The Department of Financial Services vide notification dated the 4th July, 2022 has issued directions under the Insurance Act, 1938. Every insurer, in order to meet its liabilities, shall earmark, invest and at all times keep earmarked and invested, assets of value not less than that of the liabilities. An insurer may invest not more than five per cent. of the assets by value, in a company or other body corporate which is owned or controlled by the promoters, subject to the condition that the assets shall be held free of any encumbrance, charge, hypothecation or lien.
It is further clarified that any refund of premium which may become due to an insured on account of cancellation of a policy or alteration in its terms and conditions or otherwise, shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money order or by such other means as may be specified by the Authority by regulations, and a proper receipt therefor shall be obtained by the insurer from the insured, and such refund shall in no case be credited to the account of the agent.
