Insurance Act, 1938
This Act came into force on 1st July 1939 and is applicable to the whole of India, except Jammu and Kashmir. This law is applicable to all the insurance companies and other entities participating in the insurance industry in India .
The purpose of enactment of this law is:
1. To supervise all the organisations operating in insurance business in India. This is
ensured by making registration compulsory.
2. To increase deposit of insurance companies to ensure that they are adequately
financed and conform to minimum capital requirements.
3. Full disclosure of information is enforced to ensure soundness and transparency in
management.
4. Submission of accounts and inspection of insurance companies by authorities.
5. Guidelines are laid for investment of funds by insurance companies.
6. Regulations to govern the assignment and transfer of life insurance policies besides
including the possibility of making nominations.
The Insurance Act, 1938 was amended in 1950, again in 1956 when life insurance business
was nationalized and again in 1972 when general insurance was nationalised.
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