Life Insurance Corporation General Regulations, 2021

Life Insurance Corporation General Regulations, 2021[1]

[22nd July, 2021]

In exercise of the powers conferred by Section 49 of the Life Insurance Corporation Act, 1956 (31 of 1956) and in supersession of the Life Insurance Corporation Regulations, 1959, except as respect things done or omitted to be done before such supersession, the Board, with the previous approval of the Central Government hereby makes the following regulations, namely—

PRELIMINARY

Regulation - 1. Short title and commencement.

(1)     These regulations may be called the Life Insurance Corporation General Regulations, 2021.

(2)     They shall come into force on the date of their publication in the Official Gazette.

Regulation - 2. Definitions.

(1)     In these regulations, unless the context otherwise requires,—

(a)      “Act” means the Life Insurance Corporation Act, 1956 (31 of 1956);

(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)      “Company Secretary” shall mean a person who is a member of the Institute of Company Secretaries of India, constituted under the Company Secretaries Act, 1980 (56 of 1980) and who is the head of the secretarial function of the Corporation;

(d)      “Depositories Act” means the Depositories Act, 1996 (22 of 1996);

(e)      “Depositories and Participants Regulations” means the regulations made by the Securities and Exchange Board of India regarding depositories and participants, under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and Section 25 of the Depositories Act;

(f)       “draft offer document” means the draft offer document filed with the Securities and Exchange Board of India in relation to a public issue under the regulations made by the Securities and Exchange Board of India regarding issue of capital and disclosure requirements;

(g)      “embedded value” shall have the same meaning as is assigned to it in the Actuarial Practice Standard, issued by the Institute of Actuaries of India constituted under Section 3 of the Actuaries Act, 2006 (35 of 2006), for determination thereof in respect of life insurance companies incorporated in India and regulated by the Authority;

(h)     “form” means a form annexed to these regulations;

(i)       “registrar to an issue” shall have the same meaning as is assigned to it in the regulations made by the Securities and Exchange Board of India regarding registrar to an issue and share transfer agent;

(j)       “section” means section of the Act;

(k)      “Securities and Exchange Board of India” means the Securities and Exchange Board of India established under Section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(l)       “share transfer agent” shall have the same meaning as is assigned to it in the regulations made by the Securities and Exchange Board of India regarding registrar to an issue and share transfer agent.

(2)     All other words and expressions used herein and not defined in these regulations, but defined in the Act shall have the meanings respectively assigned to them in the Act.

Part I MEETINGS OF THE BOARD AND ITS COMMITTEES

Regulation - 3. Manner of holding meetings of Board and its committees.

(1)     In respect of meetings of the Board, the Chairperson and in his absence the senior-most whole-time director of the Corporation, and in respect of meetings of any committee of the Board such person as the Board has appointed as the chairperson of the committee shall, fix the date, time and place of meetings of the Board or its committee, as the case may be, and approve the items of agenda therefor.

(2)     Notice for meetings shall be issued by the Company Secretary or, if there is no Company Secretary, any director or any other officer of the Corporation authorised by the Board in this behalf.

(3)     The Chairperson, and in his absence the senior-most whole-time director present, shall chair a Board meeting.

(4)     The chairperson of a committee of the Board shall chair its meetings:

Provided that in the absence of the chairperson, any other director chosen by the members present at the meeting from amongst themselves shall chair the meeting.

(5)     The Corporation shall observe in respect of the Board and its committees such secretarial standards as are applicable in respect of Board meetings of a company under sub-section (10) of Section 118 of the Companies Act, save as otherwise provided for in the Act, the rules and regulations made thereunder.

Part II CAPITAL, SHARES, OTHER SECURITIES AND MEMBERS OF THE CORPORATION

Regulation - 4. Kinds and nature of share capital.

The share capital of the Corporation shall be of such kinds as are provided for in respect of a company in Section 43 of the Companies Act in so far as they are not inconsistent with the provisions of the Act and the rules made there under:

Provided that the provisions of sub-clause (ii) of clause (a) of the said section shall not apply in respect of the share capital of the Corporation.

Regulation - 5. Nature of shares and debentures.

The shares, debentures and other interest of any member in the Corporation shall be movable property transferable in the manner provided in Regulation 11.

Regulation - 6. Manner of issue of securities.

(1)     The Corporation may issue securities either in physical form or in dematerialised form in accordance with the provisions of the Depositories Act and the Depositories and Participants Regulations.

(2)     Where the Corporation issues any securities in physical form, the issuance of such securities shall be in accordance with the requirements as the Board may specify in this behalf, including as to the authority for issuance of security, its form, the manner of signing of the certificate on behalf of the Corporation, printing and custody of blank certificates and process for issuance of duplicate certificate.

(3)     The Corporation shall appoint a registrar to an issue or a share transfer agent and shall enter into a tripartite agreement with the registrar to an issue or the share transfer agent, as the case may be, and a depository, in respect of the securities to be issued in dematerialised form

Regulation - 7. Other provisions regarding manner of and conditions subject to which shares may be issued.

(1)     The Corporation shall issue equity shares to the Central Government in consideration for the paid-up equity capital provided by the Central Government to the Corporation, in accordance with the provisions of sub-section (2) of Section 5.

(2)     The Corporation may from time to time increase its issued share capital, with the previous approval of the Central Government, by way of public issue or rights issue or preferential allotment or private placement or issue of bonus shares to existing members holding equity shares, or by issue of shares to employees pursuant to share based employee benefits schemes, or by issue of shares to life insurance policyholders of the Corporation, or otherwise, in accordance with the provisions of Section 5.

Provided that bonus shares may be issued by the Corporation to its members only out of its free reserves or the share premium account, and no issue of bonus shares shall be made by capitalising reserves created by the revaluation of assets:

Provided further that if the Corporation proposes to make a public issue of equity shares, it shall, before filing its draft offer document with the Securities and Exchange Board of India, request the Authority for its observations, if any (supported by a certified copy of the Board resolution in this regard), while furnishing on the following aspects the details specified in respect of the same in the form as provided for an applicant Indian insurance company transacting life insurance business under insurance regulations on issuance of capital, namely—

(a)      its overall financial position, pre-and post-issue capital structure and embedded value as assessed by an independent actuary;

(b)      its record on maintenance of control level of solvency required under regulations made by the Authority and on policyholder protection;

(c)      its record of compliance with insurance regulations, as applicable to the Corporation;

(d)      the status of compliance with public disclosure requirements under any circular of the Authority in this regard, insofar as such circular is applicable to the Corporation:

Provided also that while filing the draft offer document with the Securities and Exchange Board of India, the Corporation shall—

(i)           take into account the observations, if any, issued by the Authority, with a view to ensure that the disclosures therein are in accordance with the regulations made by the Securities and Exchange Board of India in this behalf;

(ii)         make therein such other disclosures regarding risk factors specific to the Corporation, particulars of its committees, key management persons, investors, promoters and financial statements, particulars of the issue, overview of the insurance industry, industry related terms and legal and other information, as are specified in insurance regulations for issuance of capital in respect of an Indian insurance company transacting life insurance business.

Regulation - 8. Calls on shares and acceptance of unpaid share capital not called up.

The Corporation may, with the approval of the Board, make calls upon a member for further share capital in respect of any amount remaining unpaid on shares held by him and also accept from him the whole or part of such amount even if the amount has not been called up, in accordance with the provisions as applicable in respect of a company under Sections 49 and 50 of the Companies Act and model Articles 13 to 18 specified in Table F of Schedule I to the said Act, read with sub-sections (6) and (7) of Section 5 thereof.

Regulation - 9. Manner of nomination by member.

Members may make nomination referred to in Section 5-E in the manner provided for nomination by the security holders of a company in rules made under Section 72 of the Companies Act with regard to share capital and debentures, in Form ‘A’, and variation therein or cancellation thereof may be made in Form ‘B’.

Regulation - 10. Forfeiture of share.

A share of a member who fails to pay any call or instalment thereof on the day appointed for its payment may be forfeited and sold or otherwise disposed of by the Board in like circumstances and in like manner, and subject to like conditions, as are provided for shares of a company under model Articles 28 to 34 specified in Table F of Schedule I to the Companies Act, read with sub-sections (6) and (7) of Section 5 thereof.

Regulation - 11. Transfer or transmission or transposition of securities.

(1)     For carrying out activities in relation to transfer of securities, the Corporation shall appoint a share transfer agent or manage the transfer of securities' facility in-house:

Provided that in the case of in-house securities transfer facility, as and when the total number of holders of securities of the Corporation exceeds one lakh, the Corporation shall appoint a person, who is registered with the Securities and Exchange Board of India, as the registrar to an issue and share transfer agent of the Corporation.

(2)     The Board may delegate the power of transfer of securities to a committee or to the compliance officer of the Corporation or to the registrar to an issue or share transfer agent:

Provided that the Board or such committee or officer or registrar or agent shall attend to the formalities pertaining to transfer of securities at least once in a fortnight:

Provided further that the committee or officer or registrar or agent, as the case may be, shall report to the Board or its committee on transfer of securities in each meeting thereof.

(3)     The transfer and transmission of securities of the Corporation shall be carried out in like manner as is provided therefor in respect of a company in sub-sections (1) to (5) of Section 56 of the Companies Act:

Provided that the instrument of transfer for such transfer shall be executed by or on behalf of the transferor and the transferee in such form as may be specified by the Board.

(4)     The Corporation shall not register a transfer of partly paid shares unless it has given notice to the transferee in the form as may be specified by the Board and the transferee has conveyed within two weeks from the date of receipt of the notice that he has no objection to such transfer.

Regulation - 12. Manner of keeping and maintaining registers.

The Corporation shall maintain the registers referred to in sub-section (1) of Section 5-B in respect of its members in Form ‘C’ and in respect of debenture holders or security holders in Form ‘D’, in like manner as is provided for such security holders of a company in rules made under Section 88 of the Companies Act with regard to management and administration of companies, including in respect of the index of names to be included and authentication of entries in such registers, and the closure, inspection and supply of copies thereof:

Provided that separate registers shall be maintained for members and for the holders of each type of debentures or other securities.

Regulation - 13. Dividend.

The Corporation shall pay dividend in proportion to the amount paid-up on each share.

Part III MISCELLANEOUS

Regulation - 14. Manner and form in which contracts binding on the Corporation may be executed.

(1)     Contracts made on behalf of the Corporation shall be made in writing, signed by any person acting under its authority, express or implied, and may in the same manner be varied or discharged.

(2)     All contracts made according to the provisions of this regulation shall be valid and binding on the Corporation.

Regulation - 15. Accounts, receipts and documents of the Corporation by whom to be signed.

The whole-time directors, Company Secretary, and the head of the finance function of the Corporation as the Board may authorise in this behalf, and such other officers of the Corporation as the Chief Executive may authorise in this behalf, may, to such extent and subject to such limitations, if any, as may be specified or imposed in so authorising, for and on behalf of the Corporation,—

(a)      endorse and transfer promissory notes, stock-receipts, stocks, debentures, shares, securities and documents of title to goods, standing or held in the name of the Corporation or held by it;

(b)      draw, accept and endorse bills of exchange and other instruments in the current and authorised business of the Corporation;

(c)      issue insurance policies; and

(d)      sign all accounts, receipts and documents connected with the aforesaid.

Regulation - 16. Plaints etc., by whom to be signed.

Plaints, written statements, rejoinders, complaints, petitions, applications, affidavits, vakalatnamas and all other documents connected with legal proceedings may be signed, verified and presented before any court, tribunal or authority on behalf of the Corporation by any officer empowered by or under Regulation 15.

Regulation - 17. Use of electronic records and electronic signature.

For the purposes of these regulations, any requirement of—

(a)      making, varying or discharging a contract, or making, varying or cancelling a nomination, or giving of notice, or maintaining a register, or executing an instrument of transfer or other document shall be satisfied if the same is made, varied or discharged, or maintained or given or executed, as the case may be, in the form of an electronic record as defined in the Information Technology Act, 2000 (21 of 2000);

(b)      a person signing a contract, a form for nomination or for the variation or cancellation thereof, register, instrument or transfer or document shall be satisfied if he affixes thereon his electronic signature as defined in the Information Technology Act, 2000.

Form ‘A’

Nomination by member

[See Regulation 9]

 

 

 

Form ‘B’

Variation/cancellation of nomination

[See Regulation 9]

 

 

 

 

Form ‘C’

Register of members

[See Regulation 12]

(To be maintained separately for each class of shares)

Central Office address:

Class of snares (equity/preference/other):

Nominal value per share (in Rupees):

Total shares held:

Folio number:

Personal details:

Name of the member:

Name(s) of other joint holders, if any:

Address (or, in the case of a body corporate, its registered address):

Email address:

CIN/Registration number:

Unique identification number:

Father's/mother's/spouse's name:

Category of shareholder:

Occupation:

Income-tax Permanent Account Number (PAN):

Nationality:

In case the member is a minor:

Name of the guardian:

Date of birth of the minor:

Details of membership:

Date of becoming member:

Date of declaration under Section 5-C of the Life Insurance Corporation Act, 1956, if applicable:

Name and address of beneficial owner:

Name and address of significant beneficial owner:

Date of receipt of nomination, if applicable:

Name and address of nominee:

Number of shares kept in abeyance, if applicable:

Record of lien on shares, if applicable:

Date of cessation of membership:

Instructions:

Particulars of dividend mandates, power of attorney and other instructions, if any:

Instruction for sending notices etc., if any:

Details of shareholding:

 

 

 

Form ‘D’

Register of debenture holders or other securities holders

[See Regulation 12]

(To be maintained separately for each class of debentures or other securities)

Central office address:

Class of debentures or other securities:

Nominal value per unit (in Rs.):

Total number of debentures or other securities held:

Folio number:

Personal details:

Name of the debenture holder/other security holder:

Name of joint holder(s), if any:

Address (or, in the case of a body corporate, its registered address):

Email address:

Income-tax Permanent Account Number (PAN):

CIN/Registration number:

Unique identification number:

Father's/mother's/spouse's name:

Occupation, if any:

Nationality:

In case debenture holder/other security holder is a minor:

Name of guardian:

Date of birth of minor:

Details of holding:

Date of becoming holder of debentures/other securities:

Date of receipt of nomination:

Name and address of nominee:

Number of debentures/other securities kept in abeyance, if any:

Record of lien on debentures/other securities, if any:

Date of cessation as holder of debentures/other securities:

Details of security:

Whether repayment of the debentures/other securities is secured [Yes/No]:

Brief particulars of the assets to secure such debentures/other securities:

Instructions:

Particulars of interest mandates, power of attorney and other instructions, if any:

Instruction for sending notices of class meetings, etc., if any:

Details of debentures/other securities: