PART V - DIRECTION AND CONTROL OF DEFAULTING INSURER
Section 59. Action against insurer, employee or director.
(1) This section applies where the Bank is satisfied that-
(a) a licensed insurer-
(i) is carrying on business in a manner detrimental to the interests of its policy owners, creditors, or the public generally;
(ii) is incurring expenditure in procuring, maintaining or administering its insurance business which is unduly high in relation to its premium income;
(iii) is in a situation where section 58 applies; or
(iv) has contravened any provision of this Act, or any condition of its licence, or any written law, regardless that there has been no criminal prosecution in respect of the contravention; or
(b) a director or officer of a licensed insurer-
(i) has pecuniary interest, direct or indirect, in a matter and that interest raises a conflict with the performance of his duties in relation to that matter; or
(ii) conducts the affairs of the licensed insurer with self-interest or in a manner prejudicial to the interests of the licensed insurer.
(2) The Bank, by order in writing, may do any act in relation to the licensed insurer, its business, director or employee or may require the licensed insurer to do or not to do any act in relation to itself, its business, director or employee.
Penalty: Imprisonment for three years or three million ringgit or both. Default penalty.
(3) The Bank, whether or not any action has been taken under subsection (2), with the approval of the Minister, by order in writing may do all or any of the following:
(a) remove from employment or office, with effect from such date as may be set out in the order, an employee or a director of the licensed insurer, or appoint a person as-
(i) an employee of the licensed insurer in such capacity and with such job description and authority as may be described in the order; or
(ii) a director of the licensed insurer,
and provide in the order for the employee or director so appointed to be paid by the licensed insurer such remuneration as may be set out in the order notwithstanding anything in any written law, or any limitations contained in its constituent documents;
(b) appoint a person to advise the licensed insurer in relation to the proper conduct of its business, and provide in the order for the person so appointed to be paid by the licensed insurer such remuneration as may be set out in the order; or
(c) terminate any contract, agreement or arrangement entered into by the licensed insurer with any person in relation to its business or otherwise.
(4) The Minister, whether or not any action has been taken under subsection (2) or (3), on the recommendation of the Bank, by order published in the Gazette, may provide-
(a) for the Bank to assume control of, or to carry on, the whole or part of the licensed insurer's property, business and affairs, as the case may be, or for the Bank to appoint an appointed person to do so on behalf of the Bank which appointment shall be binding on the licensed insurer and for the costs and expenses of the Bank, or the remuneration of the appointed person, to be payable as a first charge by the licensed insurer; or
(b) whether or not an order has been made under paragraph (a), for the Bank to present a petition to the Court for the winding up of the licensed insurer.
(5) No order under this section shall be made unless the licensed insurer, employee, director or person has been given a reasonable opportunity of making representation in writing to the Bank or the Minister, as the case may be.
(6) Notwithstanding subsection (5), an order under this section may be made first and the opportunity to make representation be given immediately after the order has been made if any delay would be detrimental to the interests of the licensed insurer, its policy owner, or the public generally.
(7) An order, in consequence of representation made under subsection (5) or (6), may be confirmed, amended or revoked.