Section 11. Requirements as to assets of insurance funds (INSURANCE ACT, 1963

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

PART II - CONDUCT OF INSURANCE BUSINESS
Deposits, registers of policies and insurance funds

Section 11. Requirements as to assets of insurance funds

(1) The assets of any insurance fund under this Act shall be kept separate from all other assets of the insurer, and shall not include assets comprised in a deposit under this Act except as provided by sub-section (4), nor any amounts on account of goodwill, the benefit of development expenditure or similar items not realisable apart from the business or part of the business of the insurer.

(IA) The assets of an insurance fund established in respect of general business shall not include any amount representing the total of outstanding premiums and agents' balances which is in excess of twelve and a half per cent of written premiums:

Provided that this sub-section shall have effect with the substitution for the words "twelve and one half per cent"

(a)

for the accounting period commencing in the year 1966, of "twenty per cent"; and

(b)

for the accounting period commencing in the year 1967, of "seventeen and one half per cent"; and

(c)

for the accounting period commencing in the year 1968, of "fifteen per cent";

(2) Subject to section 14 the assets of any insurance fund shall be such that the value of items specified in the Second Schedule, with any such additions as are permitted by subsection (3), is not at any time less than fifty-five per cent of the total value of the assets of the fund:

Provided that this sub-section shall have effect with the substitution for the words" fifty-five per cent"-

(a)

for the yea 1963, f the words "twenty-five per cent"; an

(b)

for the year. 1964, \of the words "thirty-five per cent"; an

(c)

for the year 965, of he words "forty-five per cent";

and for any of those years the Commissioner may, on the application of any insurer and with the approval of the Minister, reduce the percentage for that insurer below that specified for the year in this proviso.

(3) For the purposes of sub-section (2) there may be added to the value of items specified in the Second Schedule the amount or value of an assets of the fund of the following descriptions:

(a)

income arising from those items but not yet received;

(b)

outstanding premiums on life policies on which future liabilities may be met out of the assets of the fund, being premiums which are to be paid in the currency of the Federation;

(c) outstanding premium and agents' balances in respect of Federation policies for general business but not exceeding the

amount permitted in sub- section (lA);

(d)

interest not yet received on loans secured on any such policies, being interest which is to be paid in the currency of the

Federation.

(4) Notwithstanding anything in sub-section (1) an existing insurer may, on the first establishment of an insurance fund for either class of insurance business, allocate thereto under sub-section (9) of section 10 assets then comprised in the insurer's deposit under this Act in respect of that class of business, and the assets so allocated and the assets from time to time representing them in the deposit may form part of the insurance fund accordingly.

(5) For purposes of this section the assets from time to time representing any re-insurer's deposit held by the insurer to meet liabilities of an insurance fund shall be treated as assets of the fund.