MODULE – IV

i. The Insurance Act, 1938, [Section 1-64],

ii. IRDA Act, 1999

THE INSURANCE ACT, 1938

 Scheme of the Act As per the syllabus

PART I
PRELIMINARY
Section 1-2B

SECTIO HEADING
N
1 Short title, extent and commencement.

2 Definitions.

2A Interpretation of certain words and expressions.

2B Appointment of Controller of Insurance

PART II (SECTION 2C-64)

Following are the various Heading of the provisions included in Part II of the
Insurance Act, 1938.
G
M
H
F
N
T
S
U
Q
V
O
R
L
IA
C
E
P
,7
4
2
Y
)B
1
-6
3
5
W
K
(D
X
SALIENT FEATURES OF THE INSURACE ACT, 19381

 It was the first comprehensive legislation governing both life and non-life
companies providing strict control over insurance business.

The salient features of this Act were as follows:

 Constituting a Department of Insurance to supervise and control insurance

business.
 Compulsory registration of insurance companies & submission of annual
financial returns.
 Provision for initial deposits to allow only serious players in the field.
 Compulsory investment of life fund to the extent of 55% in Government
approved securities.
 Prohibiting rebating, restriction on payment of commission and licensing of
agents were other important provisions to bring in a sort of professionalism in
to this business.
 Periodical Valuation was made compulsory to assess financial viability of the
insurance companies.
 Provision was made for policyholder’s director in the Board.
 Policy formats were standardized and premium tables were to be certified by an
Actuary.

The Insurance Act, 1938 is enacted with the objective of consolidating and
amending the laws relating to business of insurance.
This act further regulates the Insurance Business in India.

1
https://commercelecturer.wordpress.com/tag/salient-feature-of-life-insurance-act-1938/