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[Section Index]

The Insurance Act, 1938

( ACT NO. IV Of 1938 )

Restriction on dividends and bonuses
49. (1) No insurer, being an insurer specified in sub-clause (a) (ii) or sub-clause (b) of clause (9) of section 2, who carries on the business of life insurance or any other class or sub-class of insurance business to which section 13 applies shall for the purpose of declaring or paying any dividend to shareholders or any bonus to policy-holders or of making any payment in service of any debentures, utilise directly or indirectly any portion of the life insurance fund or of the fund of such other class or sub-class of insurance business, as the case may be, except a surplus shown in the valuation balance-sheet in Form I as set forth in the Fourth Schedule submitted to the Chief Controller of Insurance as part of the abstract referred to in section 15 as a result of an actuarial valuation of the assets and liabilities of the insurer; nor shall he increase such surplus by contributions out of any reserve fund or otherwise unless such contributions have been brought in as revenue through the revenue account applicable to that class or sub-class of insurance business on or before the date of the valuation aforesaid, when the reserve fund is made up solely of transfers from similar surpluses disclosed by valuations in respect of which returns have been submitted to the Chief Controller of Insurance under section 15 of this Act 1[* * *]:
 
 
Provided that payments made out of any such surplus in service of any debentures shall not exceed fifty per cent of such surplus including any payment by way of interest on the debentures, and interest paid on the debentures shall not exceed ten per cent of any such surplus except when the interest paid on the debentures is off-set against the interest credited to the fund or funds concerned in deciding the interest basis adopted in the valuation disclosing the aforesaid surplus.
 
 
 
 
(2) No insurer other than an insurer specified in sub-clause (a)(ii) or sub-clause (b) of clause (9) of section 2 who carries on the business of life insurance in Bangladesh shall for the purpose of declaring or paying any bonus to policy-holders in Bangladesh utilise directly or indirectly any portion of the life insurance fund except a surplus shown in the valuation balance-sheet in Form I as set forth in the Fourth Schedule submitted to the Chief Controller of Insurance as part of the abstract referred to in section 15 as a result of an actuarial valuation of the assets and liabilities of the insurer in Bangladesh; nor shall he increase such surplus by contributions out of any reserve fund or otherwise unless such contributions have been brought in as revenue through the revenue account applicable to life insurance business on or before the date of the valuation aforesaid, except when the reserve fund is made up solely of transfers from similar surpluses disclosed by valuations in respect of which returns have been submitted to the Chief Controller of Insurance under section 15 of this Act 2[* * *].

  • 1
    The words, figures and comma “or to the Central Government under section 11 of the Indian Life Assurance Companies Act, 1912” were omitted by section 3 and the Second Schedule of the Bangladesh Laws (Revision And Declaration) Act, 1973 (Act No. VIII of 1973)
  • 2
    The words, figures and comma “or to the Central Government under section 11 of the Indian Life Assurance Companies Act, 1912” were omitted by section 3 and the Second Schedule of the Bangladesh Laws (Revision And Declaration) Act, 1973 (Act No. VIII of 1973)
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