General Insurance Business (Nationalisation) Act, 1972
No: 57 Dated: Sep, 20 1972
THE GENERAL INSURANCE BUSINESS (NATIONALISATION) ACT, 1972
ACT NO. 57 OF 1972
General Insurance Business (Nationalisation) Amendment Act, 2021
An Act to provide for the acquisition and transfer of shares of Indian insurance companies and undertakings of other existing insurers in order to serve better the needs of the economy by securing the development of general insurance business in the best interests of the community and to ensure that the operation of the economic system does not result in the concentration of wealth to the common detriment, for the regulation and control of such business and for matters connected therewith or incidental thereto.
BE it enacted by Parliament in the Twenty-third Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. Short title.—This Act may be called the General Insurance Business (Nationalisation) Act, 1972.
2. Declaration as to the policy of the State.—It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles specified in clause (c) of article 39 of the Constitution.
Explanation.—In this section, “State” has the same meaning as in article 12 of the Constitution
3. Definitions.—In this Act, unless the context otherwise requires,—
(a) “acquiring company” means any Indian insurance company and, where a scheme has been framed involving the merger of one Indian insurance company in another or the amalgamation of two or more such companies, means the Indian insurance company in which any other company has been merged or the company which has been formed as a result of the amalgamation;
(b) “appointed day” means such day not being a day later than the 2nd day of January, 1973, as the Central Government may, by notification, appoint;
(c) “Companies Act” means the Companies Act, 1956 (1 of 1956);
(d) “Corporation” means the General Insurance Corporation of India formed under section 9;
(e) “existing insurer” means every insurer the management of whose undertaking has vested in the Central Government under section 3 of the General Insurance (Emergency Provisions) Act, 1971 (17 of 1971), and includes the undertaking of the Life Insurance Corporation in so far as it relates to the general insurance business carried on by it;
(f) “foreign insurer” means an existing insurer incorporated under the law of any country outside India;
(g) “general insurance business” means fire, marine or miscellaneous insurance business, whether carried on singly or in combination with one or more of them, but does not include capital redemption business and annuity certain business;
(h) “Government company” means a Government company as defined in section 617 of the Companies Act;
(i) “Indian insurance company” means an existing insurer having a share capital who is a company within the meaning of the Companies Act;
(j) “Insurance Act” means the Insurance Act, 1938 (4 of 1938);
(k) “Life Insurance Corporation” means the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956);
(l) “notification” means a notification published in the Official Gazette;
(m) “prescribed” means prescribed by rules made under this Act;
(n) “Schedule” means the Schedule to this Act;
(o) “scheme” means the scheme framed under section 161 [and also includes a scheme framed under section 17A];
(p) words and expressions used in this Act but not defined herein and defined in the Insurance Act, shall have the meanings respectively assigned to them in that Act;
(q) words and expressions used in this Act but not defined herein or in the Insurance Act and defined in the Companies Act, shall have the meanings respectively assigned to them in the Companies Act.
CHAPTER II
TRANSFER TO PUBLIC OWNERSHIP OF GENERAL INSURANCE BUSINESS
4. Transfer of shares of Indian insurance companies.—(1) On the appointed day, all the shares in the capital of every Indian insurance company shall, by virtue of this Act, stand transferred to and vested in the Central Government free of all trusts, liabilities and encumbrances affecting them.
(2) Out of the shares so transferred and vested, the Central Government shall, immediately thereafter, by notification, provide for the transfer of not less than ten shares of every such company to such persons as may be specified in the notification to enable the Indian insurance company to function as a Government company.
(3) Every notification made under sub-section (2) shall specify the names and description of the persons to whom the shares are transferred and the particulars of the shares which are transferred to each such person.
(4) A copy of every notification made under sub-section (2) shall, as soon as may be after it is made, be sent by the Central Government to the concerned Indian insurance company, who shall, on receipt of such copy, and notwithstanding anything contained in the Companies Act or in its articles of association, forthwith rectify its register of members by including therein the persons mentioned in the notification as the holders of the shares specified therein.
(5) For the removal of doubts it is hereby declared that the transfer and vesting of shares effected under sub-section (1) shall not be deemed to affect any right of the Indian insurance company subsisting immediately before the appointed day against any shareholder to recover from him any sum of money on the ground that that shareholder has not paid or credited to the insurer the whole or any part of the value of the shares held by him or on any other ground whatsoever