In exercise of the
powers conferred by section 114A of the Insurance Act, 1938 (4 of 1938) read
with section 26 of the Insurance Regulatory and Development Authority Act, 1999
(41 of 1999), the Authority, in consultation with the Insurance Advisory
Committee, hereby makes the following regulations, namely:- (1) These regulations may
be called Insurance Regulatory and Development Authority (Registration of
Indian Insurance Companies) Regulations, 2000. (2) They shall come into
force on the date of their publication in the Official Gazette. [1][(1) In these
Regulations, unless the context otherwise requires,- (a) "Act" means
the Insurance Act, 1938 (4 of 1938); (b) "Authority"
means the Insurance Regulatory and Development Authority of India established
under sub-section (1) of section 3 of the Insurance Regulatory and Development
Authority Act, 1999 (41 of 1999); (c) "Applicant"
means a company as defined in sub-section (20) of section 2 of the Companies
Act, 2013 (18 of 2013) or a statutory body established by an Act of Parliament
to carry on insurance business; (d) "Certificate"
means a Certificate of Registration granted by the Authority under these
Regulations; (e) "Foreign
Investors" means "foreign investors" as defined in rule 2 (g) of
Indian Insurance Companies (Foreign Investment) Rules, 2015. (f) "Indian
Investors" means "Investors" other than foreign investors. (g) "Indian
promoter" means (i)
a
company as defined in the Companies Act, 2013 (18 of 2013), which is not a
subsidiary as defined in section 2(87) of that Act; (ii)
a
banking company as defined in sub section(c) of section 5 of the Banking
Regulations Act, 1949 but does not include a foreign bank or branch thereof
functioning in India; (iii)
a
core investment company (CIC) as defined under Core Investment Companies
(Reserve Bank of India) Directions, 2011 as amended from time to time. (iv)
a
public financial institution as defined in section 2(72) of the Companies Act,
2013 (18 of 2013); (v)
a
co-operative society registered under any relevant law for the time being in
force; (vi)
a
limited liability partnership formed under the Limited Liability Partnership
Act, 2008 (6 of 2009); (vii)
Any
other person or entity as may be allowed by the Authority from time to time; which meets one or
more conditions in Section 2(69) of Companies Act, 2013. (h) "Investors"
mean persons falling within the meaning of "Investor" as defined in
regulation 2(f) of Insurance Regulatory and Development Authority of India
(Transfer of Equity Shares of Insurance Companies) Regulations, 2015. (i) "Key Management
Person" will include members of the core management team of an
insurer/applicant including all whole-time directors/Managing Directors/Chief
Executive Officer and the functional heads one level below the Managing
Director/Chief Executive Officer, including the Chief Financial Officer,
Appointed Actuary, Chief Investment Officer, Chief Risk/Compliance Officer and
the Company Secretary. (j) "Preliminary
Expenses" means expenses relating to the formation of an applicant. These
include legal, accounting and share issue expenses incurred for the formation
of the applicant and expenses incurred prior to grant of Certificate of
Registration. (2)
All words and expressions used herein
and not defined in these Regulations but defined in the Insurance Act, 1938(4
of 1938), or in the Insurance Regulatory and Development Authority Act, 1999
(41 of 1999) or Rules or Regulations made thereunder shall have the same
meanings respectively assigned to them in those Acts, Rules or Regulations.] CHAPTER II
[2][Registration
of i) Indian Insurance Company; or ii) a statutory body established by an Act
of Parliament to carry on insurance business (1) An applicant desiring
to carry on insurance business shall make an application to the Authority for
issuance of requisition for registration application form IRDAI/R1. (2) The Authority may
require the applicant, which makes an application under regulation 3 (1), to
furnish further information or clarifications regarding the matters relevant to
the consideration of the application for issuance of requisition for
registration application. (3) The Authority, by
recording the reasons in writing, may reject the application for issuance of
requisition for registration application Form IRDAI/R1. (4) An applicant
aggrieved by the decision of the Authority under sub-regulation (3) may, within
a period of thirty days from the date of such communication, appeal to the
Securities Appellate Tribunal. (5) An applicant, whose
requisition for registration application has been accepted by the Authority,
shall make an application in Form IRDAI/R2 for grant of certificate of
registration. (1) The classes of
business of insurance for which requisition for registration application may be
made are: (i) Life insurance
business; (ii) General insurance
business; (iii) Health insurance
business exclusively; (iv) Reinsurance business. (2) An applicant shall
make a requisition for registration application under regulation 3 either for
Life Insurance Business or General Insurance Business or Health Insurance
Business exclusively or Reinsurance Business. (1) An applicant shall
not be eligible to apply for the requisition in the following circumstances: (i)
Where
the requisition for registration application has been rejected by the Authority
or withdrawn; or (ii)
where
the foreign investors or Indian Promoter of the existed venture have exited for
any reason at any time during the preceding two financial years from the date
of requisition for registration application; or (iii)
Where
application for registration has been rejected by the Authority or withdrawn by
the applicant for any reason at any time during the preceding two financial
years from the date of requisition for registration application; or (iv)
Where
Certificate of Registration has been cancelled by the Authority; or (v)
Where
the name of the applicant does not contain the words 'insurance' or
'assurance'. (2) Every requisition for
registration application shall be accompanied by (i)
a
certified copy of the Memorandum of Association and Articles of Association,
where the applicant is a company and incorporated under the Companies Act, 2013
(18 of 2013); or a certified copy of the Act of Parliament setting up the
statutory body to carry on insurance business; (ii)
the
name, address and the occupation of the directors; (iii)
a
certified copy of the annual report of Indian Promoters and the Foreign
Investors for the last five years preceding the year of filing of requisition
of registration application; (iv)
a
certified copy of the shareholders' agreement between Indian Promoters and
Foreign Investors of the applicant; (v)
Projection
of Business for 5 years duly approved by the Board of Directors of the
applicant. The Authority may
require the applicant, which makes a requisition under Regulation 3, to furnish
further information or clarification regarding the matters relevant to consider
the requisition for registration application. (1) The Authority shall
take into account all matters relating to carrying on of the business of
insurance by the applicant while considering its requisition for registration
application. (2) In particular and
without prejudice to the generality of the foregoing, the Authority shall
consider the following matters, namely:- (i)
the
general track record of conduct and performance of each of the Indian Promoters
and Foreign Investors in the fields of business/profession they are engaged in; (ii)
the
record of conduct and performance of the directors and persons in management of
the Indian Promoters, Foreign Investors and the applicant; (iii)
the
capital structure of the applicant; (iv)
the
ability to meet the obligation to provide life insurance or general insurance
or health insurance to the persons residing in the rural sector, workers in the
unorganised sector or informal sector or for economically vulnerable or
backward classes of the society and other categories of persons specified by
the Authority; (v)
the
ability to meet the obligation to underwrite insurance business in third party
risks of motor vehicles as specified by the Authority in respect of general
insurance companies; (vi)
the
planned infrastructure of the applicant; (vii)
the
proposed business expansion plan for five succeeding years, including
establishment of place of business in rural areas, to effectively carry out the
insurance business; and (viii)
other
relevant matters for carrying out the provisions of the Act. (3) The Authority on
being satisfied with the information submitted and on verification that- (a) the requisition in
Form IRDAI/R1 is complete in all respects and is accompanied by all documents
required therein; and (b) the applicant shall
carry on all functions in respect of the insurance business including
management of investments within India as may be specified; may accept the
requisition and issue the application for registration in Form IRDAI/R2 for
grant of certificate of registration to the applicant. (1) Where the
requirements under Regulation 7 are not complied with, the Authority may, after
giving the applicant a reasonable opportunity of being heard, reject the
application. (2) The order rejecting
the application under sub-regulation (1) shall be communicated by the Authority
within thirty days of such rejection to the applicant in writing stating
therein the grounds on which the application has been rejected. An applicant
aggrieved by the decision of the Authority under regulation 8 may appeal to the
Securities Appellate Tribunal.] (1) An applicant, whose
requisition has been accepted, may make an application in Form IRDAI/R2 for
grant of certificate of registration. (2) Every such
application shall be accompanied by- (a) evidence of having
rupees one hundred crore or more paid up equity share capital, in case the
application for grant of certificate is for life insurance business or general
insurance business or health Insurance business; (b) evidence of having
rupees two hundred crore or more paid up equity share capital, in case the
application for grant of certificate is for re-insurance business; (c) an affidavit by the
promoters and foreign investors of the applicant certifying that the
requirements of the second proviso to section 6(1) of the Act to the effect
that paid-up equity capital is adequate after excluding any preliminary
expenses of the company have been satisfied; (d) a statement
indicating the distinctive numbers of shares issued to each Indian promoter and
Investors in respect of share capital of the applicant; (e) an affidavit by the
managing director, chief executive officer or whole-time director of the Indian
promoters and the foreign investors of the applicant certifying that the
holding of foreign paid up equity capital, referred to in sub-clause (b) of
clause (7A) of Section 2 of the Act, is calculated in accordance with Indian
Insurance Companies (Foreign Investment) Rules, 2015 read with Regulation 11 of
these Regulations and does not exceed forty nine percent of the total paid-up
equity capital of the applicant company: Provided that in case
of the Indian promoter being Limited Liability Partnership, such affidavit
shall be signed by the Designated Partner. (f) In case of there
being foreign investment in the applicant, an affidavit by the managing
director, chief executive officer or whole-time directors and the Indian
promoters and Foreign Investors of the applicant certifying that the company is
"Indian owned and controlled" as per clause (b) of sub-section (7A) of
the section 2 of the Act read with Indian Insurance Companies (foreign
Investment) Rules, 2015 and Guidelines issued by the Authority on "Indian
Owned and Controlled" as amended from time to time;. (g) Where the foreign
direct investment is more than 26 percent, a certified copy of the approval
given by FIPB in accordance with Indian Insurance Companies (Foreign
Investment) Rules, 2015; (h) a certified copy of
the published prospectus, if any; (i) a certified copy of
the standard forms of the insurer and statements of the assured rates,
advantages, terms and conditions to be offered in connection with insurance
policies together with a certificate by an actuary in case of life insurance
business that such rates, advantages, terms and conditions are workable and sound; (j) a certified copy of
the Memorandum of Understanding or Management Agreement or Shareholders
Agreement or Voting Rights Agreements or any other agreements in whatsoever
form entered into between the Indian promoters and the foreign investors, if
any, or amongst the promoters as a whole including details of the
support/comfort letters exchanged between the parties; (k) proof in support of
payment of the non-refundable fee of rupees five lakh. (l) a certificate from a
practising chartered accountant or a practising company secretary certifying
that all the requirements relating to registration fees, equity share capital,
and other requirements of the Act have been complied with by the applicant; (m) any other information
required by the Authority during the processing of the application for
registration. (1) For the purposes of
the Act and these Regulations, the calculation of the holding of equity shares
by one or more Foreign Investors in the applicant company, shall be made as
under and shall be aggregate of:- (i)
the
quantum of paid up equity share capital held by the Foreign Investors including
foreign venture capital investors, in the applicant company; and (ii)
the
proportion of the paid up equity share capital held or controlled by such
foreign investor(s) either by itself or through its subsidiary companies in the
Indian promoter(s) or Indian Investor(s) as mentioned in sub-clause (i) of this
Regulation: Provided that clause
(ii) shall not be applicable to an Indian promoter or Indian investors referred
in clause (ii) and (iv) of clause (g) of sub-regulation (1) of Regulation 2. (2) Every insurer who has
been granted registration under the Act shall, within 45 days of the end of
every quarter, furnish to the Authority a statement indicating changes
exceeding 1% of the paid up capital of the promoter. However, any change in
excess of 5% of the paid up capital of the promoters shall be reported to the
Authority immediately. (1) The Authority shall
take into account for considering the grant of certificate, all matters
relating to carrying on of the business of insurance by the applicant. (2) In particular and
without prejudice to the generality of the foregoing and without in any manner
affecting its powers, the Authority shall consider the following matters for
grant of certificate to the applicant, namely:- (a) the nature of
insurance products; (b) the level of
actuarial, accounting and other professional expertise within the management of
the applicant company; (c) the organisation
structure of the applicant to carry on all functions in respect of the insurance
business including management of the investments within its own organisation; (d) all other relevant
matters for carrying out the provisions of the Act. (1) Where an application
for registration is not complete in all respects and does not conform to the
regulations or instructions specified in Form IRDAI/R2, and after considering
the matters referred to in regulations 12 and 16 and on being satisfied that it
is not desirable to grant a certificate by the Authority, the Authority by an
Order, may reject the application. (2) The Order rejecting
the application under sub-regulation (1) shall be communicated by the Authority
within thirty days of such rejection to the applicant in writing stating
therein the ground on which the application has been rejected. (3) An applicant
aggrieved by the decision of the Authority under sub-regulation (2) may, within
a period of thirty days from the date of such communication, appeal to the
Securities Appellate Tribunal in accordance with sub-section (2C) of section 3
of the Act. An applicant, whose
application for registration has been rejected shall not be entitled to a
certificate of registration. The non-refundable
fee of rupees five lakh for registration shall be remitted by a bank draft
issued by any scheduled bank payable at Hyderabad or by any recognised
electronic funds transfer to Insurance Regulatory and Development Authority of
India. The Authority, after
making such inquiry as it deems fit and on being satisfied that- (a) the applicant is
eligible, and in its opinion, is likely to meet effectively its obligations
imposed under the Act; (b) the financial
condition of the promoters, foreign investors and the general character of the
management of the applicant are sound; (c) the volume of
business likely to be available to, and the capital structure and earning
prospects of the applicant will be adequate; (d) the interests of the
general public will be served if the certificate is granted to the applicant in
respect of the class of insurance business specified in the application; and (e) the applicant has
complied with the provisions of sections 2C, 5, 31A and 32A of the Act and has
fulfilled all the requirements of these sections applicable to it. may register the
applicant as an insurer for the class of business for which the applicant is
found suitable and grant the applicant the certificate in Form IRDAI/R3: Provided that the
Authority may impose such conditions as may be deemed fit at the time of grant
of the Certificate of Registration. The applicant shall be bound by the
conditions subject to which the certificate in Form IRDAI/R3 has been issued. An applicant granted
the Certificate of Registration under the Regulations shall commence insurance
business for which it has been authorised within 12 months of the date grant of
Certificate of Registration: Provided that if the
company feels that it will not be in a position to commence the insurance
business within the specified period of 12 months, it can before the time limit
expires, seek an extension, through a proper written application, to the
Authority. The Authority on
receipt of the request referred to in Regulation 17 will examine it and
communicate its decision in writing, either rejecting the request or granting
it. No extension of time
shall be granted by the Authority beyond 24 months from the date of grant of
Certificate of Registration under Regulation 16.][3] (1) Manner of payment of
annual fee (i) An insurer who has
been granted a Certificate of Registration under Section 3 of the Act shall
pay, an annual fee for every financial year to the Authority before 31st day of
January of the preceding financial year. (ii) The annual fee shall
be higher of (a) five lakh rupees, and (b) one-twentieth of one
per cent of total gross premium written direct by an insurer in India during
the financial year preceding the year in which the annual fee is required to be
paid, or rupees ten crore whichever is less: Provided that in the
case of an insurer carrying on solely re-insurance business, instead of the
total gross premium written direct in India, the total premium in respect of
facultative reinsurance accepted by it in India shall be taken into account. (2) If the insurer fails
to deposit the annual fee before the date specified in sub-regulation (1), the
Authority may accept the payment of annual fee along with an additional fee by
way of penalty of (a) Two percent of the
annual fee if the fee is paid within 30 days after the expiry of the last date
of payment of annual fee; or (b) Ten percent of the
annual fee if the fee is paid after 30 days from the expiry of the last date of
payment stipulated in Regulation 20 (1) (i) but before the end of financial
year in which the annual fee was required to be paid. (3) Where the insurer has
failed to pay the fee before the end of the financial year, certificate of
registration is liable to be cancelled in terms of provisions of Section 3 read
with Section 3A (2) of the Act. Manner of payment of
annual fee-The annual fee shall be paid into the account of Insurance
Regulatory and Development Authority of India. The annual fee shall
be remitted by a bank draft issued by any scheduled bank payable at Hyderabad
or by any recognised electronic funds transfer mode. The Authority may, on
receipt of fee of rupees five thousand, issue a duplicate certificate to an
insurer, if the insurer makes an application to the Authority in Form IRDAI/R4.][4] CHAPTER – V
PROCEDURE FOR ACTION IN CASE OF DEFAULT Without prejudice to
any penalty which may be imposed or any action taken under the provisions of
the Act, the registration of an Indian insurance company or insurer may be
suspended for a class or classes of insurance business for such period as may
be specified by the Authority by an order under the following circumstances- (i)
the
insurer fails, at any time, to comply with the provisions of Section 64VA as to
the excess of the value of its asset over the amount of its liabilities, (ii)
the
insurer is in liquidation or is adjudged as an insolvent, (iii)
the
business or a class of the business of the insurer has been transferred to any
person or has been transferred to or amalgamated with the business of any other
insurer without the approval of the Authority, (iv)
defaults
in complying with, or acts in contravention of, any requirement of the Act or
of any Rule or any Regulation, direction or Order issued by the Authority,
particularly if the insurer, (a) conducts its business
in a manner prejudicial to the interest of the policyholders; (b) fails to furnish any
information as required by the Authority relating to its insurance business; (c) does not submit
periodical returns as required under the Act or by the Authority; (d) does not cooperate in
any inquiry conducted by the Authority; (e) indulges in
manipulative practices; (f) indulges in unfair
trade practices; (g) fails to make
investment in the infrastructure or social sector specified in the regulations. (v)
the
Authority has reasons to believe that any claim upon the insurer arising in India
under any policy of insurance remains unpaid for three months after final
judgment in regular court of law, (vi)
the
insurer carries on any business other than insurance business or any prescribed
business, (vii)
the
insurer defaults in complying with any direction issued or order made, as the
case may be, by the Authority under the Insurance Regulatory and Development
Authority Act, 1999, (viii)
the
insurer defaults in complying with, or acts in contravention of, any
requirement of the Companies Act, 2013, or the General Insurance Business
(Nationalisation) Act, 1972 or the Foreign Exchange Management Act, 1999 or the
Prevention of Money Laundering Act, 2002; (ix)
the
insurer fails to pay the annual fee required under section 3A, or (x)
the
insurer is convicted for an offence under any law for the time being in force: Provided that the
Authority for reasons to be recorded in writing may, in case of repeated
defaults of the type mentioned above, may impose a penalty of cancellation of
Certificate of Registration. No order of
suspension or cancellation shall be imposed except after holding an enquiry in
accordance with the procedure specified in these Regulations. (1) For the purpose of
holding an enquiry under regulation 24, the Authority may appoint an enquiry
officer. (2) The enquiry officer
shall issue a notice to the insurer at the registered office or the principal place
of business of the insurer. (3) The insurer may,
within thirty days from the date of receipt of such notice, furnish to the
enquiry officer a reply, together with copies of documentary or other evidence
relied upon by it or sought by the Authority from the insurer. (4) The enquiry officer
shall give a reasonable opportunity of being heard to the insurer to enable it
to make submissions in support of its reply made under sub-regulation (3). (5) If it is considered
necessary, the enquiry officer may ask the Authority to appoint a presenting
officer to present its case. (6) The insurer may
appear before the enquiry officer, either in person or through any person duly
authorised by the insurer: Provided that no
advocate shall be permitted to represent the insurer at the enquiry: Provided further that
where an advocate has been appointed by the Authority as the presenting
officer, under sub-regulation (5) it shall be lawful for the insurer to present
its case through an advocate. (7) The enquiry officer
shall, after taking into account all relevant facts and submissions made by the
insurer, submit a report to the Authority and recommend the penalty to be
awarded as also the justification of the penalty proposed. (1) On receipt of the
report from the enquiry officer, the Authority shall consider the same and if
considered necessary by it, issue a show-cause notice as to why an action, as
it considers appropriate, should not be taken against the insurer. (2) The insurer shall,
within twenty-one days of the date of receipt of the show-cause notice, send a
reply to the Authority. (3) The Authority after
considering the reply to the show-cause notice, shall as soon as possible but
not later than thirty days from the receipt of the reply, pass such orders as
it deems fit. If no reply is furnished to the Authority by the insurer within
90 days of the servicing of the notice, the Authority can proceed to decide the
issue ex-parte. (4) An Order passed under
sub-regulation (3) shall give reasons therefore including justification of the
penalty imposed by that Order. (5) The Authority shall
send a copy of the Order made under sub-regulation (3) to the insurer. On and from the date
of suspension or cancellation of the Certificate, the insurer shall cease to
transact new insurance business: However, the
Authority may direct the insurer to continue to service the existing
policyholders for such period as may be specified in the Order made under sub-regulation
26 (3). The Order of the
Authority passed under sub-regulation (3) of regulation 26, shall be published
in atleast two daily newspapers in the area where the insurer has its principal
place of business.][5] CHAPTER VII
PROVISIONS APPLICABLE TO EXISTING INSURERS (1) Every insurer being
an Indian Insurance Company and who has already been granted Certificate of
Registration for carrying on insurance business in India shall ensure
compliance of "Indian owned and controlled" as specified in Section
2(7A) of the Act within such period as may be specified by the Authority in the
Guidelines issued in this regard. (2) However, the
Authority may, on an application made to it by an existing insurer, for valid
reasons, grant a further period of time to comply with the above Regulation,
provided that the total time taken by an existing insurer to comply with
sub-regulation (1) above does not extend beyond six months from the date of
issue of such Guidelines/directions. An undertaking to the
effect that compliance of "Indian owned and controlled" as required
under regulation 29 (1) has been ensured shall be filed by all Indian Insurance
Companies duly signed by the Chief Executive Officer and Chief Compliance
Officer within 45 days from the date of meeting of the Board of Directors,
whereat such compliance has been confirmed. Every undertaking
shall be accompanied by: (1) A certified copy of
resolution passed by the Board of Directors confirming the compliance of
regulation 29 (1) (2) Where applicable,
certified copy of the agreement/Joint venture Agreement where amendments to the
agreement/joint venture agreement have been carried out to give effect to the
provisions of Section 2(7A) of the Act. The Chairperson shall
have powers for interpretation of these Regulations. The interpretation of the
Chairperson shall be final and binding on the applicant and insurers.] [1]
Substituted by the
Insurance Regulatory and Development Authority of India (Registration of Indian
Insurance Companies) (Seventh Amendment) Regulations, 2016 vide Notification
No. IRDAI/Reg/3/115/2016 dated 22.02.2016 for the following:- "In these
regulations, unless the context otherwise requires, - (a) "Act"
means the Insurance Act, 1938 (4 of 1938); (b)
"Authority" means the Insurance Regulatory and Development Authority
established under sub-section (1) of section 3 of the Insurance Regulatory and
Development Authority Act, 1999 ( 41 of 1999); (c)
"certificate" means a certificate of registration granted or renewed
by the Authority under these regulations; (d) "enquiry
officer" means an officer of the Authority or any person specifically
appointed by it to conduct an enquiry for purposes of these regulations; (e) "general
annuity business" means the business of effecting contracts to pay
annuities on human life but does not include contracts under pension business; (f) "health
insurance business" or "health cover means the effecting of contracts
which provide sickness benefits or medical, surgical or hospital expense
benefits, whether in-patient or out patient, on an indemnity, reimbursement,
service, prepaid, hospital or other plans basis, including assured benefits and
long term care; (g) "Indian
promoter" means and includes- (i) a company formed
under the Companies Act, 1956 (1 of 1956), which is not a subsidiary as defined
in section 4 of that Act; (ii) a banking
company as defined in subsection (4A) of section 2 of the Act but does not
include a foreign bank or branch thereof functioning in India; (iii) a Public
financial institution as defined in section 4A of the Companies Act, 1956 (1 of
1956); (iv) a co-operative
society registered under any relevant law for the time being in force; (v) a person, who is
an Indian citizen or a combination of persons who are Indian citizens; (h) ["Infrastructure
facility", means "Harmonised Master list of Infrastructure
sub-sectors] (i) a road, highway,
bridge, airport, port, Railways including BOLT, road transport system, a water
supply project, irrigation project, industrial parks, water treatment system,
solid waste management system, sanitation and sewerage system; (ii) generation or
distribution or transmission of power; (iii)
telecommunication; (iv) project for
housing; (v) any other public
facility of a similar nature as may be notified by the Authority in this behalf
in the Official Gazette; (i) "linked
business' means life insurance contracts or health insurance contracts under
which benefits are wholly or partly to be determined by reference to the value
of underlying assets or any approved index; (j) "non-linked
business" means life insurance contracts or health insurance contracts
which are not linked business; (k) "pension
business' includes business of effecting contracts to manage investments of
pension funds or superannuation schemes or contracts to pay annuities that may
be approved by the Authority in this behalf; (l) "principal
officer" means any person connected with the management of the applicant
or any other person upon whom the Authority has served notice of its intention
of treating him as the principal officer thereof; (m)
All words and expressions used herein and not defined in but defined in the Insurance
Act, 1938(4 of 1938), or in the Insurance Regulatory and Development Authority
Act, 1999 (41 of 1999), shall have the meanings respectively assigned to them
in the those Acts. [2]
Substituted by the
Insurance Regulatory and Development Authority of India (Registration of Indian
Insurance Companies) (Seventh Amendment) Regulations, 2016 vide Notification
No. IRDAI/Reg/3/115/2016 dated 22.02.2016 for the following:- "3. Procedure
for registration. (1) An applicant
desiring to carry on insurance business in India shall make a requisition for
registration application in Form IRDA/R1. (2) An applicant,
whose requisition for registration application has been accepted by the
Authority, shall make an application in Form IRDA/R2 for grant of a certificate
of registration. 4. Classes of
insurance business for which requisition for registration application may be
made.- (1) An applicant
shall make a separate requisition for registration application under regulation
3 for each class of business of insurance. (2) The classes of
business of insurance for which requisition for registration application may be
made are : (a) Life insurance
business consisting of linked business, non-linked business or both; or, (b) general insurance
business including health insurance business (or health cover). 5. Requisition for
Registration Application.- (1) An applicant
shall be eligible to apply for requisition referred to in sub-regulation (1) of
regulation 3, if such applicant upon registration will be an Indian insurance company
as defined in section 2(7A) of the Act: Provided that the
applicant whose,- (i) requisition for
registration application has been rejected by the Authority at any time during
the preceding five financial years on the date of requisition for registration
application; or (ii) application for
registration has been rejected by the Authority at any time during the
preceding five financial years on the date of requisition for registration
application; or (iii) certificate of
registration has been cancelled or withdrawn by the Authority; or (iv) name does not
contain the words 'insurance company' or 'assurance company'; shall not be eligible
to make a requisition for registration application under this regulation. (2) Every requisition
for registration application shall be accompanied by (a) a certified copy
of the memorandum of association and articles of association, where the
applicant is a company and incorporated under Companies Act, 1956 (1 of 1956); (b) the name, address
and the occupation of the directors and principal officer; (c) a statement of
the class of insurance business proposed to be carried on; (d) a statement
indicating the sources that will contribute the share capital required under
section 6 of the Act; 6. Furnishing of
further information and clarification, etc. (1) The Authority may
require the applicant, which makes a requisition under regulation 3, to furnish
further information or clarification regarding the matters relevant to consider
the requisition for registration application. (2) The applicant
referred to in sub-regulation (1) of Regulation 5, if so required, may appear
before the Authority through its principal officer. 7. Consideration of
requisition for registration application. The Authority on
being satisfied that- (a) the requisition
in Form IRDA/R1 is complete in all respects and is accompanied by all documents
required therein; (b) all information
given in the Form IRDA/R1 is correct; (c) the applicant
will carry on all functions in respect of the insurance business including
management of investments within its own organisation; (d) the applicant
submitting requisition for registration application- (i) is a bona fide
applicant for registration under section 3 of the Act; (ii) will be in a
position to comply with all the requirements for grant of certificate; may accept the
requisition and direct supply of the application for registration to the
applicant. 8. Rejection of
requisition for registration application.- (1) Where the
requirements under regulation 7 are not complied with, the Authority may, after
giving the applicant a reasonable opportunity of being heard, reject the
application. (2) The order
rejecting the application under sub-regulation (1) shall be communicated by the
Authority within thirty days of such rejection to the applicant in writing
stating therein the ground on which the application has been rejected. (3) An applicant
aggrieved by the decision of the Authority under sub-regulation (2) may, within
a period of thirty days from the date of such communication, apply to the
Authority for reconsideration of its decision. (4) The Authority
shall consider the application made under sub-regulation (3) and communicate
its decision, as soon as possible, in writing to the applicant. 9. Action upon
rejection of application for requisition.- An
applicant, whose requisition for registration application has been rejected,
may approach the Authority with a fresh request for registration application
after a period of two years from the date of rejection, with a new set of
promoters and or for a class of insurance business other than the originally
proposed one." [3]
Substituted by the
Insurance Regulatory and Development Authority of India (Registration of Indian
Insurance Companies) (Seventh Amendment) Regulations, 2016 vide Notification
No. IRDAI/Reg/3/115/2016 dated 22.02.2016 for the following:- "10. Application
for registration.- (1) An applicant,
whose requisition has been accepted, may make an application in Form IRDA/R2
for grant of certificate of registration. (2) Every application
shall be accompanied by- (a) documentary proof
evidencing the making of deposit required under section 7 of the Act. (b) evidence of
having rupees one hundred crore or more paid up equity share capital, in case
the application for grant of certificate is for life insurance business or
general insurance business; (c) evidence of
having rupees two hundred crore or more paid up equity share capital, in case
the application for grant of certificate is for re-insurance business; (d) an affidavit by
the principal officer and the promoters of the applicant certifying that the
requirements of the first proviso to section 6 of the Act to the effect that
paidup share capital is adequate after excluding any preliminary expenses
incurred in the formation and registration of the company and the deposit
required to be made under section 7 of the Act have been satisfied; (e) a statement
indicating the distinctive numbers of shares issued to each promoter and
shareholder in respect of share capital of the applicant; (f) an affidavit by
the principal officer and the promoters of the applicant certifying that the
paid up equity capital referred to in sub-clause (b) of clause (7A) of section
2 of the Act, calculated is in accordance with regulation 11 does not exceed
twenty six percent; (g) a certified copy
of the published prospectus, if any; (h) a certified copy
of the standard forms of the insurer and statements of the assured rates,
advantages, terms and conditions to be offered in connection with insurance
policies together with a certificate by an actuary in case of life insurance
business that such rates, advantages, terms and conditions are workable and
sound; (i) a certified copy
of the memorandum of understanding entered into between the Indian promoter and
the foreign promoter, if any, or amongst the promoters as a whole including
details of the support comfort letters exchanged between the parties; (j) the original
receipt showing payment of the fee of rupees fifty thousand for a class of
business; (k) a certificate
from a practising chartered accountant or a practising company secretary
certifying that all the requirements relating to registration fees, share
capital, deposits, and other requirements of the Act have been complied with by
the applicant; (l) any other
information required by the Authority during the processing of the application
for registration. 11. Manner of
calculation of twenty six per cent. equity capital held by a foreign company.- (1) For the purposes
of the Act and these Regulations, the calculation of the holding of equity
shares by a foreign company either by itself or through its subsidiary
companies or its nominees (hereafter referred to as foreign investor) in the
applicant company, shall be made as under and shall be aggregate of:- (i) the quantum of
paid up equity share capital held by the foreign company either by itself or
through its subsidiary companies or nominees in the applicant company; (ii) the quantum of
paid up equity share capital held by other foreign investors, non-resident
Indians, overseas corporate bodies and multinational agencies in the applicant
company; and (iii) the quantum
represented by that proportion of the paid up equity share capital to the total
issued equity capital of an Indian promoter company mentioned in sub-clause (i)
of clause (g) of regulation 2 held or controlled by the category of persons
mentioned in sub-clauses (i) and (ii) of this sub regulation. Explanation: For
purposes of calculation referred to above, account need not be taken of the
holdings of equity in an Indian promoter company held by foreign institutional
investors, other than the foreign promoters of the applicant and their
subsidiaries and nominees, and Indian mutual funds to the extent the investment
of foreign institutional investors and Indian mutual funds are within the
approved limits laid down by the Securities and Exchange Board of India under
its rules, regulations or guidelines issued from time to time. (2) Every insurer who
has been granted registration under the Act shall, within 15 days of the end of
every quarter, furnish to the Authority a statement indicating changes
exceeding 1% of the issued capital in the holding of the shares in his company
and those of the promoter. (3) Interpretation :
The interpretation of this regulation will be that of the Authority, whose
decision on all issues will be binding on all applicants/insurers and will be
final. 12. Consideration of
Application.- (1) The Authority
shall take into account for considering the grant of certificate, all matters
relating to carrying on the business of insurance by the applicant. (2) In particular and
without prejudice to the generality of the foregoing without in any manner
affecting its freedom, the Authority shall consider the following matters for
grant of certificate to the applicant, namely:- (a) the record of
performance of each of the promoters in the fields of business/profession they
are engaged in; (b) the record of
performance of the directors and persons in management of the promoters and the
applicant; (c) the capital
structure of the applicant company; (d) the extent of
obligation to provide life insurance or general insurance policies to the
persons residing in the rural sector, workers in the unorganised sector or
informal sector or for economically vulnerable or backward classes of the
society and other categories of persons specified by the Authority; (e) the nature of
insurance products; (f) the planned
infrastructure of the applicant company, including branches in rural areas, to
effectively carry out the insurance business; (g) the level of
actuarial and other professional expertise within the management of the
applicant company; (h) the organisation
structure of the applicant to meet the requirements of regulation 7(c). (i) other relevant
matters for carrying out the provisions of the Act. (3) The Authority
shall give preference in grant of certificate of registration to those
applicants who propose to carry on the business of providing health covers to
individuals or groups of individuals. 13. Rejection of
application for registration.- (1) Where an
application for registration is not complete in all respects and does not
conform to the regulations or instructions specified in Form IRDA/R2, and after
considering matters referred to in regulations 12 and 16 and on being satisfied
that it is not desirable to grant a certificate by the Authority, by an order,
may reject the application. (2) The order
rejecting the application under sub-regulation (1) shall be communicated by the
Authority within thirty days of such rejection to the applicant in writing
stating therein the ground on which the application has been rejected. (3) An applicant
aggrieved by the decision of the Authority under sub-regulation (2) may, within
a period of thirty days from the date of such communication, appeal to the
Central Government in accordance with sub-section (2C) of section 3 of the Act,
for reconsideration of such decision. (4) The decision of
the Central Government on such appeal shall be final and shall not be
questioned before any Court. (5) The fees,
referred to in clause (j) of sub-regulation (2) of regulation 10, shall not be
refunded. 14. Effect of
rejection of application for registration.- An applicant, whose
application for registration has been rejected shall not be entitled to a
certificate: An applicant may
approach the Authority with a fresh request for registration after a period of
two years from the date of rejection, with a new set of promoters and or for a
class of insurance business other than the originally proposed one. 15. Manner of payment
of fee for registration.- The fee of rupees
fifty thousand for each class of business for registration shall be remitted by
a bank draft issued by any scheduled bank in favour of the Insurance Regulatory
and Development Authority payable at New Delhi. 16. Grant of
certificate of registration.- The Authority, after
making such inquiry as it deems fit and on being satisfied that - (a) the applicant is
eligible, and in its opinion, is likely to meet effectively its obligations
imposed under the Act; (b) the financial
condition and the general character of management of the applicant are sound; (c) the volume of
business likely to be available to, and the capital structure and earning
prospects of, the applicant will be adequate; (d) the interests of
the general public will be served if the certificate is granted to the
applicant in respect of the class of insurance business specified in the
application; and (e) the applicant has
complied with the provisions of sections 2C, 5, 31A 32 and 32A has fulfilled
all the requirements of these sections applicable to him, may register the
applicant as an insurer for the class of business for which the applicant is
found suitable and grant him a certificate in Form IRDA/R3. 17. An applicant
granted a certificate of registration under the Regulations shall commence
insurance business for which he has been authorised within 12 months of the
date of registration. Provided, however,
that if the company feels that it will not be able to commence the insurance
business within the specified period of 12 months, it can before the time limit
expires, seek an extension, by a proper written application, to the Authority. 18. The Authority
on receipt of the request referred to in Regulation 17 will examine it and
communicate its decision in writing either rejecting the request or granting
it. 19. No extension of
time shall be granted by the Authority beyond 24 months from the date of grant
of registration under Regulation 16." [4]
Substituted by the
Insurance Regulatory and Development Authority of India (Registration of Indian
Insurance Companies) (Seventh Amendment) Regulations, 2016 vide Notification
No. IRDAI/Reg/3/115/2016 dated 22.02.2016 for the following:- "20. Manner of
renewal of certificate.- (1) An insurer, who
has been granted a certificate under section 3 of the Act, shall make an
application in Form IRDA/R5 for the renewal of the certificate to the Authority
before the 31st day of December each year, and such an application shall be
accompanied by evidence of the payment of the fee which shall be the higher
of,- (a) fifty thousand
rupees for each class of insurance business, and (b) one-fifth of one
per cent. of total gross premium written direct by an insurer in India during
the financial year preceding the year in which the application for renewal of
certificate is required to be made, or rupees five crores, whichever is less;
(and in the case of an insurer carrying on solely re-insurance business,
instead of the total gross premium written direct in India, the total premium
in respect of facultative reinsurance accepted by him in India shall be taken
into account) (2) If the insurer
fails to apply for the renewal of registration before the date specified in
sub-regulation (1), the Authority may accept an application for renewal of
registration on receipt of the fee payable with the application along with an
additional fee by way of penalty of ten per cent. of the fee payable with the
application. 21. Manner of payment
of fee for renewal of certificate.- The fee for renewal
of certificate shall be paid to the account of Insurance Regulatory and
Development Authority with the Reserve Bank of India. 22. Issue of
duplicate certificate. The
Authority may, on receipt of fee of rupees five thousand, issue a duplicate
certificate to an insurer, if the insurer makes an application to the Authority
in Form IRDA/R4." [5]
Substituted by the
Insurance Regulatory and Development Authority of India (Registration of Indian
Insurance Companies) (Seventh Amendment) Regulations, 2016 vide Notification
No. IRDAI/Reg/3/115/2016 dated 22.02.2016 for the following:- "23. Suspension
of certificate.- Without prejudice to
any penalty which may be imposed or any action taken under the provisions of
the Act, the registration of an Indian insurance company or insurer who - (a) conducts its
business in a manner prejudicial to the interests of the policyholders; (b) fails to furnish
any information as required by the Authority relating to its insurance
business; (c) does not submit
periodical returns as required under the Act or by the Authority; (d) does not
cooperate in any inquiry conducted by the Authority; (e) indulges in
manipulating the insurance business; (f) indulges in
unfair trade practices; (g) fails to make
investment in the infrastructure or social sector specified under sub-section
(1A) of section 27D of the Act, may be suspended for
a class or classes of insurance business for such period as may be specified by
the Authority by an order; Provided that the
Authority for reasons to be recorded in writing may, in case of repeated
defaults of the type mentioned above, impose a penalty of cancellation of
certificate. 24. Manner of making
order of suspension or cancellation of certificate.- No order of
suspension or cancellation shall be imposed except after holding an enquiry in
accordance with the procedure specified in these regulations. 25. Manner of holding
enquiry before suspension or cancellation.- (1) For the purpose
of holding an enquiry under regulation 24, the Authority may appoint an enquiry
officer. (2) The enquiry
officer shall issue to the insurer a notice at the registered office or the
principal place of business of the insurer. (3) The insurer may,
within thirty days from the date of receipt of such notice, furnish to the
enquiry officer a reply, together with copies of documentary or other evidence
relied on by it or sought by the Authority from the insurer. (4) The enquiry
officer shall give a reasonable opportunity of hearing to the insurer to enable
it to make submissions in support of its reply made under sub-regulation (3). (5) Before the
enquiry officer, the insurer may either appear in person or through any person
duly authorised by the insurer: Provided that no
advocate shall be permitted to represent the insurer at the enquiry: Provided further that
where an advocate has been appointed by the Authority as the presenting officer
under sub-regulation (6), it shall be lawful for the insurer to present its
case through an advocate. (6) If it is considered
necessary, the enquiry officer may ask the Authority to appoint a presenting
officer to present its case. (7) The enquiry
officer shall, after taking into account all relevant facts and submissions
made by the insurer, submit a report to the Authority and recommend the penalty
to be awarded as also the justification of the penalty proposed. 26. Show-cause notice
and order.- (1) On receipt of the
report from the enquiry officer, the Authority shall consider the same and if
considered necessary by it, issue a show-cause notice as to why a penalty as it
considers appropriate should not be imposed. (2) The insurer
shall, within twenty-one days of the date of receipt of the show-cause notice,
send a reply to the Authority. (3) The Authority
after considering the reply to the show-cause notice, if received, shall as
soon as possible but not later than thirty days from the receipt of the reply,
if any, pass such orders as it deems fit. If no reply is furnished to the
Authority by the insurer within 90 days of the service of the notice, the
Authority can proceed to decide the issue ex-parte. (4) An order passed
under sub-regulation (3) shall give reasons therefor including justification of
the penalty imposed by that order. (5) The Authority
shall send a copy of the order made under sub-regulation (3) to the insurer. 27. Effect of
suspension or cancellation of certificate.- On and from the date
of suspension or cancellation of the certificate, the insurer shall cease to
transact new insurance business: 28. Publication of
order.- The
order of the Authority passed under sub-regulation (3) of regulation 26, shall
be published in atleast two daily newspapers in the area where the insurer has
his principal place of business."INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY (REGISTRATION OF INDIAN INSURANCE COMPANIES) REGULATIONS, 2000
PREAMBLE