Section 27. Investigation of affairs of insurer. (INSURANCE ACT, 1963

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

PART III - RETURNS, INVESTIGATIONS, WINDING UP AND TRANSFERS OF BUSINESS
Investigations

Section 27. Investigation of affairs of insurer.

(1) Subject to sub-section (2) the Commissioner may institute an investigation into the whole or any part of the business carried on in the Federation by an insurer registered under this Act, if it appears to the Commissioner-

(a)

that the insurer is or is likely to become unable to meet its obligations; or

(b)

that the insurer as failed to comply with any provisions of this Act relating to insurance funds; or

(c)

that the insurer, having been given a notice under section 18, has not, within one month thereafter furnished the required

information fully and satisfactorily; or

(

) that the insurer has failed to comply with any provisions of section 22, 23 or 26; or

(e)

that the expenditure or any class of expenditure incurred in procuring, maintaining or administering any insurance business of the insurer carried on in the Federation is unduly high in relation to the income derived from premiums; or

(

) that the method by which any income or expenditure of the insurer is apportioned between insurance funds or between an insurance fund and any other fund or account is inequitable; or

(g)

that any information in the possession of the Commissioner calls for such an investigation.

(2) Before instituting an investigation under this section, the Commissioner shall serve on the insurer a notice in writing specifying the grounds for instituting an investigation and calling upon the insurer within such period, not less than fourteen days from the service of the notice, as may be specIfied in the notice, to show cause why an investigation should not be instituted on those grounds.

(3) If the insurer fails within the period specified in the notice to show cause to the satisfaction of the Commissioner, the Commissioner may himself make the investigation or may appoint an inspector to make it and report the results of it to him.

(4) In making an investigation under this section, the Commissioner or inspector may, by notice in writing, require-

(a)

the insurer, or any person having the custody thereof on behalf of the insurer; or

(b)

any person who is or has at any time been or acted as a director, actuary, auditor, officer, servant or agent of. the insurer;

(c)

any past or present member or policy owner of the insurer;

to produce for his inspection, and allow him to copy the whole or any part of, any books, accounts, records, or other documents of the insurer, whether kept in the Federation or elsewhere (including documents evidencing the insurer's title to any assets):

Provided that a requirement under this sub-section shall extend only to documents relating to business carried on by the insurer in the Federation, or evidencing the insurer's title to assets held for the purposes of any such business.

(5) In making an investigation under this section, the Commissioner or inspector may require any such individual as is specified in sub-section (4) to attend before him and be examined on oath with respect to the insurer's business, and for the purposes of this sub-section may administer oaths.

(6) If any person refuses or fails, when required to do so under sub-section (4) or (5), to produce any document in his custody or power or to attend for or submit to examination by the Commissioner or inspector, or to answer any question put to him on such examination, the Commissioner or inspector may certify the refusal under his hand to the High Court; and the High Court may thereupon enquire into the case, and after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, punish the offender in like manner as if he had been guilty of contempt of the High Court.