1. Short title, extent and commencement. — (1) This Act may be called the Insurance Act, 1938.
2
[(2) It extends to the whole of India 3***.]
(3) It shall come into force on such date4
as the Central Government may, by notification in the
Official Gazette, appoint in this behalf.
2. Definitions. — In this Act, unless there is anything repugnant in the subject or context, —
5
[(1) “actuary” means an actuary as defined in clause (a) of sub-section (1) of section 2 of the
Actuaries Act, 2006 (35 of 2006);
(1A) “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);]
6
[(2) “policy-holder” includes a person to whom the whole of the interest of the policy-holder in
the policy is assigned once and for all, but does not include an assignee thereof whose interest in the
policy is defeasible or is for the time being subject to any condition ;]
7
[(3) “approved securities” means—
(i) Government securities and other securities charged on the revenues of the Central
Government or of the Government of a 8*** State or guaranteed fully as regards principal and
interest by the Central Government, or the Government of any 6*** State ;
1. The Act has been extended to—
Goa, Daman and Diu with modifications by Reg. 12 of 1962, s. 3 and the Schedule (w.e.f. 15-12-1963); and came into force in
Pondicherry on 1-10-1963, vide Reg. 7 of 1963, s. 3 and the Schedule I; and brought into force in Dadra and Nagar Haveli
(w.e.f. 1-7-1965) by Reg. 6 of 1963, s. 2 and the Schedule I; the whole of the Union territory of Lakshadweep (w.e.f. 1-10-
1967) vide Reg. 8 of 1965, s. 3 and the Schedule; and brought into force in the State of Sikkim (w.e.f. 1-7-1975) vide S.O.
274(E), dated 24-6-1975.
2. Subs. by Act 47 of 1950, s. 2, for sub-section (2) (w.e.f. 1-6-1950).
3. The words “except the State of Jammu and Kashmir” omitted by Act 62 of 1956, s. 2 and the Schedule (w.e.f. 1-11-1956).
4. 1st July, 1939: see notification no. 589-(4)/38, dated the 1st April, 1939, Gazette of India, 1939, Pt. I, p. 631.
5. Subs. by Act 5 of 2015, s. 3, for clauses (1) and (1A) (w.e.f. 26-12-2014).
6. Subs. by Act 6 of 1946, s. 2, for clause (2) (w.e.f. 20-3-1946).
7. Subs. by Act 47 of 1950, s. 3, for clause (3) (w.e.f. 1-6-1950).
8. The words “Part A” omitted by the Adaptation of Laws (No. 3) Order, 1956.
* Subject to verification and confirmation by the administrative ministry.
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(ii) debentures or other securities for money issued under the authority of any Central Act or
Act of a State Legislature by or on behalf of a port trust or municipal corporation or city
improvement trust in any presidency-town ;
(iii) shares of a corporation established by law and guaranteed fully by the Central
Government or the Government of a 1*** State as to the repayment of the principal and the
payment of dividend ;
(iv) securities issued or guaranteed fully as regards principal and interest by the Government
of any Part B State and specified as approved securities for the purposes of this Act by the
Central Government by notification in the Official Gazette ; and
2* * * * *
3
[Explanation. — In sub-clauses (i) and (iii), “Government of a State” in relation to any
period before the 1st November, 1956, means the Government of a Part A State.]
4
[(4) “auditor” means a person qualified under the Chartered Accountants Act, 1949 (38 of 1949),
to act as an auditor of companies;]
5
[(4A) “banking company” and “company” shall have the meanings respectively assigned to them
in clauses (c) and (d) of sub-section (1) of section 5 of the Banking Companies Act, 1949 (10 of
1949) 6***;]
(5) “certified” in relation to any copy or translation of a document required to be furnished by or
on behalf of 7
[an insurer or a provident society as defined in Part III] means certified by a principal
officer of 8
[such insurer or provident society] to be a true copy or a correct translation, as the case
may be;
9* * * * *
10[(5B) “Controller of Insurance” means the officer appointed by the Central Government under
section 2B to exercise all the powers, discharge the functions and perform the duties of the Authority
under this Act or the Life Insurance Corporation Act, 1956 (31 of 1956) or the General Insurance
Business (Nationalisation) Act, 1972 (57 of 1972) or the Insurance Regulatory and Development
Authority Act, 1999 (41 of 1999);]
(6) “Court” means the principal Civil Court of original jurisdiction in a district, and includes the
High Court in exercise of its ordinary original civil jurisdiction;
1. The word “Part A” omitted by the Adaptation of Laws (No. 3) Order, 1956.
2. Sub-clause (v) omitted by Act 42 of 2002, s. 2 (w.e.f. 23-9-2002).
3. Ins. by The Adaptation of Laws (No. 3) order 1956.
4. Subs. by Act 47 of 1950, s. 3 for clause 4 (w.e.f. 1-6-1950).
5. Ins. by s. 3, ibid, (w.e.f. 1-6-1950).
6. Now renamed as Banking Regulation Act, 1949 (10 of 1949).
7. Subs. by Act 13 of 1941, s. 2, for “an insurer” (w.e.f. 8-4-1941).
8. Subs. by s. 2, ibid, for “the insurer” (w.e.f. 8-4-1941).
9. Clause (5A) omitted by Act 5 of 2015, s. 3 (w.e.f. 26-12-2014).
10. Subs. by Act 41 of 1999, s. 30 and the First Schedule (w.e.f. 19-4-2000). Earlier it was inserted by Act 47 of 1950, s. 3
(w.e.f. 1-6-1950).
15
1
[(6A) “fire insurance business” means the business of effecting, otherwise than incidentally to
some other class of insurance business, contracts of insurance against loss by or incidental to fire or
other occurrence customarily included among the risks insured against in fire insurance policies;
(6B) “general insurance business” means fire, marine or miscellaneous insurance business,
whether carried on singly or in combination with one or more of them;]
2
[(6C) “health insurance business” means the effecting of contracts which provide for sickness
benefits or medical, surgical or hospital expense benefits, whether in-patient or out-patient travel
cover and personal accident cover;]
3
[(7) “Government security” means a Government security as defined in the Public Debt Act,
1944 (18 of 1944);]
4
[(7A) “Indian insurance company” means any insurer, being a company which is limited by
shares, and, —
(a) which is formed and registered under the Companies Act, 2013 (18 of 2013) as a public
company or is converted into such a company within one year of the commencement of the
Insurance Laws (Amendment) Act, 2015 (5 of 2015);
5
[(b) in which the aggregate holdings of equity shares by foreign investors including portfolio
investors, do not exceed seventy-four per cent. of the paid-up equity capital of such Indian
insurance company, and the foreign investment in which shall be subject to such conditions and
manner, as may be prescribed.]
Explanation. —For the purposes of this sub-clause, the expression “control” shall include the
right to appoint a majority of the directors or to control the management or policy decisions
including by virtue of their shareholding or management rights or shareholders agreements or
voting agreements;
(c) whose sole purpose is to carry on life insurance business or general insurance business or
re-insurance business or health insurance business;]
6* * * * *
7
[(8A) “insurance co-operative society” means any insurer being a co-operative society, —
(a) which is registered on or after the commencement of the Insurance (Amendment) Act,
2002 (42 of 2002), as a co-operative society under the Co-operative Societies Act, 1912 (2 of
1912) or under any other law for the time being in force in any State relating to Co-operative
Societies or under the Multi-State Co-operative Societies Act, 1984 (51 of 1984);
1. Ins. by Act 47 of 1950, s. 3 (w.e.f. 1-6-1950).
2. Ins. by Act 5 of 2015, s. 3 (w.e.f. 26-12-2014).
3. Subs. by Act 47 of 1950, s. 3, for clause (7) (w.e.f. 1-6-1950).
4. Subs. by Act 5 of 2015, s. 3, for clause (7A) (w.e.f. 26-12-2014).
5. Subs. by Act 6 of 2021, s. 2, for sub-clause (b) (w.e.f. 1-4-2021).
6. Clause (8) omitted by s. 3, ibid. (w.e.f. 26-12-2014).
7. Ins. by Act 42 of 2002, s. 2 (w.e.f. 9-8-2002).
16
1
[(b) having a minimum paid-up capital of rupees one hundred crore in case of life insurance
business, general insurance business and health insurance business;]
(c) in which no body corporate, whether incorporated or not, formed or registered outside
India, either by itself or through its subsidiaries or nominees, at any time, holds more than
twenty-six per cent of the capital of such Co-operative Society;
(d) whose sole purpose is to carry on life insurance business or general insurance
business 2
[or health insurance business] in India;]
3
[(9) “insurer” means—
(a) an Indian Insurance Company, or
(b) a statutory body established by an Act of Parliament to carry on insurance business, or
(c) an insurance co-operative society, or
(d) a foreign company engaged in re-insurance business through a branch established in
India.
Explanation. — For the purposes of this sub-clause, the expression “foreign company” shall
mean a company or body established or incorporated under a law of any country outside India
and includes Lloyd’s established under the Lloyd’s Act, 1871 (United Kingdom) or any of its
Members;]
(10) “insurance agent” means an insurance agent 4*** 5*** who receives or agrees to receive
payment by way of commission or other remuneration in consideration of his soliciting or procuring
insurance business 6
[including business relating to the continuance, renewal or revival of policies of
insurance];
6
[(10A) “investment company” means a company whose principal business is the acquisition of
shares, stocks, debentures or other securities ;]
7
[(10B) “intermediary or insurance intermediary” shall have the meaning assigned to it in
clause (f) of sub-section (1) of section 2 of the Insurance Regulatory and Development Authority
Act, 1999 (41 of 1999);]
8
[(11) “life insurance business” means the business of effecting contracts of insurance upon
human life, including any contract whereby the payment of money is assured on death (except death
by accident only) or the happening of any contingency dependent on human life, and any contract
1. Subs. by Act 5 of 2015, s. 3, for sub-clause (b) (w.e.f. 26-12-2014).
2. Ins. by s. 3, ibid. (w.e.f. 26-12-2014).
3. Subs. by s. 3, ibid., for clause (9) (w.e.f. 26-12-2014).
4. The words and figures “licensed under section 42” omitted by s. 3, ibid. (w.e.f. 26-12-2014).
5. The words “being an individual” omitted by Act 35 of 1957, s. 2 (w.e.f. 1-9-1957).
6. Ins. by Act 47 of 1950, s. 3 (w.e.f. 1-6-1950).
7. Ins. by Act 42 of 2002, s. 2 (w.e.f. 23-9-2002).
8. Subs. by Act 47 of 1950, s. 2, for clause (11) (w.e.f. 23-9-2002).
17
which is subject to payment of premiums for a term dependent on human life and shall be deemed to
include—
(a) the granting of disability and double or triple indemnity accident benefits, if so provided
in the contract of insurance,
(b) the granting of annuities upon human life ; and
(c) the granting of superannuation allowances and 1
[benefit payable out of any fund]
applicable solely to the relief and maintenance of persons engaged or who have been engaged in
any particular profession, trade or employment or of the dependents of such persons ;]
2
[Explanation. — For the removal of doubts, it is hereby declared that “life insurance
business” shall include any unit linked insurance policy or scrips or any such instrument or unit,
by whatever name called, which provides a component of investment and a component of
insurance issued by an insurer referred to in clause (9) of this section.]
3* * * * *
4* * * * *
5
[(13A) “marine insurance business” means the business of effecting contracts of insurance upon
vessels of any description, including cargoes, freights and other interests which may be legally
insured, in or in relation to such vessels, cargoes and freights, goods, wares, merchandise and
property of whatever description insured for any transit by land or water, or both, and whether or not
including warehouse risks or similar risks in addition, or as incidental to such transit, and includes
any other risks customarily included among the risks insured against in marine insurance policies ;
(13B) “miscellaneous insurance business” means the business of effecting contracts of insurance
which is not principally or wholly of any kind or kinds included in clauses (6A), (11) and (13A);]
6
[(13BA) “National Company Law Tribunal” means the National Company Law Tribunal
constituted under section 10FB of 7
[the Companies Act, 2013 (18 of 2013)];
(13BB) “National Company Law Appellate Tribunal” means the National Company Law
Appellate Tribunal constituted under sub-section (1) of section 10FR of 7
[the Companies Act, 2013
(18 of 2013);]
(14) “prescribed” means prescribed by rules made under 8
[this Act]; and
9* * * * *
10* * * * *
1. Subs. by Act, 5 of 2015, s. 3, for “annuities payable out of any fund” ( w.e.f. 26-12-2014).
2. Ins. by Act 26 of 2010, s. 3 (w.e.f. 9-4-2010).
3. Clause (12) omitted by Act 5 of 2015, s. 3 (w.e.f. 26-12-2014).
4. Clause (13) omitted by s. 3, ibid. (w.e.f. 26-12-2014).
5. Ins. by Act 47 of 1950, s. 3 (w.e.f. 1-6-1950).
6. Ins. by Act 11 of 2003, s. 133 and the Schedule (w.e.f. 1-4-2003).
7. Subs. by Act 5 of 2015, s. 2(b), for “the Companies Act, 1956” (w.e.f. 26-12-2014).
8. Subs. by Act 41 of 1999, s. 30 and the First Schedule, for “section 114” (w.e.f. 19-4-2000).
9. Clause (14A) omitted by Act 62 of 1956, s. 2 and the Schedule (w.e.f. 1-11-1956).
10. Clause (15) omitted by Act 5 of 2015, s. 3 (w.e.f. 26-12-2014).
18
(16) “private company” and “public company” have the meanings respectively assigned to them
in 1
[clause (68) and clause (72) of section 2 of the Companies Act, 2013 (18 of 2013)];
2
[(16A) “regulations” means the regulations framed by the Insurance Regulatory and
Development Authority of India established under the Insurance Regulatory and Development
Authority Act, 1999 (41 of 1999);
(16B) “re-insurance” means the insurance of part of one insurer’s risk by another insurer who
accepts the risk for a mutually acceptable premium;
(16C) “Securities Appellate Tribunal” means the Securities Appellate Tribunal established
under section 15K of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]
3* * * * *
4
[2A. Interpretation of certain words and expressions. — Words and expressions used and not
defined in this Act but defined in the Life Insurance Corporation Act, 1956 (31 of 1956), the General
Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and the Insurance Regulatory and
Development Authority Act, 1999 shall have the meanings respectively assigned to them in those Acts.]
5
[2B. Appointment of Controller of Insurance. — 6
[(1) If at any time, the Authority is superseded
under sub-section (1) of section 19 of the Insurance Regulatory and Development Authority Act, 1999,
the Central Government may, by notification in the Official Gazette, appoint a person to be the Controller
of Insurance till such time the Authority is reconstituted under sub-section (3) of section 19 of that Act.]
(2) In making any appointment under this section, the Central Government shall have due regard
to the following considerations, namely, whether the person to be appointed has had experience in
industrial, commercial or insurance matters and whether such person has actuarial qualifications.]