Section 28. Proceedings after investigation. (INSURANCE ACT, 1963

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

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

Section 28. Proceedings after investigation.

(1) On the completion of an investigation under section 27, the Commissioner shall transmit to the insurer a summary of his conclusions therefrom.

(2) If as the result of the investigation the Commissioner is satisfied that, by reason of the insolvency of the fund maintained by the insurer under this Act for either class of insurance business, it is expedient to do so in the interests of the policy owners interested in that fund, he may by notice in writing to the insurer direct that no further policies belonging to that class are to be issued by it or to be entered in its register of policies; but in the case of a company incorporate or established outside the Federation the direction shall not apply to the issue of policies in the course of its business outside the Federation.

(3) Whether or not the Commissioner gives a direction under sub-section (2), the Commissioner may give to the insurer such directions as to the conduct of the insurer's affairs, the disposition or recovery of assets of the insurer, or the taking of any available steps for the recovery by the insurer of sums appearing to the Commissioner to have been illegally or improperly paid, as he considers appropriate having regard to his conclusions from the investigation:

Provided that no direction as to the conduct of the insurer's affairs shall continue in force for more than twelve months from the giving thereof, without prejudice however to the giving of a further direction.

(4) If the insurer is aggrieved by a direction under this section, or disputes the validity of such a direction, the insurer may within such time as may be limited by rules of Court appeal to the High Court, but the validity of a direction shall not be questioned except on such an appeal and, in the case of a direction under sub-section (2) or of a direction under sub-section (3) as to the conduct of the insurer's affairs, neither the bringing of the appeal nor any order made on the appeal shall affect the operation of the direction as regards any period before the determination of the appeal.

(5) On an appeal under sub-section (4) the High Court may confirm or quash the direction or may remit the matter to the Commissioner for him to vary the direction or to replace it with a different direction in accordance with the order of the Court.

(6) For each occasion on which an insurer purports in contravention of a direction under sub-section (2) to issue a policy or enter a policy in a register of policies under this Act, the insurer shall be liable on conviction to a fine of one thousand dollars.

(7) If an insurer, having made default in complying with a direction under sub-section (3), fails to make good the default within one month after the service on the insurer by the Commissioner of a notice requiring it to do so, the High Court may on the application of the Commissioner make such order against the insurer or any director or officer of the insurer as the High Court thinks fit with a view to making good the default.