Life Insurance Corporation General Regulations, 2021

Life Insurance Corporation General Regulations, 2021

 LIFE INSURANCE CORPORATION OF INDIA 

NOTIFICATION

Mumbai, the 22 July, 2021

F. No.I-13011/03/2021-Ins.I.—In exercise of the powers conferred by section 49 of the Life Insurance Corporation Act, 1956 (31 of 1956) and in supersession of the Life Insurance Corporation Regulations, 1959, except as respect things done or omitted to be done before such supersession, the Board, with the previous approval of the Central Government hereby makes the following regulations, namely:—

PRELIMINARY

1. Short title and commencement.—(1) These regulations may be called the Life Insurance Corporation General Regulations, 2021.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. Definitions.—(1) In these regulations, unless the context otherwise requires,—

(a) “Act” means the Life Insurance Corporation Act, 1956 (31 of 1956);

(b) “Authority” means the Insurance Regulatory and Development Authority of India established under sub- section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);

(c) “Company Secretary” shall mean a person who is a member of the Institute of Company Secretaries of India, constituted under the Company Secretaries Act, 1980 (56 of 1980) and who is the head of the secretarial function of the Corporation;

(d) “Depositories Act” means the Depositories Act, 1996 (22 of 1996);

(e) “Depositories and Participants Regulations” means the regulations made by the Securities and Exchange Board of India regarding depositories and participants, under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and section 25 of the Depositories Act;

(f) “draft offer document” means the draft offer document filed with the Securities and Exchange Board of India in relation to a public issue under the regulations made by the Securities and Exchange Board of India regarding issue of capital and disclosure requirements;

(g) “embedded value” shall have the same meaning as is assigned to it in the Actuarial Practice Standard, issued by the Institute of Actuaries of India constituted under section 3 of the Actuaries Act, 2006 (35 of 2006), for determination thereof in respect of life insurance companies incorporated in India and regulated by the Authority;

(h) “form” means a form annexed to these regulations;

• (i) “registrar to an issue” shall have the same meaning as is assigned to it in the regulations made by the Securities and Exchange Board of India regarding registrar to an issue and share transfer agent;

• (j) “section” means section of the Act;

• (l) “share transfer agent” shall have the same meaning as is assigned to it in the regulations made by the Securities and Exchange Board of India regarding registrar to an issue and share transfer agent.

• (2) All other words and expressions used herein and not defined in these regulations, but defined in the Act shall have the meanings respectively assigned to them in the Act.

PART I

Meetings of the Board and its committees

3. Manner of holding meetings of Board and its committees.—

(1) In respect of meetings of the Board, the Chairperson and in his absence the senior-most whole-time director of the Corporation, and in respect of meetings of any committee of the Board such person as the Board has appointed as the chairperson of the committee shall, fix the date, time and place of meetings of the Board or its committee, as the case may be, and approve the items of agenda therefor.

(2) Notice for meetings shall be issued by the Company Secretary or, if there is no Company Secretary, any director or any other officer of the Corporation authorised by the Board in this behalf.

(3) The Chairperson, and in his absence the senior-most whole-time director present, shall chair a Board meeting.

(4) The chairperson of a committee of the Board shall chair its meetings:

Provided that in the absence of the chairperson, any other director chosen by the members present at the meeting from amongst themselves shall chair the meeting.

(5) The Corporation shall observe in respect of the Board and its committees such secretarial standards as are applicable in respect of Board meetings of a company under sub-section (10) of section 118 of the Companies Act, save as otherwise provided for in the Act, the rules and regulations made thereunder.

PART II

Capital, shares, other securities and members of the Corporation

4. Kinds and nature of share capital.—The share capital of the Corporation shall be of such kinds as are provided for in respect of a company in section 43 of the Companies Act in so far as they are not inconsistent with the provisions of the Act and the rules made there under:

Provided that the provisions of sub-clause (ii) of clause (a) of the said section shall not apply in respect of the share capital of the Corporation.

5. Nature of shares and debentures.—The shares, debentures and other interest of any member in the Corporation shall be movable property transferable in the manner provided in regulation 11.

6. Mannerofissue of securities.—

(1) The Corporation may issue securities either in physical form or in dematerialised form in accordance with the provisions of the Depositories Act and the Depositories and Participants Regulations.

(2) Where the Corporation issues any securities in physical form, the issuance of such securities shall be in accordance with the requirements as the Board may specify in this behalf, including as to the authority for issuance of security, its form, the manner of signing of the certificate on behalf of the Corporation, printing and custody of blank certificates and process for issuance of duplicate certificate.

(3) The Corporation shall appoint a registrar to an issue or a share transfer agent and shall enter into a tripartite agreement with the registrar to an issue or the share transfer agent, as the case may be, and a depository, in respect of the securities to be issued in dematerialised form

7. Other provisions regarding manner of and conditions subject to which shares may be issued.—(1)The Corporation shall issue equity shares to the Central Government in consideration for the paid-up equity capital provided by the Central Government to the Corporation, in accordance with the provisions of sub-section (2) of section 5.

(2) The Corporation may from time to time increase its issued share capital, with the previous approval of the Central Government, by way of public issue or rights issue or preferential allotment or private placement or issue of bonus shares to existing members holding equity shares, or by issue of shares to employees pursuant to share based employee benefits schemes, or by issue of shares to life insurance policyholders of the Corporation, or otherwise, in accordance with the provisions of section 5.

Provided that bonus shares may be issued by the Corporation to its members only out of its free reserves or the share premium account, and no issue of bonus shares shall be made by capitalising reserves created by the revaluation of assets:

Provided further that if the Corporation proposes to make a public issue of equity shares, it shall, before filing its draft offer document with the Securities and Exchange Board of India, request the Authority for its observations, if any (supported by a certified copy of the Board resolution in this regard), while furnishing on the following aspects the details specified in respect of the same in the form as provided for an applicant Indian insurance company transacting life insurance business under insurance regulations on issuance of capital, namely:—

(a) its overall financial position, pre- and post-issue capital structure and embedded value as assessed by an independent actuary;

(b) its record on maintenance of control level of solvency required under regulations made by the Authority and on policyholder protection;

(c) its record of compliance with insurance regulations, as applicable to the Corporation;

(d) the status of compliance with public disclosure requirements under any circular of the Authority in this regard, insofar as such circular is applicable to the Corporation:

Provided also that while filing the draft offer document with the Securities and Exchange Board of India, the Corporation shall—

(i) take into account the observations, if any, issued by the Authority, with a view to ensure that the disclosures therein are in accordance with the regulations made by the Securities and Exchange Board of India in this behalf;

(ii) make therein such other disclosures regarding risk factors specific to the Corporation, particulars of its committees, key management persons, investors, promoters and financial statements, particulars of the issue, overview of the insurance industry, industry related terms and legal and other information, as are specified in insurance regulations for issuance of capital in respect of an Indian insurance company transacting life insurance business.

8. Calls on shares and acceptance of unpaid share capital not called up.—The Corporation may, with the approval of the Board, make calls upon a member for further share capital in respect of any amount remaining unpaid on shares held by him and also accept from him the whole or part of such amount even if the amount has not been called up, in accordance with the provisions as applicable in respect of a company under sections 49 and 50 of the Companies Act and model articles13 to 18 specified in Table F of Schedule Ito the said Act, read with sub-sections (6) and (7) of section 5 thereof.

9. Manner of nomination by member.—Members may make nomination referred to in section 5E in the manner provided for nomination by the security holders of a company in rules made under section 72 of the Companies Act with regard to share capital and debentures, in Form ‘A’, and variation therein or cancellation thereof may be made in Form ‘B’.

10. Forfeiture of share.—A share of a member who fails to pay any call or instalment thereof on the day appointed for its payment may be forfeited and sold or otherwise disposed of by the Board in like circumstances and in like manner, and subject to like conditions, as are provided for shares of a company under model articles 28 to 34 specified in Table F of Schedule I of the Companies Act, read with sub-sections (6) and (7) of section 5 thereof.

11. Transfer or transmission or transposition of securities.—(1) For carrying out activities in relation to transfer of securities, the Corporation shall appoint a share transfer agent or manage the transfer of securities’ facility in-house:

Provided that in the case of in-house securities transfer facility, as and when the total number of holders of securities of the Corporation exceeds one lakh, the Corporation shall appoint a person, who is registered with the Securities and Exchange Board of India, as the registrar to an issue and share transfer agent of the Corporation. ……………………………… Click here for read more.