in the corporation under this act is a composite 20 insurer, the provisions of the preceding sections shall only apply to the extent to which any property appertains to his controlled business and to rights and powers acquired, and to debts, liabilities 8dd obli~ations incurred, and to contracts, agreements and other instruments made by the insurer for the purposes of his controlled 25 business and to legal proceedings relating to those purposes, and the provisions of those sections shall be construed accordingly (2) the central government may by rules made in this behalf provid&-(a) for the determination of the question whether any pro- 30 perty appertains to his controlled business or whether any rights, powers, debts, liabilities or obllgations were acquired or incurred or any contract, agreement or other instrument was made by the insurer for the purposes of his controlled business or whether any documents relate to those purposes; 35 (b) for the allocation of the paid-up capital or &ssets representing such paid-up capital, as the case may be between' the controlled business of the insurer and -any other business; (c) for substituting for any agreements entered into by any insurer partly for the purposes of his controlled business and 40 partly for other purposes separate agreements in the requisite  terms and for any apportionments and indemnities consequent tmreon; (d) for the severance of leases comprising property of which part only is transferred to and vested in th~ corporation by virtue of this act and for apportionments consequent· on such severance; s (e) for the apportionment and the making of financial adjustments with respect to any debts, liabilities or obligations incurred by any such insurer partly for the purposes of his controlled business and partly for other purposes and for any necessary variation of mortgages and encumbrances relating to such debts, liabilities or obligatio~; 10 (1) for the apportioqjllent of superannuation or provident fund moneys between persons employed in connection with the controlled business of an insurer and other persons; (g) for any other· matters supplementary to or conse-is quential on the matters aforesaid for which provision appears to be necessary or expedient (3) where at any time before the expiration of six months from the appointed day a question has arisen under this section or under any rules made thereunder as to whether any· property is or was 20 held or used by the insurer for the purposes of his controlledbusiness, the question shall be referred to the tribunal for decision 10 (1) every whole-time employee of an insurer whose con- transfer of trolled business has been transferred to and vested in the corpora- ~ ,of tion and who was employed by the insurer wholly or mainly in con- ~ of 25 nection with his controlled business immediately before the ap~ ~~_ pointed day shall, on and from the appointed day, become an tion  employee of the corporation, and shall hold his office therein by the same tenure,  at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension 30 end gratuity and other matters· as he would have held the same on the appointed -day if this act had not been passed, and shall continue ·to do so unless arid -until his employment in the corporation is terminated or until his remuneration terms and conditions are duly altered by the corporation: 35 provided that nothing contained in this sub-section shall apply to any employee of the government or to any employee who has, by notice in writing given to the central government prior to the appointed day, intimated his intention of not becoming an employee -of the corporation 40 '(2) notwithstanding anything contained in sub-section (1) or in - any contract of service, the central government may, for the purpose of rationalising the pay scales of employees of insurers whose controlled business has been transferred to and vested in it or for the purpose of reducing the remuneration payable to employees in cases where in the interest of the corporation and its policy-holders a reduction is called for, alter the terms of service of the employees as to their remuneration in such manner as it thinks fit; 5 and if the alteration is not acceptable to any employee the corporation may terminate his employment on giving him compensation equivalent to three months' remuneration unless the contract of service with such employee provides for a shorter notice of termination 10 - (3) if any question arises as to whether any person was a wholetime employee of an insurer or as to whether any employee was employed wholly or mainly in connection with the controlled business of an insurer immediately befol·e the appointed day the question shall be referred to the central government whose decisiqn 15 shall be final (4) notwithstanding anything contained in the industrial disputes act, 1947, or in any other law for the time being in force, the 14 of 1947 transfer of the services of any employee of an insurer to the corporation shall not entitle any such employee to any compensation 20 under that act, and no such claim shall be entertained by any court,  tribunal or other authority =erto 11 (1) where any property appertaining to the controlled busipa •• elrod ness of an insurer has been transferred to and vested in the cor-~ poratit)n under this act, then,-25 ~u  relating (a) every person, in whose possession, custody or control tl:ieeto any such property may be, shall deliver the property to the corporation forthwith; (b) any person who, on the appointed day has in his p0ssession, custody or control any books, documents or other papers 30 relating to such controlled business shall be liable to account for the said books, documents and papers to the corporation and shall deliver them to the corporation or to such person as the corporation may direct (2) in particular, all the assets of an insurer appertaining to life 35 insurance business held ~ deposit by the reserve bank of india under the inmrance act or by trustees in trust shall be delivered to the corporation (3) without prejudice to the' other provisions contained in this section, it shall be lawful for the corporation to take all necessary 40 steps for securing possession of all properties which have been transferred to and vested in it under this act 12 the corporation may, having regard to the financial condition power of on the appointed day 'of any insurer whose controlled business has corpo~tion been transferred to and vested in the corporation, reduce the:= of amounts of insurance under contracts of life insurance entered into ::e ins~ce 5 by such insurer in such manner' and subject to such conditions as casec::~ it thinks fit: provided that no such reduction shall be made except in accordance with a scheme prepared by the corporation in this behalf and approved by the central government 10 ii (1) where an insurer whose controlled business has been right of d corporation transferred to and vested in the corporation at any tiine within two years before the january, 1956,-un er this act has, to seek renineteenth day of lief in respect of certain transactions of the (a) made any payment to any person without consideration; insurer is (b) sold or disposed of any property of the insurer without consideration or for an inadequate consideration; (c) acquired any property or rights for an excessive consideration; (d) entered into or varied any agreement so as to require an excessive consideration to be paid or given by the insurer; 20 (e) entered into any other transaction of such an onerous nature as to cause a loss to, or impose a liability on, the insurer exceeding any benefit accruing to the insurer; 2s <f> if a composite insurer, transferred any property from his life department to his general department without consideration or for an inadequate consideration; and the payment, sale, disposal acquisition, agreement or variation thereof or other transaction or transfer was not reasonably necessary for the purpose of the controlled business of the insurer or was 30 made with an unreasonable lack of prudence on the part of the insurer, regard being had in either case to the circumstances at the time, the corporation may apply for relief to the tribunal in respect of such transaction, and all parties to the transaction shall, u!lless the tribunal otherwise directs, be made parties to the appli-35 cation (2) the tribunal may make such order against any of the parties to the application as it thinks just having regard to the extent to which those parties were respectively l'iesponsible for the transaction or benefited from it and all the circumstances of the case 40 (3) where an application is made to the tri~un~l u~der this section in respect of any transaction and the apphcabon ls determmed  in favour of the corporation, the trib~al shall have exclusive jurisdiction to determine any claims outstanding in respect of the tr8il$8ction compenaa_ 14 (1) ~ere th~ controlled business of an in8~lrer has been ~ for ac- transferred to and vested in the corporation under this act compen- 5 :oll!j of sation shall -be given by the corporation to that insurer in accordbusiness ance with the principles contained in the first schedule (2) the amount of the compensation to be 'given in accordance , with the aforesaidpr~nciples shaj} be determine,d,by the corporatio,ll in the first instance and if the amount so determined is approved ro by the cen:tra1 goveplment it shall be offered to the insurer in full satisfaction of the compensation payable to him under this act, and if, on the other hand, the amount so offered is not acceptable to the insurer he may within such time as may be prescribed for the purpose have the matter referred to the tribunal for decision 15  constitution of the tribunal15, (1) the central government may for the purpose of this act constitute a tribunal consisting of three members appointed by the central government one of whom shall be a pe~on who is, or has been, a judge of a higl,1 courtor has been a judge of th,e supreme court, and he sh~l be the chairw\in thereof 20 (2) the tribunal may choose one or more persons possessing special knowledge of any matter relating to any case under inquiry to assist the tribunal in determining any question which bas to be decided by it under this act  (3) the tribunal shall have the powers of a civil court while 25 trying a suit under the code of civil procedure, 1908, in respect of s of 1908 the following ~atters:-(a) summoning and enforcing the attendance of any person, and examining him on oath; (b) requiring ~he di~overy and production of documents; 30 (c) receiving evidence on afftdavits; (d) issuing commissions for the examination of witnesses or documents (4) the tribunal shall have power to regulate its own procedure and decide all matters within its competence, and may review any 35 of its decisions in the event of there being a mistake on the face of the, record or correct any arithmetical or clerical error therein  chapter v management16 (1) the central office of the corporation shall be at such place offices, as the central government may, by notification in the officim· branc!tea and s gazette, specify qedaea (2) the corporation shall establish a zonal office at each of the following places, namely, bombay, calcutta, delhi and madras, and, subject to the previous approval of the central government, may establish such other zonal offices as it thinks fit 10 (3) the territorial limits of each zone shall be such as may be specified by the corporation (4) there may be established as many divisional offices and branches in each zone as the zonal manager thinks fit 17 (1) the corporation may entrust the general superintendence committees j, and direction of its affairs and business to an executive committee of ~ consisting of not more than five of its members and the executive ~d~:; committee may exercise all powers and do all such acts and things as ing director may be delegated to it by the corporation (2) the corporation may appoint a managing director who shall 20 be a wholetime officer of the corporation and the managing d1rec·  tor shall exercise such powers and perform such duties· as may be entrusted or delegated to him by the executive committee or 'the corporation (3) the corporation may also form such other committees as it 2s may think fit for the purpose of discharging such of its functions as may ,be delegated to them 18 in the discharge of its functions under this act, the corpora- corporation tion shall be guided by such directions in matters of policy involv- ~o ~eguided ing public interest as the central government may give to it; and directions 30 if any question arises· whether a direction relates to a matter of ~em::i1t policy involving public interest the decision of the central government thereon shall be final 19 (1) the corporation may entrust the superintendence and zonal direction of the affairs and business of a zonal office to a person, manager 35 whether a member or not, who shall be known as the zonal manager and the zonal manager shall perform all such functions of the corporation as may be delegated to him with respect to the area within the jurisdiction of the zonal office (2) the corporation may constitute for each zone a board con-40 sisting of such number of persons as it thinks fit to appoint thereto for the purpose of 'advising the zonal 'manager in respect of such matters as are referred to it under the regulations made by the corporation staff of the  zo (1) for th~ purpose of enabling it to discharge its functions corpol'adon under this act, the corporation may appoint such number of persons as it thinks fit ' 5 (2) every person appointed by the corporation or whose services have been transferred to the corporation under section 10 shall be liable to serve anywhere in india  10  chapter vi finance, accounts i and a~=~~ %1 the corporation shall have its own fund and all receipts of the corporation shall be credited thereto and all payments of the corporation shall be made therefrom' ' i audit 2z (1) the affairs of the corporation shall ~ audited 8y auditors i, duly qualified to act as auditors of companies ~nder the law for the time being in force relating to eompa~ie8, and the auditors shall be appointed by the corporation with '~e previous approval of the central governmept and shall recei~ such re~~neration from -the corporation as ,the central government may fix 20 (2) every auditor in the perfor1lulpce of his duties shall have at all reasonable times access to the books, acco\jhts and other documents of the corporation ' (3) the auditors shall submit theirrepgrt to the corporation and shall also forward a copy of their report to the centra! government 2, , 23 the corporation shall, once at, least in every two' years, cause an investigation to be made by actu$ies into the financial condition of the business of the corporation, including a valuation of the liabilities of the corporation, and submit the repo;rt of the actuaries to the central government 30 surplua how 24 if as a result of any investigation undertaken by the corpora-:;;jjl!t  tion under section 23 any surplus emerges, not less than 95 per cent of such surplus shall be allocated to -or reserved for the policy-holders of the corporation and the remainder may be utilised for such purposes and in such manner as the central government may deter- 3s mtde  chapter vii miscellaneous25 except to the extent otherwiseexpressly provided in this act, corporation on and from the appointed day the corporation shall have the ex- !':jia,:e the 5 1· "1 f ~ullve c uslve prlvl ege 0 carrying on life insurance business in india' and privilqe on and from the said day any certificate of registration under' the ofcarlifi~  on em-insurance act held by any insurer immediately before the said day 8u~ shall cease to have effect in so far as it authorises him to carry on buuness life insurance business in india  26 where any property or rights appertaining to the controlled r,ui~ment business of an insurer are transferred to and vested in the corpora- lor oreagn be  aws to bon under this act or would be so transferred and vested but ·for complied the fact that such transfer and vesting are governed otherwise than wjtam:th in cerb h cases y t  e law of india, the insurer shall comply with such directions as is may be given to him by the corporation for the purpose of securing that the ownership of the property or as the case may be that the right is effectively transferred to the corporation 27 (1) if, in the case of any insurer incorporated outside india, repatriation the central government is satisfied on application made to it in this i~-= -rt 20 behalf that out of the assets and liabilities transferred to and vested the cue old in the corporation under this act there are assets brought into!orri8n id  india by the insurer for the purpose of building up hislife insurance ~"cel business which should not be so transferred and vested the central government· may, by order, direct that the corporation shall be 2s divested· of such assets as may be specified in the order (2) for 'the purpose of determining any such assets as are referred to in sub-section (1), the central government shall compute the value as at the 31st day of december, 1955, of the assets of the insurer in accordance with the provisions contained in paragraph 30 3 of part b of the first schedule and deduct therefrom the total amount of the liabilities of the insurer computed as at the same date and in accordance with the provisions contained in the second schedule (3) in the case of any such insurer as is referred to in sub-sec-3s tion (1) the central government may also, by order, direct that the corporation shall be divested of any liabilities in respect of life '~';insurance policies issued in any foreign currency in favour of persons : • who are not citizens of india, and the order shall specify the amount which may be necessary to enable the insurer concerned to meet 40 such liabilities  (4) the liabilities in respect of the policies referred to in subsection (3) shall be computed in accordance with the provisions contained in clause (b) of the second schedule (5) every order made by the central government under this section shall be carried out by the corporation in such manner as the central government may direct s policies to be !s the sums assured by all pollcies issued by the corporation 'mguaranteed by central eluding any bonuses declared in respect thereof and, subject to the government provisions contained in section 12 the amounts assured by all policies issued by any insurer the liabiuties under which have vested in the corporation under this act, and all bonuses declared in respect 10 thereof whether before or after the appobatedday, shall be guaranteed as to payment by the ceutral govemment , liquidation of corporation 29 no provision of law relating to the winding up of companies or corporations shall apply to the corporation established under this act, and the corporation shall not be placed 'in liquidation save by is order of the central government and in such manner as that government may direct special provillions for~ up of 30 where any insurer being a company (other than a composite insurer) whose controlled business has been transferred to and vested in the corporation under this act has in accordance with the 30 provisions of this act collected and distributed any moneys paid to iniurm him l?y the corporation by way of compensation or otherwise and has al!ilo complied with any direction given to him by the corporation for the purpose of securing that the ownership of any property or any right is effectively transferred to the corporation, the central zs ~ government may on application being made to it in this behalf by such insurer grant a certificate to the insurer that there is no reason for the continued existence of the insurer and where such a ceru-ficate has been granted shall cause the certificate to be published in the official gazette and upon the publication thereof the insurer 30 shall be dissolved penalty for 31 if any person wilfully withhold or fails to deliver to the corwithholdinl! poration as requined by section 11, any property or any books, docuproperty, etc h h' h b' h'  i  ments or ot er papers w lc may e in is possession or un awfully retains possession of any property of an insurer which has been 3s transferred to and vested in the corporation under this act or wilfully applies any such property to purposes other than those expressed in or authorised by this act, "he shall, on the complaint of th"! corporation, be punishable with imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, 40 or with both 32) no: civil court shall have jurisdiction to entertain or adjudi- tribunal cate upon any matter which the tribunal is empowered to decide or :c~~~e determine under this act !~8di~on mcertam matters 33 any decision of the tribunal may be enforced in any civil lnforcement 5 courtas if it were a decree passed by that court ~~ ~~~:t 34 the central government may, by notification in the official application gazette, direct that all or any of the provisions contained in the i!sur:~e insurance act shall apply to the corporation subject to such condi- act tiods or modifications as may 'be specified in the notification; but 10 save as aforesaid nothing contained in that' act shall apply to the corporation 35 nothing contained in this act shall apply in relation to-act not to apply in (a) any insurer whose business is being voluntarily wound certain cases up or is being wound up under the orders of the court; 15 (b) any insurer to whom the insurance act does not apply by reason of the provisions contained in section 2e thereof; (c) the scheme run by the central government known as the post office life insurance fund; (d) any approved superannuation fund as defined in clause 20 (a) of section 58n of the indian income tax act, 1922, which is it of 1922 in existence on the appointed day; (e) any scheme in existence on the appointed day whereby in consideration of certain compulsory deductions made 'by government from the salaries of its employees as part cf the con-25 ditions of service, the payment of money is assured by government on the death of the employee concerned or on the happeningof any contingency dependent on his life 36 no act or proceeding of the corporation or of any committee defects in of the corporation shall be called in question on the ground merely ~c!:;:,~~ 30 of the existence of any vacancy or defect in the constitution of the tion or corporation or committee, as the case may be ~m:itt:~ validate acts or proceedinls· 37 no suit, prosecution or other legal proceeding shall lie against protection any member or employee of the corporation for anything which is ~ctiond in good faith done or intended to be done under this act ac~n un er 35 38 (1) the central government may, by notification in the offl- power to cia} ga1ette make rules to carry out the purposes of this act make rules (2) in particular, and without prejudice to the generality of the foregoing power, such rules may provide for all' or any of the following matters, namely:-(a) the term of office and the conditions of service of mem-'bt>rsj s (b) the manner in which and the conditions subject to which investments may be made by,the corporation; - (c) the manner in which, and the persons to whom, any compensation under this act may be paid; (d) the time within which any matter which may be refer- 10 red to the tribunal for decision under this act may be so referred; (e) the conditions subject to which the corporation may appoint employees; <f) any other matter which has to be or may be prescribed is  , power to mllkeregulations(3) all rules made under this section shali be laid before both housl"s of parliament as soon as may be after they are made 39 (1) the corporation may, with the previous approval of the central government, by notification in the gazette of india, make 20 regulations not inconsistent with this act and the rules made thereunder to provide for all matters for which provision is expedient for th~ purpose of giving effect to the provisions of this act (2) in particular, and without prejudice to the generality of the foregoing power, such regulations may provide for- (a) the powers and functions of the corporation which may 25 be delegated to the zonal managers; (ib) the method of recruitment of employees and agents of the corporation and the terms and conditions of service of such employees or agents; (c) the number, term of office and conditions of service of 30 members of boards constituted under section 19 (d) the territorial limits of each zone established under this act and the business to be transacted in each zone; (e) the manner in which the fund of the corporation shall be maintained; 35 (f) the maintenance of separate funds and accounts at each of the zonal otfices; - (g) the jurisdiction of each divisional office and the establishment of councils representative of policy-holders in each area served by a divisional office for the purpose of advising 40 the divisional office in respect of any matter which may be referred to it; (jt) the conduct of business at meetings of the corporation; (i) the formation of committees of the corporation and the delegation of powers and functions of tlie corporation to such committees, and the conduct of business at meetings of such s committees; (j) the form and manner in which policies may be issued and contracts binding on the corporation may 'be executed; (k) the classification of policies, whether issued by the corporation or by any insurer whose controlled business has been 10 transferred to and vested in the corporation, for the purpose of declaring differential bonuses, wherever ne,ssary; (1) the manner in which and the intervals within which the accounts of the various zonal offices, divisional offices and branch offices may be inspected and their accounts auditeq; is (m) the conditions subject to which any payment may be made' by the corporation  principles for determining compensation (see section 14) part athe compensation to be given by the corporation to an insurer 5 who has allocated to shareholders any share of the surplus as disclosed in the abstracts prepared in accordance with part n of the fourth schec:ftjle to the insurance act in respect ~f the 18slt actuarial investigation relating to his controlled business as at a date earlier than the 1st day of january, 1955, shall be computed in accordance 10 with the frovisions contained in paragraph 1 or paragraph 2, whichever is more advantageous to the insurer paragraph i-twenty times the &nnual average of the share of the suplus allocated to shareholders as disclosed in the abstracts aforesaid in respect of the last two actuarial investigations as at is dates earlier than the 1st day of january, 1955 paragraph 2-ten times the annual average of the share of the surplus allocated to shareholders as disclosed in the abstracts aforesaid in respect of the last two actuarial investigations as at dates earlier than the 1st day of january, 1955, plu8 the paid-up capital 20 or assets equivalent thereto or, in the case of a composite insurer that part of the paid-up capital or assets equivalent thereto which has or have b~n transferred to and vested in the corporation under this act less the amount, if any of expenses or losses or both capitalised by the insurer for the purposes of form a in the 25 first schedule ito the insurance act explanation i-if the aggregate of the inter-valuation periods preceding each of the last two actuarial investigations as at dates earlier /than the 1st day of january, 1955, is less than four years, such larger number of latest actuarial investigations as at dates 30 earlier than the 1st day of january, 1955, as will make the aggregate of the inter-valuation periods preceding each of such acltuarial investigations to be not less than four years shall be taken into account for the purpose of determining the annual average of the share of the surplus under paragraph 1 or paragraph 2 35 explanation 2-for the purposes of paragraphs 1 and 2 where an' insurer has allocated to shareholders more than 5 per cent of any such surplus as is referred to therein, the insurer shall be deemed to have alloca!ted only 5 per cent of the surplus and where an insurer has allocated to shareholders less than 3 per cent of any such surplus, the insurer shall be deemed to have allocated 3 per s cent of the surplus explanation 3-in the case of, any insurer incorporated outside india who makes allocations to shareholders only in relation to actuarial investigations undertaken in respect of his world business reference in this part to actuarial investigations shall be con-10 sttued as references to the actuarial investigations undertaken under the insurance act as at the same dates as the actuarial investigations in respect of his world business explanation 4-where an insurer is an insurer incorporated outside india whose paid-up capitd is outside india, the provisions 15 contained in paragraph 1 shall have effect as if a sum equal to tha/t part of the paid-up capital of the insurer as may be determined by the central government to be allocable to the con)trolled business is to, be deducted therefrom and the provisions contained in paragraph 2 shall have effect as if all the words beginning with "plus 20 the paid~up capital" and ending with "in the first schedule to the insurance act" had been omitted therefrom explanation 5-in the case of any insurer incorporated outside india, in respect of whom an order under section 27 has been made by the central government, the share of ithe surplus allocated to 2s shareholders in respect of any relevant actuarial investigation shall be arrived at as follows:-30 (a) there shall be deducted from the surplus, disclosed as a result of the relevant actuarial investigation relating to his controlled business, jnterest at 31 per cent per annum for the inter-valuation period preceding the date as at which the relevant actuarial investigation was made, calculated on the assets of· ""hieh the corporation is divested as a resuilt of an order made under sub-section (1) of section 27; (b) with respect to the balance arrived at under clause (a) an amount shall be computed such that it bears the same proportion to the balance computed under clause (a), as the liability on policies continuing to ves!t in the corporation bears to the aggregate of the liabilities on policies so continuing and on policies of which the corporation has been divested as a - result of an order under sub-section (3) of section 27 !the liabilities on policies being computed in accordance with the previsions contained in clause (b) of the second schedule the share of the surplus for the purposes of paragraphs 1 and 2 shall be that amount which bears to !the amobnt computed under clause (b) the same proportion as the share of the surplus auocated to shareholders as disclosed in the abstracts aforesaid, read with explanation 2,beaors to the surplus disclosed as a result of the teo- 5 levant actuarial investigation:  provided that-(i) in any case where the order made under section 27 is with reference to sub-section (1) only, this explanation shall have effect as if clause (b) had been omitted therefrom and as 10 if for the words, brackets and letter 'the amount computed under clause (b)', the words, brackets and letter 'the balance arrived at under clause (a)' had been substituted; and - (ii) in any case 'where the order made under section 27 is with reference to sub-section (3) only this explanation shall is have eftec!t as if clause (a) had been omitted and as if in clause (b), the words, brackets and letter 'with respect to the balance arrived at under clause (a)' had been omitted, and for the words, brackets and letter the balance computed under clause (a)', the words 'the surplus' had been substituted 20  part bthe compensation to be given by the corporation to an insurer having a share capital on which dividend or bonus is payable who has not made any such allocation as is referred !to in part a in respect of the last actuarial investigation as at a date earlier than the 2s 1st day of january, 1955, shall be the sum of the amoun\ts computed as at the 19th day of january, 1956, in accordance with the provisions of paragraph 3 less the sum of the amounts computed as at the 19th day of january, 1956, in accordance with the provisiens of paragraph 4 paragraph 3-(a) the market value of any land or buildings aaioti (b) the market value or the purchase price, whichever is less, of any shares, securities or other investments held by the insurer (c) the total amount of the prem~ums paid by the insurer in respect of all leasehold properties reduced in the case of each such 3s 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 (d) the amount of debts due to the insurer, whether secur~d or unsecured, to the extent to which they are reasonably considered to be recoverable (e) the amount of cash held by the insurer whether in deposit s with £ bank or otherwise  '(f) the vdue of all tangible assets o'ther than those falling within any of the preceding clauses paragraph 4-(a) the total amount of liabilities of the insurer to holders of policies in respect of his controlled business on ac· liabilities 10 count of matured claims on which payment has to be made (b) the total ,mount of liabilities of the insurer to holders of policies in respect of his controlled business which have not matured for payment, the liabilities in respect thereof being calculated on the following actuarial bases:-is (i) in respect of whole-life assurances and endowment assurances, the mortality table to be used shall be the oriental 20 (~5) ultimate mortality table, and an interest rate of 31 per cent per annum shall be assumed and for expenses 20 per cent of office premiums in the case of' with-profit policies and 15 per cent of office premiums in the case of non-profit policies shall be reserved; (ii) in respect of other policies such actuarial bases determined by the ac'tuary making the valuation as may be consistent with the basis specified in clause (i); and (iii) in determining the liabilities of insurers under clause (b) the actuary shall make all the usual provisions and reserves as are ordinarily done in such ceses (e') the total amount of all other liabilities of insurt'!r  - (d) where, as a result of the actuarial valuation of policy 30 liabilities made under clause (b), the life insurance fund is shown to be in surplus, a sum equal to 96 per cent of such surplus which shall be deemed to be a liability under this paragraph  part cthe compensation to be given by the corporation to an insurer 3s having no share capital or having no share capital on which -dividend or bonus is payable shall be in the form of an addition at the r£te of rupee one per thousand in respect of the sum assured (ex- cluding bonuses) under each with-profit policy  principles for dete~lmining the value of liabliities in certain cases (see section 27)the total amount of the liabilities of an insurer incorporate4, 5 outside india for the purposes of sub-section (2) of section 21 shall be the sum of the amounts computed in accordance with the follow ing provisions:-(a) the total amount of liabilities of the insurer to holders of policies in respect of his controlled business on account of 10 matured claims on which payment has to be made; (b) the total amount of liabilities of the insurer to holders of policies in respect of his controlled business which have not matured for payment, the liabilities in respect thereof being the mean of the liabilities calculated on method a and method 15 b below: method a-actuarial liability cdculated on the same bases as adopted by the insurer at the last actuarial investig£tion as at a date earlier than the first day of january, 1955 method b-actuarial liability calculated on the method known 20 as the modified net permium method of valuation, the mortality table to be used being the oriental (25-35) ultimate mortality table, an interest rate of 2! per cent per annum being assumed and the allowance for first year expenses being rs 40 per thousand rupees of the su~ assured by the policy 2s explanation-before ascerb:ining rthe liability under method a and method b, there shall be added to ear il" ," 'l~ policy in force on the 31st day of december, 1955 bonus at the same rate as declared at the said last ~(:tuarial investigation in respect of each year or part of a year the policy had, been in force since the date 30 as at which the said last actuarial investigation was made: (c) the total amount of all other liabilities of the insurer ,,' to ensure 2'bsolute security to the policy-holder in the matter of his life insurance protection, to spread insurance much more widely and in particular to the rural areas, and as a further step m-the direction of more effective nlobilisatioli of public savings, gov$rnment ~ decided to nationalise life insurance business in indiat an ordinance was promulgated in january 1956, whereby pending the passing of a bill to nationalise such business, the management of the life insuranc3 business in india was vested in the central government a bill has been separately introduced to replace that ordinance and the present bill lays down the permarient arrangements for nationalisation under this bill a life insurance corporation of india will be set up, with a share capital provided entirely by the central government, which will undertake life insurance business in india as a monopoly and into this corporation will be integrated all the insurance companies now engaged in life business, as also the organisations functioning under the control of state governments and conducting such business for the benefit of the public all the contracts for assurance executed by the corporation will be guaranteed by -the central government the schedules to the bill lay down the principles governing grant of compensation to the insurers whose business will be taken over by the corporation c d deshmukh new delhi; the 14th february, 1956  financial memorandumunder section 5(1) the original capital of rs 5 crores of the corporation will be provided by the central government this capital may be reduced by the central government on the recommendation of the corporation , in terms of section 28, all the policies issued by the corporation will be guaranteed as to payment by the central government it is unlikely that this guarantee will lead to any liabilify in fact  memorandum on delegated legislationsection 9(2) authorises the central government to make rules generally for dealing with the taking over by the corporation of life insurance business of insurers who have been transacting other business as well by means of such rules, the business of a composite insurer may 'be divided into life insurance business and general insurance business for the purpose of facilitating the taking over under section 38(1) the central government may make rules to carry out the' purposes of the bill; section 38(3) provides that all rules so made shan be laid before both houses of parliament as soon as may be after they are made section 39(1) empowers the corporation to make regulations for the purpose of ·giving effect to the provisions of the bill with the previous approval of the central government the powers deleted under section 38 are of a ·normal character  a blllto  provide for the  nat ·onalisation of life insuran~ business in india by transf~tall,~ business to acorporatiol   -escablisked f9r the' ~ and to pro~de for the regulation and <vd&orof the business of the corporation and for matters connected therewith or incidental thereto the president -has, in pursuance of clauses (i) and (3) of article 117 of the constitution of india, recommended to lok sabha the introduction ani comideration of the bill m n kaul, secretary (shn' c d deshmukh, minister of finance) 