27.(1) Every insurer shall invest and at all times keep invested assets
•equivalent to not less than the sum of—
•Submission of
returns.
•Powers of
•Authority
•regarding
returns.
•Power of
•Authority to
•order
revaluation.
•Alterations in
•the particulars
•furnished with
•application for
•registration to
•be reported.
•Investment of
assets.
•46
(a)the amount of his liabilities to holders of life insurance policies in
•India on account of matured claims, and
(b)the amount required to meet the liability on policies of life
•insurance maturing for payment in India,
•less—
(i)the amount of premiums which have fallen due to the insurer on
•such policies but have not been paid and the days of grace for payment of
•which have not expired, and
•(ii) any amount due to the insurer for loans granted on and within the
•surrender values of policies of life insurance maturing for payment in India
•issued by him or by an insurer whose business he has acquired and in respect
•of which he has assumed liability in the following manner, namely:—
(a)twenty-five per cent. of the said sum in Government securities,
•a further sum equal to not less than twenty-five per cent. of the said sum
•in Government securities or other approved securities; and
(b)the balance in any of the approved investments,
•as may be specified by the regulations subje ct to the limitations, conditions and
•restrictions specified therein.
(2)In the case of an insurer carrying on general insurance business, twenty
•per cent. of the assets in Government Securities, a further sum equal to not less
•than ten per cent. of the a ssets in Government Securities or other approved
•securities and the balance in any other investment in accordance with the
•regulations of the Authority and subject to such limitations, conditions and
•restrictions as may be specified by the Authority in this regard.
Explanation.—In this section, the term “assets” means all the assets of
•insurer at their carrying value but does not include any assets specifically held
•against any fund or portion thereof in respect of which the Authority is satisfied
•that such fund or portion thereof, as the case may be, is regulated by the law of
•any country outside India or miscellaneous expenditure or in respect of which the
•Authority is satisfied that it would not be in the interest of the insurer to apply the
•provisions of this section.
(3)For the purposes of sub -sections (1) and (2), any specified assets shall,
•subject to such conditions, if any, as may be specified, be deemed to be assets
•invested or kept invested in approved investments specified by regulations.
(4)In computing the assets referred to in sub -sections (1) and ( 2), any
•investment made with reference to any currency other than the Indian rupee which is
•in excess of the amount required to meet the liabilities of the insurers in India with
•reference to that currency, to the extent of such excess, shall not be taken into account:
•Provided that nothing contained in this sub-section shall affect the operation
•of sub-section (2):
•Provided further that the Authority may, either generally or in any particular
•case, direct that any investment shall, subject to such conditions as may be
•imposed, be taken into account, in such manner as may be specified in computing
•the assets referred to in sub-sections (1) and (2) and where any direction has been
•issued under this proviso, copies thereof shall be laid before each house of
•Parliament as soon as may be after it is issued.
(5)Where an insurer has accepted re-insurance in respect of any policies of
•life insurance issued by another insurer and maturing for payment in India or has
•ceded re-insurance to another insurer in respect of any such policies issued by
•himself, the sum referred to in sub-section (1) shall be increased by the amount of
•the liability involved in such acceptance and decreased by the amount of the
•liability involved in such cession.
•47
(6)The Government securities and other approved securities in which assets
•are under sub-section (1) or sub-section (2) to be invested and kept invested shall
•be held by the insurer free of any encumbrance, charge, hypothecation or lien.
(7)The assets required by this section to be held invested by an insurer
•incorporated or domiciled outside India shall, except to the extent of any part
•thereof which consists of foreign assets held outside India, be held in India and
•all such assets shall be held in trust for the discharge of the liabilities of the nature
•referred to in sub-section (1) and shall be vested in trustees resident in India and
•approved by the Authority, and the instrument of trust under this sub-section shall
•be executed by the insurer with the approval of the Authority and shall define the
•manner in which alone the subject-matter of the trust shall be dealt with.
•* * * * *
27A.(1) No insurer carrying on life insurance business shall invest or keep
•invested any part of his controlled fund and no insurer carrying on general
•business shall invest or keep invested any part of his assets otherwise than in any
•of the approved investments as may be specified by the regulations subject to such
•limitations, conditions and restrictions therein.
(2)Notwithstanding anything contained in sub-section (1) or sub-section (2)
•of section 27, an insurer may, subject to the provisions contained in the next
•succeeding sub-sections, invest or keep invested any part of his controlled fund
•or assets otherwise than in an approved investment, if—
(i)after such investment, the total amounts of all such investments of
•the insure r do not exceed fifteen per cent. of the sum referred to in
•sub-section (1) of section 27 or fifteen per cent. of the assets referred to in
•sub-section (2) as the case may be;
•(ii) the investment is made, or, in the case of any investment a lready
•made, the continuance of such investment is with the consent of all the
•directors present at a meeting and eligible to vote, special notice of which
•has been given to all the directors then in India, and all such investments,
•including investments i n which any director is interested, are reported
•without delay to the Authority with full details of the investments and
•the extent of the director's interest in any such investment.
(3)An insurer shall not out of his controlled fund or assets as referred to
•in section 27,—
(a)invest in the shares of any one banking company; or
(b)invest in the shares or debentures of any one company,
•more than the percentage specified by the regulations.
(4)An insurer shall not out of his controlled fund or assets as referred to
•in sub -section (2) of section 27 invest or keep invested in the shares or
•debentures of any private limited company.
(5)All assets forming the controlled fund or assets as r eferred to in
•sub-section (2) of section 27, not being Government securities or other
•approved securities in which assets are to be invested or held invested in
•accordance with this section, shall (except for a part thereof not exceeding
•one-tenth of the controlled fund or assets as referred to in sub -section (2)
•thereof in value which may, subject to such conditions and restrictions as may
•be prescribed, be offered as security for any loan taken for purposes of any
•investment), be held free of any encumbrance, charge, hypothecation or lien.
•Further
•provisions
•regarding
investments.
•48
•Provisions
•regarding
•investments of
•assets of insurer
•carrying general
•insurance
business.
•Investment by
•insurer in
•certain cases.
(6)If at any time the Authority considers any one or more of the investments
•of an insurer to be unsuitable or undesirable, the Authority may, after giving the
•insurer an opportunity of being heard, direct him to realise the investment or
•investments, and the insurer shall comply with the direction within such time as
•may be specified in this behalf by the Authority.
(7)Nothing contained in this section shall be deemed to affect in any way
•the manner in which any moneys relating to the provident fund of any employee
•or to any security taken from any employee or other moneys of a like nature are
•required to be held by or under any Central Act, or Act of a State legislature.
Explanation.—In this section “controlled fund” means—
(a)in the case of any insurer carrying on life insurance business—
(i)all his funds, if he carries on no other class of insurance
•business;
•(ii) all the funds in India appertaining to his life insurance
•business if he carries on some other class of insurance business also.
Explanation.—For the purposes of sub -clauses (i) and (ii), the fund
•does not include any fund or portion thereof in respect of which the
•Authority is satisfied that such fund or portion, as the case may be, is
•regulated by the law in force of any country outside India or it would not be
•in the interest of the insurer to apply the provisions of this section;
(b)in the case of any other insurer carrying on life insurance
•business—
(i)all his funds in India, if he carries on no other class of
•insurance business;
•(ii) all the funds in India appertaining to his life insurance
•business if he carries on some other class of insurance business also;
•but does not include any fund or portion thereof in respect of which
•the Authority is satisfied that such fund or portion thereof, as the case
•may be, is regulated by the law of any country outside India or in
•respect of which the Authority is satisfied that it would not be in the
•interest of the insurer to apply the provisions of this section.
27B.(1) All assets of an insurer c arrying on general insurance business
•shall, subject to such conditions, if any, as may be prescribed, be deemed to be
•assets invested or kept invested in approved investments specified in section 27.
(2)All assets shall (except for a part thereof not exceeding one-tenth of the
•total assets in value which may subject to such conditions and restrictions as may
•be prescribed, be offered as security for any loan taken for purposes of any
•investment or for payment of claims, or which may be kept as security de posit
•with the banks for acceptance of policies ) be held free of any encumbrance,
•charge, hypothecation or lien.
(3)Without prejudice to the powers conferred on the Authority by
•sub-section (5) of section 27A nothing contained in this section shall be deemed
•to require any insurer to realise any investment made in conformity with the
•provisions of sub -section (1) of section 27 after the commencement of the
•Insurance (Amendment) Act, 1968, which, after the makin g thereof, has ceased
•to be an approved investment within the meaning of this section.
27C.An insurer may invest not more than five per cent. in aggregate of his
•controlled fund or assets as referred to in sub -section (2) of section 27 in the
•companies belonging to the promoters, subject to such conditions as may be
•specified by the regulations.
•62 of 1968.
•49
•41 of 1999.
•18 of 2013.
•47 of 1950.
27D.(1) Without prejudice to anything contained in this section, the
•Authority may, in the interests of the policyholders, specify by the regulations,
•the time, manner and other conditions of investment of assets to be held by an
•insurer for the purposes of this Act.
(2)The Authority may give specific directions for the time, manner and
•other conditions subject to which the funds of policyholders shall be invested in
•the infrastructure and social sector as may be specified by the regulations and such
•regulations shall apply uniformly to all the insurers carrying on the business of
•life insurance, general insurance, or health insurance or re -insurance in India on
•or after the commencement of the Insurance Regulatory and Development
•Authority Act, 1999.
(3)The Authority may, after taking into account the nature of business and
•to protect the interests of the policyholders, issue to an insurer the directions
•relating to the time, manner and other conditions of investment of assets to be
•held by him:
•Provided that no direction under this sub-section shall be issued unless the
•insurer concerned has been given a reasonable opportunity of being heard.
•* * * * *
