The Insurance Act, 1938
( ACT NO. IV Of 1938 )
[ 26th February, 1938 ]
INVESTMENT, LOANS AND MANAGEMENT
Insurers of general insurance business to have assets invested in Bangladesh
1[27A. (1) Every insurer transacting general insurance business in Bangladesh shall have assets invested in Bangladesh exceeding his liabilities by at least a sum of five lakhs of Taka or ten per cent of the net premium income, whichever is the higher:
Provided that an insurer defined in sub-clause (a) (ii) or sub-clause (b) of clause (9) of section 2 who has no paid-up capital or has a paid-up capital of less than five lakhs of Taka shall be deemed to have complied with the requirements of this sub-section if the assets invested by him in Bangladesh, not being less than ten per cent of the net premium income, exceed his liability,-
(a) up to the 31st day of December, 1970, by a sum of not less than two lakh and fifty thousand Taka;
(b) up to the 31st day of December, 1971, by a sum of not less than three lakh seventy-five thousand Taka; and
(c) up to the 31st day of December, 1972, by five lakh Taka.
(2) For the purpose of sub-section (1), the following shall be deemed to be the liability of the insurer, namely:-
(a) the net claims outstanding in respect of general insurance business in Bangladesh;
(b) forty per cent of the net premium in respect of Fire, Marine and Miscellaneous insurance business written in Bangladesh;
(c) one hundred per cent of the net premium in respect of Marine and Aviation Hull insurance business written in Bangladesh;
(d) amount of provision for dividends and unpaid dividends;
(e) amount due to Insurance Companies carrying on insurance business;
(f) amount provided for taxation;
(g) amount due to other creditors but excluding share capital, general reserves, investment reserve, reserve for bad and doubtful debts, depreciation funds except on such items as are taken credits for as “assets”.
Explanation.- Marine and Aviation Hull insurance business shall include any policies issued to an owner of a vessel or aircraft relating to any interest of such an owner in respect of a vessel or aircraft.
(3) For the purpose of computing assets referred to in sub-section (1), the following shall be excluded to the extent specified, namely:-
(a) in respect of premium outstanding as at 31st January, 1958, which still remains to be collected so much as still remains to be collected till the signing of the returns under section 15 by the auditors;
(b) in respect of the premium outstanding as at the end of 31st December, 1958, and subsequent years, so much as has not been collected by the 31st March next following;
(c) sundry debts outstanding as have not been recovered till the signing of the returns under section 15 by the auditors;
(d) furniture and fixtures, stationery, dead-stock;
(e) deferred and prepaid expenses to the extent determined by the Chief Controller of Insurance.
(4) Notwithstanding anything contained in sub-section (1), an insurer carrying on business at the commencement of the Insurance (Amendment) Ordinance, 1960, to whom that sub-section applies, shall be deemed to have complied with the requirements of this section if he has invested not less than one-fourth of the amount required to be invested before 31st December, 1960, not less than one-half before 31st December, 1961, and not less than three fourth before 31st December, 1962.
(5) Every insurer carrying on general insurance business in Bangladesh shall, along with the returns under section 15, submit to the Chief Controller of insurance a return certified by an auditor showing as at 31st day of December of the preceding year the assets invested in Bangladesh and all other particulars necessary to establish that the requirements of this section have been complied with and such return shall be certified by a principal officer of the insurer.
(6) The Chief Controller of Insurance may, at any time, take such steps as he may consider necessary for the inspection or verification of the assets invested in pursuance of sub-section (1) or for the purpose of securing the particulars necessary to establish that the requirements of that sub-section have been complied with and the insurer shall comply with any requisition made in this behalf by the Chief Controller of Insurance and if he fails to do so within two months from the receipt of the requisition he shall be deemed to have made default in complying with the requirements of this section.]