THE INSURANCE ACT, 1938, PART II, INVESTIGATION

PART II

INVESTIGATION

Power of Chief Controller of Insurance to order investigation33. (1) The Chief Controller may, at any time investigate the affairs of an insurer and, wherever necessary, employ an auditor or actuary or both for assisting him in any such investigation.

(2) It shall be the duty of every manager, managing director or other officer of the insurer to produce before the Chief Controller, auditor or actuary all such books of account, registers and other documents in his custody or power and to furnish him with any such statement or information relating to the affairs of the insurer within such time as the Chief Controller, auditor or actuary may require.

(3) When an investigation is made under this section, the Chief Controller may, after giving an opportunity to the insurer to make a representation in writing or be heard in person, by order in writing,-

(a) require the insurer to take such action in respect of any matter arising out of the investigation as he may think fit to secure compliance with the provisions of this Act, or

(b) cancel the registration of the insurer under clause (f) of sub-section (4) of section 3, or

(c) apply to the Court for the winding up of the insurer, if a company, whether the registration of the insurer has been cancelled under clause (b) or not.

(4) No order made under this section other than an order made under clause (b) of sub-section (3) shall be called in question in any Court.

(5) All expenses of, and incidental to, any investigation made under this section shall be defrayed by the insurer, and shall have priority as debts due from the insurer and be recoverable as an arrear of land revenue.

Powers of investigator

  1. All the books and records of every insurer specified in sub-clause (a) (ii) or sub-clause (b) of clause (9) of section 2 in respect of all insurance business transacted by him and in the case of any other insurer in respect of the insurance business transacted by him in Bangladesh shall at all reasonable times be open to inspection by the Chief Controller of Insurance or any other person appointed by him in this behalf.

Power to give directions to the insurer52[34A. (1) The Chief Controller of Insurance may, from time to time, issue such directions as he may deem fit to all or any of the insurers if he is satisfied that it is necessary so to do-

(a) in the public interest, or

(b) to prevent the affairs of any insurer being conducted in any manner detrimental to the interests of the policy-holders or of the insurer, or

(c) generally to secure the proper management of the insurer.

(2) The Chief Controller of Insurance may, on representation made in this behalf, or on his own motion, modify or cancel any direction issued under sub-section (1) and may, in so modifying or cancelling a direction, impose such conditions as he may deem fit.

(3) Every insurer shall comply with any direction issued under sub-section (1) or such direction as modified under sub-section (2) subject to conditions, if any.

(4) No direction under sub-section (1) or modification or cancellation under sub-section (2) or any such direction shall be issued without the prior approval of the Government.

Power to require calling of meeting of directors, etc.34B. The Chief Controller of Insurance may, during the course, or after the completion of special audit under section 12A or investigation under section 33, by order in writing, and on such terms and conditions as may be specified therein,-

(a) require the insurer to call a meeting of its directors for the purpose of considering any matter relating to, or arising out of, the affairs of the insurer;

(b) require the principal officer of the insurer to discuss any matter with him or any of his officers;

(c) require the insurer to allow any officer deputed for the purpose to watch the proceedings of, and to speak at, any meeting of the Board of Directors of the insurer or of any committee or other body constituted by the insurer and to furnish such officer with a copy of the proceedings of such meeting;

(d) require the insurer to send in writing to any officer specified in this behalf by the Chief Controller, at the usual address of such officer, all notices of, and other communications relating to, any meeting of the Board of Directors of the insurer, or of any Committee or other body constituted by the insurer;

(e) require the insurer to allow any officer appointed or deputed for the purpose to observe for a specified period which may be extended from time to time the manner in which the affairs of the insurer or of any of its officers or branches are being conducted:

Provided that such order has been passed with the prior approval of the Government; and

(f) with the prior approval of the Government, require the insurer to make within such time as may be specified in the order such changes in the management as the Chief Controller may consider necessary to put the affairs of the insurer in order.

Power to remove Chairman, Director, etc., of the insurer

34C. (1) If, after the completion of a special audit under section 12A or investigation under section 33, the Chief Controller has reason to believe that a person holding the office of the Chairman, a director, manager or principal officer, by whatever name called, of an insurer has contravened the provisions of any law and that the contravention is of such a nature that the association of such person with the insurer is or is likely to be detrimental to the interests of the insurer or of the policy-holders, or is otherwise undesirable, the Chief Controller shall, after giving such person an opportunity of being heard, make a report of the fact to the Government.

(2) If, after considering a report under sub-section (1), the Government is satisfied that the association with the insurer of the person in respect of whom the report has been made is or is likely to be detrimental to the interests of the insurer or of the policy-holders, or is otherwise undesirable, it may make an order that such person shall cease to hold the office with the insurer with effect from such date as may be specified in the order, and thereupon that office shall, with effect from the said date, become vacant.

(3) An order under sub-section (2) in respect of any person may also provide that he shall not, without the previous permission of the Government in writing, in any way, directly or indirectly, be concerned with, or take part in the management of, the insurer or any other insurer for such period not exceeding five years as may be specified in the order.

(4) No order under sub-section (2) shall be made in respect of any person without giving him an opportunity of being heard unless the Government is of the opinion that any delay in making the order would be detrimental to the interests of the insurer or of the policy-holders.]

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