Insurers not to transact both life and general insurance business
[3AA. (1) After the commencement of the Insurance (Amendment) Ordinance, 1970, no person shall be registered as an insurer-
(a) for life insurance business and specified miscellaneous insurance business if he seeks registration for any class of general insurance business; or
(b) for general insurance business other than specified miscellaneous insurance business if he seeks registration for life insurance business.
(2) No insurer registered before the commencement of the Insurance (Amendment) Ordinance, 1970, for life insurance business and also for any class of general insurance business shall, after the expiry of five years from such commencement, transact both types of business:
Provided that the Government may, on the application of an insurer, from time to time extend the said period of five years by such further period, not exceeding two years in the aggregate, as it may deem fit.
(3) An insurer who, immediately before the commencement of the Insurance (Amendment) Ordinance, 1970, was transacting both life insurance business and general insurance business shall, as soon as practicable, submit for the sanction of the Chief Controller of Insurance a scheme for the separation, transfer or winding up of either type of its business.
(4) The Chief Controller of Insurance shall, upon receipt of a scheme under sub-section (3), refer it for approval to the Government suggesting such modifications therein as he may consider necessary for protecting the interests of the policy-holders and shall,-
(a) if the scheme is approved by the Government with or without any modification, sanction the scheme accordingly; and
(b) if it is not approved by the Government, return it to the insurer for submission of a fresh scheme.
(5) Where a scheme of an insurer is sanctioned under sub-section (4), with or without modification, the insurer shall separate, transfer or wind up his business according to the scheme as sanctioned.
(6) Where any scheme sanctioned under sub-section (4) involves the establishment of a new insurance company, the Government shall give its consent under the Capital Issues (Continuance of Control) Act, 1947 (XXIX of 1947), to the issue of such capital as may be necessary for the establishment of such company.
(7) No insurer transacting life insurance business shall, after the expiry of five years from the commencement of the Insurance (Amendment) Ordinance, 1970 or of the period by which the said period of five years is extended under the proviso to sub-section (2), employ in any capacity any officer employed by an insurer transaction general insurance business.
Explanation.- In this sub-section, “officer” means any person, whosoever designated, who is responsible for the conduct of any business, or the management of any of the affairs, of the insurer.]