5[113. Acquisition of surrender value by policy.-
(1) A policy of life insurance shall acquire surrender value as per the norms specified by the regulations.
(2) Every policy of life insurance shall contain the formula as approved by the Authority for calculation of guaranteed surrender value of the policy.
(3) Notwithstanding any contract to the contrary, a policy of life insurance under a non-linked plan which has acquired a surrender value shall not lapse by reason of non-payment of further premiums but shall be kept in force to the extent of paid-up sum insured, calculated by means of a formula as approved by the Authority and contained in the policy and the reversionary bonuses that have already been attached to the policy:
Provided that a policy of life insurance under a linked plan shall be kept in force in the manner as may be specified by the regulations.
(4) The provisions of sub-section (3) shall not apply-
(i) where the paid-up sum insured by a policy, inclusive of attached bonuses, is less than the amount specified by the Authority or takes the form of annuity of amount less than the amount specified by the Authority; or
(ii) when the parties, after the default has occurred in payment of the premium, agree in writing to other arrangement.]
1. Ins. by Act 5 of 2015, s. 97 (w.e.f. 26-12-2014).
2. The words "or provident society" omitted by s. 98, ibid. (w.e.f. 26.12.2014).
3. Subs. by Act 41 of 1999, s. 30 and the First Schedule, for "Controller" (w.e.f. 19-4-2000).
4. The words "or to a provident society" omitted by Act 5 of 2015, s. 98 (w.e.f. 26-12-2014).
5. Subs. by s. 99, ibid., for section 113 (w.e.f. 26-12-2014).