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 to registration under the Insurance Act held by any insurer immediately before the said
day shall cease to have effect in so far as it authorises him to carry on life insurance business in India.
1
[30A. Exclusive privilege of Corporation to cease.—Notwithstanding anything contained in this
Act, the exclusive privilege of carrying on life insurance business in India by the Corporation shall cease
on and from the commencement of the Insurance Regulatory and Development Authority Act, 1999, and
the Corporation shall, thereafter, carry on life insurance business in India in accordance with the
provisions of the Insurance Act, 1938 (4 of 1938).]
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 registrations issued by the 2
[Authority] to such person under section 3 of
the Insurance Act in respect of that class of business.
1. Ins. by Act 41 of 1999, s. 31 and the Second Schedule (w.e.f. 19-4-2000).
2. Subs. by Act 41 of 1999, s. 31 and the Second Schedule, for “Controller” (w.e.f. 19-4-2000).
36
(2) Nothing in sub-section (1) shall authorise 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.
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 fact 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.
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.
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 the section 6A of that Act and which have not been disposed of in accordance
with the provisions of that sub-section 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.
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 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 therefrom 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 the 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.
Explanation.—In computing the amount of liabilities in respect of the policies referred to in this
sub-section, allowance shall be made for receipts and payments in respect of such policies from the 31st
day of December, 1955, up to the date of the order.
37
(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.
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.
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.
1
[Provided that the Corporation shall endeavour that its funds are invested in the attractive schemes
formulated by it to ensure increased bonus to policyholders while having least investment risk so as to
enable the Corporation to play a greater role in economic enrichment of the masses while maintaining its
position as a leading player in the market.]
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.
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.
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 authorised by this Act, he shall, on the complaint of the
Corporation, be punishable with imprisonment which may extent to one year, or with fine which may
extend to one thousand rupees, or with both.
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.
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
1. The proviso ins. by Act 8 of 2012, s. 6 (w.e.f. 31-3-2012).
38
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.
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 106, 107 to 110, 111, 113, 114 and 116A.
1
[(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 authorised by the 2
[Authority] in this behalf in sub-section (1)
thereof included a reference to an officer of the Corporation authorised by the 2
[Authority] in this behalf.]
(3) The Central Government may, be notification in the Official Gazette, direct that all or any of the
provision 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.
43A. [Deduction of income-tax not to be made on interest or dividend.] Omitted by the Finance
Act, 2002 (20 of 2002), s. 157 (w.e.f. 1-6-2002).
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;
3
[Provided that nothing contained in this clause shall apply on and from the date on which the
provisions contained in section 2E of the Insurance Act, 1938 (4 of 1938) shall cease to operate.]
(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 58N of the Indian
Income-tax Act, 1922 (11 of 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
1. Ins. by Act 17 of 1957, s. 3 (w.e.f. 6-6-1957).
2. Subs. by Act 41 of 1999, s. 1, for “Controller” (w.e.f. 19-4-2000).
3. The proviso ins. by Act 8 of 2012, s. 7 (w.e.f. 31-3-2012).
39
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.
1
[(g) any Family Pension Scheme Framed under the Coal Mines Provident Fund, Family Pension
and Bonus Schemes Act, 1948 (46 of 1948), or the Employees Provident Funds and Family Pension
Fund Act, 1952 (19 of 1952), for the purpose of providing family pension and life assurance benefits
to the employees covered by the said Scheme.]
2
[45. Special provisions regarding transfer of controlled business of certain composite
insurer.—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 52A of the
Insurance Act shall be transferred to the 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 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.]
3
[46. Defects in constitution of Corporation or Committees or in appointment or nomination of
directors not to invalidate acts or proceedings.—(1) No act or proceeding of the Corporation or of its
Board or any Committee thereof shall be called in question on the ground merely of the existence of any
vacancy or defect in the constitution of the Corporation or the Board or such Committee, as the case may
be.
(2) No act done by an individual as a director shall be deemed to be invalid, notwithstanding that it
was subsequently noticed that his appointment or nomination, as the case may be, was invalid by reason
of any defect or disqualification or had terminated by virtue of any provision contained in this Act:
Provided that nothing in this sub-section shall be deemed to give validity to any act done by such
individual as director after his appointment or nomination, as the case may be, has been noticed by the
Corporation to be invalid or to have terminated.
47. Protection of action taken under this Act.—(1) No suit, prosecution or other legal proceeding
shall lie against any director or employee of the Corporation for anything which is in good faith done or
intended to be done in pursuance of this Act or of any rules or regulations made thereunder.
(2) A director who is not a whole-time director shall be held liable only in respect of such acts of
omission or commission of the Corporation which had occurred with his knowledge, attributable through
Board processes, and with his consent or connivance or where he had not acted diligently.
Explanation.—For the purposes of this sub-section, the reference to “Board” shall include
Committees of the Board.]
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 4
[directors];
5
[(aa) the manner of disclosure of interest by a director under section 4B;
1. Ins. by Act 16 of 1971, s. 31 and the Third Schedule (w.e.f. 23-4-1971).
2. Ins. by Act 17 of 1957, s. 4 (w.e.f. 6-6-1957).
3. Subs. by Act 13 of 2021, s. 143, sections 46 and 47 (w.e.f. 30-6-2021).
4. Subs. by s. 144, ibid., for “members” (w.e.f. 30-6-2021).
5. Subs. by s.144, ibid., for clause (aa) (w.e.f. 30-6-2021).
40
(ab) the conditions subject to which the Board may consent to related party transactions under
section 4C;
(ac) the securities and instruments which may be issued under section 5;
(ad) the manner of reservation in favour of life insurance policyholders and allotment against
such reservation, in relation to a public issue, under clause (a) of sub-section (9) of section 5;]
(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;
1
[(cc) the terms and conditions of service of the employees 2*** of the Corporation, including
those who became employees 2*** 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;
3
[(ha) the manner in which general meetings shall be held, and the business to be transacted and
procedure to be followed thereat;
(hb) the quorum for a general meeting, and the manner of holding the meeting if it could not be
held for want of quorum and was adjourned under section 23A;
(hc) the manner in which persons may attend a general meeting and exercise their vote;
(hd) the manner in which notices may be served on behalf of the Corporation upon members or
other persons;
(he) the form and manner in which the financial statements referred to in sub-section (8) of
section 24B may be issued, circulated or published;
(hf) matters that may be prescribed under clause (n) of sub-section (1) of section 24C;
(hg) the manner and procedure of selection and conditions of appointment of auditors under subsection (1) of section 25;
(hh) the form in which an auditor who has resigned shall indicate the reasons and other facts
relevant to the resignation under sub-section (2) of section 25A;
(hi) the matters to be prescribed under clause (j) of sub-section (3) of section 25B;
(hj) the duties and powers of the Corporation’s auditor with reference to the audit of a branch or
office of the Corporation and the auditor thereof, under sub-section (6) of section 25B;
(hk) the details, procedure and documents under sub-section (6) of section 28C.]
(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. Ins. by Act 1 of 1981, s. 2 (w.e.f. 20-6-1979).
2. The words “and agents” omitted by Act 8 of 2012, s. 8 (w.e.f. 31-3-2012).
3. Ins. by Act 13 of 2021, s. 144 (w.e.f. 30-6-2021).
41
(l) any other matter which has to be or may be prescribed;
1
[(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
provision refereed 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 judgement, decree or order of any
court, tribunal or other authority and notwithstanding anything contained in the Industrial Disputes
Act, 1947 (14 of 1947), or any other law or any agreement, settlement, award or other instrument for the
time being in force.]
2
[(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 preciously done
under that rule.]
49. Power to make regulations.—(1) The 3
[Board] 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 thereunder 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 3
[Board] which may be delegated to the Zonal Managers;
4
[(b) the method of recruitment of employees and agents of the Corporation and the terms and
conditions of the agents;]
5* * * * *
6* * * * *
(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 7
[fund or funds] of the Corporation shall be maintained;
(f) the maintenance of separate funds and accounts at each of the zonal offices;
1. Ins. by Act 1 of 1981, s. 2 (w.e.f. 31-1-1981).
2. Subs. by Act 52 of 1975, s. 43, for sub-section (3) (w.e.f. 16-2-1976).
3. Subs. by Act 13 of 2021, s. 145, for “Corporation” (w.e.f. 30-6-2021).
4. Subs. by Act 8 of 2012, s. 9, for clause (b) (w.e.f. 31-3-2012).
5. Clause (bb) omitted by Act 1 of 1981, s. 3 (w.e.f. 31-1-1981).
6. Clause (c) omitted by Act 13 of 2021, s. 145 (w.e.f. 30-6-2021).
7. Subs. by s. 145, ibid., for “Fund” (w.e.f. 30-6-2021).
42
(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 the divisional
office in respect of any matter which may be referred to it;
1
[(h) the manner in which meetings of the Board and its Committees shall be held, the business to
be transacted and procedure to be followed thereat, and the quorum therefor;]
2* * * * *
3* * * * *
(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 purposes 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.
4
[(n) the manner of election of directors under clause (f) of sub-section (2) of section 4;
(o) the form and manner of registers to be kept and maintained under sub-section (1) of section
5B;
(p) the manner of nomination by an individual registered member or joint holder of shares, the
manner of variation or cancellation of such nomination, and the manner of nomination in favour of a
minor, under section 5E;
(q) the manner in which and the conditions subject to which shares, including partly paid-up
shares, may be issued, held, transferred and registered;
(r) the maintenance and operation of the funds and reserves under section 24;
(s) the form and manner in which the books and records referred to in section 24A may be kept;]
4
[(2A) Any reference in the regulations as in force immediately before the coming into force
of section 132 of the Finance Act, 2021 to “Investment Committee” shall be construed as a reference to
the Investment Committee of the Board referred to in section 19A.]
5
[(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].
6
[50. Form, manner, etc., for companies to apply with modifications.—Where this Act provides
that the form or manner or period or details in respect of any declaration to be made or the particulars to
be included in any register to be maintained shall be such as may be prescribed for a company under the
Companies Act, such prescribed form or manner or period or details or particulars, as the case may be,
shall apply subject to such modifications, exceptions and conditions that the Central Government may, by
notification, specify.
1. Subs. by Act 13 of 2021, s. 145, for clause (h) (w.e.f. 30-6-2021).
2. Clause (i) omitted by s. 145, ibid. (w.e.f. 30-6-2021).
3. Omitted by Act 8 of 2012, s. 9 (w.e.f. 31-3-2012).
4. Ins. by Act 13 of 2021, s. 145 (w.e.f. 30-6-2021).
5. Ins. by Act 1 of 1981, s. 3 (w.e.f. 31-1-1981).
6. Ins. by Act 13 of 2021, s. 146 (w.e.f. 30-6-2021).
43
51. Power to remove difficulties.—(1) If any difficulty arises in giving effect to the provisions of
this Act as amended by Part III of Chapter VI of the Finance Act, 2021, the Central Government may, by
order published in the Official Gazette, make such provisions, not inconsistent with the provisions of this
Act, as appear to it to be necessary or expedient for removing the difficulty:
Provided that no such order shall be made after the expiry of a period of three years from the date of
commencement of Part III of Chapter VI of the Finance Act, 2021.
(2) Every order made under this section shall, as soon as may be after it is made, be laid on the table
of each House of Parliament.]