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[Section Index]

The Insurance Act, 1938

( ACT NO. IV Of 1938 )

Deposits
7. 1[(1) Every insurer shall deposit, at the time of making application for registration, and keep deposited with the Bangladesh Bank, for and on behalf of the Government, the amount specified in the Seventh Schedule, either in cash or in approved securities estimated at the market value of the securities on the day of the deposit, or partly in cash and partly in approved securities so estimated.]
 
 
 
 
(2) [Omitted by section 6 of the Insurance (Amendment) Ordinance, 1984 (Ordinance No. L of 1984).]
 
 
 
 
(3) and (4) [Omitted by section 10 of the Insurance (Amendment) Act, 1958 (Act No. XXVII of 1958).]
 
 
 
 
(5) and (6) [Omitted by section 6 of the Insurance (Amendment) Ordinance, 1984 (Ordinance No. L of 1984).]
 
 
 
 
(7) [Omitted by section 10 of the Insurance (Amendment) Act, 1958 (Act No. XXVII of 1958).]
 
 
 
 
(8) A deposit made in cash shall be held by the Bangladesh Bank to the credit of the insurer and shall except to the extent, if any, to which the cash has been invested in securities under sub-section (9A), be returnable to the insurer in cash in any case in which under the provisions of this Act a deposit is to be returned; and any interest accruing due and collected on securities deposited under sub-section (1) or sub-section (2) shall be paid to the insurer, subject only to deduction of the normal commission chargeable for the realisation of interest.
 
 
 
 
2[(9) The insurer may at any time replace any securities deposited by him under this section with the Bangladesh Bank either by cash or by other approved securities or partly by cash and partly by other approved securities, provided that such cash, or the value of such other approved securities estimated at the market rates prevailing at the time of replacement, or such cash together with such value, as the case may be, is not less than the value of the securities replaced estimated at the market rates prevailing when they were deposited.
 
 
(9A) The Bangladesh Bank shall, if so requested by the insurer,-
 
 
 
 
(a) sell any securities deposited by him with the Bank under this section and hold the cash realised by such sale as deposit, or
 
 
 
 
(b) invest in approved securities specified by the insurer the whole or any part of a deposit held by it in cash or the whole or any part of cash received by it on the sale of or on the maturing of securities deposited by the insurer, and hold the securities in which investment is so made as deposit, and may charge the normal commission on such sale or on such investment.
 
 
 
 
(9B) Where sub-section (9A) applies,-
 
 
 
 
(a) If the cash realised by the sale of or on the maturing of the securities (excluding in the former case the interest accrued) falls short of the market value of the securities at the date on which they were deposited with the Bank, the insurer shall make good the deficiency by a further deposit either in cash or in approved securities estimated at the market value of the securities on the day on which they are deposited, or partly in cash and partly in approved securities so estimated, within a period of two months from the date on which the securities matured or were sold and unless he does so the insurer shall be deemed to have failed to comply with the requirements of this section as to deposits; and
 
 
 
 
(b) if the cash realised by the sale of or on the maturing of the securities (excluding in the former case the interest accrued) exceeds the market value of the securities at the date on which they were deposited with the Bank, the Government may, if satisfied that the full amount required to be deposited under sub-section (1) is in deposit, direct the Bangladesh Bank to return the excess.]
 
 
 
 
(10) If any part of a deposit made under this section is used in the discharge of any liability of the insurer, the insurer shall deposit such additional sum in cash or approved securities estimated at the market value of the securities on the day of deposit, or partly in cash and partly in such securities, as will make up the amount so used. The insurer shall be deemed to have failed to comply with the requirements of sub-section (1), unless the deficiency is supplied within a period of two months from the date when the deposit or any part thereof is so used for discharge of liabilities.

  • 1
    Sub-section (1) was substituted for sub-section (1) by section 6 of the Insurance (Amendment) Ordinance, 1984 (Ordinance No. L of 1984)
  • 2
    Sub-sections 9, (9A) and (9B) were substituted for the original sub-section (9), by section 4 of the Insurance (Amendment) Act, 1940 (Act No. XX of 1940)
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