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45 1936

INSURANCE ACT, 1936

PART IV.

Winding up and Inspection of Insolvent Assurance Companies.

Definition of insolvency.

44. —A company shall be deemed to be or have been insolvent for the purposes of this Part of this Act on any particular date, present or past, if the circumstances of such company on that particular date are or were such that if proceedings for the winding up of such company were or had been taken on the said date, the Court could, under sections 129 and 130 of the Act of 1908, hold or have held such company to be, on the said date, unable to pay its debts.

Power of Minister to petition for winding up of assurance company.

45. —The Minister may present a petition for the winding-up of an assurance company on the ground that such company is unable to pay its debts within the meaning of sections 129 and 130 of the Act of 1908.

Powers in cases of assurance companies of doubtful solvency.

46. —(1) The Minister may, by notice served upon an assurance company, require such company to furnish to him, within such time as may be specified in such notice, such specified explanations, information, accounts, balance sheets, abstracts and statements as the Minister may consider necessary for determining whether such company is or is not insolvent.

(2) A notice served under the foregoing sub-section of this section may require that any of the explanations, information, accounts, balance sheets, abstracts and statements to be furnished in pursuance of such notice shall be—

(a) signed by such number of the directors and by such officers of the assurance company as shall be specified in such notice;

(b) be accompanied by such copies of documents as may be specified in such notice;

(c) be certified to be correct by an auditor approved by the Minister, or by an actuary so approved or by both such an auditor and such an actuary.

(3) Whenever a notice has been served by the Minister on an assurance company under the foregoing sub-section of this section, the following provisions shall have effect, that is to say:—

(a) whether such assurance company does or does not comply with such notice, the Minister may, if he so thinks proper, at any time after the expiration of the time limited by such notice for compliance therewith and after considering the information and documents (if any) furnished by such assurance company in pursuance of such notice, serve on such assurance company a notice (in this section referred to as an investigation notice) stating that the Minister proposes to investigate under this section the affairs of such assurance company at the expiration of the time (not being less than seven days from the service of such notice) specified in that behalf in such notice;

(b) at any time before the expiration of the time specified as aforesaid in such investigation notice, such assurance company may give to the Minister notice (in this section referred to as notice of objection) stating that such assurance company objects to the investigation mentioned in such investigation notice;

(c) within one month after the giving of a notice of objection, the Minister may, unless such notice of objection is sooner withdrawn by such assurance company, apply in a summary manner to the High Court for such order as is hereinafter mentioned, and on such application the High Court shall, unless it is satisfied that, having regard to all the circumstances of the case, the investigation mentioned in such investigation notice cannot reasonably be required or made by the Minister, order and empower the Minister to make such investigation;

(d) on an application under the next preceding paragraph of this sub-section the High Court may make such order as to the costs of and incidental to such application as it shall think proper;

(e) where no notice of objection is served within the time limited in that behalf, or a notice of objection so served is withdrawn before the institution of an application to the High Court by the Minister, or the High Court makes an order empowering the Minister to make such investigation, the Minister may make such investigation as is mentioned in such investigation notice at any time after whichever of the following times is applicable, that is to say:—

(i) where no notice of objection is served within the time limited in that behalf, the expiration of the time so limited, or

(ii) where a notice of objection so served is withdrawn as aforesaid, the date of such withdrawal, or

(iii) where the High Court makes such order as aforesaid, the date of such order.

(4) Whenever the Minister investigates under this section the affairs of an assurance company, he may, with the consent of the Minister for Finance, appoint one or more inspectors for the purposes of such investigation, and every inspector so appointed shall hold office upon such terms and conditions and at such remuneration as the Minister shall, with the consent of the Minister for Finance, determine.

(5) The provisions of sub-sections (3), (4) and (5) of section 109 of the Act of 1908 shall apply to every inspector appointed under the next preceding sub-section of this section in like manner as they apply to inspectors appointed under that section, and any refusal mentioned in the said sub-section (5) which is the refusal of an officer or agent of an assurance company and which is, or might be, a ground for the punishment of such officer or agent of such assurance company under the said sub-section (5), shall also be a ground upon which the Minister may present a petition for the winding up of such assurance company and upon which the High Court may, on the hearing of any such petition, make an order for the winding up of such assurance company under and in accordance with the Act of 1908.

(6) Whenever the Minister has investigated the affairs of an assurance company under this section, the Minister may apply in a summary manner to the High Court for an order that such assurance company shall repay to the Minister the whole or such part of the costs and expenses of and incidental to the carrying out of such investigation, and on the hearing of any such application the High Court may, if it so thinks fit, make an order for the payment by such assurance company to the Minister of the whole or any part of the costs and expenses of and incidental to the carrying out of such investigation, and for that purpose measure, tax, or otherwise ascertain the amount of such costs and expenses.

Evidence of inability to pay debts.

47. —In any proceedings upon a petition presented under this Part of this Act to wind up an assurance company, evidence that such company was insolvent at the close of the period to which the latest accounts and balance sheet of such company furnished to the Minister in pursuance of this Part of this Act relate, or at the date of the service of a notice by the Minister on such assurance company under this Part of this Act, shall be evidence, unless the contrary is proved, that such company is unable, taking into account its contingent and prospective liabilities to pay its debts.