Section 10:
Separation of accounts and funds.
(1) Where the insurer carries on business of more than
one of the 1[following classes, namely, life insurance, fire insurance, marine insurance or miscellaneous
insurance], he shall keep a separate account of all receipts and payments in respect of each such class of
insurance business 2[and where the insurer carries on business of 3[miscellaneous insurance] whether
alone or in conjunction with business of another class, he shall, unless the 4[Authority] waives this
requirement in writing, keep a separate account of all receipts and payments in respect of 5[each of such
sub-classes of miscellaneous insurance business] as may be 6[specified by the regulations]:
Provided that no sub-class of 7[miscellaneous insurance business] shall be prescribed under this
sub-section if the insurance business comprised in the sub-class consist of insurance contracts which are
terminable by the insurer at intervals not exceeding twelve months and under which, if a claim arises, the
insurer's liability to pay benefit ceases within one year of the date on which the claim arose.]
(2) Where the insurer carries on the business of life insurance 8[all receipts due in respect of such
business], shall be carried to and shall form a separate fund to be called the life insurance fund 9[the
assets of which shall, 10***, be kept distinct and separate from all other assets of the insurer] and the
deposit made by the insurer in respect of life insurance business shall be deemed to be 11[part of the assets
of such fund; 12[and every insurer shall, within the time limited in sub-section (1) of section 15 in regard
to the furnishing of the statements and accounts referred to in section 11, furnish to the Controller a
statement showing in detail such assets as at the close of every calendar year duly certified by an auditor
or by a person qualified to audit 13***:]
Provided that such statement shall, in the case of an insurer to whom section 11 applies, be set out as
a part of the balance-sheet mentioned in clause (a) of sub-section (I) of that section:
Provided further that an insurer may show in such statement all the assets held in his life department,
but at the same time showing any deductions on account of general reserves and other liabilities of that
department:
Provided also that the 14[Authority] may call for a statement similarly certified of such assets as at any
other date specified by him to be furnished within a period of three months from the date with reference
to which the statement is called for]].
15[(2A) No insurer carrying on life insurance business shall be entitled to be registered for any class of
insurance business in addition to the class or classes for which he has been already registered unless
the 14[Authority] is satisfied that the assets of the life insurance fund of the insurer are adequate to meet
all his liabilities on policies of life insurance maturing for payment.]
16[(2AA) Where the insurer carries on the business of insurance, all receipts due in respect of each
sub-class of such insurance business shall be carried to and shall form a separate fund, the assets of which
shall be kept separate and distinct from other assets of the insurer and every insurer shall submit to the
Authority the necessary details of such funds as may be required by the Authority from time to time and
such funds shall not be applied directly or indirectly, save as expressly permitted under this Act or
regulations made thereunder.]
(3) The life insurance fund shall be as absolutely the security of the life policy-holders as though it
belonged to an insurer carrying on no other business than life insurance business and shall not be liable
for any contracts of the insurer for which it would not have been liable had the business of the insurer
been only that of life insurance and shall not be applied directly or indirectly 17*** for any
purposes 18[other than those of the life insurance business of the insurer].
Notes:
1. Subs. by Act 62 of 1968, s. 8, for "classes specified in clause (a), (b), (c) and (d) of sub-section (1) of section 7"
(w.e.f. 1-6-1969).
2. Sub-section (1) Added by Act 13 of 1941, s. 8 (w.e.f. 8-4-1941).
3. Subs. by Act 62 of 1968, s. 8, for "the class specified in clause (d) of that sub-section" (w.e.f. 1-6-1969).
4. Subs. by Act 41of 1999, s. 30 and the First Schedule, for "Controller" (w.e.f. 19-4-2000).
5. Subs. by Act 62 of 1968, s. 8, for "each such sub-class of the class specified in clause (d)" (w.e.f. 1-6-1969).
6. Subs. by Act 5 of 2015, s. 15, for "prescribed in this behalf" (w.e.f. 26-12-2014).
7. Subs. by Act 62 of 1968, s. 8, for "the class of insurance business specified in clause (d) of sub-section (1) of section 7" (w.e.f.
1-6-1969).
8. Subs. by Act 13 of 1941, s. 8, for "the excess of receipts over payments in respect of such business" (w.e.f. 8-4-1941).
9. Ins. by Act 6 of 1946, s. 8 (w.e.f. 20-3-1946).
10. The words, brackets and figures, "after the expiry of six months from the commencement of the Insurance (Amendment)
Act, 1946 (6 of 1946)" omitted by Act 5 of 2015, s. 15 (w.e.f. 26-12-2014).
11. Subs. by Act 6 of 1946, s. 8, for "part of such fund" (w.e.f. 20-3-1946).
12. Subs. by Act 47 of 1950, s. 11, for certain words (w.e.f. 1-6-1950).
13. The words "under the law of the insure's country" omitted by Act 5 of 2015, s. 15 (w.e.f. 26-12-2014).
14. Subs. by Act 41of 1999, s. 30 and The First Schedule, for “Controller” (w.e.f. 19-4-2000).
15. Ins. by Act 6 of 1946, s. 8 (w.e.f. 20-3-1946).
16. Ins. by Act 5 of 2015, s. 15 (w.e.f. 26-12-2014).
17. The words "save as provided in section 49" omitted by Act 13 of 1941, s. 8 (w.e.f. 8-4-1941).
18. Subs. by s. 8, ibid., for "other than those of life insurance" (w.e.f. 8-4-1941).