ACT 553
INSURANCE ACT 1996

PART I - PRELIMINARY



Section 2. Interpretation.


In this Act, unless the context otherwise requires-

"adjuster" means a person who carries on adjusting business either for the insurer or the policy owner or both;

"adjusting business" means the business of investigating the cause and circumstances of a loss and ascertaining the quantum of the loss;

"annuity" means a right to a series of periodical payments at intervals of one year or less under a contract with a life insurer;

"appointed actuary" means an actuary appointed under subsection 83(1);

"appointed person" means a person appointed under paragraph 59(4)(a);

"approved company auditor" has the meaning in the Companies Act 1965 [Act 125];

"associate", in relation to a person, means-

"Bank" means the Central Bank established by the Central Bank of Malaysia Act 1958 [Act 519];

"body corporate" means a person incorporated by or under any written law, and includes a statutory body, public authority, or other authority, incorporated by or under a written law, a corporation, and a corporation sole;

"chief executive officer", in relation to an institution, means an individual, who either individually or jointly with one or more other persons, is responsible, subject to the authority of the directors, for the conduct of the business and the administration of the institution;

"child" includes an illegitimate child, a step-child and a child adopted under any written law of Malaysia or of any place outside Malaysia, or under a custom recognized by a class of persons in or outside Malaysia;

"commission" means an amount or a benefit in kind, whether expressed as a percentage of premium or not, agreed to be paid by a licensed insurer to an insurance agent or insurance broker, including introducer's fees;

"company" has the meaning in the Companies Act 1965 [Act 125];

"constituent document", in relation to an institution, means the statute, charter, memorandum of association and articles of association, rules and by-laws, partnership agreement, or other instrument, under or by which the institution is established and its governing and administrative structure and the scope of its functions and business are set out, whether contained in one or more documents;

"controller", in relation to an institution, means-
"co-operative society" means a co-operative society registered under the Co-operative Societies Act 1993 [Act 502];

"corporation" has the meaning in the Companies Act 1965 [Act 125];

"credit facility" means an advance, loan or any other facility by which the borrower has access, directly or indirectly, to the funds of the lender and includes the giving of a guarantee in relation to a credit facility;

"director" includes a person who occupies the position of a director and includes a person in accordance with whose directions or instructions the directors or officers are accustomed to act and an alternate or substitute director, and without prejudice to the foregoing, in the case of-
"document" has the meaning in the Evidence Act 1950 [Act 56] and includes books and accounts;

"effective date" means the date of coming into force of this Act;

"employee", in relation to a licensee, includes the chief executive officer;

"financial adviser" means a person who carries on financial advisory business;

[Ins. Act A1247:s.3]

"financial adviser's representative" means an individual by whatever name described, in the direct employment of or acting for or by arrangement with a financial adviser, who performs for the financial adviser any of the functions of a financial adviser other than work ordinarily performed by accountants, clerks or cashiers, whether his remuneration, if any, is by way of payment of salary, wages, commission or otherwise and includes an officer of the financial adviser who performs for the financial adviser any of those functions, whether or not his remuneration is as aforesaid;

[Ins. Act A1247:s.3]

"financial advisory business" means any or all of the following services:
[Ins. Act A1247:s.3]

"financial year", in relation to a licensee, means the period for which the licensee makes up the accounts of its business which shall be a period of twelve calendar months, calculated from the commencement of the business or from the end of the immediately preceding financial year, as the case may be, or such longer or shorter period as the Bank, in relation to a particular licensee, may approve on a particular occasion;

"foreign insurer" means an insurer which is incorporated outside Malaysia;

"foreign policy" means a policy which is issued by a licensed insurer and is not a Malaysian policy;

"Governor" means the Governor of the Bank and includes a Deputy Governor of the Bank;

"insurance" includes reinsurance;

"insurance agent" means a person who does all or any of the following:


"insurance broker" means a person who, as an independent contractor, carries on insurance broking business and includes a reinsurance broker;

"insurance broking business" means the business of soliciting, negotiating or procuring a policy with an insurer, or the renewal or continuance of the policy, for a policy owner other than himself and includes reinsurance broking for an insurer;

"insurance claim" means a demand for payment of an amount due under a policy;

"insurance fund" means an insurance fund established and maintained under section 38;

"insurer" includes a professional reinsurer;

"interest in a share" means a legal or equitable interest in a share;

"liabilities" includes debts, duties and obligations of every kind, whether present or future, whether vested or contingent;

"licensed" means licensed under section 16 or 17;

"licensed bank" has the meaning in the Banking and Financial Institutions Act 1989 [Act 372];

"licensed business" means insurance business, insurance broking business, adjusting business or financial advisory business;

[Am. Act A1247:s.3]

"licensee" means an insurer, insurance broker, adjuster or financial adviser , licensed under section 16 or 17;

[Am. Act A1247:s.3]

"life business" means the business of undertaking liability under a life policy;

"life policy" means a policy by which payment of policy moneys is insured on death or survival, including extensions of cover for personal accident, disease or sickness and includes an annuity but does not include a personal accident policy;

"local insurer" means an insurer which is incorporated in Malaysia;

"Malaysian policy" means a policy which is issued in Malaysia by a licensed insurer and which is-


"margin of solvency" means the margin of solvency required under section 46;

"member", in relation to an institution which is-

"Minister" means the Minister for the time being charged with the responsibility for finance;

"non-participating life policy" means a life policy not conferring any right to share in the surplus of a life insurance fund;

"office" includes the principal place of business, an electronic terminal and any other place from where or at which business of the licensee is carried on;

"officer", in relation to an institution, includes an employee and the chief executive officer;

"participating life policy" means a life policy conferring a right to share in the surplus of a life insurance fund;

"personal accident policy" means a policy providing fixed pecuniary benefits or benefits in the nature of indemnity or both against risks of the person insured sustaining injury or dying as the result of an accident or becoming incapacitated in consequence of disease;

"policy" means an insurance policy and includes a cover note or a contract of insurance, whether or not embodied in or evidenced by an instrument in the form of an insurance policy, and references to-

"policy moneys" includes any benefit, whether pecuniary or not, which is secured by a policy;

"policy owner" means the person who has legal title to a policy and includes-
"policy owner's address" means the address of the policy owner specified in the policy or any other address subsequently notified in writing by the policy owner to the insurer;

"premium" means the amount payable to an insurer under a policy as consideration for the obligations assumed by the insurer;

"prescribed" means prescribed by regulations published in the Gazette, and a power to prescribe includes the power to make different provisions in the regulations for different persons or classes of persons;

"private company" has the meaning in the Companies Act 1965 [Act 125];

"professional reinsurer" means a reinsurer which is licensed to carry on solely reinsurance business;

"property" means movable or immovable property and includes-
"public company" means a company incorporated under the Companies Act 1965 [Act 125] and whose memorandum of association or articles of association do not impose the restrictions, limitations and prohibitions referred to in subsection 15(1) of that Act;

"reinsurance" means insurance cover effected by an insurer with a second insurer on the risks, wholly or partly, it has accepted and includes any similar arrangement by a branch of the insurer in Malaysia with its branch outside Malaysia (the head office of the insurer being, for this purpose, treated as a branch);

"related corporation" has the meaning in the Companies Act 1965 [Act 125];

"relative", in relation to a person, means-
"repealed Act" means the Insurance Act 1963 [Act 89] repealed under subsection 214(1);

"share", in relation to a corporation, means an issued share of the corporation and includes stock except where a distinction between stock and share is expressed or implied;

"specify" means specify in writing, and a power to specify includes the power to specify differently for different persons or different classes of persons, and to amend any specification;

"subsidiary" has the meaning in section 5 of the Companies Act 1965 [Act 125].


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