Section 34. Section 64UJ, in sub-section (5), for "Central Government", wherever it occurs, substitute "Authority"

34. Section 64UJ, in sub-section (5), for "Central Government", wherever it occurs, substitute "Authority". — 35. Section 64UM, (a) in sub-section (1), — (i) in paragraph (B), after "the Insurance (Amendment) Act, 1968", insert "but before the commencement of the Insurance Regulatory and Development Authority Act, 1999"; (ii) after paragraph (B), insert the following: — "(BA) Every person who intends to act as a surveyor or loss assessor after the expiry of a period of one year from the commencement of the Insurance Regulatory and Development Authority Act, 1999, shall make an application to the Authority within such time, in such manner and on payment of such fee as may be determined by the regulations made by the Authority: Provided that any licence issued immediately before the commencement of the Insurance Regulatory and Development Authority Act, 1999 shall be deemed to have been issued in accordance with the regulations providing for such licence."; (iii) in paragraph (C), for "as may be prescribed", substitute "as may be determined by the regulations"; (iv) in paragraph (D), in clause (i), — (A) for item (a), substitute the following: — "(a) has been in practice as a surveyor or loss assessor on the date of commencement of the Insurance Regulatory and Development Authority Act, 1999, or"; (B) in item (f), for "prescribed", substitute "specified by the regulations made by the Authority"; (b) after sub-section (1), insert — "(1A) Every surveyor and loss assessor shall comply with the code of conduct in respect of their duties, responsibilities and other professional requirements as may be specified by the regulations made by the Authority.". — 36. Section 64V, (a) in sub-section (1), — (i) in clause (i), after sub-clause (g), insert the following: — "(h) such other asset or assets as may be specified by the regulations made in this behalf;"; (ii) in clause (ii), — (A) in sub-clause (b), in items (i) and (ii), for "40 per cent.", substitute "50 per cent."; (B) after sub-clause (f), insert the following: — "(g) such other liability which may be made in this behalf to be included for the purpose of clause (ii)."; (b) for sub-section (2), substitute the following: — "(2) Every insurer shall furnish to the Authority with his returns under section 15 or section 16, as the case may be, a statement certified by an auditor approved by the Authority in respect of general insurance business, or an actuary approved by the Authority in respect of life insurance business, as the case may be, of his assets and liabilities assessed in the manner required by this section as on the 31st day of March of the preceding year. (3) Every insurer shall value his assets and liabilities in the manner required by this section and in accordance with the regulations which may be made by the Authority in this behalf.". — 37. Section 64VA, (a) in sub-section (1), for "at all times", substitute "at all times before the commencement of the Insurance Regulatory and Development Authority Act, 1999"; (b) after sub-section (1), insert the following: — „(1A) Every insurer shall, at all times, on or after the commencement of the Insurance Regulatory and Development Authority Act, 1999, maintain an excess of the value of his assets over the amount of his liabilities of not less than the amount arrived at as follows (hereinafter — referred to in this section referred to as the "required solvency margin"), namely: (i) in the case of an insurer carrying on life insurance business, the required solvency — margin shall be the higher of the following amounts (a) fifty crores of rupees (one hundred crores of rupees in case of re-insurers); or (b) the aggregate sums of the results arrived at in items (I) and (II) stated below: — (I) the aggregate of the results arrived at by applying the calculation described in item (A) below (Step I) and the calculation described in item (B) below (Step II): (A) for Step I — (A. 1) there shall be taken, a sum equal to a percentage determined by the regulations not exceeding five per cent. of the mathematical reserves for direct business and re-insurance acceptances without any deduction for re-insurance cessions; (A. 2) the amount of mathematical reserves at the end of the preceding financial year after the deduction of re-insurance cessions shall be expressed as a percentage of the amount of those mathematical reserves before any such deduction; and — (A. 3) the sum mentioned in item (A. 1) above shall be multiplied (A.3.1) where the percentage arrived at under item (A. 2) above is greater than eighty-five per cent. (or in the case of a re-insurer carrying on exclusive re-insurance business, fifty per cent.), by that greater percentage; and (A.3.2) in any other case, by eighty-five per cent. (or in the case of a reinsurer carrying on exclusive re-insurance business, by fifty per cent.); — (B) for Step II (B. 1) there shall be taken, a sum equal to a percentage determined by the regulations made by the Authority not exceeding one per cent. of the sum at risk for the policies on which the sum at risk is not a negative figure, and (B. 2) the amount of sum at risk at the end of the preceding financial year for policies on which the sum at risk is not a negative figure after the deduction of re-insurance cession shall be expressed as a percentage of the amount of that sum at risk before any such deduction, and — (B. 3) the sum arrived at under item (B. 1) above shall be multiplied (B. 3.1) where the percentage arrived at under item (B. 2) above is greater than fifty per cent., by that greater percentage; and (B. 3.2) in any other case, by fifty per cent. (II) a percentage determined by the regulations made by the Authority of the value of assets determined in accordance with the provisions of section 64V; (ii) in the case of an insurer carrying on general insurance business, the required solvency margin, shall be the highest of the following amounts: — (a) fifty crores of rupees (one hundred crores of rupees in case of re-insurer); or (b) a sum equivalent to twenty per cent. of net premium income; or (c) a sum equivalent to thirty per cent. of net incurred claims, subject to credit for re-insurance in computing net premiums and net incurred claims being actual but a percentage, determined by the regulations not exceeding fifty per cent.: Provided that if in respect of any insurer, the Authority is satisfied that either by reason of an unfavourable claim experience or because of sharp increase in the volume of the business, or for any other reason, compliance with the provisions of this sub-section would cause undue hardship to the insurer, the Authority may direct, for such period and subject to such conditions, such solvency margin not being less than the lower of the amount mentioned in sub-clause (i) or sub-clause (ii) above as the case may be. Explanation .— For the purposes of this sub-section, the expressions — (i) "mathematical reserves" means the provision made by an insurer to cover liabilities (excluding liabilities which have fallen due and liabilities arising from deposit back arrangement in relation to any policy whereby an amount is deposited by re-insurer with the cedant) arising under or in connection with policies or contracts for life insurance business. Mathematical reserves also include specific provision for adverse deviations of the bases, such as mortality and morbidity rates, interest rates, and expense rates, and any explicit provisions made, in the valuation of liabilities, in accordance with the regulations made by the Authority for this purpose; (ii) "net incurred claims" means the average of the net incurred claims during the specified period of not exceeding three preceding financial years; (iii) "sum at risk", in relation to a life insurance policy, means a sum which is — (a) in any case in which an amount is payable in consequence of death other than a case falling within sub-clause (b) below, the amount payable on death, and (b) in any case in which the benefit under the policy in question consists of the making, in consequence of death, of the payments of annuity, payment of a sum by instalments or any other kind of periodic payments, the present value of that benefit, less in either case the mathematical reserves in respect of the relevant policies.'; (c) after sub-section (2), insert the following: — "(2A) If, at any time an insurer does not maintain the required solvency margin in accordance with the provisions of this section, he shall, in accordance with the directions issued by the Authority, submit a financial plan, indicating a plan of action to correct the deficiency to the Authority within a specified period not exceeding three months. (2B) An insurer who has submitted a plan under sub-section (2A) to the Authority shall propose modifications to the plan if the Authority considers it inadequate, and shall give effect to any plan accepted by the Authority as adequate. (2C) An insurer who does not comply with the provisions of sub-section (2A) shall be deemed to be insolvent and may be wound up by the court."; (d) after sub-section (6), insert the following: — "(7) Every insurer shall furnish to the Authority his returns under section 15 or section 16, as the case may be, in case of life insurance business a statement certified by an actuary approved by the Authority, and in case of general insurance business a statement certified by an auditor approved by the Authority, of the required solvency margin maintained by the insurer in the manner required by sub-section (1A).".