PART II
PROVISIONS APPLICABLE TO INSURERS
Insurers to be subject to this Act while liabilities remain unsatisfied17[2A. Every insurer shall be subject to all the provisions of this Act in relation to any class of insurance business so long as his liabilities in Bangladesh in respect of business of that class remain unsatisfied or not otherwise provided for.
2B. This Act not to apply to certain insurers ceasing to enter into new contracts before commencement of Act2B. The provisions of this Act shall not apply to an insurer as defined in paragraph (i) or (iii) of sub-clause (a) of clause (9) of section 2 in relation to any class of his insurance business where such insurer has ceased, before the commencement of this Act, to enter into any new contracts of that class of business.]
Prohibition of transaction of insurance business by certain persons18[2C. (1) No person other than-
(a) a public company, or
(b) a society registered under 19[any] law for the time being in force in Bangladesh relating to co-operative societies, or
(c) a body corporate incorporated under the law of any country outside Bangladesh not being of the nature of a private company or a subsidiary of a private company,
shall start any insurance business in Bangladesh and a person, other than a person specified in clause (a), (b) or (c), who, immediately before the commencement of the Insurance (Amendment) Ordinance, 1958, was carrying on such business in Bangladesh shall, after the expiry of one year from such commencement, discontinue such business.
(2) No Mutual Insurance Company which was not registered, before the commencement of the Insurance (Amendment) Ordinance, 1958, for any class of insurance business, shall be registered for any class of general insurance business and no Mutual Insurance Company which was registered, before such commencement, for any class of insurance business, shall, be registered for any additional class of insurance business unless such company satisfies such conditions as may be prescribed.
Explanation.- In this section, ÔÇÿMutual Insurance Company’ has the meaning assigned to it in Part IV of this Act and includes any company constituted or incorporated outside Bangladesh which is of the nature of a Mutual Insurance Company.]
Registration3. (1) No person shall, after the commencement of this Act, begin to carry on any class of insurance business in Bangladesh, and no insurer carrying on any class of insurance business in Bangladesh shall, after the expiry of three months from the commencement of this Act, continue to carry on any such business, unless he has obtained from the Chief Controller of Insurance a certificate of registration for the particular class of insurance business:
Provided that in the case of an insurer who was carrying on any class of insurance business in Bangladesh at the commencement of this Act, failure to obtain a certificate of registration in accordance with the requirements of this sub-section shall not operate to invalidate any contract of insurance entered into by him if before such date as may be fixed in this behalf by the Government by notification in the official Gazette, he has obtained that certificate.
20[(1A) Notwithstanding anything contained in this Act, no certificate of registration shall be granted by the Chief Controller of Insurance to any person 21[* * *] for carrying on any class of insurance business in Bangladesh without the prior permission of the Government.]
(2) Every application for registration shall be accompanied by-
(a) a certified copy of the memorandum and articles of association, where the applicant is a company and incorporated under the Companies Act, 1913 or under the Indian Companies Act, 1882, or under the Indian Companies Act, 1866, or under any Act repealed thereby, or, in the case of any other insurer specified in sub-clause (a) (ii) or sub-clause (b) of clause (9) of section 2, a certified copy of the deed of partnership or of the deed of constitution of the company, as the case may be, or, in the case of an insurer having his principal place of business or domicile outside Bangladesh, the document specified in clause (a) of section 63;
(b) the name, address and the occupation, if any, of the directors where the insurer is a Company incorporated under the Companies Act, 1913, or under the Indian Companies Act, 1882, or under the Indian Companies Act, 1866, or under any Act repealed thereby, and in the case of an insurer specified in sub-clause (a) (ii) of clause (9) of section 2 the names and addresses of the proprietors and of the manager in Bangladesh, and in any other case the full address of the principal office of the insurer in Bangladesh, and the names of the directors and the manager at such office and the name and address of some one or more persons resident in Bangladesh authorised to accept any notice required to be served on the insurer;
(c) a statement of the class or classes of insurance business done or to be done, and a statement that the amount required to be deposited by section 7 or section 98 before application for registration is made has been deposited together with a certificate from the Bangladesh Bank showing the amount deposited;
(d) where the provisions of section 6 or 97 apply, a statement duly certified by an auditor showing the total paid up capital or the total working capital of the insurer and a declaration verified by an affidavit made by the principal officer of the insurer authorised in that behalf that the provisions of those sections as to paid up capital or working capital, as the case may be, have been complied with;
(e) in the case of an insurer having his principal place of business or domicile outside Bangladesh, a statement verified by an affidavit made by the principal officer of the insurer setting forth the requirements (if any) not applicable to nationals of the country in which such insurer is constituted, incorporated or domiciled which are imposed by the laws or practice of that country upon Bangladesh nationals as a condition of carrying on insurance business in that country;
(f) a certified copy of the published prospectus, if any, and of the standard policy forms of the insurer and statements of the assured rates, advantages, terms and conditions to be offered in connection with insurance policies together with a certificate in connection with life insurance business by an actuary that such rates, advantages, terms and conditions are workable and sound:
Provided that in the case of marine, accident and miscellaneous insurance business other than workmen’s compensation and motor car insurance the Chief Controller of Insurance may exempt any insurer from the above requirements regarding prospectus, forms and statements to such extent and for such period as he may deem fit; and
(g) the receipt showing payment in the prescribed manner of the prescribed fee which shall not be more than 22[five lakh Taka] for each class of business.
(3) In the case of any insurer having his principal place of business or domicile outside Bangladesh, the Chief Controller of Insurance shall withhold registration or shall cancel a registration already made, if he is satisfied that in the country in which such insurer has his principle place of business or domicile Bangladesh nationals are debarred by the law or practice of the country relating to, or applied to insurance from carrying on the business of insurance, or that any requirement imposed on such insurer under the provisions of section 62 is not satisfied.
(4) The Chief Controller of Insurance shall cancel the registration of an insurer either wholly or in so far as it relates to a particular class of insurance business, as the case may be,-
(a) if the insurer fails to comply with the provisions of section 7 or section 98 as to deposits, or
(b) if the insurer is in liquidation or is adjudged an insolvent, or
(c) if the business or a class of the business of the insurer has been transferred to any person or has been transferred to or amalgamated with the business of any other insurer, or
(d) if the whole of the deposit made in respect of a class of insurance business has been returned to the insurer under section 9; or
(e) if, in the case of an insurer specified in sub-clause (c) of clause (9) of section 2, the standing contract referred to in that sub-clause is cancelled or is suspended and continues to be suspended for a period of six months,
and the Chief Controller of Insurance may cancel the registration of an insurer-
(f) if the insurer makes default in complying with, or acts in contravention of, any requirement of this Act or any rule or order made thereunder, and
(g) if the Chief Controller of Insurance has reason to believe that any claim upon the insurer arising in Bangladesh under any policy of insurance remains unpaid for three months after final judgment in regular course of law.
(5) When the Chief Controller of Insurance withholds or cancels any registration under sub-section (3) or clause (a), clause (e), clause (f) or clause (g) of sub-section (4), he shall give notice in writing to the insurer of his decision, and the decision shall take effect on such date as he may specify in that behalf in the notice, such date not being less than one month nor more than two months from the date of the receipt of the notice in the ordinary course of transmission.
23[(5A) When the Chief Controller of Insurance cancels any registration under clause (b), clause (c) or clause (d) of sub-section (4) the cancellation shall take effect on the date on which notice of the order of cancellation is served on the insurer.
(5B) When a registration is cancelled the insurer shall not, after the cancellation has taken effect, enter into any new contracts of insurance, but all rights and liabilities in respect of contracts of insurance entered into by him before such cancellation takes effect shall, subject to the provisions of sub-section (5D), continue as if the cancellation had not taken place.
(5C) Where a registration is cancelled under clause (a), clause (e), clause (f), or clause (g) of sub-section (4), the Chief Controller of Insurance may at his discretion revive the
registration, if the insurer makes the deposits required by section 7 or section 98, or has his standing contract restored or has had an application under sub-section (4) of section 3A accepted, or satisfies the Chief Controller of Insurance that no claim upon him such as is referred to in clause (g) of sub-section (4) remains unpaid or that he has complied with the requirement for the non-compliance or contravention of which the registration was cancelled under clause (f) of sub-section (4), as the case may be, and complies with any directions which may be given to him by the Chief Controller of Insurance.
(5D) Where the registration of an insurance company is cancelled under sub-section (4), the Chief Controller of Insurance may, after the expiry of six months from the date on which the cancellation took effect, apply to the Court for an order to wind up the insurance company, or to wind up the affairs of the company in respect of a class of insurance business, unless the registration of the insurance company has been revived under sub-section (5C) or an application for winding up the company has been already presented to the Court. The Court may proceed as if an application under this sub-section were an application under sub-section (2) of section 53, or sub-section (1) of section 58, as the case may be.]
(6) Subject to compliance with the provisions of sections 2C, 5, sub-section (2A) of section 10 and section 32 and of any order made under section 3B, the Chief Controller of Insurance shall, on being satisfied that the applicant has fulfilled all the requirements of this section applicable to him, register the insurer and grant him a certificate of registration.
(7) The Chief Controller of Insurance may, on payment of the prescribed fee which shall not exceed 24[five hundred Taka], issue a duplicate certificate of registration to replace a certificate lost, destroyed or mutilated, or in any other case where he is of opinion that the issue of a duplicate certificate is necessary.
Renewal of Registration25[3A. (1) An insurer who has been granted a certificate of registration under section 3 shall have the registration renewed annually for each year.
(2) An application for the renewal of a registration for any year shall be made by the insurer to the Chief Controller of Insurance before the 31st day of December of the preceding year, and shall be accompanied as provided in sub-section (3) by evidence of payment of a fee of 26[three Taka and fifty poisha] per thousand of gross direct premium written in Bangladesh during the year preceding the year ending on the said date.
(2A) and (2B) [Omitted by section 3 of the Insurance (Amendment) Ordinance 1984 (Ordinance No. L of 1984.]
(3) The prescribed fee for the renewal of a registration for any year shall be paid into the Bangladesh Bank or, where there is no office of that Bank, into the 27[Sonali Bank] acting as the agent of that Bank, or into any Government treasury, and the receipt shall be sent along with the application for renewal of the registration.
(4) If an insurer fails to apply for renewal of registration before the date specified in sub-section (2) the Chief Controller of Insurance may, so long as an application to the Court under sub-section (5D) of section 3 has not been made, accept an application for renewal of the registration on receipt from the insurer of the fee payable with the application and such penalty, not exceeding the prescribed fee payable by him as the Chief Controller of Insurance may require:
Provided that an appeal shall lie to the Government from an order passed by the Chief Controller of Insurance imposing a penalty on the insurer.
(5) The Chief Controller of Insurance shall, on fulfilment by the insurer of the requirements of this section, renew the registration and grant him a certificate of renewal of registration.]
Insurers not to transact both life and general insurance business28[3AA. (1) After the commencement of the Insurance (Amendment) Ordinance, 1970, no person shall be registered as an insurer-
(a) for life insurance business and specified miscellaneous insurance business if he seeks registration for any class of general insurance business; or
(b) for general insurance business other than specified miscellaneous insurance business if he seeks registration for life insurance business.
(2) No insurer registered before the commencement of the Insurance (Amendment) Ordinance, 1970, for life insurance business and also for any class of general insurance business shall, after the expiry of five years from such commencement, transact both types of business:
Provided that the Government may, on the application of an insurer, from time to time extend the said period of five years by such further period, not exceeding two years in the aggregate, as it may deem fit.
(3) An insurer who, immediately before the commencement of the Insurance (Amendment) Ordinance, 1970, was transacting both life insurance business and general insurance business shall, as soon as practicable, submit for the sanction of the Chief Controller of Insurance a scheme for the separation, transfer or winding up of either type of its business.
(4) The Chief Controller of Insurance shall, upon receipt of a scheme under sub-section (3), refer it for approval to the Government suggesting such modifications therein as he may consider necessary for protecting the interests of the policy-holders and shall,-
(a) if the scheme is approved by the Government with or without any modification, sanction the scheme accordingly; and
(b) if it is not approved by the Government, return it to the insurer for submission of a fresh scheme.
(5) Where a scheme of an insurer is sanctioned under sub-section (4), with or without modification, the insurer shall separate, transfer or wind up his business according to the scheme as sanctioned.
(6) Where any scheme sanctioned under sub-section (4) involves the establishment of a new insurance company, the Government shall give its consent under the Capital Issues (Continuance of Control) Act, 1947 (XXIX of 1947), to the issue of such capital as may be necessary for the establishment of such company.
(7) No insurer transacting life insurance business shall, after the expiry of five years from the commencement of the Insurance (Amendment) Ordinance, 1970 or of the period by which the said period of five years is extended under the proviso to sub-section (2), employ in any capacity any officer employed by an insurer transaction general insurance business.
Explanation.- In this sub-section, “officer” means any person, whosoever designated, who is responsible for the conduct of any business, or the management of any of the affairs, of the insurer.]
Rates, terms and conditions of operation of an insurer29[3B. If, when considering an application for registration under section 3 or at any other time, it appears to the Chief Controller of Insurance that the rates, advantages, terms and conditions offered or to be offered in connection with, or any
class, condition or warranty in, any proposal, policy or other forms of any class or sub-class of insurance business are in any respect not workable or sound or are in any respect unrealistic or un-reasonable in relation to the general experience of the business of that class or sub-class in Bangladesh or any provision in the memorandum and Articles of Association or the instrument constituting or defining the constitution of the insurer is objectionable or that the reinsurance arrangements of the insurer are not adequate, he may, by order in writing and after giving the insurer an opportunity of being heard, issue such directions to the insurer or require the insurer to make within such time as may be specified in the order such modifications, additions, or omissions in the said rates, advantages, terms, conditions, clauses, warranties, memorandum and articles of association, instrument or reinsurance arrangements as he may think necessary:
Provided that no directions under this section shall be issued without the prior approval of the Government to an insurer already registered under this Act.]
Basis for determination of premium rates30[3BB. (1) The Chief Controller of Insurance shall, at intervals of not less than five years,-
(a) prepare mortality tables indicating the average rate of mortality of the policy-holders;
(b) prepare statement of yield indicating the range of rates of interest or yield on the investment of the insurers’ funds; and
(c) lay down the level of expenses of procurement and management of an insurer.
(2) The Chief Controller of Insurance may direct an insurer to furnish such information as the Chief Controller may require for the purpose of preparing the mortality table and the statement of yield and laying down the level of expenses under sub-section (1); and every insurer shall comply with such direction.
(3) The mortality table, the statement of yield and the level of expenses prepared and laid down under sub-section (1) shall be published in the official Gazette.
(4) Every insurer shall, on the basis of the current mortality table, the statement of yield and the level of expenses published under sub-section (3),-
(a) determine the rates of premium for non-participating policies issued by him; and
(b) review and, if necessary, make consequential adjustments in, the rates of premium in the participating policies and submit to the Chief Controller of Insurance a statement indicating such adjustments.]
Determination of premium rates for general insurance business31[3BBB. The Chief Controller of Insurance shall, at intervals of not less than one year, determine, in consultation with the insurers carrying on general insurance business, the rates of premium for such insurance business.]
Provisions relating to collection of premiums32[3C. (1) Every insurer shall declare to the Chief Controller of Insurance the total amount of premiums including agents’ balances in respect of fire, marine and miscellaneous insurance business outstanding on the first day of February, 1958, and shall recover the same within such time as may be allowed and comply with such directions as may be given, by the Chief Controller.
(2) Every insurance agent and every employer of agents shall, within such time as may be allowed to him by the Chief Controller of Insurance, pay to the insurer for whom he has been acting as an insurance agent or employer of agents, all amounts due to the insurer on account of the premiums in respect of general insurance business received by him on behalf of the insurer and outstanding against him as on the first day of February, 1958.
(3) No insurer shall write off any premium in respect of general insurance business which was outstanding on the first day of February, 1958, without the prior approval of the Chief Controller of Insurance.
(4) No insurer shall assume in Bangladesh any risk in respect of general insurance business unless and until the premium payable or such part thereof as may be prescribed, has been received by him or has been guaranteed to be paid by such person in such manner and within such time as may be prescribed.
(5) Any refund of premium which may become due to the insured on account of the cancellation of a policy of general insurance or alteration in its terms and conditions shall be paid directly to the insured by a crossed or order cheque or by money-order and a proper receipt shall be obtained from the insured, and such refund shall in no case be credited to the account of the agent.
Provisions relating to reinsurances and insurances abroad3D. (1) No insurer shall reinsure outside Bangladesh any insurance business or any part thereof underwritten by him in Bangladesh which is in excess of its treaty reinsurance arrangement unless a certificate has been obtained from the Chief Controller to the effect that such excess cannot be placed within Bangladesh.
33[* * *]
Explanation I.- For the purposes of this sub-section a reinsurance arrangement shall not be deemed to be a treaty reinsurance arrangement if such arrangement operates in a casual manner and in determining whether a particular reinsurance arrangement is a treaty reinsurance arrangement or not, the decision of the Chief Controller of Insurance shall be final.
Explanation II.- For the purposes of this sub-section a reinsurance arrangement in respect of life insurance business entered into by an insurer domiciled elsewhere than in Bangladesh with his head office shall be deemed to be treaty reinsurance arrangement to the extent determined by the Chief Controller of Insurance.
(2) No person shall insure outside Bangladesh any risk or any part thereof in respect of any property or interests in Bangladesh unless a certificate has been obtained from the Chief Controller to the effect that the risk in question cannot be insured in Bangladesh:
Provided that the Chief Controller may grant an exemption to any person from the requirements of this sub-section in respect of such property or interests and for such period as he may deem fit.
(3) The Chief Controller shall, if he refuses a certificate under sub-section (1) or sub-section (2), communicate his decision in writing to the applicant for the certificate, within one month from the date of the application.
(4) Every insurer shall submit, in the prescribed manner, to the Chief Controller of Insurance before the expiry of six months from the commencement of the Insurance (Amendment) Ordinance, 1970, a certified statement giving salient features of his reinsurance arrangement in respect of his business in Bangladesh and such other information about the reinsurance treaty as may be required by the Chief Controller.
(5) Where any reinsurance treaty the particulars of which have been submitted to the Chief Controller of Insurance under sub-section (4) is altered or any new reinsurance arrangement is made after the submission of the information under sub-section (4), the insurer concerned shall submit to the Chief Controller, in the prescribed manner, a report giving the particulars or such alteration in the treaty of such reinsurance arrangement within one month of such alteration or arrangement and shall submit such further information or clarification as the Chief Controller may require.
(6) The Chief Controller of Insurance may, after examining the statement submitted under sub-section (4) and the report, if any, submitted under sub-section (5), and giving the insurer an opportunity of being heard, for reasons to be recorded in writing, direct the insurer to make such modifications in his reinsurance treaty or reinsurance arrangement as the Chief Controller may specify.
(7) Notwithstanding anything contained in any other law for the time being in force, the Government may require insurers to reinsure within Bangladesh with reinsurers approved for this purpose, or among themselves, such proportion of the insurance business or such proportion of the reinsurance treaties as may be prescribed.]
Licensing of branch offices of insurers34[3E. (1) No insurer shall, after the expiry of six months from the commencement of the Insurance (Amendment) Ordinance, 1970, transact any business at any of his branches or offices, other than the head office, unless he has obtained a licence from the Chief Controller of Insurance for each such branch or office; and the Chief Controller of Insurance shall, upon an application made in this behalf and payment of the prescribed fee, grant such licence.
(2) No insurer shall, after the commencement of the Insurance (Amendment) Ordinance, 1970, open a new branch or office unless he has obtained a licence for such branch or office from the Chief Controller of Insurance.
(3) Application for a licence under sub-section (1) or sub-section (2) shall be made in the prescribed form and shall be accompanied by a prescribed fee which shall not be more than 35[twenty-thousand Taka].
(4) The Chief Controller of Insurance may, for reasons to be recorded in writing, refuse a licence under sub-section (2) to open a new branch or office and, if he so refuses, shall
communicate his decision in writing to the applicant within six weeks from the date of the application.
(5) An insurer to whom a licence to open a new branch or office has been refused by the Chief Controller may prefer an appeal against the refusal to the Government whose decision on such appeal shall be final.
(6) Where a licence to open a new branch or office has been refused, no fresh application for a licence to open such branch or office shall be entertained within a period of one year from such refusal.
Restriction on issue of certain policies at new rates, etc.3F. No insurer shall offer any policy or contract in respect of life insurance business other than those described in the prospectus filed with the Chief Controller of Insurance under clause (f) of sub-section (2) of section 3 or any amendment to such prospectus filed with the Chief Controller of Insurance under section 26 under he files with the Chief Controller the rates, advantages and terms and conditions of such policy or contract.]
[Omitted.]4. [Minimum limits for annuities and other benefits secured by policies of life insurance.- Omitted by section 8 of the Insurance (Amendment) Act, 1958 (Act No. XXVII of 1958).]
Restriction on name of insurer5. (1) An insurer shall not be registered by a name identical with that by which an insurer in existence is already registered, or so nearly resembling that name as to be calculated to deceive except when the insurer in existing is in the course of being dissolved and signifies his consent to the Chief Controller of Insurance.
(2) If any insurer, through inadvertence or otherwise, is without such consent as aforesaid registered by a name identical with that by which an insurer already in existence whether previously registered or not is carrying on business or so nearly resembling it as to be calculated to deceive, the first-mentioned insurer shall, if called upon to do so by the Chief Controller of Insurance on the application of the second-mentioned insurer, change his name within a time to be fixed by the Chief Controller of Insurance:
Provided that nothing in this section shall apply to any insurer carrying on business before the 27th day of January, 1937, under the Indian Life Insurance Companies Act, 1912:
Provided further that in the application of this section to any insurer who begins to carry on insurance business after the commencement of the Insurance (Amendment) Act, 1946, the references to an insurer in existence in sub-section (1) and this sub-section shall be construed as including references to a provident society (as defined in Part III) in existence, whether or not the society is in the course of being dissolved.