As enacted

Contents

Regulation of Insurance Industry Act 2000 · As enacted · Part IV · Long Term Insurance Business

Section 38

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

Duty of insurer carrying on long term insurance business to maintain a separate fund and keep assets relating to such business separate from assets relating to any other business

(1)

Every insurer who carries on long term insurance business, whether solely or in addition to general insurance business, shall—

(a)

maintain a separate fund to be called the “Long Term

Insurance Fund” and shall credit all money received in respect of the long term insurance business carried on by such insurer, to that Fund ; and

(b)

keep the assets in respect of the long term insurance business separate from the assets in respect of any other class of insurance business.

(2)

The Long Term Insurance Fund maintained by an insurer under subsection (1), shall not be liable for any contracts of the insurer for which it would not have been liable had the business of the insurer been only that of long term insurance business, and shall not be applied directly or indirectly for any purposes other than those of the long term insurance business carried on by that insurer.

(3)

For the purpose of verifying whether an insurer complies with the provisions of subsection (1), the Board may—

(a)

call upon such insurer to furnish from time to time a return in such form as may be prescribed ;

(b)

authorize an officer in writing to enter at all reasonable hours the place at which such insurer is carrying on long term insurance business and examine any books, registers or documents of such insurer relating to such business, and such insurer shall furnish such return or permit such officer to enter such place and make such examination.

(4)

Where, following an actuarial investigation into the financial affairs of an insurer transacting long term insurance business under subsection (1) of section 48, there is an established surplus in respect of participating policies which the actuary has recommended as being available for distribution, the insurer shall not transfer or otherwise apply assets representing any part of that surplus, unless the insurer has allocated for the payment of bonuses to holders of participating policies at least ninety per centum of that surplus.

Read on from s 39

Part V