Page 94 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Unit 6: The Insurance Act, 1938

Notes

Task Prepare a collage from definitions under the Insurance Act, 1938.

(13B) “Miscellaneous Insurance Business” means the business of effecting contracts of insurance
which is not principally or wholly of any kind or kinds included in clauses (6A), (11) and (13A);
(14) “Prescribed” means prescribed by rules made under this Act;

(15) “Principal Agent” means a person who, not being a salaried employee of an insurer, in
consideration of any commission,—
(i) Performs any administrative and organizing functions for the insurer; and

(ii) Procures general insurance business whether wholly or in part by employing or causing
to be employed insurance agents on behalf of the insurer.
(16) “Private company” and “public company” have the meanings respectively assigned to
them in clauses (13) and (13-A) of Sec. 2 of the Indian Companies Act, 1913 (7 of 1913);
(17) “Special agent” means a person who, not being a salaried employee of an insurer, in
consideration of any commission, procures life insurance business for the insurer whether
wholly or in part by employing or causing to be employed insurance agents on behalf of the
insurer, but does not include a chief agent.

Caselet Government keen to Push Insurance Bill in
Winter Session

een to push insurance sector reforms, the UPA government is contemplating a
proposal under which the FDI cap in insurance sector would be raised from 26 per
Kcent to 49 per cent without commensurate increase in voting rights.
According to sources, the government is also looking at the possibility of allowing 23 per
cent FII investment, over and above the existing FDI ceiling of 26 per cent in the sector.
These permutations and combinations, they said, are being worked out to elicit support of
the principal opposition party BJP, which is not opposed to the insurance sector reforms
but has reservations about hiking the FDI limit.

The legislation is likely to be taken up in the upcoming Winter Session of Parliament,
which would be the last full session of the current government before 2014 Lok Sabha
polls.

The Bill seeking to raise FDI in insurance sector to 49 per cent has been pending in Rajya
Sabha since 2008. The Standing Committee, to which it was referred earlier, has already
given its report to the Parliament.
The ruling UPA is keen to pursue the insurance sector reforms and the Cabinet had in
October 2012 approved the proposal to raise Foreign Direct Investment (FDI) cap to 49 per
cent.
Finance Minister P Chidambaram had earlier met main opposition leaders on the issue,
but no compromise formula was worked out.

Contd...

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