Various acts relating to General Insurance Business in India

Various legislations and acts influencing transaction of general insurance business in India and also loss minimization and risk management :

• The Aircraft Act, 1934 : To make better provision for the control of the manufacture, possession, use, operation, sale, import and export of aircraft.
• Aircraft Rules, 1937 : The Rules extend to the whole of India and apply to (i) aircrafts (including persons on board) registered in India, wherever they may be, and to (ii) all aircrafts (including person on board) for the time being in or over India. However, the regulations relating to registration, licensing of personnel, airworthiness and log-books provided in the Rules do not apply to foreign aircrafts which are governed by the relev­ant regulations of the respective countries in which the air­craft are registered.
• The Bill of Lading Act, 1855 : This Act defines the charac­ter of the bill of lading as an evidence of the contract of carriage of goods between the shipowner and the shipper, as an acknowledgement of the receipt of the goods on board the vessel and, as  a document of title. The bill of lading is one of the various documents required in connection with settlement of marine cargo claims.
• Carriage by Air Act, 1972 : The Act gives effect to the provisions of the Warsaw Convention, 1929 and the Hague Protocol, 1955 relating to international carriage of passengers and goods by air. The Act defines the liability of the air carrier for death of or injury to passengers and for loss of or damage to registered luggage and cargo. The provisions of the Act also apply, with some changes, to domestic carriage, i.e, carriage within India.
• Carriage of Goods by Sea Act, 1925 : This act defines the minimum rights, liabilities and immunities of a shipping Co. in respect of loss or damage to cargo carried.
• The Carriers Act, 1865 : This Act defines the rights and liabilities of truck-owners or operators who carry goods on public hire, in respect of loss or damage to goods carried by them. The Act also prescribes the time limit within which notice of loss or damage must be filed with the road carriers.
• Employees State Insurance Act, 1948 (ESI) : This is an Act to provide for certain benefits to employees in cases of sick­ness, maternity and employment injury and to make provision for certain other matters in relation thereof. Under the Act, the Employees State Insurance Corporation has been set up to admin­ister the insurance Scheme. The scheme is applicable to indus­trial employees as defined.
• Foreign Exchange Regulation Act, 1973 (FERA) : Exchange control regulations governing general insurance business written in India are set out in a Memorandum which is issued by the Reserve Bank of India under Sec. 73(3) of the Foreign Exchange Regulation Act.
• General Insurance Business (Nationalization) Act, 1972 : This Act came into force on 1st January, 1973 with the following objectives :

1. To provide for the acquisition and transfer of shares of Indian Insurance companies and undertakings of other existing insurers.
2. To serve better the needs of the economy  by securing the development of general insurance business in the best interest of the community.
3. To ensure that the and activities of the economic system does not result in concentration of wealth to the detriment of common interest.
4. For the regulation and control of such business and for matters connected therewith or incidental thereto.

• Indian Arbitration Act, 1940 : Disputes regarding insurance claims relating to the amounts payable under the policy are settled through the process of arbitration provided in this Arbitration Act.
• Indian Boiler Act, 1923: The manufacturing, supply, operation, registration of Boilers in India are governed by this Act.
• Indian Contract Act, 1872: To codify laws of contract.
• Indian Factories Act, 1948: This Act defines Factory and provides for regulations for governing factories. This Act also provides for various provisions of safety for various types of machinery, plant etc. in factories.
• Indian Mines Act, 1952 : Similar to Factories Act, defines mines and provides for regulations to ensure safety and security in mines.
• Indian Ports (Major Ports) Act, 1963 : This Act defines the liability of Port Trust authorities for loss of or damage to goods whilst in their custody and prescribes time limits for filing monetary claim on, or suit against the Port Trust au­thorities.
• Indian Post Office Act, 1898 : This Act defines the liability of the Government for loss, misdelivery, delay of or damage  to any postal article in course of transit by post.
• Indian Railways Act, 1890 : The Act deals with various aspects of Railways administration also relevant to Marine Insurance practice as it deals with the responsibility of Rail­ways administration as carriers.
• Indian Stamp Act, 1899 : The Act provides that a policy of Insurance be stamped in accordance with the schedule of rates prescribed.
• Inland Steam-Vessels Act, 1917 : The Inland Steam-Vessels Act, 1917 as amended in 1977, provides for the application of the provisions of Chapter VIII of the Motor Vehicles Act, 1939 in relation to insurance of mechanically propelled vessels against third party risks. The Act makes it compulsory for owners or operators of inland vessels to insure against legal liability for death or bodily injury of third parties or of passengers carried for hire or reward and for damage to property of third parties. The limits of liability are also prescribed.
• Insurance Act, 1938: The Act applies to the General In­surance Corporation of India and the four Subsidiary companies subject to exceptions, restrictions and limitations as specified by the Central Government under powers conferred by Section 35 of the General Insurance Business (Nationalization) Act. The important provisions of the Act relate, among other things, to registrations, accounts and returns, investments, limitations in expenses of Management, prohibition of rebates, powers of inves­tigation, licensing of agents, licensing of surveyors, advance payment of premium and Tariff Advisory Committee etc.
• Marine Insurance Act, 1963: This Act codifies the law relating to Marine Insurance. With a few exceptions this Act closely follows the UK Marine Insurance Act, 1906.
• Motor Vehicles Act, 1939: Chapter VIII provides for compulsory insurance of motor vehicles. According to this Act, no motor vehicle can be used in public places unless there is, in force, in relation to that vehicle, a policy of insurance issued by an authorized insurer.
• Motor Vehicles Act, 1988: The Motor Vehicles (Amendment) Act, 1988 has introduced changes which have far-reaching conse­quences. The changes also affect Third Party Liability arising out of the use of the Motor Vehicles in a public place.
• Workmen’s Compensation Act, 1923: The Act provides for the payment of compensation by employers to their workmen for injury by accident arising out of and in the course of employment.

Extracts from “General Insurance & Risk Management Glossary” published by  The Insurance Times, Edited by Dr. Rakesh Agarwal. Copyright of Sashi Publications, Kolkata. www.bimabazaar.com