Discuss the salient features of the insurance act,1938
Answers
The salient features of this Act were as follows :
1.Constituting a Department of Insurance to supervise and control insurance business.
2.Compulsory registration of insurance companies & submission of annual financial returns.
3.Provision for initial deposits to allow only serious players in the field.
4.Compulsory investment of life fund to the extent of 55% in Government approved securities.
5.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.
6.Periodical Valuation was made compulsory to assess financial viability of the insurance companies.
7.Provision was made for policyholders’ director in the Board.
8.Policy formats were standardised and premium tables were to be certified by an Actuary.
THANK YOU