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Sha'ban 15, 1437/Ravivara
Jyaistha 01, 1938, at 09:19:47 PM
The National Insurance Corporation Act,
1976
1ACT XXIII OF 1976
[26th April, 1976]
An Act to establish a National Insurance
Corporation.
WHEREAS it is expedient to
establish a National Insurance Corporation and to provide for matters connected
therewith or incidental thereto;
It is hereby enacted as
follows:‑--
1. Short title, extent
and commencement.__(1) This Act may be called the National
Insurance Corporation Act, 1976.
(2) It extends to the whole
of
(3) It shall come into force
at once.
2. Definitions. In this Act, unless there is anything
repugnant in the subject or context,---
(1) “Chairman” means the
Chairman of the Corporation;
(2) “Corporation” means the
National Insurance Corporation established Who under section 3;
(3) “Board” means the Board
of Directors of the Corporation;
(4) “company” has the same
meaning as in the Companies Act, 1913 (VII of 1913);
(5) “Fund” means the
National Insurance Fund established by the Government of Pakistan on the first
day of July 19/3;
(6) “public property” means,---
(a) any property, movable or immovable, which belongs to, or the
safety of which is the legal responsibility of,‑--
(i) the Government or a local authority or
statutory corporation; or
1For Statement of Objects and Reasons,
see Gaz., of P., 1976, Ext., Pt. III, p. 201.
(ii) any company, firm, undertaking, institution,
organization or other establishment which is managed or controlled by the
Government or a local authority or statutory corporation or in which the
Government, by itself or jointly with a local authority or statutory
corporation or company in which the Government, by itself or jointly with a
local authority or corpora. t]on or company managed or controlled by it, holds
controlling financial share or interest or which is specified by the Federal
Government for the purposes of this clause; and
(b) a project financed out of an external
loan, or with external aid until it reaches,---
(i) in the case of an industrial project, the stage at which it
is capable of commencing normal production; and
(ii) in the case of any other project, the stage at which
it is capable for being put to the use for which it is intended;
(7) “regulations” means
regulations made under section 26
(8) “rules” means rules
made under section 25;
(9) “statutory corporation”
means a body corporate, other than a company, established or set up by the
Government in pursuance of any law; and
(10) all words and phrases
used but not defined in this Act shall have the same meaning as in the
Insurance Act, 1938 (IV of 1938).
3. Establishment and
Incorporation of the Corporation.__ (1) As soon as may be after the
commencement of this Act, the Federal Government shall, by notification in the
official Gazette, establish a corporation for the purposes of this Act.
(2) The Corporation shall
be a body corporate to be called the National Insurance Corporation, having
perpetual succession and a common seat with power, subject to the provisions of
this Act, to acquire and hold property both movable and immovable and shall by
the said name sue and be sued.
(3) The Head Office of the
Corporation shall be at such place as the Federal Government may, by
notification in the official Gazette, specify.
(4) The Corporation may
establish such regional and other offices as it thinks fit.
4. Capital. The initial capital of the
Corporation shall be provided wholly by the Federal Government which shall
determine the amount of such capital and the conditions upon which it is to be
provided.
5. Management.__ (1) The general direction and
administration of the affairs and business of the Corporation shall be vested
in a Board of Directors which shall consist of,---
(a) a Chairman to be appointed by the Federal
Government, who shall also be the chief executive of the Corporation; and
(b) such
number of Directors as the Federal Government may, from time to time, appoint.
(2) In the discharge of any
of the functions of the Corporation, the Board shall act, as far as possible,
on business considerations consistently with the interests of the Government,
the statutory corporations and the other bodies referred to in paragraph (ii)
of sub‑clause (a) of clause (6) of section 2.
(3) The Chairman shall be
responsible for the management of the affairs and business of the Corporation
and, in addition, exercise such powers and perform such functions as may be
prescribed by regulations or as may be assigned to him by the Board.
(4) The terms of
appointment of the Chairman and a Director shall be such as may be determined
by the Federal Government from time to time.
(5) The Chairman and a
Director shall hold office during the pleasure of the Federal Government.
(6) The Federal Government
may, from time to time, give such directions to the Board and the Chairman as
it may deem fit.
6. Disqualification. No person shall be, or shall continue to
be, the Chairman or a Director if he,---
(a) is, or at any time has been, adjudicated
an insolvent;
(b) is found to be a lunatic or of unsound
mind;
(c) is, or at any time has been, convicted of
an offence which in the opinion of the Federal Government is an offence
involving moral turpitude;
(d) not being a Government official, is for the time being
disqualified from holding any public office or from being a member of an
elective body under any law for the time being in force; or
(e) is a minor.
7. Declaraton of
fidelity and secrecy. The
Chairman and every Director, auditor, officer or servant of the Corporation
shall, before entering upon his duties, make a declaration of fidelity and
secrecy in the form set out in the Schedule.
8. Delegation of powers. The Board may, for the purpose of
ensuring efficient functioning of the Corporation and facilitating transaction
of its daily business, by a resolution, delegate to the Chairman, subject to
such conditions, if any, as may be specified therein, such of its powers and
duties under this Act as it may deem necessary.
9. Functions of the
Corporation. Subject
to the provisions of this Act, the Corporation may transact the following kinds
of business, namely:---
(a) undertaking general insurance business relating to any
public property or to any risk or legal liability appertaining to the use of
any public property, including execution of bonds, guarantees and other
instruments of indemnity and granting of personal accident insurance to the
directors, officers or employees of Government, statutory corporations and
other bodies referred to in paragraph (ii) of sub‑clause (a) of clause
(6) of section 2, but excluding life insurance business;
(b) undertaking general insurance business
relating to any risk or legal liability appertaining to the use of public
property, including execution of bonds, guarantees and other instruments of
indemnity and granting of personal accident insurance to the directors,
officers or employees thereof but excluding life insurance business;
(c) advising the Government, statutory
corporations and other bodies referred to in paragraph (ii) of sub‑clause
(a) of clause k6) of section 2 on any matter relating to insurance including
measures to minimum wastage arising from causes which are usually insured
against and to reduce the cost of insurance;
(d) undertaking such other general insurance
business relating to other properties and interests as the Federal Government,
may from time to time authorise the Corporation to undertake;
(e) subject to the provisions of section 13,
re‑insuring or counter‑re‑insuring any risk and undertaking
all kinds of re‑insurance and counter‑re‑insurance connected
with any business aforesaid;
(f) conducting or managing the business relating to any Scheme
or undertaking any functions connected with general insurance business which
the Federal Government may entrust to the Corporation from time to time.
(g) borrowing or raising any money in such
manner and upon such security as the Corporation may think fit; and
(h) generally all matters and things
incidental or subsidiary to, or consequential upon, the exercise of its powers
or the performance of its functions under this Act.
10. Public property to
be insured with the Corporation only.__ (1) All insurance business relating
to any public property or to any risk or liability appertaining to any public
property, shall be placed with the Corporation and with no other insurer:---
Provided that the marine
insurance relating to goods the import of which is financed out of an external
loan, or with external aid, may, at the option of the importer, be placed with‑any
insurer authorised to do marine insurance business in the country giving the
loan or aid.
(2) Any policy of insurance
taken or issued in contravention of subsection (1) shall be void:---
Provided that any claim for
loss, damage, compensation or refund of premium arising out of, or relating to,
such policy shall be binding on the insurer:---
Provided further that any
such policy operative immediately before the establishment of the Corporation,
or a policy relating to any property, or to any risk or liability appertaining
to any property, taken before such property becomes public property, shall,
unless earlier determined in accordance with the terms thereof, continue in
force for the term for which it had been originally issued.
11. Insurance of other
properties permissible. Nothing in section 10 shall be construed as precluding the
Corporation from accepting re‑insurance relating to any property or risk
from the Pakistan Insurance Corporation under any of the pooling arrangements
devised by that Corporation.
12. Taking over assets
and liabilities of the Fund. The business, assets and liabilities, including bank accounts,
deposits, securities and rights, of the Fund operating immediately before the
establishment of the Corporation shall, on such establishment stand transferred
to and vest in the Corporation.
13. Re‑insurance
business. The
Corporation shall re‑insure with the Pakistan Insurance Corporation, on
generally acceptable terms and conditions, such portion of its insurance
business as it cannot retain on its own account.
14. Disputes arising
under policies, etc.__ (1) Where any dispute arises under a
policy, or over a claim under a policy, issued by the Corporation, any party to
the dispute may make an application to the Federal Government.
(2) The Federal Government
shall, as soon as possible, constitute for the purpose of deciding disputes
referred to in sub-section (1) or any particular dispute, a Dispute Settlement
Committee consisting of such members, including a Chairman, as it may think
fit.
(3) The decision of a
Dispute Settlement Committee on an application shall be final and shall not be
called in question in any Court.
15. Transfer of service
of existing employees.__ (1) Every whole‑time employee
of the Pakistan Insurance Corporation who was mainly engaged on the business of
the Fund and who had continuously served in connection with the business of tee
Fund for a period of not less than six months immediately before the
establishment of the Corporation under sub-section (1) of section 3 shall on
such establishment, become an employee of the Corporation and shall hold office
therein on the same terms and conditions including remuneration, tenure of
office, rights, perquisites, privileges and obligations as to Gratuity,
Provident Fund, Group Insurance and other matters, as were applicable to him
immediately before such establishment;
Provided that the Federal
Government shall be the sole judge as to whether any person employed in the
Pakistan Insurance Corporation was or was not mainly engaged on the business of
the Fund.
(2) The Pakistan Insurance
Corporation shall pay to the Corporation, as soon as possible, the amount of
Provident Fund, Gratuity Fund and other funds, credits or assets relating to
the employees referred to in sub-section (1).
16. Investments of
moneys. The
Corporation may invest its moneys in such manner as the Board may deem fit.
17. Bank account. The Corporation may open current or
deposit accounts in such banks as may be approved by the Board from time to
time, subject to any general or special instructions of the Federal Government.
18. Accounts. The accounts relating to the transactions
connected with the business of the Corporation shall be maintained, and the
annual Revenue Account, Profit and Lobs Account, Profit and Loss Appropriation
Account and Balance‑sheet shall be prepared, by the Corporation in the
forms set forth in the Schedules to the Insurance Act, 1938 (1V of 1938).
19. Disposal of profits. If, after meeting all claims and expenses,
and after making appropriations and providing for the Premium Reserve, Reserve
for outstanding Claims, Exceptional Loss Reserve, General and Contingency
Reserves and such other reserves as may be approved by the Federal Government,
there remains a surplus in the profit and loss account of the Corporation for
any year, such surplus shall be credited to the revenues of the Federation.
20. Audit.__ (1) The accounts of the Corporation
shall be audited by not less than two auditors, being chartered accountants
within the meaning of the Chartered Accountants Ordinance, 1961 (X of 1961), who shall be appointed by the Federal
Government on such remuneration as may be determined by it.
(2) Notwithstanding
anything contained in sub-section (1), the Auditor-General of Pakistan may at
any time of his own motion, and shall when required by the Federal Government
so to do, undertake such audit of the accounts of the Corporation as the Auditor‑General
or, as the case may be, the Federal Government, may consider necessary.
(3) Every auditor in the
performance of his duties shall have at all reasonable times access to the
books of accounts and other documents of the Corporation.
(4) The auditors shall, in
the audit of accounts, have the powers of, exercise the functions vested in,
and discharge the duties, and the subject to the liabilities and penalties,
imposed on, auditors of companies under the law for the time being in force
relating to companies.
21. Returns. The Corporation shall furnish to the
Federal Government,---
(a) annually a report giving an account of its activities and
performance during the year, an account of the activities and plans, if any,
which are likely to be undertaken by the Corporation during the year next
following the year to which the report relates together with statements, of
revenue and profit and loss accounts as audited, and the audited balance‑sheet,
for the year, within six months after the close of the year; and
(b) such other reports, statements and returns in respect of the
working of the Corporation, at such intervals, as the Federal Government may,
from time to time require.
22. Liquidation of the
Corporation. The
Corporation shall not be wound up save by order of the Federal Government and
in such manner as it may direct.
23. Advisory Committee. The Corporation may appoint an Advisory
Committee consisting of the representatives of the departments of Government
and the statutory corporations to advise it on any of the aspects of its
working.
24. Application of
Insurance Act, 1938 (IV of 1938). Such provisions of the Insurance Act, 1938 (IV of 1938), shall
apply to the Corporation as may be specified by the Federal Government by
notification in the official Gazette, and while issuing such a notification the
Federal Government may direct that any such provision shall, m its application
to the Corporation, have effect subject to such exceptions and modifications as
may be specified in the notification.
25. Powers to make
rules. The Federal
Government may, by notification in the official Gazette, make rules for
carrying out the purposes of this Act.
26. Power to make
regulations. The
Board may, with the approval of the Federal Government, make regulations not
inconsistent with this Act or the rules to provide for all matters for which
provision is necessary or expedient for the purpose of giving effect to the
provisions of this Act.
27. Removal of
difficulties. If any
difficulty arises in giving effect to any of the provisions of this Act, the
Federal Government may make such order, not inconsistent with the provisions of
this Act, as may appear to it to be necessary for the purpose of removing the
difficulty:---
Provided that no such power
shall be exercised after the expiry of one year from the commencement of this
Act.
28. Repeal. The National Insurance Corporation
Ordinance, 1975 (XXV of 1975), is hereby repealed.
THE SCHEDULE
(See section 7)
I,……………………………………………………hereby declare that
I will faithfully, truly and to the best of my judgement, skill and ability,
execute and perform the duties required of me as the Chairman, or a Director,
Officer, servant or auditor (as the case may be) of the National Insurance
Corporation and which properly relate to any office or position in the said
Corporation held by me.
I further declare that
Twill not communicate or allow to be communicated to any person not legally
entitled thereto any information relating to the affairs of the Corporation nor
will I allow any such person to inspect or have access to any books or
documents belonging to or in the possession of the Corporation and relating to
the business of the Corporation.
Signed before me Signature…………………
Signature………………………..
Designation……………………..
Date…………………………….
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