101A. Re-insurance with Indian re-insurers.—(1) Every insurer shall re-insure with Indian
re-insurers such percentage of the sum assured on each policy as may be specified by the 2
[the Authority
with the previous approval of the Central Government] under sub-section (2).
(2) For the purposes of sub-section (1), 3
[the Authority] may, by notification in the Official
Gazette, —
(a) specify the percentage of the sum assured on each policy to be re-insured and different
percentages may be specified for different classes of insurance:
Provided that no percentage so specified shall exceed thirty per cent. of the sum assured on such
policy; and
(b) also specify the proportions in which the said percentage shall be allocated among the Indian
re-insurers.
(3) Notwithstanding anything contained in sub-section (1), an insurer carrying on fire insurance
business in India may, in lieu of re-insuring the percentage specified under sub-section (2) of the sum
assured on each policy in respect of such business, re-insure with Indian re-insurers such amount out of
the first surplus in respect of that business as he thinks fit, so however that, the aggregate amount of the
premiums payable by hi m on such re-insurance in any year is not less than the said percentage of the
premium income (without taking into account premiums on re-insurance ceded or accepted) in respect of
such business during that year.
Explanation.—For the purposes of this sub-section, the year 1961 shall be deemed to mean the period
from 1st April to-the 31st December of that year.
(4) A notification under sub-section (2) may also specify the terms and conditions in respect of any
business of re-insurance required to be transacted under this section and such terms and conditions shall
be binding on Indian re-insurers and other insurers.
(5) No notification under sub-section (2) shall be issued except after consultation with the Advisory
Committee constituted under section 101B.
(6) Every notification issued under this section shall be laid before each House of Parliament, as soon
as may be, after it is made.
(7) For the removal of doubts, it is hereby declared that nothing in sub-section (1) shall be construed
as preventing an insurer from re-insuring with any Indian re-insurer or other insurer the entire sum
assured on any policy or any portion thereof in excess of the percentage specified under sub-section (2).
(8) In this section,
1. Ins. by Act 11 of 1961, s. 2 (w.e.f. 1-4-1961).
2. Subs. by Act 41 of 1999, s. 30 and The First Schedule, for “the Central Government” (w.e.f. 19-4-2000).
3. Subs. by s. 30 and the First Schedule, ibid., for “the Central Government” (w.e.f. 19-4-2000).
86
(i) “policy” means a policy issued or renewed on or after the 1st day of April, 1961 , in respect of
general insurance business transacted in India and does not include a re-insurance policy; and
1
[(ii) “Indian re-insurer” means an Indian insurance company which has been granted a certificate
of registration under sub-section (2A) of section 3 by the Authority to carry on exclusively the reinsurance business in India.]
101B. Advisory Committee. (1)
2
[The Authority with the previous approval of the Central
Government] shall, for the purposes of section 101 A, constitute an Advisory Committee consisting of not
more than five persons having special knowledge and experience of the business of insurance.
(2) The term of office of, and the allowances payable to, members of the Advisory Committee, the
procedure to be followed by, and the quorum necessary for the transaction of business of, the Committee
and the manner of filling casual vacancies therein shall be such as may be 3
[determined by the regulations
made by the Authority].
4
[101C. Examination of re-insurance treaties.— The 5
[Authority] may, at any time, —
(a) call upon an insurer to submit for his examination at the principal place of business of the
insurer in India all re-insurance treaties and other re-insurance contracts entered into by the insurer;
(b) examine any officer of the insurer on oath in relation to any such document as is referred to in
clause (a) above; or
(c) by notice in writing, require any insurer to supply him with copies of any of the documents
referred to in clause (a), certified by a principal officer of the insurer.]