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SECTION 23: STAFF OF THE CORPORATION
(1) For the purpose of enabling it to discharge its functions under this Act, the Corporation may employ such number of persons as it thinks fit.
(2) Every person employed by the Corporation or whose services have been transferred to the Corporation under this Act, shall be liable to serve anywhere in India.
CHAPTER 6 FINANCE, ACCOUNTS AND AUDIT
SECTION 24: FUNDS OF THE CORPORATION
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 there from.
SECTION 25: AUDIT
(1) The accounts of the Corporation shall be audited by auditors duly qualified to act as auditors of companies under the law for the time being in force relating to companies, and the auditors shall be appointed by the Corporation with the previous approval of the Central Government and shall receive such remuneration from the Corporation as the Central Government may fix.
(2) Every auditor in the performance of his duties shall have at all reasonable times access to the books, accounts and other documents of the Corporation.
(3) The auditors shall submit their report to the Corporation and shall also forward a copy of their report to the Central Government.
SECTION 26: ACTUARIAL VALUATIONS
The Corporation shall, once at least in every two years, cause an investigation to be made by actuaries into the financial condition of the10[life insurance business of the Corporation, including a valuation of the liabilities of the-Corporation in respect thereto], and submit the report of the actuaries to the Central Government.
SECTION 27: ANNUAL REPORT OF ACTIVITIES OF CORPORATION
The Corporation shall, as soon as may be, after the end of each financial year, prepare and submit to the Central Government in such form as may be prescribed a report giving an account of its activities during the previous financial year, and the report shall also give an account of the activities, if any which are likely to be undertaken by the Corporation in the next financial year.
SECTION 28: SURPLUS FROM LIFE INSURANCE BUSINESS HOW TO BE UTILIZED
If as a result of any investigation undertaken by the Corporation under section 26-any surplus emerges, ninety-five per cent of such surplus or such higher percentage thereof as the Central Government may approve shall be allocated to or reserved for the life insurance policy-holders of the Corporation and after meeting the liabilities of the Corporation, if any, which may arise under section 9, the remainder shall be paid to the Central Government or if that Government so directs, be utilized for such purposes and in such manner as that Government may determine.]
SECTION 28A: PROFITS FROM ANY BUSINESS (OTHER THAN LIFE INSURANCE BUSINESS) HOW TO BE UTILIZED
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 profits shall be paid to the Central Government.]
SECTION 29: REPORT TO BE LAID BEFORE PARLIAMENT
The Central Government shall cause the report of the auditors under section 25 -, the report of the actuaries under section 26 and the report giving an account of the activities of the Corporation under section 27-to be laid before both Houses of Parliament as soon as may be after each such report is received by the Central Government.
CHAPTER 7 MISCELLANEOUS
SECTION 30: CORPORATION TO HAVE THE EXCLUSIVE PRIVILEGE OF CARRYING ON LIFE INSURANCE BUSINESS
Except to the extent otherwise expressly provided in this Act on and from the appointed day, the Corporation shall have the exclusive privilege of carrying on life insurance business in India; and on and from the said day any certificate of registration under the
Insurance Act held by any insurer immediately before the said day shall cease to have effect in so far as it authorizes him to carry on life insurance business in India.
SECTION 31: EXCEPTION IN THE CASE OF INSURANCE BUSINESS IN RESPECT OF PERSONS RESIDING OUTSIDE INDIA
(1) Notwithstanding anything contained in section 30 -or in the Insurance 'Act, the Central Government may, by order, permit any person who has made an application in that behalf, to carry on life insurance business in India in respect of the lives of persons ordinarily resident outside India, subject to such restrictions and conditions as may be specified in the order and any such order shall be deemed to have effect as if it were a certificate of registration issued by the Controller to such person under section 3-of the Insurance Act in respect of that class of business.
(2) Nothing in sub-section (1) shall authorize any person permitted to carry on life insurance business of the nature referred to in that sub-section, to insure the life of any person ordinarily resident outside India, during any period of his temporary residence in India.
SECTION 32: POWER OF CORPORATION TO HAVE OFFICIAL SEAL IN CERTAIN CASES
The Corporation may have for use in any zonal office, divisional office or in any office outside India an official seal which shall be a facsimile of the common seal of the Corporation with the addition on its face of the name of the zonal office, divisional office or other office where it is to be used, and any such official seal may be affixed to any deed or document to which the Corporation is a party.
SECTION 33: REQUIREMENT OF FOREIGN LAWS TO BE COMPLIED WITH IN CERTAIN CASES
Where any property or rights appertaining to the controlled business of an insurer are transferred to and vested in the Corporation under this Act or would be so transferred and vested but for the fact that such transfer and vesting are governed otherwise than by the law of India, the insurer shall comply with such directions as 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.
SECTION 34: REVESTING OF CERTAIN SHARES VESTED IN THE ADMINISTRATOR-GENERAL
Notwithstanding anything contained in the Insurance Act, all shares which have vested in the Administrator -General of any State under sub-section (8) of section 6A-of that Act and which have not been disposed of in accordance with the provisions of that subsection before the appointed day shall, on payment of the amount of expenditure, if any, incurred by the Administrator-General in relation to such shares by the persons who would have been entitled to those shares if the said sub-section had not been enacted, revest in such persons.
SECTION 35: REPATRIATION OF ASSETS AND LIABILITIES IN THE CASE OF FOREIGN INSURERS IN CERTAIN CASES
(1) Any insurer incorporated outside India may, before the appointed day, make an application to the Central Government stating that among the assets appertaining to the controlled business of the insurer there are assets brought into India by the insurer for the purpose of building up his life insurance business in India which notwithstanding anything contained in section 7-, should not be transferred to and vested in the Corporation.
(2) On receipt of an application under sub-section (1), the Central Government shall determine the value of the assets of the insurer appertaining to his controlled business in existence on the 31st day of December, 1955, computed as at that date in accordance with the provisions contained in paragraph 3 of Part B of the First Schedule, and deduct there from the total amount of the liabilities of the insurer appertaining to his controlled business in existence on the 31st day of December, 1955, computed as at that date in accordance with the provisions contained in the Second Schedule; and if there is any excess, the Central Government may, by order, direct that such assets equivalent in value to the excess as may be specified in the order shall not be transferred to or vested in the Corporation or where the order is made after the appointed, day, that the Corporation shall be divested of the said assets. (3) In the case of any insurer incorporated outside India, the Central Government may also, by order, direct that any such liabilities in respect of life insurance policies expressed in any foreign currency issued on the lives of persons who are not citizens of India as are specified in the order together with any such assets necessary to meet the liabilities, as may be so specified, shall not be transferred to or vested in the Corporation or, if the order is made after the appointed day, that the
Corporation shall be divested of such liabilities and assets as aforesaid.
(4) The amount of liabilities in respect of the policies referred to in an order made under sub-section (3) shall be computed as at 31st day of December 1955,-
(a) in any case where in respect of the insurer concerned an order has been made under sub-section (2), in accordance with the provisions contained in clause (b) of the Second Schedule; and
(b) in any other case, in accordance with method A specified in 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.
SECTION 36: CONTRACTS OF CHIEF AGENTS AND SPECIAL AGENTS TO TERMINATE
Notwithstanding anything contained in the Insurance Act or in any other law for the time being in force, every contract appertaining to controlled business subsisting immediately before the appointed day,-
(a) between an insurer and his chief agent or between an insurer and a special agent; or
(b) between the chief agent of an insurer and a special agent; shall, as from the appointed day cease to have effect and all rights accruing to the chief agent or the special agent under any such contract shall terminate on that day: Provided that in every such case compensation shall be given by the Corporation to the chief agent or the special agent, as the case may be in accordance with the principles contained in the Third Schedule, and the provisions of sub-section (2) of section 16-shall, so far as may be apply in every such case.
SECTION 37: POLICIES TO BE GUARANTEED BY CENTRAL GOVERNMENT
The sums assured by all policies issued by the Corporation including any bonuses declared in respect thereof and, subject to the provisions contained in section 14 -the amounts assured by all policies issued by any insurer the liabilities under which have vested in the Corporation under this Act, and all bonuses declared in respect thereof, whether before or after the appointed day, shall be guaranteed as to payment in cash by the Central Government.
SECTION 38: LIQUIDATION OF CORPORATION
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 order of the Central Government and in such manner as that
Government may direct.
SECTION 39: SPECIAL PROVISIONS FOR WINDING UP OF CERTAIN INSURERS
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 provisions of this Act, collected and distributed any moneys paid to him by the Corporation by way of compensation or otherwise and has also 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 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 certificate has been granted shall cause the certificate to be published in the Official Gazette and upon the publication thereof the insurer shall be dissolved.
SECTION 40: PENALTY FOR WITHHOLDING PROPERTY, ETC
If any person wilfully withholds or fails to deliver to the Corporation as required by section 13 -, any property or any books, documents or other papers which may be in his possession or unlawfully retains possession of any property of an insurer which has been transferred to and vested in the Corporation under this Act or wilfully applies any such property to purposes other than those expressed in or authorized by this Act, he shall, on the complaint of the Corporation, be punishable with imprisonment which may extend to one year, or with fine which may extend to one thousand rupees, or with both.
SECTION 41: TRIBUNAL TO HAVE EXCLUSIVE JURISDICTION IN CERTAIN MATTERS
No Civil Court shall have jurisdiction to entertain or adjudicate upon any matter which a Tribunal is empowered to decide or determine under this Act.
SECTION 42: ENFORCEMENT OF DECISIONS OF TRIBUNALS
Any decision of a Tribunal may be enforced in any Civil Court within the local limits of whose jurisdiction the person against whom the decision is to be enforced actually and voluntarily resides or carries on business or personally works for gain or owns any property, as if it were a decree passed by that Court.
SECTION 43: APPLICATION OF THE INSURANCE ACT
(1) The following sections of the Insurance Act shall, so far as may be, apply to the Corporation as they apply to any other insurer, namely,- Sections 2,2B, 3, 18,26,33,38,39,41,45,46,47A, 50,51,52, 110A, 110B, 110C, 119, 121, 122 and 123.
(2) The Central Government shall, as soon as may be after the commencement of this Act,- by notification in the Official Gazette, direct that the following sections of the Insurance Act shall apply to the Corporation subject to such conditions and
modifications as may be specified in the notification, namely- Sections 2D, 10,11,13,14,15,20,21,22,23,25; 27A, 28A, 35,36,37,40,40A, 40B, 43,44, 102 to l06,107 to 110,111,113,114 and 116A. 14[(2A)Section 42-of the Insurance Act shall have effect in relation to the issue to any individual of a licence to act as an agent for the purpose of soliciting or procuring life insurance business for the Corporation as if the reference to an officer authorized by the Controller in this behalf in sub-section (1) thereof included a reference to an officer of the Corporation authorised by the Controller in this behalf.]
(3) The Central Government may, by notification in the Official Gazette, direct that all or any of the provisions of the Insurance Act other than those specified in sub -section (1) or sub-section (2), shall apply to the Corporation subject to such conditions and modifications as may be specified in the notification.
(4) Every notification issued under sub-section (2) or sub-section (3) shall be laid for not less than thirty days before both Houses of Parliament as soon as possible after it is issued, and shall be subject to such modifications as Parliament may make during the session in which it is so laid or the session immediately following.
(5) Save as provided in this section, nothing contained in the Insurance Act shall apply to the Corporation.
SECTION 43A: DEDUCTION OF INCOME-TAX NOT TO BE MADE ON INTEREST OR DIVIDEND
Notwithstanding anything contained in or section l94 of the Income-tax Act, 1961-, no deduction of income-tax shall be made on any interest or dividend payable to the Corporation in respect of any securities or shares owned by it or in which it has full beneficial interest.]
SECTION 44: ACT NOT TO APPLY IN CERTAIN CASES
Nothing contained in this Act shall apply in relation to-
(a) any insurer whose business is .being voluntarily wound up or is being wound up under the orders of the Court;
(b) any insurer to whom the Insurance Act does not apply by reason of the provisions contained in section 2E -thereof;
(c) any composite insurer in respect of the management of whose affairs an Administrator has been appointed under section 52A of the Insurance Act-;
(d) the scheme run by the Central Government known as the Post Office Life Insurance Fund;
(e) any approved superannuation fund as defined in clause (a) of section 58 N of the Indian Income-tax Act, 1922, which is in existence on the appointed day;
(f) any scheme in existence on the appointed day or any scheme framed after the appointed day with the approval of the Central Government whereby, in consideration of certain compulsory deductions made by Government from the salaries of its employees as part of the conditions of service, the payment of money is assured by Government on the death of the employee concerned or on the happening of any contingency dependent on his life;
16[(g) any Family Pension Scheme framed under the Coal Mines Provident Fund, Family Pension and Bonus Schemes Act, 1948, or the Employees' Provident Funds and Family Pension Fund Act, 1952, for the purpose of providing family pension and life insurance benefits to the employees covered by the said Scheme.]
SECTION 45: SPECIAL PROVISIONS REGARDING TRANSFER OF CONTROLLED BUSINESS OF CERTAIN COMPOSITE INSURERS
Notwithstanding anything contained in clause (c) of section 44-, the Central Government may, by notification in the Official Gazette, direct that on and with effect from Such date as may be specified in the notification the assets and liabilities appertaining to the controlled business of a composite insurer in respect of the management of whose affairs an Administrator has been appointed under section 52 -A of the Insurance Act-shall be transferred to and vested in the Corporation, and on the issue of such a notification
the provisions of this Act shall, so far as may be, apply in relation to such insurer and to the transfer and vesting of the assets and liabilities of his controlled business in the Corporation as they apply in relation to all other insurers and to the transfer and vesting of the assets and liabilities of their controlled business in the Corporation, subject to the modification that references in this Act to the appointed day shall be construed as references to the day specified in the notification.]
SECTION 46: DEFECTS IN CONSTITUTION OF CORPORATION OR COMMITTEES NOT TO INVALIDATE ACTS OR PROCEEDINGS
No act or proceeding of the Corporation or of any Committee of the Corporation shall be called in question on the ground merely of the existence of any vacancy or defect in the constitution of the Corporation or Committee, as the case may-be.
SECTION 47: PROTECTION OF ACTION TAKEN UNDER ACT
No suit, prosecution or other legal proceeding shall lie against any member or employee of the Corporation for anything which is in good faith done or intended to be done under this Act.
SECTION 48: POWER TO MAKE RULES
(1) The Central Government may, by notification in the Official Gazette, make rules' to carry out the purposes of this Act.
(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 members;
(b) the manner in which the moneys and other assets belonging to any such fund as is referred to in section 8-shall be apportioned between the trustees of the fund and the Corporation;
(c) the services which the chief agent should have rendered for the purpose of the proviso to section 12-;
19[(cc) the terms and conditions of service of the employees and agents of the Corporation, including those who became employees and agents of the Corporation on the appointed day under this Act;]
(d) the jurisdiction of the Tribunals constituted under section 17-;
(e) the manner in which, and the persons to whom, any compensation under this Act may be paid;
(f) the time within which any matter which may be referred to a Tribunal for decision under this Act may be so referred;
(g) the manner in which and the conditions subject to which investments may be made by the Corporation;
(h) the manner in which an Employees and Agents Relations Committee may be constituted for each zonal office;
(i) the form in which the report giving an account of the activities of the Corporation shall be prepared;
(j) the conditions subject to which the Corporation may appoint employees;
(k) the fees payable under this Act and the manner in which they are to' be collected;
(1) any other matter which has to be or may be prescribed.
20[(2A) The regulations and other provisions as in force immediately before the commencement of the Life Insurance Corporation (Amendment) Act, 1981, with respect to the terms and conditions of service of employees and agents of the Corporation including those who became employees and agents of the Corporation on the appointed day under this Act, shall be deemed to be rules made under clause (cc) of sub-section (2) and shall, subject to the other provisions of this section, have effect accordingly:
(2B) The power to make rules conferred by clause (cc) of sub-section (2) shall include -
(i) the power to give retrospective effect to such rules; and
(ii) the power to amend by way of addition, variation or repeal, the regulations and other provisions referred to in sub-section (2A), with retrospective effect, from a date not earlier than the twentieth day of June, 1979,
(2C) The provisions of clause (cc) of sub-section (2) and sub-section (2B) and any rules made under the said clause (cc) shall have effect, and any such rule made with retrospective effect from any date shall also be deemed to have had effect from that date, notwithstanding any judgment, decree or order of any court, tribunal or other authority and notwithstanding anything contained in the Industrial Disputes Act, 1947 or any other law or any agreement, settlement, award or other instrument for the time being in force.]
21[(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]
SECTION 48A: ACT TO APPLY TO GOA, DAMAN AND DIU SUBJECT TO MODIFICATIONS
The provisions of this Act shall, in their application to the Union territory of Goa, Daman and Diu, have effect subject to the following modifications, namely,-
SECTION 49: POWER TO MAKE REGULATIONS
26(1) The Corporation may, with the previous approval of the Central government, by notification in the Gazette of India, make regulations not inconsistent with this Act and the rules made there under to provide for all matters for which provision is expedient for the 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 be delegated to the Zonal Managers;
(b) the method of recruitment of employees and agents of the Corporation23[ * * * * * * * * * * * * * * * *]24 [* * * * * * * * * * * ** * * * * ]
(c). the number, term of office and conditions of service of members of Boards constituted under section 22-;
(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;
(f) the maintenance of separate funds and accounts at each of the zonal offices;
(g) the jurisdiction of each divisional office and the establishment of Councils representative of policy holder s in each area served by a divisional office for the purpose of advising the divisional office in respect of any matter which may be referred to it;
(h) 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 the Corporation to such Committees, and the conduct of business at meetings of such 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 transferred to and vested in the Corporation, for the purpose of declaring differential bonuses, wherever necessary;
(l) 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 audited;
(m) the conditions subject to which any payment may be made by the Corporation.
25[(3) Every regulation made under this section shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry, of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.]
Footnotes:
3. 1st September, 1956, see S.R.O., 1937, dated 30-8-1956 published in Gazette of India. 30-8-1956, Pt.II- sec. 3, Ext., p. 1799.
4. Substituted for the word "fifteen" by the Public Financial Institutions Laws (Amendment) Act, 1975
(52 of 1975), sec. 40 (16-2-1976).
6. Substituted for the former sub-section (2) by the Life Insurance Corporation (Amendment) Act, 1957 (17 of 1957), section 2 (6-6-1957).
7. Substituted for the words "vested in it" by the Repealing and Amending Act, 1957 (36 of 1957), section 3 and Schedule 11 (17-9-1957).
8. Bombay is the place so specified-See S.R.O. 1939, dated 30-8-1956, published in Gaz. of Ind., 1956, Extra, Pt. II, section 3, page 1799.
9. Substituted for the words "seven members of whom not less than three" by the Public Financial Institutions Laws (Amendment) Act, 1975 (52 of 1975), S. 42 (16-2-1976).
10. Substituted for the words "business of the Corporation, including a valuation of the liabilities of the Corporation", by the Life Insurance Corporation (Amendment) Act, 1965 (33 of 1965), section 2 (29-9-1965)
14. Inserted by the Life Insurance Corporation (Amendment) Act, 1957 (17 of 1957), S. 3 (6-6-1957).
16. Inserted by Labour Provident Fund Laws (Amendment) Act, 1971 (16 of 1971), Section 31 (23-4-1971).
19. Inserted and deemed to have been so inserted w.r.e.f. 20-6-1979 by Life Insurance Corporation (Amendment) Act, 1981 (1 of 1981), Section 2 (a).
20. Inserted, by Life Insurance Corporation (Amendment) Act, 1981, S. 2 (b)(31-l-81).
21. Substituted by Financial Institutions Laws (Amendment) Act, 1975 (52 of 1975), S. 43 (16-2-1976).
24. Cl. (bb) omitted, by Life Insurance Corporation (Amendment) Act, 1981, S. 3(a)(ii).
25. Added, by Life Insurance Corporation (Amendment) Act, 1981, S. 3 (b).
26. For Life Insurance Corporation of India (Agents) Regulations, 1972-See Gaz. of India, 1-5-1972, Pt.
III, S. 4, Ext., p. 1.
LIFE INSURANCE CORPORATION OF INDIA CLASS III AND GLASS IV EMPLOYEES (BONUS AND DEARNESS ALLOWANCE) RULES, 1981
In exercise of the powers conferred by Section 48 of the Life Insurance Corporation Act, 1956 (31 of 1956), as amended by the Life Insurance Corporation (Amendment) Ordinance, 1981 (Ordinance No. 3 of 1981), the Central Government hereby makes the following rules, namely:-
RULE 01: SHORT TITLE AND COMMENCEMENT
(1) These rules may be called the Life Insurance Corporation of India Class III and Glass IV Employees (Bonus and Dearness Allowance) Rules, 1981.
(2) This rule and Rule 4-shall come into force on the date of th
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