IREC Rule No.935: Release Of Insurance Policies

935.  Release Of Insurance Policies:-

(1)   If a policy assigned to the President under clause (a) of sub-rule (1) of rule 932 matures before the subscriber quits service, and before his death, or if a policy on the joint lives of a subscriber and the subscriber’s wife or husband assigned under the said rule, falls due for payment by reason of the death of the subscriber’s wife or husband, the Accounts Officer shall, save as provided by Rule 937 proceed as follows;

(i)   If the amount assured, together with the amount of any accrued bonuses, is greater than the whole of the amount withheld or withdrawn from the fund in respect of the policy with interest thereon, the Accounts Officer shall re-assign the policy in the prescribed form, to the subscriber or to the joint assured as the case may be and make it over to the subscriber, who shall immediately, on receipt of the policy monies from the Insurers pay or repay to the fund the whole of any amount withheld  or withdrawn with interest, and in default, the provisions of the Rule 938 shall apply  as they apply in relation to cases where money withheld or withdrawn from the fund  under clause (a) or clause (b) of rule 927 has been utilized for a purpose other than  that for which sanction was given to the withholding or withdrawal;

(ii)    If the, amount assured, together with the amount of any accrued bonuses is less than the whole of the amount withheld or withdrawn with interest, the Accounts Officer shall realize the amount assured together with any accrued bonuses and shall place the amount so realized to the credit of the subscriber in the fund.

(2)   Save as provided by Rule 937 if a policy delivered to the Accounts Officer under clause (b) of sub-rule (1) of Rule 932 matures before the subscriber quits service, the Accounts Officer shall make over the policy to the subscriber.

Provided that if the interest in the policy of the wife of the subscriber, or of his wife and children or any of them, as expressed on the face of the policy, expires when the policy matures, the subscriber, if the policy monies are paid to him by the Insurer, shall immediately on receipt thereof pay or repay to the fund either;

(i)   The whole of any amount withheld or withdrawn from the fund in respect of the policy with interest thereon, or

(ii)    Any amount assured together with any accrued bonuses, whichever is less, and in default, the provisions of Rule 938 shall apply as they apply in relation to cases where money withheld or withdrawn from the fund under clause (a) or clause (b) of Rule 927 has been utilized for a purpose other than that for which sanction was given to the withholding or withdrawal.

Note: In the case of the Insurer going into liquidation, the expression ‘amount assured together with the amount of any accrued bonuses’ occurring in this rule shall be taken to mean the amount payable by the liquidated Insurer to the insured. In cases where the policies require to be re-assigned to the subscriber, the necessary re-assignment should be made in the normal manner and a notice of re-assignment sent to the Insurer. In the case of an Insurer under liquidation the liquidator takes the place of the management for all practical purposes and his powers include the power to receive such notices.