Section 3. Requirements for carrying on business as insurer. (INSURANCE ACT, 1963

(P.M. ACT 1 OF 1963)
INSURANCE ACT, 1963

PART II - CONDUCT OF INSURANCE BUSINESS
General restriction on insurers

Section 3. Requirements for carrying on business as insurer.

(1) Subject to the provisions of this Act, insurance business shall not be carried on in the Federation by any person as insurer except-

(a)

by a company as defined in the Companies Act, 1965 [

Act 79/65

], or a company incorporated outside the Federation which has an established place of business in the Federation; or

(b)

by a society registered under the Co-operative Societies Ordinance*, 1948 [

470/64

]; or

(c)

by an unincorporated company established in the United Kingdom before the year 1862 which has been carrying on

business as insurer in the Federation since before the commencement of this Act, and has an established place of business in the Federation.

(2) No such company or society shall carry on life business or general business in the Federation as insurer unless it is registered under this Act in respect of that class of business and has the deposit required by this Act in respect of it :

Provided that this sub-section shall not apply to an existing insurer so as to require a deposit before the end of three months from the commencement of this Act, or so as to require registration before th end of six months from that commencement.

(3) The Commissioner may, on the application of an existing insurer, direct that sub-section (2) shall not apply to the insurer in respect of the collection or receipt of premiums on Federation policies belonging to either class of business, if the insurer satisfies the Commissioner before the end of three months from the commencement of this Act

(a)

that the insurer is not carrying on nor proposing to carry on that class of business in the Federation as insurer otherwise than by the collection or receipt of premiums on those policies; and

(b)

that reasonable provision has been or will be made for the insurer's liability in respect of those policies, and adequate arrangements will exist for payment in the Federation of premiums and claims on those policies.

(4) A person who contravenes this section shall on conviction be liable to a fine of five thousand dollars, increased by one thousand dollars for each day on which he is proved to have done so, or to imprisonment for a term of twelve months, or to both such fine and such imprisonment.
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* In its application to Sabah and Sarawak, substitute the corresponding written law- The Co-operative Societies Ordinance of Sabah 3/1958, and The Co-operative Societies Ordinance of Sarawak (Cap. 66), as the case may be-See Modification of Laws (Insurance) (Extension) Order, 1964, F.L.N. 470/64.

In its application to Sabah and Sarawak, the reference to the commencement of this Act, in relation to pre-registered insurers, shall be construed as a reference to the 31st December, 1964-See Modification of Laws (Insurance) (Extension) Order, 1964, F.L.N. 470/64.

For definition of "pre-registered insurer"-See F.L.N. 470/64.