18. Power of Central Government to issue directions.—(1) Without prejudice to the foregoing
provisions of this Act, the Authority shall, in exercise of its powers or the performance of its functions
under this Act, be bound by such directions on questions of policy, other than those relating to technical
and administrative matters, as the Central Government may give in writing to it from time to time:
Provided that the Authority shall, as far as practicable, be given an opportunity to express its views
before any direction is given under this sub-section.
(2) The decision of the Central Government, whether a question is one of policy or not, shall be final.
19. Power of Central Government to supersede Authority.—(1) If, at any time the Central
Government is of the opinion,—
(a) that, on account of circumstances beyond the control of the Authority, it is unable to discharge
the functions or perform the duties imposed on it by or under the provisions of this Act; or
(b) that the Authority has persistently defaulted in complying with any direction given by the
Central Government under this Act or in the discharge of the functions or performance of the duties
imposed on it by or under the provisions of this Act and as a result of such default the financial
position of the Authority or the administration of the Authority has suffered; or
(c) that circumstances exist which render it necessary in the public interest so to do,
the Central Government may, by notification and for reasons to be specified therein, supersede the
Authority for such period, not exceeding six months, as may be specified in the notification and appoint a
person to be the Controller of Insurance under section 2B of the Insurance Act, 1938 (4 of 1938), if not
already done:
Provided that before issuing any such notification, the Central Government shall give a reasonable
opportunity to the Authority to make representations against the proposed supersession and shall consider
the representations, if any, of the Authority.
(2) Upon the publication of a notification under sub-section (1) superseding the Authority,—
(a) the Chairperson and other members shall, as from the date of supersession, vacate their offices
as such;
(b) all the powers, functions and duties which may, by or under the provisions of this Act, be
exercised or discharged by or on behalf of the Authority shall, until the Authority is reconstituted
under sub-section (3), be exercised and discharged by the Controller of Insurance; and
(c) all properties owned or controlled by the Authority shall, until the Authority is reconstituted
under sub-section (3), vest in the Central Government.
(3) On or before the expiration of the period of supersession specified in the notification issued under
sub-section (1), the Central Government shall reconstitute the Authority by a fresh appointment of its
Chairperson and other members and in such case any person who had vacated his office under clause (a)
of sub-section (2) shall not be deemed to be disqualified for reappointment.
(4) The Central Government shall cause a copy of the notification issued under sub-section (1) and a
full report of any action taken under this section and the circumstances leading to such action to be laid
before each House of Parliament at the earliest.
20. Furnishing of returns, etc., to Central Government.—(1) The Authority shall furnish to the
Central Government at such time and in such form and manner as may be prescribed, or as the Central
Government may direct to furnish such returns, statements and other particulars in regard to any proposed
or existing programme for the promotion and development of the insurance industry as the Central
Government may, from time to time, require.
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(2) Without prejudice to the provisions of sub-section (1), the Authority shall, within nine months
after the close of each financial year, submit to the Central Government a report giving a true and full
account of its activities including the activities for promotion and development of the insurance business
during the previous financial year.
(3) Copies of the reports received under sub-section (2) shall be laid, as soon as may be after they are
received, before each House of Parliament.
21. Chairperson, members, officers and other employees of Authority to be public servants.—
The Chairperson, members, officers and other employees of the Authority shall be deemed, when acting
or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the
meaning of section 21 of the Indian Penal Code (45 of 1860).
22. Protection of action taken in good faith.—No suit, prosecution or other legal proceedings shall
lie against the Central Government or any officer of the Central Government or any member, officer or
other employee of the Authority for anything which is in good faith done or intended to be done under
this Act or the rules or regulations made thereunder:
Provided that nothing in this Act shall exempt any person from any suit or other proceedings which
might, apart from this Act, be brought against him.
23. Delegation of powers.— (1) The Authority may, by general or special order in writing, delegate
to the Chairperson or any other member or officer of the Authority subject to such conditions, if any, as
may be specified in the order, such of its powers and functions under this Act as it may deem necessary.
(2) The Authority may, by a general or special order in writing, also form committees of the members
and delegate to them the powers and functions of the Authority as may be specified by the regulations.
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[23A. Powers of Authority not to apply to International Financial Services Centre.—
Notwithstanding anything contained in any other law for the time being in force, the powers exercisable
by the Authority under this Act, —
(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of
section 18 of the Special Economic Zones Act, 2005 (28 of 2005);
(b) shall be exercisable by the International Financial Services Centres Authority established
under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019,
in so far as regulation of financial products, financial services and financial institutions that are permitted
in the International Financial Services Centres are concerned.]
24. Power to make rules.—(1) The Central Government may, by notification, make rules for
carrying out the provisions 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 salary and allowances payable to, and other terms and conditions of service of, the
members other than part-time members under sub-section (1) of section 7;
(b) the allowances to be paid to the part-time members under sub-section (2) of section 7;
(c) such other powers that may be exercised by the Authority under clause (q) of sub-section (2)
of section 14;
(d) the form of annual statement of accounts to be maintained by the Authority under
sub-section (1) of section 17;
(e) the form and manner in which and the time within which returns and statements and
particulars are to be furnished to the Central Government under sub-section (1) of section 20;
1. Ins. by Act 50 of 2019, s. 33 and the second Schedule (w.e.f. 1-10-2020).
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(f) the matters under sub-section (5) of section 25 on which the Insurance Advisory Committee
shall advise the Authority;
(g) any other matter which is required to be, or may be, prescribed, or in respect of which
provision is to be or may be made by rules.
25. Establishment of Insurance Advisory Committee.—(1) The Authority may, by notification,
establish with effect from such date as it may specify in such notification, a Committee to be known as
the Insurance Advisory Committee.
(2) The Insurance Advisory Committee shall consist of not more than twenty-five members excluding
ex officio members to represent the interests of commerce, industry, transport, agriculture, consumer fora,
surveyors, agents, intermediaries, organisations engaged in safety and loss prevention, research bodies
and employees‟ association in the insurance sector.
(3) The Chairperson and the members of the Authority shall be the ex officio Chairperson and
ex officio members of the Insurance Advisory Committee.
(4) The objects of the Insurance Advisory Committee shall be to advise the Authority on matters
relating to the making of the regulations under section 26.
(5) Without prejudice to the provisions of sub-section (4), the Insurance Advisory Committee may
advise the Authority on such other matters as may be prescribed.
26. Power to make regulations.—(1) The Authority may, in consultation with the Insurance
Advisory Committee, by notification, make regulations consistent with this Act and the rules made
thereunder to carry out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may
provide for all or any of the following matters, namely:—
(a) the time and places of meetings of the Authority and the procedure to be followed at such
meetings including the quorum necessary for the transaction of business under sub-section (1) of
section 10;
(b) the transaction of business at its meetings under sub-section (4) of section 10;
(c) the terms and other conditions of service of officers and other employees of the Authority
under sub-section (2) of section 12;
(d) the powers and functions which may be delegated to committees of the members under
sub-section (2) of section 23; and
(e) any other matter which is required to be, or may be, specified by regulations or in respect of
which provision is to be or may be made by regulations.
27. Rules and regulations to be laid before Parliament.—Every rule and every regulation made
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 regulation or
both Houses agree that the rule or regulation should not be made, the rule or 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 rule or regulation.
28. Application of other laws not barred.—The provisions of this Act shall be in addition to, and
not in derogation of, the provisions of any other law for the time being in force.
29. Power to remove difficulties.—(1) If any difficulty arises in giving effect to the provisions of
this Act, the Central Government may, by order published in the Official Gazette, make such provisions
not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty:
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Provided that no order shall be made under this section after the expiry of two years from the
appointed day.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each
House of Parliament.
30. Amendment of Act 4 of 1938.—The Insurance Act, 1938 shall be amended in the manner
specified in the First Schedule to this Act.
31. Amendment of Act 31 of 1956.—The Life Insurance Corporation Act, 1956 shall be amended in
the manner specified in the Second Schedule to this Act.
32. Amendment of Act 57 of 1972.—The General Insurance Business (Nationalisation) Act, 1972
shall be amended in the manner specified in the Third Schedule to this Act.