PART III
PROVIDENT SOCIETIES
Definition of “provident society”65. (1) In this Part “provident society” means, a person who, or a body of persons (whether corporate or un-incorporate) which, not being an insurer registered for the time being under Part II of this Act, carries on the business of insuring the payment, on the happening of any of the contingencies mentioned in sub-section (2), of-
(a) an annuity of or equivalent to one hundred Taka or less, payable for an uncertain period, or
(b) a gross sum of nine hundred Taka or less, whether paid or payable in a lump sum or in two or more instalments over a certain period,
exclusively in both cases (a) and (b) of any profit or bonus not being a guaranteed profit or bonus.
Explanation.- For the purposes of this sub-section a period is “certain” if its duration is ascertainable in advance and “uncertain” if its duration is not so ascertainable.
(2) The contingencies referred to in sub-section (1) are the following, namely:-
(a) the birth, marriage or death of any person or the survival by a person of a stated or implied age or contingency;
(b) failure of issue;
(c) the occurrence of a social, religious or other ceremonial occasion;
(d) loss of or retirement from employment;
(e) disablement in consequence of sickness or accident;
(f) the necessity of providing for the education of a dependent;
(g) any other contingency which may be prescribed or which may be authorised by the 105[Government].
(3) For the purposes of sub-sections (1) and (2)-
(a) contracts entered into before the commencement of this Act shall not be taken into account;
(b) two or more policies issued to one person shall, for the purposes of determining whether the limits fixed by sub-section (1) have or have not been exceeded, be deemed to be one policy if the contingencies on the happening of which the sums are payable under the policies (whether the contingencies be the same or different) relate to one person only, whether he be the policy-holder or some other person.
(4) Every person or body of persons for the time being registered as a provident society under the Provident Insurance Societies Act, 1912, and every person or body of persons for the time being registered as a provident society under this Act, shall be deemed to be a provident society for all the purposes of this Act.
(5) If any question arises whether any person or body of persons is or is not a provident society within the meaning of this section, the Chief Controller of Insurance shall decide the question and his decision shall be final.
Restrictions on provident societies66. No provident society shall undertake any form of insurance not falling within the limits fixed by sub-section (1) of section 65, nor shall any provident society be eligible to be registered under section 3.
Name67. No provident society established after the commencement of this Act, shall adopt as its name, and no provident society established before the commencement of this Act shall continue after the expiry of six months from the commencement thereof to use as its name, any combination of words which fails to include the word “provident” or which includes the word “life”.
Insurable interest68. No provident society shall receive any premium or contribution for insuring money to be paid to any person other than the person paying such premium or contribution or the wife, husband, child, grand-child, parent, brother or sister, nephew or niece of such a person.
Dividing business69. (1) No provident society shall carry on any business upon the dividing principle, that is to say, on the principle that the benefit secured by a policy is not fixed but depends either wholly or partly on the results of a distribution of certain sums amongst policies becoming claims within certain time-limits, or on the principle that the premiums payable by a policy holder depend wholly or partly on the number of policies becoming claims within certain time-limits.
(2) The Chief Controller of Insurance shall, as soon as possible, take steps to have any provident society which carries on business on the dividing principle wound up:
Provided that, where any such provident society in existence at the commencement of this Act applies within three months of such commencement to the Chief Controller of Insurance for permission to continue carrying on its business with a view meanwhile to reorganise its business in accordance with the provisions of this Act, the Chief Controller of Insurance may at his discretion, with due regard to the past history of the society, permit the society to continue business for a period not exceeding two years from the date of receipt of such permission, so however that no new business on the dividing principle is undertaken by the society.
(3) Where after the commencement of the Insurance (Amendment) Act, 1941, a provident society is to be wound up in pursuance of this section, or where, whether before or after the commencement of that Act, a provident society ceases to carry on business on the dividing principle, the provisions of sub-section (2) and sub-section (3) of section 52 shall, so far as may be, apply in like manner as they apply to an insurer ceasing to carry on business on the dividing principle.
Registration70. (1) No provident society except a provident society registered under the provisions of the Provident Insurance Societies Act, 1912, shall receive any premium or contribution until it has obtained from the Chief Controller of Insurance a certificate of registration.
(2) Every application for registration shall be accompanied by-
(a) a certified copy of the rules of the society, and when the society is a company incorporated under the Companies Act, 1913, or under the Indian Companies Act, 1882, or under the Indian Companies Act, 1886, or under any Act repealed thereby a certified copy of the Memorandum and Articles of Association, or where the society is not such a company, a certified copy of the deed of constitution of the society;
(b) the names and addresses of the proprietors or directors, and the managers of the society, the full address of the registered office of the society, the full address of the principal office of the society in Bangladesh, the name of 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 society;
(c) a certificate from the Bangladesh Bank that the initial deposit referred to in section 73 has been made;
(d) a declaration verified by an affidavit made by the principal officer of the society authorised in that behalf that the minimum working capital required by section 72, is available; and
(e) the receipt showing payment in the prescribed manner of the prescribed fee for registration being not more than two hundred Taka.
(3) The Chief Controller of Insurance may refuse to issue a certificate of registration until he is satisfied that the rules of the society comply with the provisions of this Act and that the Society complies with the provisions of sections 67,71,72,73 and 73A , but if he is so satisfied he shall register the society and its rules.
106[(3A) The Chief Controller of Insurance shall, if he refuses a certificate of registration, communicate his decision in writing to the applicant for such registration within three months from the date of the application.]
(4) The Chief Controller of Insurance may, after giving previous notice in writing in such manner as he thinks fit specifying the grounds for the proposed cancellation, and allowing the society concerned an opportunity of being heard, cancel the registration of the society made under this section or made under the provisions of the Provident Insurance Societies Act, 1912-
(a) if he is satisfied from the returns furnished under the provisions of this Act or as the result of an inquiry made under section 87-
- ii) that the business of the society is conducted fraudulently or not in accordance with the rules thereof, or that it is in the interests of the policy-holders that the society should cease to carry on business,
(b) if the initial deposit or any of the further deposits required by section 73 has not been made, or
(c) if the society, having failed to comply with any requirement or having contravened any provision of this Act, has continued such failure or contravention, for a period of one month after notice of such failure or contravention has been conveyed to the society by the Chief Controller of Insurance:
Provided that the Chief Controller of Insurance may without such previous notice,-
(a) cancel the registration of a provident society, which has failed to have its registration renewed, or
(b) cancel, on such terms and conditions as he thinks fit, the registration of any provident society which applies to him for such cancellation if he is satisfied that the society has ceased to carry on insurance business and that all its liabilities in respect of insurance policies are either satisfied or otherwise provided for, or
(c) cancel the registration of a provident society if he has reason to believe that any claim upon the society arising in Bangladesh under any policy of insurance remains unpaid for three months after final judgment in regular course of law.
(5) When a registration is cancelled the provident society 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 it before such cancellation takes effect shall, subject to the provisions of section 88, continue as if the cancellation had not taken place.
(6) Where a registration is cancelled under clause (b) of sub-section (4) or clause (c) of the proviso to that sub-section, or because the society has failed to have its registration renewed, the Chief Controller of Insurance may at his discretion revive the registration if the provident society, within six months from the date on which the cancellation took effect, makes the deposits required by section 73 or satisfies the Chief Controller of Insurance that no claim upon it such as is referred to in the said clause (c) remains unpaid or has had an application under sub-section (3) of section 70A accepted, as the case may be, and complies with any directions which may be given to it by the Chief Controller of Insurance.
(7) The Chief Controller of Insurance may, on payment of the prescribed fee which shall not exceed five 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 registration
107[70A. (1) Every provident society registered under this Act, or under the Provident Insurance Societies Act, 1912, shall have its registration renewed annually for each period of twelve months after that ending on the 30th day of June, 1942.
(2) An application for the renewal of a registration shall be made by the society to the Chief Controller of Insurance before the 30th day of June preceding the period for which renewal is sought, and shall be accompanied as provided in sub-section (3) by evidence of payment of the prescribed fee which shall not exceed two hundred Taka but may vary according to the volume of insurance business done by the society.
(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, 108[* * *] into any Government treasury, and the receipt shall be sent along with the application for renewal of the registration.
(4) If a provident society fails to apply for renewal of registration before the date specified in sub-section (2) the Chief Controller of Insurance may, so long as he has taken no action under section 88 to have the society wound up, accept an application for renewal of registration on receipt from the society of the fee payable with the application and such penalty, not exceeding the prescribed fee payable by the society, as he may require.
(5) The Chief Controller of Insurance shall, on being satisfied that the society has fulfilled the requirements of this section, renew the registration and grant it a certificate of renewal of registration.
(6) The Chief Controller of Insurance shall, if he refuses the renewal of registration, communicate his decision in writing to the application for such renewal within three months from the date of the application.
Supplementary information and reports of alterations in particulars furnished with application for registration70B. (1) Every provident society registered under section 70 before the commencement of the Insurance (Amendment) Act, 1941, shall, before the expiration of three months from the commencement of the Insurance (Amendment) Act, 1941, furnish to the Chief Controller of Insurance such particulars in addition to those already supplied for the purpose of obtaining registration as are required by sub-section (2) of section 70 of this Act as amended by the Insurance (Amendment) Act, 1941.
(2) [Omitted by section 3 and the Second Schedule of the Bangladesh Laws (Revision And Declaration) Act, 1973 (Act No. VIII of 1973).]
(3) When any alteration occurs or is made which affects any of the matters which are required under the provisions of sub-section (2) of section 70 to accompany an application by a provident society for registration under that section, or are to be furnished to the Chief Controller of Insurance under this section, the provident society shall furnish forthwith to the Chief Controller of Insurance full particulars duly authenticated of such alteration.]
Certain provisions of Part II to apply to provident societies
- The provisions of sections 20,32,46 and 53A shall apply to provident societies as they apply to insurers, and in such application references to shareholders of an insurer shall be construed as references to members of a provident society:
Provided that a provident society may charge a fee not exceeding one Taka for supplying a copy of any document referred to in sub-section (2) of section 20.
Working capital72. No provident society shall be registered unless it has a paid-up capital sufficient to provide as working capital a net sum of not less than five thousand Taka exclusive of deposits made under this Act and exclusive in the case of a company of any expenses incurred in connection with the formation of the company.
Deposits73. (1) Every provident society shall, if established before the commencement of this Act within one year from such commencement, or, if established after the commencement of this Act before the society applies for registration under section 70, deposit and keep deposited with the Bangladesh Bank in one of the offices in Bangladesh of the Bank, for and on behalf of the Government cash or approved securities amounting at the market value of the securities on the date of deposit to five thousand Taka, and shall thereafter make in each calendar year a further deposit amounting to not less than one-fifth of the premium income for the preceding calendar year as shown in the revenue account of the society (including admission fees and other fees received by the society) until the total amount so deposited and kept is fifty thousand Taka.
(2) The provisions of sub-sections (8),(9),(9A),(9B) and (10) of section 7 and of sub-section (1) of section 8 and of section 9 shall apply to the deposits made under this section as they apply to deposits made by an insurer.
Restriction on name of provident society109[73A. (1) A provident society shall not be registered by a name identical with that by which an insurer or another provident society in existence is already registered, or so nearly resembling that name as to be calculated to deceive, except when the provident society in existence is in the course of being dissolved and signifies its consent, or the insurer in existence signifies his consent, to the Chief Controller of Insurance.
(2) If a provident society, through inadvertence or otherwise, is without such consent as aforesaid registered by a name identical with that by which an insurer or another provident society already in existence is registered, or so nearly resembling it as to be calculated to deceive, the first-mentioned society shall, if called upon to do so by the Chief Controller of Insurance on the application of the insurer or the second-mentioned society, change its name within a time to be fixed by the Chief Controller of Insurance:
Provided that nothing in this section shall apply to any provident society carrying on business before the commencement of the Insurance (Amendment) Act, 1946.]
Rules74. (1) Every provident society shall in its rules set forth-
(a) the name, the object and the location of the registered office of the society;
(b) the contingencies or classes of contingency on the happening of which money is to be paid;
(c) the conditions to be complied with before, and the payments to be made on, admission to the society;
(d) the rates of premium or contribution, and the periods for which or the times at which premiums or contributions are payable;
(e) the maximum amount payable to a subscriber or policy-holder;
(f) the nature and amounts of the benefits provided for by the society;
(g) the circumstances in which a bonus may be paid to a policy-holder;
(h) the nature of the evidence required for the proof of the happening of any contingency on which money is to be paid;
(i) the circumstances in which policies may be forfeited or renewed or the whole or a part of the premiums paid on a policy may be returned, or a surrender value of a policy may be granted;
(j) the penalties for delay in paying or failure to pay premiums or contributions;
(k) the proportion of the annual income of the society which may be disbursed on and the provisions to be made for meeting the expenses of the management of the society;
(l) the person or persons who or the authority which shall have power to invest the funds of the society;
(m) the provisions for appointment of auditors and their remuneration;
(n) the procedure to be adopted in altering the rules of the society;
(o) unless these are provided for in the Articles of Association of a society which 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,-
(i) the mode of appointment and removal, the qualification and the powers of a director, manager, secretary or other officer of the society;
(ii) the manner of raising additional capital; and
(iii) the provisions for the holding of general meetings of the members and policy-holders and for the powers to be exercised and the procedure to be followed thereat; and
(p) such other matters as may be prescribed.
(2) Where the rules of any provident society registered under the Provident Insurance Societies Act, 1912, fail to comply with the provisions of this section the society shall, before the expiry of twelve months from the commencement of this Act, amend the rules so as to comply with these provisions.
Amendment of rules75. (1) No amendment of any rule of a provident society shall be valid until it has been sent to the Chief Controller of Insurance and has been registered by him.
(2) The Chief Controller of Insurance on being satisfied that the proposed amendment is not contrary to the provisions of this Act shall, unless he is of opinion that the amendment unfairly affects the rights of existing members or policy-holders of the society, issue to the society an acknowledgment of the registration of the amended rule.
(3) The Chief Controller of Insurance shall, if he refuses registration of any amendment of any rule, communicate his decision in writing to the applicant for such registration within three months from the date of the application.
Supply of copy of rules76. Every provident society shall on demand deliver free of cost to any member of the society a copy of the rules of the society and to any person other than a member a copy of such rules on the payment of a sum not exceeding one Taka.
Registered office77. Every provident society shall have in Bangladesh a principal office (on the outside of which it shall keep displayed its name in a conspicuous position in legible characters) to which all communications and notices may be addressed, and shall give notice to the Chief Controller of Insurance of any change in the location thereof within twenty-eight days of its occurrence.
Publication of authorised capital to contain also subscribed and paid-up capital78. Where any notice, advertisement or other official publication of a provident society contains a statement of the amount of the authorised capital of the society, the publication shall also contain a statement of the amount of the capital which has been subscribed and the amount paid up.
Registers and books79. Every provident society shall keep at its principal office in Bangladesh-
(a) such registers in such form as may be prescribed;
(b) a cash book in which shall be entered separately for each class of contingency separately specified in section 65 all sums received and expended by the society and the matters in respect of which the receipt of expenditure takes place;
(c) a ledger;
(d) a journal.
Revenue account, balance-sheet and annual statements80. (1) Every provident society shall at the expiry of the calendar year prepare a revenue account and balance-sheet in the prescribed form verified in the prescribed manner, together with a report on the general state of the society’s affairs and shall cause the revenue account and balance-sheet to be audited by an auditor, and the auditor shall so far as may be in the audit of a provident society have the powers of, exercise the functions vested in, and discharge the duties and be subject to the liabilities imposed on, an auditor of companies by section 145 of the Companies Act, 1913.
(2) Every provident society shall at the expiry of the calendar year prepare with respect to that year-
(a) a statement showing separately for each class of contingency separately specified in section 65-
(i) the number of new policies effected, the total amount insured thereby and the total premium income received in respect thereof and the number of existing policies discontinued during the year with the total amount insured thereby, and
(ii) the total amount of claims made and the total amount paid in satisfaction thereof;
(b) a statement showing details of every insurance effected on a life other than the life of the person insuring; and
(c) a statement showing the total amount paid as allowances to agents and canvassers.
(3) [Omitted by section 3 and the Second Schedule of the Bangladesh Laws (Revision And Declaration) Act, 1973 (Act No. VIII of 1973).]
Actuarial report and abstract81. (1) Every provident society shall once in every five years or at such shorter intervals as may be laid down by the rules of the society cause an investigation to be made as at the last day of a calendar year into its financial condition including the valuation of its liabilities and assets by an actuary. (2) The report of the actuary shall contain an abstract in which shall be stated-
(a) the general principles adopted in the valuation including the method by which the valuation age of lives was ascertained,
(b) the rate at each age of the mortality and any other factor assumed and the annuity values used in valuation,
(c) the reserve values held against policies effected,
(d) the rate of interest assumed, and
(e) the provision made for expenses,
and shall have appended to it a certificate signed by a principal officer of the society that all material necessary for proper valuation has been placed at the disposal of the actuary and that full and accurate particulars of every policy under which there is a liability either actual or contingent have been furnished to the actuary for the purpose of the investigation.
(3) If the actuary finds that the financial condition of the society is such that no surplus exists for distribution as bonus to the policy-holders or as dividend to the shareholders, he shall state in his report whether in his opinion the society is insolvent and, if so, whether it should be wound up or not, and the extent to which in his opinion existing contracts should be modified or existing rates of premium should be adjusted to make good the deficiency in the assets.
Submission of returns to Chief Controller of Insurance82. (1) The revenue account and balance-sheet with the auditor’s report thereon and the report on the general state of the society’s affairs referred to in sub-section (1) of section 80, shall be printed and four copies of these and of the statements referred to in sub-section (2) of section 80, shall be furnished as returns to the Chief Controller of Insurance within six months from the end of the period to which they relate.
(2) All the material necessary for the proper valuation of the liabilities of the society under the provisions of section 81 shall be placed at the disposal of the actuary within three months from the end of the period to which such material relates, and the report and abstract referred to in section 81 shall be furnished as a return to the Chief Controller of Insurance within a further period of three months.
(3) The provisions of sub-section (2) of section 15 relating to the copies therein referred to shall apply to the returns referred to in sub-section (1) of this-section, and the provisions of section 17 shall apply to the accounts and balance-sheet of a provident society being 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, as they apply to the accounts and balance-sheet of an insurer and the Chief Controller of Insurance may exercise, in respect of returns made by a provident society and in respect of an investigation or valuation to which section 81 refers, the same powers as are exercisable by him under section 21 and section 22, respectively, in the case of an insurer.
Actuarial examination of schemes83. (1) Every provident society 110[shall cause every scheme of insurance which it proposes to put into operation] to be examined by an actuary, and shall not receive any premium or contribution in connection with the scheme until the actuary has certified that the rates, advantages, terms and conditions of the scheme are workable and sound, and such certificate has been forwarded to the Chief Controller of Insurance.
(2) The provisions of sub-section (1) shall apply to any alteration of a scheme already in operation but the Chief Controller of Insurance may, if he is of opinion that the alteration unfairly affects the interests of existing policy-holders, prohibit the alteration, and, if he does so, the society shall not put the altered scheme into operation, unless it first discharges to the satisfaction of the Chief Controller of Insurance all its liabilities to those of the existing policy-holders who dissent from the alteration.
Separation of accounts and funds84. Where a provident society effects policies of insurance in connection with more than one of the classes of contingency separately specified in sub-section (2) of section 65, the receipts and payments in respect of each such class shall be recorded in a separate account in the cash book kept in accordance with section 79.
Investment of funds85. (1) Every provident society shall, unless it already holds invested in approved securities or securities mentioned or referred to in clauses (c) and (d) of section 20 of the Trusts Act, 1882, not less than fifty per cent of the total assets of the society, invest in such securities every increase that takes place in those assets and in that part of those assets which is held in cash as soon as practicable after the increase takes place and in any case within six months of its taking place, until the total amount so invested amounts to not less than fifty per cent of the total assets of the society, and shall thereafter keep invested in such securities not less than fifty per cent of the total assets of the society:
Provided that for the purpose of determining the amount to be invested under this sub-section, any deposit made in cash under section 73 shall be taken into account as if such cash were Government securities amounting at the market value of the securities on the date the deposit was made to the total deposited in cash.
(2) No funds or investments of a provident society except a deposit made under section 73 or under the law of any State or country relating to insurance shall be kept otherwise than in the name of the society or in the name of a public officer approved by the Government.
(3) No loan shall be made out of the assets of a provident society, to any director, manager, managing agent, auditor, actuary, officer or partner of the society except on the security of a policy of insurance held in the society and within its
surrender value and no such loan shall be made to any concern of which a director, manager, managing agent, auditor, actuary, officer or partner of the society is a director, manager, managing agent, actuary, officer or partner:
Provided that nothing in this sub-section shall apply to loans made by a provident society to a banking company:
Provided further that where any event occurs giving rise to circumstances, the existence of which at the time of the grant of any subsisting loan would have made such grant a contravention of this sub-section, such loan shall, notwithstanding any contract to the contrary, be repaid within three months from the occurrence of such event or from the commencement of the Insurance (Amendment) Act, 1946, whichever is later; and in case of default, the director, manager, managing agent, auditor, actuary or partner concerned shall, without prejudice to any other penalty which he may incur, cease to hold office in the society on the expiry of the said three months.
111[(3A) Any loan prohibited under sub-section (3), made before and outstanding at the commencement of the Insurance (Amendment) Act, 1940, shall be repaid before the 1st day of January, 1941, and in case of default the director, manager, managing agent, auditor, actuary, officer or partner who has received the loan or is connected with the concern which has received the loan, as the case may be, shall cease to hold office in or be a partner of the society and shall be ineligible to hold office in or be a partner of the society until the loan is repaid.]
(4) Any director, manager, managing agent, auditor, actuary, officer or partner of a society which contravenes the provisions of sub-section (3) who is knowingly a party to the contravention, shall without prejudice to any other penalty which he may incur be jointly and severally liable to the society for the amount of the loan, and such amount, together with interest from the date of the loan at such rate not exceeding twelve per cent per annum as the Chief Controller of Insurance
may fix, shall on application by the Chief Controller of Insurance to any Civil Court of competent jurisdiction be recoverable by execution as if a decree for such amount had been passed by that Court.
(5) The provisions of section 86D of the Companies Act, 1913, shall not apply to a loan granted to a director of a provident society being a company if the loan is once granted on the security of a policy on which the society bears the risk and the policy was issued to the director on his own life and the loan is within the surrender value of the policy.
Inspection of books86. The books of every provident society shall at all reasonable times be open to inspection by the Chief Controller of Insurance or any person appointed by him in this behalf or by any member or policy-holder of the society who has, on application in this behalf, been permitted by the Chief Controller of Insurance, subject to such conditions, if any, as he may impose, to make such inspection.
Inquiry by or on behalf of Chief Controller of Insurance87. (1) The Chief Controller of Insurance shall at least once in two years and may, if he thinks fit, at any time visit personally or depute a suitable person to visit the principal office of a provident society or the principal office in Bangladesh of a society having its principal place of business or domicile outside Bangladesh and inquire into the affairs of the society, or may, after giving notice to the society and giving it an opportunity to be heard, direct such an inquiry to be made by an auditor or actuary appointed by him or by both an auditor and an actuary appointed simultaneously, or first by an auditor only or an actuary only and afterwards by an actuary or auditor.
(2) For the purposes of any such inquiry the Chief Controller or the auditor or actuary, as the case may be, shall be entitled to examine all books and documents of the society and may demand from the society or any officer of the society such explanations as he may require on any matter relating to the affairs of the society.
(3) The results of any such inquiry shall be recorded in writing by the person making the inquiry, and four copies of the record shall be supplied to the Chief Controller of Insurance; and when the inquiry is completed, a copy of the
record, or of each such record where more than one are made in the course of the same inquiry, shall be sent by the Chief Controller of Insurance to the society concerned and shall be open to inspection by any member or policy-holder of the society.
(4) All expenses of and incidental to any inquiry made by an auditor or actuary under sub-section (1) including any expenses incurred before the date on which the Chief Controller of Insurance receives notice of an appeal under clause (e) of sub-section (1) of section 110 shall be defrayed by the provident society, shall have priority over other debts due from the society, and shall be recoverable as an arrear of land-revenue.
(5) The Chief Controller of Insurance may, by notice in writing require the provident society to comply within a time to be specified therein (not being less than fifteen days from the receipt of the notice by the society) with any directions he may issue to remedy defects disclosed by an inquiry under this section.
(6) If the society fails to comply with any directions issued under sub-section (5), the Chief Controller of Insurance may, after giving notice to the society and giving it an opportunity to be heard, apply to the Court for the winding up of the society.
Amalgamation and transfer of insurance business
112[87A. (1) The insurance business of a provident society may be transferred to any person or transferred to or amalgamated with the insurance business of any other provident society in accordance with a scheme prepared under this section and sanctioned by the Chief Controller of Insurance.
(2) Any scheme prepared under this section shall set out the agreement under which the transfer or amalgamation is proposed to be effected, and shall contain such further provisions as may be necessary for giving effect to the scheme.
(3) Before an application is made to the Chief Controller of Insurance to sanction any such scheme, notice of the intention to make the application together with a statement of the nature of the amalgamation or transfer, as the case may be, and of the reason therefore, shall at least two months before the application is made, be sent to the Chief Controller of Insurance and certified copies, four in number, of each of the following documents shall be furnished to him, and other such copies shall during the two months aforesaid be kept open for the inspection of the members and policy-holders at the principal and branch offices of the provident societies concerned, namely:-
(a) a draft of the agreement or deed under which it is proposed to effect the amalgamation or transfer,
(b) balance-sheets in respect of the insurance business of each of the provident societies concerned in such amalgamation or transfer,
(c) actuarial reports and abstracts in respect of the insurance business of each of the provident societies so concerned,
(d) a report on the proposed amalgamation or transfer, prepared by an independent actuary,
(e) any other reports on which the scheme of amalgamation or transfer was founded;
and the balance-sheets, reports and abstracts referred to in clauses (b), (c) and (d) shall all be prepared as at the date at which the amalgamation or transfer if sanctioned by the Chief Controller of Insurance is to take effect, which date shall not be more than twelve months before the date on which the application to the Chief Controller of Insurance is made under this section:
Provided that the Chief Controller of Insurance may exempt the provident society or societies concerned from furnishing to him and from keeping open for inspection any one or more of the above documents.
(4) When any application such as is referred to in sub-section (3) is made to the Chief Controller of Insurance, he may require, if for special reasons he so directs, notice of the application to be sent to every person resident in Bangladesh; 113[* * *] who is the holder of a policy of any provident society concerned and may cause a statement of the nature and terms of the amalgamation or transfer, as the case may be, to be published in such manner and for such periods as he may direct, and after hearing the societies concerned, such policy-holders as apply to be heard and such other persons as he may deem fit, may sanction the arrangement, if he is satisfied that no sufficient objection to the arrangement has been established and shall make such consequential orders as are necessary to give effect to the arrangement, including orders as to the disposal of any deposit made under section 73:
Provided that-
(a) no part of the deposit made by any party to the amalgamation or transfer shall be returned except where, after effect is given to the arrangement the whole of the deposit to be made by the provident society carrying on the amalgamated business or the person to whom the business is transferred is completed;
(b) only so much shall be returned as is no longer required to complete the deposit last mentioned in clause (a);
(c) while the deposit last mentioned in clause (a) remains uncompleted, no accession, resulting from the arrangement, to the amount already deposited by the provident society carrying on the amalgamated business or the person to whom the business is transferred shall be appropriated as payment or part payment of any instalment of deposit subsequently due from it or him under section 73.
(5) A copy of the order under sub-section (4) sanctioning or refusing to sanction the arrangement shall be sent to each of the societies concerned and to each of the policy-holders who applied to be heard.
(6) If the scheme involves a reduction of the amount of the insurance and other contracts of the transfer or society or of any or all of the societies concerned in the amalgamation, the Chief Controller of Insurance may sanction the scheme, reducing the amount of such contracts upon such terms and subject to such conditions as he may think proper and the reduction of the contracts as sanctioned by the Chief Controller of Insurance shall be valid and binding on all the parties concerned.]
Winding up by Court and voluntary winding up88. (1) The Court may order the winding up of a provident society being 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 the provisions of the Companies Act, 1913, shall, subject to the provisions of this Part, apply accordingly.
(2) In addition to the grounds on which such an order may be based, the Court may order the winding up of a provident society if the Chief Controller of Insurance, who is hereby authorised to do so, applies in this behalf to the Court on any of the following grounds, namely:-
(a) that the registration of the society has been cancelled under sub-section (4) of section 70;
(b) that it appears from the returns furnished under the provisions of this Act or as the result of an inquiry made under section 87 that the society is insolvent;
(c) that the continuance of the society is prejudicial to the interests of the policy-holders.
(3) A provident society being 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, may be wound up voluntarily in accordance with the provisions of the Companies Act, 1913, but shall not be so wound up except for the purpose of effecting an amalgamation or reconstruction of the society or on the ground that by reason of its liabilities it cannot continue its business.
(4) A provident society not being 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, may be wound up voluntarily under this Act if a resolution is passed by the proprietors that the society should be wound up voluntarily for the purpose or on the ground specified in sub-section (3), and the Chief Controller of Insurance may, in any case where he has ordered the cancellation of the registration of a society under sub-section (4) of section 70, order the winding up of the society under this Act.
Reduction of insurance contracts89. The Court may make an order reducing the amount of the insurance contracts of a provident society upon such terms and subject to such conditions as the Court thinks just-
(a) if the Chief Controller of Insurance as an alternative to cancelling the registration of a society under sub-section (4) of section 70 applies to the Court in this behalf;
(b) if while a society is in liquidation the Court thinks fit;
(c) if when a society has been proved to be insolvent, the Court thinks fit to do so in place of making an order for the winding up of the society; or
(d) if the Court is satisfied on an application made in this behalf by the society supported by the report of an actuary, and after giving the policy-holders an opportunity to be heard that it is desirable to do so.
Appointment of liquidator90. (1) Where a provident society is to be wound up whether under the Companies Act, 1913, or under this Act, the society shall, within seven days from the date of the order of the Court ordering the winding up or the passing of the resolution authorising the winding up, as the case may be, give notice thereof to the Chief Controller of Insurance and, except where the winding up is done by an order of the Court, the Chief Controller of Insurance shall appoint the liquidator and shall determine the remuneration to be paid to him:
Provided that if the Chief Controller of Insurance is not satisfied that the assets of the society are sufficient to meet the costs of liquidation including the remuneration of the liquidator, he may decline to make such appointment, and in such a case the society shall itself appoint a liquidator who shall carry out the liquidation as if the winding up was being done by an order of the Court.
(2) Any liquidator appointed by the Chief Controller of Insurance under sub-section (1) may be removed by the Chief Controller of Insurance if satisfied that the duties entrusted to him are not being properly discharged.
Application of Act to liquidators114[90A. Notwithstanding anything to the contrary contained in the Companies Act, 1913, the provisions of sections 91, 92 and 93 shall apply to any liquidator appointed to wind up a provident society, whether by the Court, the Chief Controller of Insurance or the society itself.]
Powers of liquidator91. (1) A liquidator appointed to wind up a society shall have power-
(a) to institute or defend any legal proceedings on behalf of the society by his name of office;
(b) to determine the contribution to be made by members of the society respectively to the assets of the society;
(c) to investigate all claims against the society and to decide questions of priority arising between claimants;
(d) to determine by what persons and in what proportion the costs of the liquidation including the remuneration of the liquidator and any expenses incurred under clause (g) of this sub-section are to be borne;
(e) to give such directions in regard to the collection and distribution of the assets of the society as may appear to him to be necessary for winding up the affairs of the society;
(f) to summon, and enforce the attendance of, witnesses and to compel the production of documents by the same means and as far as may be in the same manner as is provided in the case of a Civil Court by the Code of Civil Procedure, 1908; and
(g) with the sanction of the Chief Controller of Insurance, to employ such establishment and to obtain such assistance from an actuary or an auditor as may be necessary for the discharge of his duties.
(2) The liquidator shall, for settling the list of contributories and realising the amount of contributions, have the same powers as an official liquidator appointed by the Court for the winding up of a company under the Companies Act, 1913.
Procedure at liquidation92. (1) As soon as a liquidator is appointed to wind up a society he shall take charge of all property movable or immovable of the society and of all its books and documents.
(2) If any proprietor or officer of the society or any other person retains any portion of the assets of the society or fails to deliver to the liquidator any book or document when so required by the liquidator he shall be punishable with imprisonment which may extend to six months, or with fine which may extend to five hundred Taka, or with both, and the Court may order the delivery of the assets or book or document to the liquidator.
(3) The liquidator shall, within fifteen days of his appointment, send notice by post to all persons who appear to him to be creditors of the society that a meeting of the creditors of the society will be held on a date not being less than twenty-one nor more than twenty-eight days after his appointment, and at a place and hour to be specified in the notice, and shall also advertise notice of the meeting once in the 115[* * *] official Gazette and once at least in two newspapers 116[* * *].
(4) At the meeting so held the creditors shall determine whether an application shall be made for the appointment of any person as liquidator in the place of or jointly with the liquidator already appointed, or for the appointment of a committee of inspection, and, if they so resolve and an application accordingly is made at any time not later than fourteen days after the date of the meeting by any creditor appointed for the purpose at the meeting, the Chief Controller of Insurance shall appoint a suitable person in place of or jointly with the liquidator already appointed, and determine the remuneration to be paid to him, and if so desired, shall also appoint a committee of inspection.
(5) The committee of inspection shall, subject to any prescribed conditions, have a general power of supervision over the acts of the liquidator and shall have the right to inspect his accounts at all reasonable times.
(6) The liquidator shall, with such assistance from an actuary as may be required, ascertain as soon as practicable the amount of the society’s liability to every person appearing by the society’s books to be entitled to or interested in any policy issued by the society, and shall give notice of the amount so found to each such person in the prescribed manner and each such person on receiving such notice shall be bound by the value so ascertained.
(7) The liquidator shall make a valuation of the assets of the society and an estimate of the costs of the winding up, and shall on the basis of these, settle the list of contributories.
(8) The liquidator shall apply to the Chief Controller of Insurance for an order for the return of the deposit made by the society under section 73 and the Chief Controller of Insurance shall on such application order the return of the deposit subject to such terms and conditions as he may think fit.
(9) In administering and distributing the assets of the society the liquidator shall have regard to any directions that may be given by the creditors or contributories at a general meeting or by the Chief Controller of Insurance.
(10) The liquidator shall keep books of account in which he shall record the proceedings at all meetings attended by him, all amounts received or expended by him and any other matter that may be prescribed, and these books may, with the sanction of the Chief Controller of Insurance, be inspected by any creditor or contributory.
(11) If the winding up continues for more than a year, the liquidator shall summon a meeting of the creditors and contributories at the end of the first year and of each succeeding year, and shall lay before them an account of his acts and dealings and of the conduct of the winding up, and that account together with any views expressed thereon by the meeting shall be forwarded by the liquidator to the Chief Controller of Insurance.
(12) So far as is not otherwise provided herein or is not otherwise prescribed under this Act, the liquidator shall so far as practicable follow the procedure to be followed by an official liquidator appointed by the Court for the winding up of a company under the Companies Act, 1913.
(13) The costs of the liquidation including the remuneration of the liquidator and any expenses incurred under clause (g) of sub-section (1) of section 91 shall, if the liquidator decides that they shall be payable out of the assets of the society, be payable in priority to all other claims.
Dissolution of provident society93. (1) As soon as the affairs of a provident society are fully wound up, the liquidator shall prepare an account of the winding up showing how the winding up has been conducted and the property of the society has been disposed of and shall call a meeting of the members, creditors and contributories for the purpose of laying before it the account and giving any explanation thereof.
(2) Notice of the meeting shall be sent to each person individually and shall be advertised in the 117[* * *] official Gazette and in at least two newspapers 118[* * *].
(3) Within one week after the meeting the liquidator shall send to the Chief Controller of Insurance a copy of the account and shall report to him the holding of the meeting and its date and shall forward to him a copy of the proceedings of the meeting.
(4) The Chief Controller of Insurance may return the account to the liquidator if it is incomplete or unsatisfactory and may require the liquidator to carry out any further steps necessary to complete the winding up and the liquidator shall comply with such requirement and shall submit a further report to the Chief Controller of Insurance within six months.
(5) If the Chief Controller of Insurance is satisfied that the affairs of the society have been fully wound up he shall register the account of the liquidator who shall forthwith make over to the Chief Controller of Insurance sums, if any, remaining undisposed of, and on the expiry of three months from the registering of the account the Chief Controller of Insurance shall declare the society dissolved and cause the dissolution of the society to be notified in the official Gazette, and the liquidator shall thereupon be discharged from further responsibility.
(6) If within a period of five years from the date on which any sums have been made over to the Chief Controller of Insurance under sub-section (5) an order of a Court of competent jurisdiction has not been obtained at the instance of any claimant to such sums for their disposal the said sums shall become the property of Government.
Nominations and assignments94. (1) The provisions of section 38 and section 39 relating to assignment, transfer and nomination in the case of life insurance policies shall, subject to the provisions of this section, apply to policies of insurance issued by any provident society covering any of the contingencies specified in clause (a) of sub-section (2) of section 65.
(2) No nomination shall be valid if the person nominated is not the husband, wife, father, mother, child, grand-child, brother, sister, nephew or niece of the holder of the policy.