|For business information, annual reports, laws, ordinances, regulations and articles.|
APPOINTMENT OF ADMINISTRATORS
135. When Administrator for management of insurance business may be
appointed.- (1) If at any time the Commission has reason to believe that an insurer carrying on insurance business is acting in a manner likely to be prejudicial to the interest of holders of insurance policies it may, after giving an opportunity to the insurer to be heard, appoint an Administrator to manage the affairs of the insurer under the direction and control of the Commission.
The Administrator shall receive such remuneration as the
prescribe and the Commission may at any time cancel the
appointment and appoint some other person as Administrator.
(3) The management of the business of the insurer shall as on and after the date of appointment of the Administrator vest in such Administrator but except with the leave of the Commission the Administrator shall not issue any further policies.
As on and after the date of appointment of the
Administrator any person
with any such management immediately prior to that date shall be
divested of that management.
(5) The Commission may issue such directions to the Administrator as to his powers and duties as the Commission deems desirable in the circumstances of the case, and the Administrator may apply to the Commission at any time for instructions as to the manner in which he shall conduct the management of the business of the insurer or in relation to any matter arising in the course of such management.
136. Powers and duties of the Administrator.- (1) The Administrator shall conduct the management of the business of the insurer with the greatest economy compatible with efficiency and shall, as soon as may be possible, file with the Commission a report stating his opinion as to which of the following courses is in the circumstances most advantageous to the general interest of the holders of insurance policies:-
(a) the transfer of the business of the insurer to some other insurer;
(b) the carrying on of its business by the insurer (in case of life insurance business whether with the policies of the business continued for the original sum insured with the addition of the bonuses that attach to the policies or for reduced amounts);
(c) the winding up of business of the insurer; or
(d) such other course as he deems advisable.
(2) On the filing of the report with the Commission, the Commission may take such action, not inconsistent with the other provisions of this Ordinance, as it thinks fit for promoting the interest of the holders of insurance policies in general.
(3) Any order passed by the Commission under sub-section (2) shall be binding on all persons concerned, and shall have effect notwithstanding anything in the Memorandum or Articles of Association of the insurer, if a company.
137. Powers of Administrator respecting property liable to attachment under section 160.- (1) If the Administrator is satisfied that any person has rendered himself liable to be proceeded against under section 146, he may, pending the institution of proceedings against such person under that section, by order in writing prohibit him or any other person from transferring or otherwise disposing of any property which, in the opinion of the Administrator, would be liable to attachment in proceedings under that section.
(2) Any person aggrieved by an order made by the Administrator under sub section (1) may, within fourteen days from the date on which the order is served on him, appeal against such order to the Tribunal.
(3) An order made by the Administrator under sub-section (1) shall, subject to any order made by the Tribunal on appeal, be in force for a period of three months from the date of the order unless before the expiry of the said period, an application is made under sub-section (1) of section 160 to the Court competent to exercise jurisdiction under that sub-section, and when such an application is made, the order shall, subject to any order made by the Court, continue in force as if it were an order of attachment made by that Court in proceedings under that section.
(4) An order made by the Administrator under this section shall
(a) in the case of an order affecting a corporation or firm, be served in the manner provided for the service of summons in rule 2 of Order XXIX or rule 3 of the Order XXX, as the case may be, in the First Schedule to the Code of Civil Procedure, 1908 (Act V of 1908), and
(b) in the case of an order affecting a person not being a corporation or firm, be served on such person,
(i) personally, by delivering or tendering to him the order, or by post, or
where the person cannot be found, by leaving a copy of the order with some adult male member of his family or by affixing such copy to some conspicuous part of the premises in which he is known to have last resided or carried on business or personally worked for gains, and every such order shall also be published in the official Gazette.
(5) If any question arises whether a person was duly served with an order under sub-section (4) the publication of the order in the official Gazette shall be conclusive proof that the order was so served, and a failure to comply with the provisions of clause (a) or clause (b) of sub-section (4) shall not affect the validity of the order.
(6) Notwithstanding anything contained in this section, any property in respect of which an order has been made by the Administrator may, with the previous permission of the Administrator and subject to such terms and conditions as he may impose, be transferred or otherwise disposed of.
(7) Notwithstanding anything contained in any other law for the time being in force, the transfer or other disposition of any property in contravention of any order made by the Administrator under this section or of any terms and conditions imposed by him shall be void.
(8) For the purpose of enabling him to form an opinion as to whether any property would be liable to attachment in proceedings under section 160 or for the purpose of enabling him to institute proceedings under that section, the Administrator may require any person to furnish information on such points or matters as, in the opinion of the Administrator may be relevant for the purpose, and any person so required shall be deemed to be legally bound to furnish such information within the meaning of section 176 of the Pakistan Penal Code (Act XLV of 1860).
(9) The Administrator shall have all the powers of a civil court under the Code of Civil Procedure, 1908 (Act V of 1908), while trying a suit in respect of the following matters, namely:-
(a) summoning and enforcing the attendance of witnesses and examining them on oath;
(b) requiring the production of documents; and
(c) receiving evidence on affidavits;
and any proceeding before the Administrator under this section shall be deemed to be a judicial proceeding within the meaning of section 193 and 228 of the Pakistan Penal Code (Act XLV of I860)..
(10) Save as provided in this section or in section 160, and notwithstanding anything contained in any other law for the time being in force -
(a) no suit or other legal proceeding shall lie in any Court to set aside or modify any order of the Administrator or the Federal Government made under this section; and
(b) no Court shall pass any decree, grant any injunction or make any other order which shall have the effect of nullifying or affecting in any way any such order.
138. Cancellation of contracts and agreement- The Administrator may, at any time during the continuance of his appointment with respect to any insurer and after giving an opportunity to the persons concerned to be heard, cancel or vary (either unconditionally or subject to such conditions as he thinks fit to impose) any contract or agreement (other than a policy) between the insurer and any other person which the Administrator is satisfied is prejudicial to the interests of holders of insurance policies.
139. Termination of appointment of Administrator.- If at any time it appears to the Commission that the purpose of the order appointing the Administrator has been fulfilled or that for any reason it is undesirable that the order of appointment should remain in force, the Commission may cancel the order and thereupon the Administrator shall be divested of the management of the insurance business which shall, unless otherwise directed by the Commission, again vest in the person in whom it was vested immediately prior to the date of appointment of the Administrator.
140. Finality of decision of appointing Administrator.- Any order or decision of the Commission made in pursuance of section 135 or section 139 shall be final and shall not be called in question in any Court or Tribunal.
141. Penalty for withholding document or property from Administrator.-
If any director or officer of the insurer or any other person fails to deliver to the Administrator any books of account, registers or any other documents in his custody relating to the business of the insurer the management of which has vested in the Administrator, or retains any property of such insurer, he shall be punishable with imprisonment which may extend to six months, or with fine which may extend to one million rupees, or with both.
142. Protection of action taken under sections 135 to 139.- (1) No suit, prosecution or other legal proceeding shall lie against an Administrator for anything which is in good faith done or intended to be done in pursuance of section 135, section 136, section 137 or section 138.
(2) No suit or other legal proceeding shall lie against the Commission for any damage caused or likely to be caused by anything which is in good faith done or intended to be done under section 135, section 136 or section 139.
143. Winding up by the Court.- (1) The Court may order the winding up in
accordance with the Companies Ordinance, 1984 (XLVII of 1984), of any insurance company and the provisions of that Ordinance shall, subject to the provisions of this Ordinance, apply accordingly.
(2) The Court may, provided that it is satisfied that such order is in the
interests of the policy holders of the company, order the winding up of an insurance company:
on the grounds set out in section 305 of the Companies
Ordinance 1984 (XLVII of 1984), but subject always to the
provisions of this Ordinance;
if with the sanction of the Court previously obtained a
petition in this behalf is presented by shareholders not less
in number than one-tenth of the whole body of
shareholders and holding not less than one-tenth of the whole share capital or by not less than fifty policy holders holding participating policies of life insurance other than paid up policies, that have been in force for not less than three years and have a total sum insured, including bonuses added to the sum assured of not less than fifty million rupees; or (c) if the Commission, who is hereby authorised to do so,
applies in this behalf to the Court on any of the following grounds, namely:-
(i) that the company having failed to comply with any requirement of this Ordinance has continued such failure or having contravened any provision of this Ordinance has continued such contravention for a period of three months after notice of such failure or contravention has been conveyed to the company by the Commission;
(ii) that it appears from the returns furnished under the provisions of this Ordinance, or from the results of any investigation made thereunder, or from a report made by any Administrator appointed thereunder that the company is insolvent; or
(iii) that the continuance of the company is prejudicial to the interests of the policy holders.
An insurance company in respect of which a winding up
order is made
shall immediately cease to enter into new contracts of insurance, whether
in life or non-life insurance.
All contracts of non-life insurance issued by an insurer
which are in force
date of an order for the winding up of the insurer, shall stand
cancelled as at the date of the order or at such later date as may be specified in the order.
144. Voluntary winding up.- Notwithstanding anything contained in the Companies Ordinance, 1984 (XLVII of 1984), an insurance company shall not be wound up voluntarily unless it has first transferred or otherwise made provision for the settlement of its liabilities incurred under insurance contracts, and its registration has been revoked.
145. Court may order continuation of life insurance business.- (1) The
liquidator of an insurer carrying on life insurance shall, if the Court so orders, carry on the life insurance business, or the life insurance business carried on in any one or more statutory funds, of the insurer with a view to its being transferred as a going concern to another insurer (being a company) registered under this Ordinance, whether an existing company or a company formed for that purpose.
(2) If an order is given under sub-section (1), and has not been revoked, each statutory fund to which the order applies shall be considered for the purposes of the liquidation to constitute a single asset of the insurer, and no assets of any such statutory fund shall be applied in the winding up of the insurer, neither shall any liabilities of any such statutory fund share in any distribution of assets upon winding up.
(3) In carrying on the life insurance business in any statutory fund of an insurer in accordance with an order of a Court under sub-section (1), the liquidator may, subject to the provisions of this Ordinance, agree to the variation of any contracts of insurance in existence when the winding up order is made but shall not effect any new contracts of insurance.
146. Court may appoint special manager of life insurance business.- (1) If
the liquidator of a life insurer is satisfied that the interests of policyholders require the appointment of a special manager of the insurer's life insurance business, he may make application to the Court to appoint a special manager.
(2) The Court may, on an application made under sub-section (1), appoint a
special manager of the insurer's life insurance business to act during such time as the Court may direct, with such powers, including any of the powers of a receiver or manager, as may be entrusted to him by the Court.
147. Court may appoint independent actuary.-(1) The Court may, on the application of the liquidator, of a special manager appointed under section 146 or of the Commission, appoint an actuary (not being the insurer's appointed actuary at any time during the five years prior to the insurer entering into liquidation) to investigate the life insurance business of the insurer according to such scope as the Court shall direct, but including without limitation:
(a) the desirability or otherwise of that business being continued; and
(b) any reduction in the contracts made in the course of carrying on that business that may be necessary for its successful continuation.
(2) An actuary appointed under sub-section (1) shall report to the liquidator,
the special manager or to the Court and within such time as the Court may direct, on any investigation conducted by the actuary pursuant to this section.
148. Powers of Court to reduce contracts of life insurance.- (1) Where an insurer is in liquidation, the Court may make an order reducing the amount of the insurance contracts of the insurer upon such terms and subject to such conditions as the Court believes to be in the interests of the policy holders of the insurer.
(2) This section applies also to the business of a statutory fund of a life insurer which is being carried on by a liquidator pursuant to an order made by the Court under section 145.
(3) An application for an order under this section may be made either by the liquidator, or by or on behalf of the company or by a policy holder, or by the Commission; and the Commission and any person whom the Court thinks likely to be affected shall be entitled to be heard on any such application.
149. Commission empowered to apply for directions.-(1)
may apply to the Court for directions regarding any matter arising in
connection with or upon the winding-up of an insurer.
(2) Before making an application under sub-section (1), the Commission shall give the liquidator and the special manager (if any) written notice of that proposed application, including details of the proposed application.
(3) The liquidator and the special manager shall be entitled to be heard on the application.
150. Commission entitled to notice and hearing.-(1) Before making an application to the Court in relation to a matter arising in connection with
or upon the winding-up of an insurer, a liquidator or a special manager shall give the Commission not less than fifteen days written notice of that proposed application, including details of the proposed application.
(2) The Commission shall be entitled to be heard on the application.
151. Commission entitled to obtain information.- (1) The Commission may in writing request a liquidator or a special manager to provide such information as the Commission may deem necessary, in relation to the winding up of an insurer.
(2) The liquidator or special manager shall comply with the request within fifteen days or, such further period as the Commission shall, on application made to it for extension of time for providing such information, grant.
152. Determination of insurance liabilities.- (1)
This section shall
to the life insurance business of a statutory fund of a life insurer in
respect of which an order has been made by the Court under section 145
to continue that business, and that order has not been revoked.
(2) In the winding up of an insurer the liquidator shall -
by examination of the books and records of the insurer,
identify persons appearing by those books and records to
be entitled to or interested in the policies granted by the
determine the value of the liability of the insurer to
such person; and
give notice of such value to those persons in such manner
as the Court may direct.
A determination under clause (b) of subsection (2) shall
be made in
accordance with the directions of the Court.
In giving directions under sub-section (3) the Court
shall, and in making
the determination under the clause (b) of sub-section (2) the liquidator
shall have regard to -
(a) the surrender value of life insurance contracts;
the amount of surplus, if any, that has been allocated
the benefit of participating life insurance policyholders;
the premium paid, the pattern of risk and the length of
unexpired portion of contracts of non-life insurance.
(5) Any person to whom notice is given under clause
(c) of sub-section (2)
shall be bound by the value stated in that notice unless he gives notice of
his intention to dispute such value in such manner and within such time
as may be specified by applicable rules and failing which by an order of
153. Application of statutory fund assets.- (1) This section, other than sub-
sections (6) and (7), does not apply to a statutory fund of a life insurer in respect of which an order has been made under section 145 to continue the life insurance business of that statutory fund, and that order has not been revoked.
(2) In the winding up of an insurance company carrying on life insurance
business, the assets and the liabilities of each statutory fund of the insurer shall be ascertained separately from the value of the assets and liabilities of each other statutory fund or of the shareholders' fund.
Subject to this section, in the winding-up of a life
insurer, the assets of a
statutory fund shall first be applied in accordance with section 405 of the
Companies Ordinance in discharging preferential payments given priority
under that section.
Sub-section (3) shall have effect only to the extent that
creditors of the
company which have statutory preference under section 405 of the
Companies Ordinance, 1984 (XLVII of 1984), in respect of liabilities
which are liabilities that are referable to the business of the statutory
If any assets of the statutory fund remain after the
subsection (3), the assets shall be applied according to the following
the assets shall be applied first in discharge of policy
liabilities of the insurer referable to the statutory fund;
if any assets remain, they shall be applied in discharge
other liabilities that are referable to the business of the
if, after the application of assets according to clauses
and (b), any assets of the statutory fund remain, those
assets are to be applied in such manner as the Court directs;
directions given for the purpose of clause (c) are to be
directions as the Court considers equitable, having regard
in decreasing order of preference to:
(i) the interests of the holders of policies referable to
the statutory fund; (ii) the interests of the holders of policies referable to
statutory funds of the insurer other than the statutory
fund; (iii) the interests of creditors of the company other than
creditors of the statutory fund whose debts have not
been discharged by the application of assets
according to clause (b); and (iv) the interests of shareholders of the company.
(6) If a liability of the company-
is referable to two or more statutory funds (including a
statutory fund or funds referred to in sub-section (1)); or
is referable in part to a statutory fund or statutory
(including in both cases a statutory fund referred to in sub
section (1)) but is also related to the shareholders' fund;
the liquidator may apportion the liability so as to determine the part of the liability that is to be borne by each of the statutory funds or by the statutory fund or funds and the shareholder's fund, as the case may be on a fair and equitable basis.
In making an apportionment under subsection (6), the
comply with any directions of the Court.
The part of the amount so determined in relation to a
statutory fund is to
be treated as a liability of the insurer that is referable to the business of
154. Winding up secondary companies.-(1) Where the insurance business
or any part of the insurance business of an insurance company has been transferred to another insurance company under an arrangement in pursuance of which the first mentioned company (in this section referred to as the secondary company) or the creditors thereof has or have claims against the company to which such transfer was made (in this section referred to as the principal company) then, if the principal company is
being wound up by or under the supervision of the Court, the Court shall (subject as hereinafter mentioned) order the secondary company to be wound up in conjunction with the principal company and may be the same or any subsequent order appoint the same person to be liquidator for the two companies and make provision for such other matters as may seem to the Court necessary with a view to the companies being wound up as if they were one company.
The commencement of the winding up of the principal
otherwise ordered by the Court, be the commencement of the
winding up of the secondary company.
(3) In adjusting the rights and liabilities of the members of the several companies among themselves the Court shall have regard to the constitution of the companies and to the arrangements entered into between the companies in the same manner as the Court has regard to the rights and liabilities of different classes of contributories in the case of the winding up of a single company or as near thereto as circumstances admit.
(4) Where any company alleged to be secondary is not in process of being wound up at the same time as the principal company to which it is alleged to be secondary, the Court shall not direct the secondary company to be wound up, unless, after hearing all objections (if any) that may be urged by or on behalf of the company against its being wound up, the Court is of opinion that the company is secondary to the principal company and that the winding up of the company in conjunction with the principal company is just and equitable.
(5) An application may be made in relation to the winding up of any secondary company in conjunction with the principal company by any creditor of, or person interested in, the principal or secondary company.
(6) Where a company stands in the relation of a principal company to one insurance company and in the relation of a secondary company to some other insurance company or where there are several insurance companies standing in the relation of secondary companies to one principal company, the Court may deal with any number of such companies together or in separate groups as it thinks most expedient upon the principle laid down in this section.
155. Return of deposits.- In the winding up of an insurer the liquidator shall apply to the Court for an order for the return of the deposit made by the insurer under section 29 and the Court shall on such application order a return of the deposit subject to such terms and conditions as it shall direct. Provided that in the case of a deposit made under section 29 which by virtue of this Ordinance is deemed to be an asset of a statutory fund in respect of which an order has been made under section 145 to continue the life insurance business of that statutory fund and that order has not been revoked, the Court shall not order the return of that deposit.
OFFENCES AND PENALTIES
156. Penalty for default in complying with, or acting in contravention of
this Ordinance.- Except as otherwise provided in this Ordinance, any insurer who makes default in complying with or acts in contravention of any requirement of this Ordinance, and, where the insurer is a company,
any director, or other officer of the company, who is knowingly a party to the default, shall be punishable with fine which may extend to one million rupees and, in the case of a continuing default, with an additional fine which may extend to ten thousand rupees for every day during which the default continues.
157. Penalty for transacting insurance business in
and 29.- (1) Any insurer or any person acting on behalf of
an insurer, who carries on any class of insurance business in contravention of any of the provisions of sections 5, 6 and 29, or does any
one or more of the acts constituting the business of insurance in relation to any insurance business carried on in contravention of any of the said sections shall be punishable with fine which may extend to two million rupees.
(2) Any person knowingly taking out a policy of insurance with any insurer or person guilty of an offence under sub-section (1) shall be punishable with fine which may extend to five hundred thousand rupees:
Provided that nothing in sub-section (1) or sub-section (2) shall apply to the business of reinsurance between an insurer in Pakistan and an insurer not having an office in Pakistan.
158. Penalty for false statement in document.- Except as otherwise provided in this Ordinance, whoever, in any return, report, certificate, balance-sheet or other document, required by or for the purposes of any of the provisions of this Ordinance, wilfully makes a statement false in any material particular, knowing it to be false, shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to one million rupees, or with both.
159. Wrongfully obtaining or withholding property.- Any director, or other officer or employee of an insurer who wrongfully obtains possession of any property of the insurer or having any such property in his possession wrongfully withholds it or wilfully applies it to purposes other than those expressed or authorised by this Ordinance, shall, on the complaint of the Commission made after giving the insurer not less than fifteen days' notice of its intention, or on the complaint of the insurer or any member or any policy holder thereof, be punishable with fine which may extend to one million rupees and may be ordered by the Court trying the offence to deliver up or refund within a time to be fixed by the Court any such property improperly obtained or wrongfully withheld or wilfully misapplied and in default to suffer imprisonment for a period not exceeding two years.
(2) For the purposes of this section, property of a life insurance statutory fund maintained by an insurer is property of that insurer.
160. Power of Tribunal to order restoration of property of insurer or compensation in certain cases.- (1) If, on the application of the Commission or an Administrator appointed under section 135 or an insurer or any policy holder or any member of an insurance company or the liquidator of an insurance company (in the event of the insurance company being in liquidation), the Tribunal is satisfied:
(a) that any insurer (including in any case where the insurer is an insurance company any person who has taken part in the promotion or formation of the insurance company or any past or present director, managing agent, manager, secretary or liquidator) or any officer, employee or agent of the insurer, -
(i) has misapplied or retained or become liable or become accountable for any money or property of the insurer; or
(ii) has been guilty of any misfeasance or breach of trust in relation to the insurer; or
(b) that any person, whether he is or has been in any way connected with the affairs of the insurer or not, is in wrongful possession of any money or property of the insurer or having any such money or property in his possession wrongfully withholds it or has converted it to any use other than that of the insurer;
the Tribunal may examine any such insurer, director, managing agent, manager, secretary or liquidator or any such officer, employee or agent of the insurer or such other person, as the case may be, and may compel him to contribute such sums to the assets of the insurer by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust as the Tribunal thinks fit, or to pay such sum as may be found due from him in respect of any money or property of the insurer for which he is liable or accountable or to restore any money or property of the insurer or any part thereof, as the case may be; and the Tribunal shall have power to order the payment of damages at such rate and from such time as specified in section 118 or as the Tribunal may otherwise deem fit.
Without prejudice to the provisions contained in
sub-section (1) or sub
section (3), where it is proved that any money or property of an insurer
has disappeared or has been lost, the Tribunal shall presume that every
person in charge of, or having a disposing power over, such money or
property at the relevant time (whether a director, manager, principal
officer or any other officer) has become accountable for such money or
within the meaning of sub-clause (i) of clause (a) of sub-section
(1), and the provisions of that sub-section shall apply accordingly, unless
person demonstrates to the satisfaction of the Tribunal that the
or property has been utilised or disposed of in the ordinary course
business of the insurer and for the purpose of that business and in
accordance with the provisions of this Ordinance, or that he took all reasonable steps to prevent the disappearance or loss of such money or property or otherwise satisfactorily accounts for such disappearance or loss.
(3) Where the insurer is an insurance company and any of the acts referred to in clauses (a) or (b) of sub-section (1) has been committed by any person, every person who was at the relevant time a director, managing agent, manager, liquidator, secretary or other officer of the insurance company shall, for the purposes of that sub-section be deemed to be liable for that act in the same manner and to the same extent as the person who has committed the act, unless he proves that act was committed without his consent or connivance and was not facilitated by any neglect or omission on his part.
(4) For the purposes of this section, money or property of an insurer includes money or property of a life insurance statutory fund maintained by that insurer, and any sum paid to or money or property restored to or liquidated damages paid to an insurer in accordance with sub-section (1) which relate to the money or property of a statutory fund shall be applied to that statutory fund.
(5) Where at any stage of the proceedings against any person under this section (hereinafter referred to as the delinquent), the Tribunal is satisfied by affidavit or otherwise:-
(a) that a prima facie case has been made out against the delinquent; and
(b) that it is just and proper so to do in the interest of the policy holders of an insurer or of the members of an insurance company,
the Tribunal may direct the attachment of:-
(i) any property of the insurer in the possession of the delinquent;
(ii) any property of the delinquent which belongs to him or is deemed to belong to him within the meaning of sub-section (6); or
(iii) any property transferred by the delinquent within
two years before the commencement of proceedings under sub-section (1) or during the pendency of such proceedings, if the Tribunal is satisfied by affidavit or otherwise that the transfer was otherwise than in good faith and for consideration.
(6) For the purposes of sub-section (5), the following classes of property shall be deemed to belong to a delinquent:-
(a) any property standing in the name of any person which by reason of the person being connected with the delinquent, whether by way of relationship or otherwise, or on account of any other relevant circumstances appears to belong to the delinquent;
(b) the property of a private company in respect of the affairs of which the delinquent, by himself or through his nominees, relatives, partners or persons interested in any shares of the company is able to exercise or is entitled to acquire control, whether direct or indirect.
Explanation. For the purposes of this section a person shall be deemed to be a nominee of a delinquent, if, whether directly or indirectly, he possesses on behalf of the delinquent, or may be required to exercise on the direction or on behalf of the delinquent, any right or power which is of such a nature as to enable the delinquent to exercise or to entitle the delinquent to acquire control over the company's affairs.
(7) Any claim to any property attached under this section or any objection to such attachment shall be made by an application to the Tribunal and it shall be for the claimant or objector to adduce evidence to show that the property is not liable to attachment under this section, and the Tribunal shall proceed to investigate the claim or objection in a summary manner.
(8) When disposing of an application under sub-section (1), the Tribunal shall, after giving all persons who appear to it to be interested in any property attached under this section an opportunity of being heard, make such order as it thinks fit respecting the disposal of any such property for the purpose of effectively enforcing any liability under this section, and all such persons shall be deemed to be parties to the proceedings under this section.
(9) In any proceedings under this section the Tribunal shall have full powers and exclusive jurisdiction to decide all questions of any nature whatsoever arising thereunder and in particular, with respect to any property attached under this section and no other Tribunal shall have jurisdiction to decide any such question in any suit or other legal proceeding.
(10) In making any order with respect to the disposal of the property of any private company referred to in clause (b) of sub-section (6), the Tribunal shall have due regard to the interests of all persons interested in such property other than the delinquent and persons referred to in that clause.
(11) This section shall apply notwithstanding that the act is one for which the person concerned may be criminally liable
(12) In proceedings under this section the Tribunal shall have all the powers which a Court has under section 418 of the Companies Ordinance, 1984 (XLVII of 1984).
(13) The Tribunal entitled to exercise jurisdiction under this section shall be the Tribunal within whose jurisdiction the registered office of the insurer is situate and any proceedings under this section pending immediately before the commencement of this Ordinance in any Court shall, on such commencement, stand transferred to the Tribunal.
(14) A Tribunal may, with the approval of the High Court exercising territorial jurisdiction over it, make rules providing for-
(a) the manner in which enquiries and proceedings may be held under this section; and
(b) any other matter for which provision has to be made for enabling the Tribunal effectively to exercise its jurisdiction under this section.
161. Notice to Commission and hearing.-(1) When application is made to the Tribunal for the making of any order to which this section applies the Tribunal shall, unless the Commission has itself made the application or has been made a party thereto, send a copy of the application together with intimation of the date fixed for the hearing thereof to the Commission, and shall give the Commission an opportunity of being heard.
(2) The orders to which this section applies are the following namely:-
(a) an order for the attachment in execution of a decree of any deposit made under section 29;
(b) an order under section 155 for the return of any such deposit;
(c) an order under section 69 sanctioning any arrangement for the transfer or amalgamation of life insurance business or any order consequential thereon; and
(d) an order for the winding up of an insurance company.
162. Previous sanction of Commission for institution of proceedings.- (1)
Except where proceedings are instituted by the Commission no proceedings under this Ordinance against an insurer or any director, manager or other officer of an insurer shall be instituted by any person unless he has previous thereto obtained the sanction of the Commission (which shall not unreasonably be withheld) to the institution of such proceedings.
(2) Where the proceedings are not initiated by the Commission or the Commission has not been made a party, the Tribunal shall before proceeding further in the matter give notice to the Commission and shall not proceed to hear and decide the matter without giving the Commission the opportunity of participating in the proceedings and being heard.
163. Power of Court to grant relief.-
If in any
proceedings, civil or criminal,
appears to the Court or the Tribunal hearing the case that a person is or
may be liable in respect of negligence, default, breach of duty or breach of trust but that he has acted honestly and reasonably and that having regard to all the circumstances of the case he ought fairly to be excused for the negligence, default, breach of duty or breach of trust, the Court or the Tribunal may relieve him either wholly or partly from his liability on such terms as it may think fit.
164. Service of notiees.- (1) Any process or notice required to be served on an insurer shall be sufficiently served if addressed to any person registered with the Commission as a person authorised to accept notices on behalf of the insurer and left at, or sent by registered post to, the address of such person as registered with the Commission.
(2) Any notice or other document which is by this Ordinance required to be sent to any policy holder may be addressed and sent to the person to whom notices respecting such policy are usually sent and any notice so addressed and sent shall be deemed to be notice to be holder of such policy:
Provided that, where any person claiming to be interested in a policy as transferee, assignee or nominee has given to an insurer notice in writing of his interest, any notice which is by this Ordinance required to be sent to policy holders shall also be sent to such person at the address specified by him in his notice.
165. Insurance of interests in Pakistan.- (1) The Federal Government may make rules, not inconsistent with this Ordinance, imposing conditions on the ability of any person to insure outside Pakistan any risk or part thereof in respect of any property or interests which are located in Pakistan at the time the insurance is effected.
(2) The Federal Government may make rules, not inconsistent with this Ordinance, imposing conditions on the ability of any insurer to issue life insurance policies denominated in currencies other than the Pakistan Rupee to persons who are citizens of Pakistan and resident in Pakistan at the time the insurance is effected.
166. Insurance of public property .- (1) This section applies to direct non- life insurance of public property.
(2) In this section -
(a) "Company" means the National Insurance Company Limited;
(b) "public property" means:
(i) any property, movable or immovable, which belongs to, or the safety of which is the legal responsibility of, -
(A) the Federal Government, a Provincial Government or a local authority or statutory corporation; or
any company, firm, undertaking, institution,
organisation or other establishment which is
or controlled by the Federal or a
Provincial Government or local authority or statutory corporation or in which such Government, by itself or jointly with a local authority or corporation or company managed or controlled by it, holds a controlling financial share or interest or which is specified by the Federal Government for the purposes of this clause;
(ii) a project financed out of an external loan, or with external aid until it reaches: (A) in the case of an industrial project, the stage at which it is capable of commencing normal production; and
(B) in the case of any other project, the stage at which it is capable of being put to the use for which it is intended; and
(c) "statutory corporation" means a body corporate, other than a company, established or set up by the Federal Government or a Provincial Government in pursuance of any law.
(3) Subject to the provisions of sub-sections (4) and (5), all insurance business relating to any public property, or to any risk or liability appertaining to any public property, shall be placed with the Company only and shall not be placed with any other insurer:
Provided that marine, aviation and transport insurance relating to goods the import of which is financed out of an external loan, or with external aid, may, at the option of the importer, be placed with any insurer authorised to carry out such insurance business in the country giving the loan or aid.
(4) The Federal Government may -
(a) by order in writing exempt from compliance with sub section (3) any property or liability to which that sub section applies; or
(b) by notification in the official Gazette exclude from the application of sub-section (3) such property or liability as is specified in that notification.
(5) If the Company declares in writing that it is not able, by virtue of the operation of a provision of this Ordinance or for any other reason, to enter into a contract of insurance to which sub-section (3) refers, the property or liability which is the subject of that proposed contract of insurance shall be exempted from the provisions of sub-section (3) to the extent of the insurance proposed to be obtained by means of that contract of insurance.
(6) Any person who insures, and any insurer which accepts insurance of, any property or liability, knowing such insurance to be in contravention of sub-section (3), shall be guilty of an offence:
Provided that no person shall be in contravention of sub-section (3) by reason only of that sub-section becoming applicable to property or liability to which it was not applicable at the time that a contract of insurance in respect of that property or liability was taken out.
(7) The Federal Government may, by notification in the official Gazette, make rules, regulations and notifications, not inconsistent with the provisions of this Ordinance, for carrying out the purposes of this section.
(8) Rules, regulations and notifications, made under the authority of the National Insurance Corporation Act 1976 for the purposes of section 10 of that Act and in force as at the commencement date, shall be deemed to have been made under the provisions of the preceding sub-section and shall apply mutatis mutandis except in so far as and to the extent that they conflict with the provisions of this Ordinance.
(9) This section shall have effect until the earliest of the following dates:
(a) the effective date of a notification by the Federal Government in the official Gazette that this section longer has effect;
the effective date of a direction by the Commission to
to cease entering into new contracts of insurance;
(c) the effective date at which the Federal Government ceases to hold a controlling ownership interest in the Company.
RULES AND REGULATIONS
167. Power to make rules and regulations.-(1) The Federal Government
may, subject to the condition of previous publication by notification in the official Gazette, make rules to carry out the purposes of this Ordinance.
(2) The power of the Federal Government to make rules in respect of matters expressly required in this Ordinance to be prescribed by the Commission, shall be deemed to have been hereby delegated to the Commission, who may, subject to the condition of previous publication by notification in the official Gazette, and subject to the condition of previous approval by the Board, make rules in respect of such matters and in respect of any other matters which are required to be or may be prescribed under this Ordinance, which the Federal Government may, in exercise of the power hereby conferred, in writing, published in the Gazette, delegate to the Commission.
(3) The powers of the Board and of the Commission to make regulations, which is conferred by section 40 of the SECP Act, shall extend to the making of such regulations as may be required to carry out the purposes of this Ordinance.
REPEAL AND SAVINGS
168. Repeal - The Insurance Act, 1938 (IV of 1938) is hereby repealed.
169. Repealed Act to apply to certain insurers ceasing to enter into new contracts before commencement of this Ordinance.-
(1) Sections 28, 29, 36 of this Ordinance shall not apply to an insurer in relation to any insurance business where such insurer has ceased, before the commencement of this Ordinance, to enter into any new contracts of insurance and notwithstanding the repeal of the repealed Act, the like provisions of the repealed Act shall for so long as he continues to have any liability under any such contracts, apply to such insurer and any contracts written by him prior to the commencement date:
Provided that not later than one month after the commencement date such insurer has given to the Commission notice of having ceased to write new contracts and with such notice provides to the Commission:
(a) details of all policies which remain in force as at the commencement date;
(b) details of all claims reported to the insurer which have not been fully and finally settled as at the commencement date;
(c) a statement of assets and liabilities in the form prescribed as at a date not earlier than three months before the commencement date;
if the insurer carries on or has carried on non-life
a report certified by an actuary estimating the
settlement cost, inclusive of expenses of
of claims incurred by the insurer under non-life
policies issued by it, whether or not reported, as
at the date to which the statement of assets and liabilities is made up;
(e) if the insurer carries on or has carried on life insurance business, a report in the form prescribed, certified by an actuary, on the financial condition of the life insurance business carried on by the insurer, as at the date to which the statement of assets and liabilities is made up; and
(f) such other particulars as may be prescribed.
(2) An insurer to which sub-section (1) applies shall in each year submit to the Commission, at the time it submits its annual statutory accounts, statements as follows:
(a) details of all policies which remain in force as at 31st December in the year to which the annual statutory accounts relate; and
(b) details of all claims reported which have not been fully and finally settled as at 31st December in the year to which the annual statutory accounts relate.
(3) Within fifteen days of the insurer ceasing to have any policies in force, an insurer to which sub-section (1) applies shall give notice to the Commission to that effect and thereafter the insurer shall not be required to submit the statement identified in clause (a) of sub-section (2).
For the purposes of this section, a policy is in force
as at a date if the
has not lapsed or been cancelled with effect on or before that date,
and either -
(a) the term stipulated in the policy during which premium is to be paid has not expired, on or before that date; or
(b) the term stipulated in the contract during which an insured event may occur has not expired, on or before that date.
(5) For the avoidance of doubt, a policy of life insurance which has been paid up is a policy in force for the purposes of this section.
170. Savings.- (1) Nothing in this Ordinance shall affect the liability of an insurer, being a company, to comply with the provisions of the Companies Ordinance, 1984 (XLVII of 1984), in matters not otherwise specifically provided for by this Ordinance.
(2) Save as otherwise provided in this Ordinance, nothing in this
Ordinance shall affect or be deemed to affect anything done, investigation or proceedings commenced, order, rule, regulation, appointment, document or agreement made, fee prescribed or charged, resolution passed, direction given, proceedings taken, or instrument executed or issued under or pursuant to the repealed Act or any law amended or repealed by this Ordinance and any such thing, action, investigation, proceedings, order, rule, regulation, appointment, document or agreement, fee, resolution, direction, proceedings or instrument shall, if in force at the commencement date for this section and not inconsistent with any of the provisions of this Ordinance, continue in force and have effect as if it had been respectively done, taken, commenced, made, prescribed, charged, directed, passed, given, executed or issued under this Ordinance or any other laws as amended by this Ordinance.
(3) Save as otherwise provided in this Ordinance, all debts and obligations incurred or contracts entered into or rights acquired and all matters and things engaged to be done by, with or for the Federal Government under or pursuant to the repealed Act before the commencement date shall be deemed to have been incurred, entered into, acquired or engaged to be done by, with or for the Commission, as the case may be.
(4) Until the establishment of a Tribunal or Tribunals under this Ordinance, sections 47C to 47L both inclusive and section 110 of the repealed Act shall continue to have effect in relation to the cases already filed or pending before the Claims Settlement Board or Insurance Appellate Tribunal and shall be determined and decided in according with the law in force immediately before the commencement date.
(5) All suits and other legal proceedings instituted by or against the Federal Government under or pursuant to the repealed Act before the commencement date shall be deemed to be suits and proceedings by or against the Commission as the case may be and may proceed and be dealt with accordingly.
171. Exemptions.- (1) Nothing in this Ordinance shall apply to any insurance business carried on by the Federal or by a Provincial Government.
(2) For the purposes of this section, insurance business carried on by a body corporate shall not be deemed to be insurance business carried on by the Federal or by a Provincial Government by virtue only of the fact that the Federal or Provincial Government holds a controlling ownership interest in the body corporate.
(3) Any provision in any other law which exempts an insurer to which this Ordinance applies from compliance with this Ordinance or which requires such an insurer to contravene this Ordinance shall be void to the extent of that exemption or requirement.
172. Removal of difficulties.- If any difficulty arises in giving effect to the provisions of this Ordinance, the Federal Government may, by notification in the official Gazette, make such provision or order as may appear to it to be necessary for the purpose of removing the difficulty:
Provided that the power conferred on the Federal Government by this section shall not be exercised after two years from the commencement date.
MUHAMMAD RAFIQ TARAR
|Home | About Us | Contact | Information Resources|