Page 107 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes In making any appointment under this section, the Central Government shall have due
regard to the following considerations, namely, whether the person to be appointed has
had experience in industrial, commercial or insurance matter and whether such person
has actuarial qualifications.
The Government securities and other approved securities in which assets are under sub-
section (1) to be invested and kept invested shall be held by the insurer free of any
encumbrance, charge, hypothecation or lien.

A certificate issued under this section shall entitle the holder thereof to act as a principal
agent, chief agent, or special agent, as the case may be, for any insurer.
The provisions of sub-sections (6) and (7) shall not take effect until the expiry of six months
from the commencement of the Insurance (Amendment) Act, 1950.

Every contract between an insurer and a principal agent shall be in writing and the terms
contained in Part A of the Sixth Schedule shall be deemed to be incorporated in, and form
part of, every such contract.
An application for the renewal of a registration for any year shall be made by the insurer
to the Authority before the 31st day of December of the preceding year, and shall be
accompanied as provided in sub-section
No public company as aforesaid which carries on life insurance business shall, after the
commencement of the Insurance (Amendment) Act, 1950 (47 of 1950), issue any shares
other than ordinary shares of the nature specified in sub-section (1).

6.8 Keywords

Fire Insurance Business: Fire insurance business means the business of effecting, otherwise than
incidentally to some other class of insurance business, contracts of insurance against loss by or
incidental to fire or other occurrence customarily included among the risks insured against in
fire insurance Policies.

General Insurance Business: General insurance business means fire, marine or miscellaneous
insurance business, whether carried on singly or in combination with one or more of them.
Managing Agent: Managing Agent means a person, firm or company entitled to the management
of the whole affairs of a company by virtue of an agreement with the company, and under the
control and direction of the directors except to the extent, if any, otherwise provided for in the
agreement, and includes any person, firm or company occupying such position by whatever
name called.

Policy-holder: Policy-holder includes a person to whom the whole of the interest of the policy-
holder in the policy is assigned once and for all, but does not include an assignee thereof whose
interest in the policy is infeasible or is for the time being subject to any condition.

6.9 Review Questions

1. Define authority as per the Insurance Act, 1938.
2. Explain approved securities as per the Insurance Act, 1938.
3. What do you mean by chief agent as per the Insurance Act, 1938?

4. Define Indian insurance company as per the Insurance Act, 1938.
5. Discuss fire insurance business and marine insurance business as per the Insurance
Act, 1938.

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