In force · As amended up to 2026-08
39. Power to make rules.— (1) The Central Government may, by notification, make rules to carry out the provisions of this Act.
1. Ins. by Act 50 of 2019, s. 33 and Sch II (w.e.f. 1-10-2020).
(2) In particular, and without prejudice to the generality of the foregoing power, rules made under this — section may provide for
(a) the manner in which the profits, if any, and other moneys received by the Corporation may be dealt with;
1[(b) the conditions, if any, subject to which the Corporation shall carry on re-insurance business;
(ba) the conditions, if any, subject to which the acquiring companies shall carry on general insurance business;]
(c) the terms and conditions subject to which any reinsurance contracts or treaties may be entered into;
(d) the form and manner in which any notice or application may be given or made to the Central Government;
(e) the reports which may be called for by the Central Government from the Corporation and the acquiring companies;
(f) any other matter which is required to be, or may be, prescribed.
(3) Every rule made under this section and every notification issued under section 35 shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made, the rule or notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or notification.
40 . [ Omission of section 14 of Act 17 of 1971.] Rep. by the Repealing and Amending Act , 1978
(38 of 1978), s . 2 and the First Schedule ( w.e.f. 26-11-1978).
1. Subs. by Act 40 of 2002, s. 8, for cl. (b) (w.e.f. 21-3-2003).
THE SCHEDULE ( See section 11) Amounts to be paid
PART A
|Serial|Name of Indian insurance company|||||Amount to|
|---|---|---|---|---|---|---|
|Number||||||be paid|
|(1)|(2)|||||(3)|
|1.|All India General Insurance|.||.|.|Rs.<br>10,00,000|
||Company Ltd.||||||
|2.<br>3.|Anand Insurance Company Ltd.<br>Bhabha Marine Insurance Company|.|Preference<br>Shares<br>Equity Shares<br> <br>.<br>.|||3,50,000<br>2,00,000<br>54,448|
||Ltd.||||||
|4.<br>5.|Bharat General Reinsurance Ltd.<br>British India General Insurance|Preference<br>Shares<br>Ordinary Shares<br>.<br>.<br>.||||8,18,000<br>13,49,844<br>37,50,000|
||Company Ltd.||||||
|6.|Calcutta Insurance Company|.||.|.|7,49,442|
||Limited||||||
|7.|Central Mercantile Assurance|.||.|.|3,38,499|
||Company Ltd.||||||
|8.|Clive Insurance Company Ltd.|.||.|.|26,12,600|
|9.|Commonwealth Assurance|.||.|.|1,000|
||Company Ltd.||||||
|10.|Concord of India Insurance|.||.|.|39,77,100|
||Company Ltd.||||||
|11.|Devkaran Nanjee Insurance|.||.|.|16,80,000|
||Company Ltd.||||||
|12.|General Assurance Society Ltd.|.||.|.|8,06,000|
|13.|Hercules Insurance Company Ltd.|.||.|.|87,48,000|
|14.|Hindusthan General Insurance|.||.|.|15,52,500|
||Society Ltd.||||||
|15.|Hindusthan Ideal Insurance|.||.|.|25,20,605|
||Company Ltd.||||||
|16.|Howrah Insurance Company Ltd.|.||.|.|975|
|17.|Hukumchand Insurance Company|.||.|.|10,00,000|
||Ltd.||||||
|18.|India Reinsurance Corporation Ltd.|.||.|.|2,05,02,200|
|19.|Indian Guarantee & General|.||.|.|1,95,69,760|
||Insurance CompanyLtd.||||||
|Serial|Name of Indian insurance company||||Amount to|
|---|---|---|---|---|---|
|Number|||||be paid|
|(1)|(2)||||(3)|
|20.|Indian Mercantile Insurance|.|.|<br>.|Rs.<br>50,33,195|
||Company Ltd.|||||
|21.|Indian Merchants' Marine|.|.|.|2,28,753|
||Insurance Company Ltd.|||||
|22.|Indian Ocean Insurance Company|.|.|.|1,00,000|
||Ltd.|||||
|23.|Indian Trade & General Insurance|.|.|.|61,21,200|
||Company Ltd.|||||
|24.|Jalanath Insurance Ltd.|.|.|.|10,42,955|
|25.|Jupiter General Insurance Company|.|.|.|26,24,445|
||Ltd.|||||
|26.|Kalyan Marine Insurance Company|.|.|.|1,79,880|
||Ltd.|||||
|27.|Liberty Insurance Company Ltd.|.|.|.|1,000|
|28.|Madras Motor and General|.|.|.|1,77,69,600|
||Insurance Company Ltd.|||||
|29.|Madura Insurance Company Ltd.|Preference Shares<br>Ordinary Shares|||700<br>15,83,900|
|30.|Marine & General Insurance|Deferred Shares<br>.<br>.<br>.|||12,500<br>8,95,300|
||Company Ltd.|||||
|31.|Mother India Fire & General|.|.|.|7,44,345|
||Insurance Company Ltd.|||||
|32.|Motor Owners' Insurance Company|.|.|.|1,65,575|
||Ltd.|||||
|33.|Naranji Bhanabhai & Company|.|.|.|49,200|
||Ltd.|||||
|34.|Narhari Marine Insurance Company|.|.|.|2,36,400|
||Ltd.|||||
|35.|National Insurance Company Ltd.|.|.||60,58,150|
|36.|Neptune Assurance Company Ltd.|.|.|.|10,00,000|
|37.|New Great Insurance Company of|.|.|.|43,50,000|
||India Ltd.|||||
|38.|New India Assurance Company|.|.|.|8,20,37,678|
||Limited.|||||
|39.|New Merchants Insurance|.|.||68,912.|
||CompanyLtd.|||||
|Serial|Name of Indian insurance company||||Amount to|
|---|---|---|---|---|---|
|Number|||||be paid|
|(1)|(2)||||(3)|
|40.|New Premier Insurance Company|.|.|.|Rs.<br>1,21,110|
||Ltd.|||||
|41.|Northern India General Insurance|.|.|.|998|
||Company Ltd.|||||
|42.|Oriental Fire & General Insurance|.|.|.|2,43,98,000|
||Company Ltd.|||||
|43.|Pandyan Insurance Company Ltd.|.|.|.|90,00,000|
|44.|Pioneer Fire & General Insurance|.|.|.|11,82,610|
||Company Ltd.|||||
|45.|Porbandar Insurance Company Ltd.|.|.|.|59,194|
|46.|Prachi Insurance Company Ltd.|.|.|.|21,375|
|47|Ruby General Insurance Company|.|.|.|1,38,74,000|
||Ltd.|||||
|48.|Shree Mahasagar Vima Company|.|.|.|1,18,252|
||Ltd.|||||
|49.|South Indian Insurance Company|.|.|.|60,63,000|
||Ltd.|||||
|50.|Sterling General Insurance|Preference||Shares|23,000|
|51|Company Ltd.<br>Triton Insurance Company Ltd.|Ordinary Shares<br>.<br>.<br>.|||16,08,139<br>47,07,180|
|52.|United India Fire & General|.|.|.|21,39,991|
||Insurance Company Ltd.|||||
|53.|Universal Fire & General Insurance|.|.|.|24,71,618|
||Company Ltd.|||||
|54.|Vanguard Insurance Company Ltd.|.|.|.|896|
|55.|Vulcan Insurance CompanyLtd.|.|.|.|32,49,617|
|55.|Vulcan Insurance CompanyLtd.|.|.|.|32,49,617|
|---|---|---|---|---|---|
|||PART B||||
|Serial|Name of insurer||||Amount to|
|Number|||||be paid|
|(1)|(2)||||(3)|
|1.|Co-operative Fire & General|.|.|.|Rs.<br>18,69,000|
||Insurance Society Ltd.|||||
|2.|Co-operative General Insurance|.|.|.|5,93,000|
||SocietyLtd.|||||
|Serial|Name of insurer||||Amount to|Amount to|
|---|---|---|---|---|---|---|
|Number|||||be paid||
|(1)|(2)||||(3)||
|3.|Indian Mutual General Insurance|.|.|.|Rs.|1,40,000|
||Society Ltd.||||||
|4.|Life Insurance Corporation of India|.|.|.|2,81,34,000||
|5.|Millowners' Mutual Insurance|.|.|.|12,89,000||
||Association Ltd.||||||
|6.|Orissa Co-operative Insurance|.|.|.||2,83,000|
||Society Ltd.||||||
|7.|Reinsurance Association of India|.|.|.||13,000|
||(International) Ltd.||||||
|8.|Union Co-operative Insurance|.|.|.|37,60,000||
||Society Ltd.||||||
|9.|Alliance Assurance Company Ltd.|.|.|.|36,65,000||
|10.|American Insurance Company|.|.|.||3,30,000|
|11.|Atlas Assurance Company Ltd.|.|.||64,85,000||
|12.|Baloise Insurance Company Ltd.|.|.|.|22,67,000||
|13.|British Aviation Insurance|.|.|.||1,000|
||Company Ltd.||||||
|14.|Caledonian Insurance Company|.|.|.||81,000|
|15.|Century Insurance Company Ltd.|.|.|.||6,04,000|
|16.|Commercial Union Assurance|.|.|.|85,20,000||
||Company Ltd.||||||
|17.|Eagle Star Insurance Company Ltd.|.|.|.|37,12,000||
|18.|Gerling Global Reinsurance|.|.|.||1,000|
||Company Ltd.||||||
|19.|Great American Insurance|.|.|.||3,81,000|
||Company||||||
|20.|Guardian Assurance Company Ltd.|.|.|.|19,98,000||
|21.|Hanover Insurance Company|.|.|.|42,13,000||
|22.|Hartford Fire Insurance Company|.|.|.||2,96,000|
|23.|Home Insurance Company|.|.|.||3,73,000|
|24.|Legal & General Assurance Society|.|.|.||5,28,000|
||Ltd.||||||
|25.|Liverpool and London and Globe|.|.|.||8,23,000|
||Insurance Company Ltd.||||||
|26.|London Assurance|.|.|.|12,30,000||
|27.|London Guarantee & Accident|.|.|.||40,000|
||CompanyLtd.||||||
|Serial|Name of insurer||||Amount to|
|---|---|---|---|---|---|
|Number|||||be paid|
|(1)|(2)||||(3)|
|28.|London & Lancashire Insurance|.|.|.|Rs.<br>47,70,000|
||Company Ltd.|||||
|29.|L'Union Fire, Accident and General|.|.|.|1,000|
||Insurance Company Ltd.|||||
|30.|National Employers' Mutual|.|.|.|3,17,003|
||General Insurance Association Ltd.|||||
|31.|National Insurance Company of|.|.|.|1,000|
||New Zealand Ltd.|||||
|32.|New Hampshire Insurance|.|.|.|19,08,000|
||Company|||||
|33.|New Zealand Insurance Company|.|.|.|10,84,000|
||Ltd.|||||
|34.|Norwich Union Fire Insurance|.|.|.|31,43,000|
||Society Ltd.|||||
|35.|Phoenix Assurance Company Ltd.|.|.|.|2,63,000|
|36.|Provincial Insurance Company Ltd.|.|.|.|1,000|
|37.|Queensland Insurance Company|.|.|.|10,31,000|
||Ltd.|||||
|38.|Royal Exchange Assurance|.|.|.|49,62,000|
|39.|Royal Insurance Company Ltd.|.|.|.|73,28,000|
|40.|Scottish Union & National|.|.|.|43,15,000|
||Insurance Company|||||
|41.|Skandia Insurance Company Ltd.|.|.|.|1,000|
|42.|South British Insurance Company|.|.|.|18,42,000|
||Ltd.|||||
|43.|Sun Insurance Office Ltd.|.|.|.|25,86,000|
|44.|Switzerland General Insurance|.|.|.|6,35,000|
||Company Ltd.|||||
|45.|Threadneedle Insurance Company|.|.|.|1,000|
||Ltd.|||||
|46.|Tokio Marine & Fire Insurance|.|.|.|92,000|
||Company Ltd.|||||
|47.|Union Insurance Society of Canton|.|.|.|5,89,000|
||Ltd.|||||
|48.|United Scottish Insurance Company|.|.|.|83,000|
||Ltd.|||||
|49.|Welfare Insurance Company Ltd.|.|.|.|1,000|
|50.|Western Assurance Company|.|.|.|13,92,000|
|51.|Yorkshire Insurance Company Ltd.|.|.|.|16,31,000|
|52.|Zurich Insurance Company Ltd.|.|.|.|1,000|
STATEMENT OF OBJECTS AND REASONS
By the General Insurance (Emergency Provisions) Ordinance, 1971, which was later replaced by an Act of Parliament, the management of the undertakings of all insurers carrying on general insurance business was vested in the Central Government pending nationalisation.
The object of the present Bill is to complete the process of nationalisation which is sought to be effected in the following manner. On a day, to be appointed by the Central Government, the shares in insurance companies carrying on general insurance business, which are incorporated in India and having a share capital, would automatically stand transferred to, and vested in, the Central Government. A few shares, however, would thereafter he formally transferred to the nominees of the Central Government in order to enable each of the Indian insurance companies to function as a Government company. On the appointed day, the undertakings of all other insurers, including foreign insurers, and the LIC in so far as it relates to the general insurance business carried on by it, would also stand transferred to and vested in such one or other of the Indian insurance companies as the Central Government may specify.
It is also proposed to form under the Companies Act, 1956, a Government company, to be called the General Insurance Corporation of India, which will be entrusted with the task of supervising, controlling and carrying on the business of general insurance. On the formation of the Corporation, the shares of the Indian insurance companies, vested in the Central Government would stand automatically transferred to the Corporation and all the Indian insurance companies would become the subsidiaries of the Corporation.
The Bill further provides for the framing of one or more schemes whereby the Indian insurance companies would so get merged in one another that ultimately there will be only four Indian companies, so situated as to promote competition between them so that effective services in the field of general insurance may be rendered by them in all parts of India.
NEW DELHI; Y.B. CHAVAN.
The 26 [th] May , 1972
Source: India Code