Section 30. Special provision for insurers directed to cease insurance business. (INSURANCE ACT, 1963

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

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

Section 30. Special provision for insurers directed to cease insurance business.

(1) Where the Commissioner gives an insurer a direction under sub-section (2) of section 28, the insurer may be wound up by the Court under the Companies Act, 1965, as if it had suspended its business for a whole year (or, in the case of a winding up under Division 5 of Part X of that Act, as if it had ceased to carry on business).

(2) Where the commissioner gives an Insurer a direction as aforesaid but, on a petition for the insurer to be wound up by the Court, the Court is satisfied that the insurer will be able to pay its debts in full within twelve months or such longer period as the Court thinks reasonable, the Court may (if it thinks fit) order the affairs of the insurer to be wound up only as regards the insurance fund maintained for the class of business to which the direction relates.

(3) An order under sub-section (2) for a limited winding up shall be of the same effect as an order for the insurer to be wound up generally, except in so far as this section otherwise provides.

(4) Where such an order is made, the powers of the liquidator shall be exercisable only for the purpose of applying the assets of the relevant insurance fund (including the deposit under this Act) in discharging the liabilities to which they are applicable, together with the costs, charges and expenses incurred in the winding up; but the insurer shall from time to time, as the Court may direct, make such additions to those assets as are required to secure that they are sufficient for the purpose or shall, if the Court so directs, discharge any of those liabilities out of other assets.

(5) In the winding up of an insurer under such an order, the Companies Act, 1965 [Am. Act 79/65] , shall have effect subject to the following modifications:

(a)

section 214 (or, as the case may be, section 316) and other sections so far as they relate to contributories shall not apply;

(b)

section 222 shall apply after, as it applies before, the making of the finding up order, and section 126 (3) shall not

apply;and

(c)

sections 223, 224, 272, 283, and 293 to 299 shall not apply.

(6) Where such an order is made, the Court may at any time, on the application of the liquidator or of any person who might petition for the insurer to be wound up, substitute an order for the insurer to be wound up generally, and give such directions as the Court thinks fit as to matters in progress under the previous order; and, subject to any such directions, the winding up shall for all purposes connected with the substituted order be deemed to have commenced at the time of the application for that order.