5[42. Appointment of insurance agents.-
(1) An insurer may appoint any person to act as insurance agent for the purpose of soliciting and procuring insurance business: Provided that such person does not suffer from any of the disqualifications mentioned in sub-section (3).
(2) No person shall act as an insurance agent for more than one life insurer, one general insurer, one health insurer and one of each of the other mono-line insurers: Provided that the Authority shall, while framing regulations, ensure that no conflict of interest is allowed to arise for any agent in representing two or more insurers for whom he may be an agent.
(3) The disqualifications referred to in the proviso to sub-section (1) shall be the following:-
(a) that the person is a minor;
(b) that he is found to be of unsound mind by a court of competent jurisdiction;
(c) that he has been found guilty of criminal misappropriation or criminal breach of trust or cheating or forgery or an abetment of or attempt to commit any such offence by a court of competent jurisdiction:
Provided that where at least five years have elapsed since the completion of the sentence imposed on any person in respect of any such offence, the Authority shall ordinarily declare in respect of such person that his conviction shall cease to operate as a disqualification under this clause;
(d) that in the course of any judicial proceeding relating to any policy of insurance or the winding up of an insurer or in the course of an investigation of the affairs of an insurer it has been found that he has been guilty of or has knowingly participated in or connived at any fraud, dishonesty or misrepresentation against an insurer or insured;
(e) that in the case of an individual, who does not possess the requisite qualifications or practical training or passed the examination, as may be specified by the regulations;
(f) that in the case of a company or firm making, a director or a partner or one or more of its officers or other employees so designated by it and in the case of any other person the chief executive, by whatever name called, or one or more of his employees designated by him, do not possess the requisite qualifications or practical training and have not passed such an examination as required under clauses (e) and (g); (g) that he has not passed such examination as may be specified by the regulations;
(h) that he has violated the code of conduct as may be specified by the regulations.
(4) Any person who acts as an insurance agent in contravention of the provision of this Act, shall be liable to a penalty which may extend to ten thousand rupees and any insurer or any person acting on behalf of an insurer, who appoints any person as an insurance agent not permitted to act as such or transacts any insurance business in India through any such person shall be liable to penalty which may extend to one crore rupees.
(5) The insurer shall be responsible for all the acts and omissions of its agents including violation of code of conduct specified under clause (h) of sub-section (3) and liable to a penalty which may extend to one crore rupees.]
1. Subs. by Act 5 of 2015, s. 47, for sections 40B and 40C (w.e.f. 26-12-2014).
2. Subs. by Act 13 of 1941, s. 27, for "effect or renew" (w.e.f. 8-4-1941).
3. Ins. by s. 27, ibid, (w.e.f. 8-4-1941).
4. Subs. by Act 5 of 2015, s. 48, for sub-section (2) (w.e.f. 26-12-2014).
5. Subs. by s. 49, ibid., for section 42 (w.e.f. 26-12-2014).
1. Subs. by Act 5 of 2015, s. 50, for sections 42A, 42B and 42C (w.e.f. 26-12-2014).