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The General Insurance Business (Nationalisation) Act, 1972

Administered Ministry: Ministry of Finance / Department of Financial Services

A1972-57.pdf
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Section
Section 35 Application of Insurance Act.
Subject to such exceptions, restrictions and limitations, if any, as the Central Government may, by notification, specify in this behalf, the Insurance Act shall apply to or in relation to the Corporation and every acquiring company as if the Corporation or the acquiring company, as the case may be, were an insurer carrying on general insurance business within the meaning of that Act.
Section 35A Omitted.
[Deduction of income-tax not to be made on interest or dividend payable to the Corporation, etc.] Omitted by The Finance Act 2002 (20 of 2002), s. 158 (w.e.f. 1-6-2002).
Section 36 Exemptions
(1) Nothing contained in this Act shall apply in relation to--
(a) any general insurance business carried on by a State Government, to the extent to which such insurance relates to properties belonging to it or undertakings owned wholly or mainly by the State Government or to properties belonging to semi-government bodies, or any Board or body corporate established by the State Government under any statue or any industrial or commercial undertaking in which the State Government has substantial financial interest, whether as shareholder, lender or guarantor;
(b) any general insurance business not falling within clause (a) which has been carried on by a State Government before the commencement of this Act, to the extent to which it is necessary to allow such business to run off:
Provided that nothing contained in this clause shall be deemed to authorise the State Government to issue any new policies or renew any existing policies;
(c) any insurer whose business is being voluntarily wound up or is being wound up by a court;
(d) the insurance business carried on by the Calcutta Hospital and Nursing Home Benefits Association Limited;
(e) the insurance business carried on by the Export Credit and Guarantee Corporation Limited and the Deposit Insurance Corporation established under section 3 of the Deposit Insurance Corporation Act, 1961 (47 of 1961);
(f) any scheme in existence immediately before the 14th day of May, 1971 or any scheme framed after the said day with the approval of the Central Government for the insurance of crops or of cattle or of flood risks or of war or emergency risks.
(2) If the Central Government is satisfied that an insurer, whether established before or after the appointed day, carries on only such general insurance business as is not carried on ordinarily by insurers, it may, by notification, direct that nothing contained in this Act shall apply to such insurer.
Section 37 Vacancies, etc., not to invalidate proceedings.
No act or proceeding of the Corporation or of an acquiring company shall be called in question merely on the ground of the existence of any vacancy in, or defect in the constitution of, the Corporation or the company.
Section 38 Protection of action taken in good faith.
No suit, prosecution or other legal proceeding shall lie against any officer of the Central Government or officer or other employee of the Corporation or of the acquiring company for anything which is in good faith done or intended to be done under this Act.
Section 38A Powers of Insurance Regulatory and Development Authority of India not to apply to International Financial Services Centre.
1[38A. Powers of Insurance Regulatory and Development Authority of India not to apply to International Financial Services Centre.--Notwithstanding anything contained in any other law for the time being in force, the powers exercisable by the Insurance Regulatory and Development Authority of India under this Act,
(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of section 18 of the Special Economic Zones Act, 2005 (28 of 2005);
(b) shall be exercisable by the International Financial Services Centres Authority established under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019, in so far as regulation of financial products, financial services and financial institutions that are permitted in the International Financial Services Centres are concerned.]

1. Ins. by Act 50 of 2019, s. 33 and the second Schedule (w.e.f. 1-10-2020).
Section 39 Power to make rules.

(1) The Central Government may, by notification, make rules to carry out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, rules made under this section may provide for---

(a) the manner in which the profits, if any, and other moneys received by the Corporation may be dealt with;

1[(b) the conditions, if any, subject to which the Corporation shall carry on re-insurance business;

(ba) the conditions, if any, subject to which the acquiring companies shall carry on general insurance business;]

(c) the terms and conditions subject to which any reinsurance contracts or treaties may be entered into;

(d) the form and manner in which any notice or application may be given or made to the Central Government;

(e) the reports which may be called for by the Central Government from the Corporation and the acquiring companies;

2[(ea) the manner of holding an inquiry and imposing penalties under sub-section (1) of section 30A;

(eb) the form and manner of preferring appeal to the appellate authority against the order of adjudicating officer under sub-section (2) of section 30A;]

(f) any other matter which is required to be, or may be, prescribed.

(3) Every rule made under this section and every notification issued under section 35 shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made, the rule or notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or notification.

1. Subs. by Act 40 of 2002, s. 8, for clause (b) (w.e.f. 21-3-2003).

2. Ins. by Act 8 of 2026, s. 2 and Sch. (w.e.f. 23-6-2026).

Section 40 Repealed.
[Omission of section 14 of Act 17 of 1971.] Rep. by the Repealing and Amending Act, 1978 (38 of 1978), s. 2 and the First Schedule (w.e.f. 26-11-1978).
Section 30A Adjudication of penalties.

1[30A. Adjudication of penalties.—(1) For the purpose of adjudicating penalties under section 30, the Central Government shall appoint an officer not below the rank of Joint Secretary to the Government of India as an adjudicating officer for holding an inquiry and imposing penalties in such manner as may be prescribed:

Provided that the Central Government may appoint as many adjudicating officers as may be required:

Provided further that no such penalty shall be imposed without giving the person concerned a reasonable opportunity of being heard.

(2) Any person aggrieved by an order of the adjudicating officer under sub-section (1) may, within thirty days from the date of receipt of such order, prefer an appeal to such officer, at least one rank higher than the adjudicating officer, as may be appointed by the Central Government as an appellate authority, in such form and manner as may be prescribed.

(3) The appellate authority may admit an appeal after the expiry of the said period of thirty days, if the appellant satisfies the appellate authority that he had sufficient cause for not preferring the appeal within that period.

(4) The appellate authority may, after giving the parties to the appeal an opportunity of being heard,

pass such an order as he may deem fit.

(5) An appeal under sub-section (2) shall be disposed of within sixty days from the date of filing.

(6) If a penalty imposed by the adjudicating officer under sub-section (i) or by an order of the appellate authority under sub-section (4), as the case may be, is not deposited, the amount shall be recovered as an arrear of land revenue.]

1. Ins. by Act 8 of 2026, s. 2 and Sch. (w.e.f. 23-6-2026).