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The Insurance Act, 1938

( ACT NO. IV OF 1938 )

[ 26th February, 1938 ]

Part II

COMMISSION AND REBATES AND LICENSING OF AGENTS

Licensing of insurance agents
42. (1) Any person who possesses such qualifications as may be prescribed in this behalf and who makes an application in the prescribed manner to the Chief Controller of Insurance accompanied by the prescribed fee, which shall not be more than 1[two hundred] Taka may be granted a temporary licence for the purpose of soliciting or procuring life insurance business.
 
 
 
 
(2) A temporary licence issued under sub-section (1) shall remain in force for a period of two years.
 
 
 
 
(3) On his making an application to the Chief Controller of Insurance in the prescribed manner accompanied by the prescribed fee, the holder of a temporary licence who has passed such examination as may be prescribed, and any other person who has passed the examination, shall be granted a renewable licence.
 
 
 
 
(4) A renewable licence shall remain in force for a period of three years from the date of issue but shall be renewed for a further period of three years at any one time if-
 
 
 
 
(i) an application in the prescribed form for renewal of the licence reaches the Chief Controller at least one month before the date on which the licence ceases to remain in force;
 
 
(ii) the applicant has paid the prescribed renewal fee which shall not be more than 2[three hundred] Taka; and
 
 
 
 
(iii) except in such circumstances as may be prescribed, the applicant has procured during the previous three years such volume of business, and from out of the business procured by him the number of policies lapsing has been below such percentage, as may be prescribed.
 
 
 
 
(5) A person to whom a temporary licence is granted and who is unable to pass the examination prescribed under sub-section (3) shall not be entitled to apply for another temporary licence:
 
 
 
 
Provided that the Chief Controller may grant a fresh temporary licence to a person who has previously held a temporary licence if such person has procured such volume of business, and from out of the business procured by whom the number of policies lapsing is below such percentage as may be prescribed.
 
 
 
 
3[(6) The Chief Controller of Insurance or an officer authorised by him in this behalf shall, in the prescribed manner and on payment of prescribed fee, which shall not be more than 4[two hundred Taka], issue to any individual making an application in the prescribed manner a licence to act as an insurance agent for the purpose of soliciting or procuring general insurance business.
 
 
 
 
(7) A licence issued under sub-section (6) shall remain in force for a period of one year from the date of issue but shall be renewed for a period of three years at any one time if :-
 
 
 
 
(i) an application in the prescribed form for renewal of the licence reaches the issuing authority at least one month before the date on which the licence ceases to remain in force;
 
 
(ii) the applicant has paid the prescribed renewal fee which shall not be more than three hundred Taka; and
 
 
 
 
(iii) the applicant has procured during the previous three years general insurance business yielding at an average a premium income of not less than one lakh Taka.
 
 
 
 
(8) No fresh licence for general insurance business shall be issued to an insurance agent whose licence has not been renewed under sub-section (7), until after one year from the date on which his last licence ceased to remain in force.]
 
 
 
 
(9) Notwithstanding the provisions of clause (i) of sub-section (4) 5[or clause (i) of sub-section (7)], an application for the renewal of a licence which does not reach the issuing authority at least one month before the date on which the licence ceases to remain in force shall be entertained at any time before that date if the applicant has paid an additional fee of a prescribed amount not exceeding five Taka by way of penalty:
 
 
 
 
Provided that the Chief Controller of Insurance may, if satisfied that undue hardship would be caused otherwise, entertain an application received after the licence ceases to remain in force on payment by the applicant of a penalty of a prescribed amount not exceeding thirty Taka.
 
 
 
 
6[(10) For the purpose of sections 40 and 40A, no insurance agent who is licensed to act as an insurance agent for life insurance business be deemed to be an insurance agent for general insurance business and no insurance agent who is licensed to act as an insurance agent for general insurance business shall be deemed to be an insurance agent for life insurance business.]
 
 
 
 
(11) A licence issued under this section shall entitle the holder thereof to act as an insurance agent for any insurer.
 
 
(12) No person shall apply for temporary or renewable licence or apply for the renewal of a licence in respect of life insurance business 7[or a licence in respect of general insurance business] if:-
 
 
 
 
(i) he is a minor;
 
 
 
 
(ii) he has been found to be of unsound mind by a Court of competent jurisdiction;
 
 
 
 
(iii) he has been found guilty of criminal misappropriation or criminal breach of trust or cheating or forgery or an abetment of or attempt to commit any such offence by a Court of competent jurisdiction:
 
 
 
 
Provided that where, in the case of a person convicted of any such offence, five years have elapsed since the date of the sentence or, where the sentence was of imprisonment with or without fine, from the date of his release, the Chief Controller of Insurance shall ordinarily declare in respect of such person that his conviction shall cease to debar him from making such an application.
 
 
 
 
(iv) in the course of any judicial proceeding relating to any policy of insurance or the winding up of an insurance company or in the course of an investigation of the affairs of an insurer, it has been found that he has been guilty of or has knowingly participated in or connived at any fraud, dishonesty or misrepresentation against an insurer or an insured.
 
 
 
 
(13) If it be found that an insurance agent is debarred by sub-section (12) from making an application, without prejudice to any other penalty to which he may be liable, the Chief Controller of Insurance shall, and if the agent has knowingly contravened any provision of this Act, or any rule or order made thereunder may, cancel a licence issued to the agent under this section.
 
 
(14) In the event of the cancellation of a licence under sub-section (13), the Chief Controller of Insurance may refuse to grant a fresh licence to the insurance agent for such period as the Chief Controller deems fit.
 
 
 
 
(15) The authority which issued any licence under this section may issue a duplicate licence to replace a licence lost, destroyed or mutilated on payment of the prescribed fee which shall not be more than one Taka.
 
 
 
 
(16) The Chief Controller shall if he refuses any licence or the renewal of any licence under this section, communicate his decision in writing to the applicant for the licence or the renewal within six weeks of the date of the application.]
  • 1
    The words “two hundred” were substituted for the words “twenty” by section 7 of the Insurance (Amendment) Act, 1993 (Act No. XII of 1993)
  • 2
    The words “three hundred” were substituted for the words “thirty” by section 7 of the Insurance (Amendment) Act, 1993 (Act No. XII of 1993)
  • 3
    Sub-sections (6), (7) and (8) were substituted by section 7 of the Insurance (Amendment) Act, 1993 (Act No. XII of 1993)
  • 4
    The words “two hundred Taka” were substituted for the words “one hundred Taka” by section 5 of the Insurance (Amendment) Act, 2004 (Act No. IV of 2004)
  • 5
    The words and commas “or clause (i) of sub-section (7)” were inserted by section 7 of the Insurance (Amendment) Act, 1993 (Act No. XII of 1993)
  • 6
    Sub-section (10) was inserted by section 7 of the Insurance (Amendment) Act, 1993 (Act No. XII of 1993)
  • 7
    The words and commas “or a licence in respect of general insurance business” were inserted by section 7 of the Insurance (Amendment) Act, 1993 (Act No. XII of 1993)
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Ministry of Law, Justice and Parliamentary Affairs