27B. Further provisions regarding investments.- (1) No insurer carrying on general insurance business shall, after the commencement of the Insurance (Amendment) Act, 1968 (62 of 1968), invest or keep invested any part of his asset otherwise than in any of the following approved investments, namely: (a) the investment specified in clauses (a) to (e), (n), (q) and (r) of sub-section (1) of Sec. 27A; (b) debentures secured by a first charge on any immoveable property, plant or equipment of any company which has paid interest in full for the three years immediately preceding or for at least three out of the four or five years immediately preceding on such or similar debentures issued by it; (c) debentures secured by a first charge on any immoveable property, plant or equipment of any company where either the book value or the market value, whichever is less, of such property, plant or equipment is more than twice the value of such debentures; (d) first debentures secured by a floating charge on all its assets or by a fixed charge on fixed assets and floating charge on all other assets of any company which has paid dividends on its equity shares for the three years immediately preceding or for at least three out of the four or five years immediately preceding the date of the investment; (e) preference shares of any company which has paid dividends on its equity shares for the three years immediately preceding or for at least three out of the four or five years immediately preceding; (f) preference shares of any company on which dividends have been paid for the three years immediately preceding or for at least three out of the four or five years immediately preceding and which have priority in payment over all the equity shares of the company in winding up; (g) shares of any company which have been guaranteed by another company, such other company having paid dividends on its equity shares for the three years immediately preceding or for at least three out of the four or five years immediately preceding: Provided that the total amount of shares of all the companies under that guarantee by the guaranteeing company is not in excess of fifty percent. of the paid up amount of preference and equity shares of the guaranteeing company; (h) shares of any company on which dividends of not less than four per cent including bonus have been paid for the three years immediately preceding or for at least three out of the four or five years immediately preceding; (i) first mortgages on immoveable proper situated in India or in any other country where the insurer is carrying on insurance business: Provided that the property mortgaged is not lease hold property with an outstanding term of less than fifteen years and the value of the property exceeds by one third, or if it consists of buildings, exceeds by on-half, the mortgage money; (j) such other investments as the Authority may, by notification in the Official Gazette, declare to be approved investments for the purposes of this section. (2) Any prescribed assets shall, subject to such conditions, if any, as may by prescribed be deemed to be assets invested or kept invested in approved investments specified in sub-section (1). (3) Notwithstanding anything contained in sub section (1), an insurer may, subject to the provisions contained in the next succeeding sub-sections, invest or keep invested any part of his assets otherwise than in an approved investment specified in subsection (1), if- (i) after such investment, the fatal amounts of all such investments of the insurer do not exceed twenty five per cent of his assets, and (ii) the investment is made or in the case of any investment already made, the continuance of such investment is with the consent of all the directors, other than the directors appointed under Section 34 C, present at a meeting and eligible to vote, special notice of which has been given to all the directors then in India, and all such investments, including investments in which any director is interested, are reported without delay to the Authority with full details of investments and the extent of the director's interest in any such investment: Provided that the making, or the continuance, of such investment is not objected to by any director appointed under Section 34 C (4) An insurer shall not invest or keep invested any part of his assets in the shares of any one banking company or investment company more than- (a) ten per cent of his assets, or (b) two per cent of the subscribed share capital and Dentures of the banking company or investment company concerned, whichever is less. (5) An insurer shall not invest or keep invested any part of his assets in the shares or debentures of any one company other than a banking company or investment company more than (a) ten per cent of his assets, or (b) ten per cent of the subscribed share capital and debentures of the company, whichever is less: Provided that nothing in this sub-section shall apply to any investment made by an insurer in the shares of any other insurer if such other insurer is a company within the meaning of Section 3 of the Companies Act, 1956 (1 of 1956) and carries on insurance or re insurance business in India. (6) An insurer shall not invest or keep invested any part of his assets in the shares or debentures of any private company. (7) Where an investment is in partly paid up shares, the uncalled liability on such shares shall be added to the amount invested for the purpose of computing the percentages referred to in Clause (a) of sub-section (4) and Clause (a) of sub section (5). (8) Notwithstanding anything contained in sub sections (4) and (5) where new shares are issued to the existing shareholders by a company, the existing shares of which are covered by Clause (e) or clause (g) or Clause (h) of sub section (1) and of which an insurer is already a share holder, the insurer may subscribe to such new shares: Provided that the proportion of new snares subscribed by him does not exceed the proportion which the paid up amount on the shares held by him immediately before such subscription bears to the total paid up capital of the company at the time of such subscription (9) If, on an application submitted to the Authority, he has satisfied that special grounds exist warranting such exemption, he may, for such period, to such extent and in relation to such particular investments and subject to such conditions as may be specified by him in this behalf, exempt an insurer from all or any of the provisions of sub sections (4), (5) and (8). (10) An insurer shall not keep more than ten per cent. of his assets in fixed deposit or current deposit, or partly in fixed deposit and partly in current deposit, with any one banking company or with any co operative society registered under the Co operative Societies Act, 1912 ( 2 of 1912), or under any other law for the time being in force and doing banking business: Provided that in applying this sub section to the amount in deposit with a banking company on any day, all the premiums credited during the preceding sixty days, to the account of the insurer with such banking company and the amounts deposited, during the preceding thirty days, by such insurer with that banking company for payment of claims or out of re insurance recoveries, shall be excluded. (11) All assets shall (except for a part thereof not exceeding one tenth of the total assets in value which may, subject to such conditions and restriction as may be prescribed, be offered as security for any loan taken for purposes of any investment or for payment of claims, or which may be kept as security deposit with the banks for acceptance of policies) be held free of any encumbrance, charge, hypothecation or lien. (12) If at any time the Authority considers any one or more of the investments constituting an insurer's assets to be unsuitable or undesirable, he may, after giving the insurer an opportunity of being heard, direct the insurer to realize the investment or investments, and the insurer shall comply with the direction within such time as may be specified in this behalf by the Authority. (13) Every insurer in existence at the commencement of the insurance (Amendment) Act, 1968, whose investments or any part thereof at such commencement do or does not fulfill the requirements of this section, shall, within ninety days from such commencement, submit to the Authority a report specifying all such investments, and, if the Authority is satisfied that it will not be in the interest of the insurer or any class of insurers generally to realise any such investments, he may, by order direct that the provisions of this section, other than the provisions contained in sub-section (12), shall not apply in relation to any such investments or to any class of investments generally for such period or periods as may be specified in the order. (14) Without prejudice to the powers conferred on the Authority by subsection (12), nothing contained in this section shall be deemed to require any insurer to realise any investment made in conformity with the provisions of sub section (1) after the commencement of the Insurance (Amendment) Act, 1968(62 of 1968), which, after the making thereof, has ceased to be an approved investment within the meaning of this section. (15) Nothing contained in this section shall be deemed to affect in any way the manner in which any moneys relating to the provident fund of any employee or to any security taken from any employee or other moneys of a like nature are required to be held by or under any Central, Provincial or State Act. (16) In this section, unless the context otherwise requires, "assets" means- (a) in the case of an insurer carrying on life insurance business in India, all his assets required to be shown under the column "Other Classes of Business" in the balance sheet in Form A, in Part II of the First Schedule, but excluding any items against the head "Other Accounts (to be specified)"; (b) in the case of an insurer specified in sub-clause (a) (ii) or sub-clause (b) of C1ause (9) of Sec. 2, who is not carrying on life insurance business in India, all his assets required to be shown in the balance sheet in Form A in Part II of the First Schedule but excluding any items against the head "Other Accounts (to be specified)"; and (c) in the case of any other insurer, the assets required to be shown in the statement in Form AA, in Part II of the First Schedule, but excluding office furniture, but does not include any assets specifically held against any fund or portion thereof in respect of which the Authority is satisfied that such funds or portion thereof, as the case may be, is regulated by the law of any country outside India or in respect of enrich the Authority is satisfied that it would not be in the interest of the insurer to apply the provisions of this section. | 
