Report No. 66

8.42. Recommendation to amend the insurance Act.-

On a careful consideration of all aspects of the matter, we have come to the conclusion that while the present, statutory scheme as contained in the various provisions mentioned above, may be complex, the complexity is primarily due to legislative anxiety to provide for the variety of results which, in actual life, persons taking out a life insurance may desire to achieve. The insured may wish merely to avoid a controversy as between his heirs and the insurer, without more. For him, nomination is a suitable device. He may desire to go further, and decide to transfer all rights under the policy. He can then resort to assignment. Or he may prefer the less elaborate machinery of section 6, if he wishes to create a trust governed by that section.

The statutory provisions are, thus as varied as the intentions of the insured. Hence the apparent complexity. Essentially, then, this complexity is unavoidable, for the reasons mentioned above. However, it is possible to make one improvement whereby it will be easier than at present to decide, in a particular case, whether the arrangement falls or does not fall under section 6. We have in mind the suggestion made in a judgment of the Madras High Court,1 to which we have already made a reference. We reiterate our recommendation to carry out that suggestion.2

To give statutory effect to the suggestion which we have referred to above, it would be convenient if a suitable provision is added in the Insurance Act, 1938, so that the number of controversies as to whether section 6 applies or does not apply, will be reduced to the minimum. We are recommending insertion3of a new section4 in the Insurance Act.

1. Abhiramavalli v. Official Trustee, AIR 1932 Mad 222 (para. 8.29, supra).

2. See discussion as to point (c)(i), paras. 8.29 and 8.30, supra.

3. For another point concerning the Insurance Act, see para. 8.53, infra.

4. See para. 15.7, infra.