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Insurance Act [Cap 82]

LAWS OF THE REPUBLIC OF VANUATU
CONSOLIDATED EDITION 2006

Commencement: 29 December 1973

CHAPTER 82

INSURANCE

QR 18 of 1973
QR 11 of 1974
QR 2 of 1975
QR 7 of 1978
Act 10 of 1988

ARRANGEMENT OF SECTIONS

PART 1 – PRELIMINARY PROVISIONS

1. Interpretation
2. Application of Parts 2 and 3

PART 2 – PROVISIONS GOVERNING REGISTRATION, CANCELLATION OF REGISTRATION, AND THE CARRYING ON OF INSURANCE BUSINESS BY INSURERS (OTHER THAN MEMBERS OF ASSOCIATIONS OF UNDERWRITERS)
3. Insurers to be registered
4. Financial requirement for registration
5. Application for registration as insurer
6. Minister may register or refuse application
7. Notification of decision on application
8. Provisions for restricting registered insurers from writing new business and for securing proper conduct of business
9. Cancellation of registration
10. Policies issued before refusal of application or cancellation of registration
11. Registered insurers to maintain principal office and appoint principal representative
12. Control of advertisements
13. Separate accounts for business other than insurance business of insurers
14. Life assurance carrying on other business
15. Security of life policy-holders
16. Audit of accounts of registered insurers
17. Accounts and balance sheets of registered insurers to be submitted
18. Separate or group accounts
19. Keeping of records by insurers
20. Periodical investigations to be made into financial position of life assurers
21. Amalgamations and transfers of insurance business

PART 3 – PROVISIONS GOVERNING REGISTRATION, CANCELLATION OF REGISTRATION AND THE CARRYING ON OF INSURANCE BUSINESS BY MEMBERS OF ASSOCIATIONS OF UNDERWRITERS

22. Registration of associations of underwriters
23. Documents and information relating to insurance business to be furnished to the Registrar
24. Local policies to be governed by British law
25. Application of other sections

PART 4 – REGISTRATION AND CANCELLATION OF REGISTRATION OF INSURANCE AGENTS, BROKERS AND INSURANCE SALESMEN

26. Insurance agents, insurance brokers and insurance salesmen to be registered
27. Application for registration
28. Cancellation of registration
29. Lists of registered insurance agents, brokers and salesmen to be maintained
30. Insurance agent and broker to keep record of business
31. Agents of insurer
32. Paying over premiums to insurer

PART 5 – EXEMPTED INSURERS

33. Exempted insurers
34. Provisions not applying to exempted insurers

PART 6 – GENERAL POWERS AND DUTIES
35. Minister may accept compliance certificates from external insurers
36. Minister may extend periods specified for performance of acts
37. Registrar may demand information
38. Registration and cancellation of registration to be notified in Gazette
39. Investigation of the affairs of an insurer
40. Power of Registrar to petition for winding-up

PART 7 – MISCELLANEOUS PROVISIONS
41. Restriction on use of word "insurance"
42. Registered names
43. Policies to be printed or typed in clearly legible letters
44. Policy not invalid owing to failure to comply with law
45. Cancellation of policies
46. Jurisdiction of local courts
47. Borrowing powers of directors
48. Prohibition of loans to directors, etc.
49. Service of process upon registered insurers
50. Persons acting on behalf of unregistered insurers
51. False statements, etc.
52. General provisions relating to offences
53. Decisions not to be questioned in court
54. Immunity of officials exercising powers
55. Rules
56. Fees

INSURANCE

To make provision relating to the carrying on of insurance business within and from within Vanuatu and for purposes connected therewith.

PART 1 – PRELIMINARY PROVISIONS

1. Interpretation

In this Act, unless the context otherwise requires –

"actuary" means a person qualified as an actuary by examination of the Institute of Actuaries in England or the Faculty of Actuaries in Scotland or an actuary possessing such other qualifications as the Minister may recognise;

"association of underwriters" means an association of individual underwriters, organised according to the system known as Lloyd’s whereby every underwriting member of a syndicate becomes liable for a separate part of the sum secured by each policy subscribed to by that syndicate, limited or proportionate to the whole sum thereby secured;

"auditor" means a person who is qualified for appointment as auditor of a company under the provisions of section 166 of the Companies Act, Cap. 191 or under any other law which may be enacted from time to time regulating auditors carrying on business in Vanuatu;

"director" means any person occupying the position of director of a body corporate by whatever name called;

"exempted insurer" means an insurer registered as an exempted insurer under the provisions of section 33;

"external insurer" means an insurer who is not a local insurer nor an exempted insurer;

"financial year", in relation to an insurer, means each period not exceeding 53 weeks at the end of which the balance of the accounts of the insurer is struck;

"Inspector" means a person appointed as such under the provisions of section 39;

"insurance agent" means a person who with the authority of an insurer acts on his behalf in the initiation of insurance business, the receipt of proposals, the issue of policies or the collection of premiums;

"insurance broker" means a person who arranges insurance business with insurers on behalf of prospective policy-holders or as a policy-holder’s representative;

"insurance business" means the soliciting, effecting or carrying out of contracts of insurance as an insurer and includes re-insurance business;

"insurance salesman" means an individual employed by an insurer or agent to solicit applications for insurance or negotiate insurance business on behalf of an insurer or an agent, but shall not include a bona fide salaried employee of a registered insurer, insurance agent or broker who is employed at its principal office or branch thereof;

"insurer" means a person effecting and carrying on insurance business and, except where otherwise stated, includes each member of an association of underwriters;

"life assurance business" means insurance of human lives and insurance appertaining thereto or connected therewith and includes the granting of annuities, endorsement benefits, sinking fund benefits and benefits in the event of death or disability by accident or sickness:

Provided that such insurance against disability by accident or sickness is included as an additional benefit in a life policy;

"life assurance policy" means an ordinary life assurance policy, an industrial life assurance policy or a sinking fund or bond investment policy;

"life assurer" means an insurer carrying on life assurance business;

"local insurer" means an insurer incorporated or constituted in and having its head office in Vanuatu;

"local policy" means a policy issued by a registered insurer on property, lives or other risks located in Vanuatu;

"Minister" means the Minister responsible for commerce;

"mutual company" means an insurance company whose capital is owned by the policy- holders of that company;

"officer", in relation to a body corporate, includes a director, manager or secretary of that body, or any person having or exercising powers or duties substantially similar to any of those officers;

"owner", in relation to a policy, means a person who is entitled to claim any benefit provided for in the policy;

"policy" means any written contract of insurance whether contained in one or more documents;

"principal office" means the office notified to the Registrar in accordance with the provisions of section 11;

"principal representative" means the representative notified to the Registrar in accordance with the provisions of section 11;

"Registrar" means the person appointed as Registrar for the administration of this Act and includes any person appointed to be the Deputy Registrar or an Assistant Registrar when exercising any powers under this Act in accordance with the directions of the Registrar;

"registered insurance agent" means a person registered as such under Part 4 and thereby qualified to act as an agent for a registered insurer;

"registered insurance broker" means a person registered as such under Part 4;

"registered insurer" means an insurer registered under Part 2 or Part 3;

"sinking fund policy" means a policy whereby one party to the contract assumes the obligation to pay, after the expiration of a certain period or during a specified period, a certain sum or certain sums of money to a particular person in return for the payment from time to time of certain sums of money by the other party to the contract;

"rules" means rules made by the Minister under this Act.

2. Application of Parts 2 and 3

Subject to the provisions of section 25 –

(a) Part 2 shall apply to insurers other than members of an association of underwriters;

(b) Part 3 shall apply to insurers who are members of an association of underwriters;

PART 2 – PROVISIONS GOVERNING REGISTRATION, CANCELLATION OF REGISTRATION, AND THE CARRYING ON OF INSURANCE BUSINESS BY INSURERS (OTHER THAN MEMBERS OF ASSOCIATIONS OF UNDERWRITERS)

3. Insurers to be registered

(1) Notwithstanding the provisions of any other law, no insurance business shall, save as hereinafter provided, be carried on in or from within Vanuatu except by a registered insurer or an insurer deemed to be registered under this Part, or by a member of an association of underwriters which is registered, or deemed to be registered, under the provisions of section 22.

(2) Any person who contravenes the provisions of subsection (1) shall be guilty of an offence and shall be liable on conviction to the penalty prescribed in section 52.

(3) For the purposes of this Part, any company which maintains a business office in Vanuatu shall be deemed to issue from within Vanuatu any policy of insurance issued in its name, on property, lives or other risks located in Vanuatu whether or not such policy of insurance is or has been issued in Vanuatu.

4. Financial requirement for registration

(1) No company shall be registered as an insurer under this Part unless it satisfies the standards required under subsection (2), if carrying on life assurance business, and of subsection (3), if carrying on insurance business other than life assurance business.

(2) Every company registered as an insurer carrying on life assurance business shall have a paid up share capital, or equivalent surplus if a mutual company, of VT 30,000,000.

(3) Every company registered as an insurer carrying on insurance business, other than life assurance business, shall have assets which exceed all liabilities by the amount specified in the following table –

TABLE

(4) The Minister may by notice in the Gazette modify the requirements of this section where it appears to him to be necessary to do so in order to create a market for insurance coverage needed in the public interest.

5. Application for registration as insurer

Any company desirous of being registered as an insurer in accordance with this Part shall apply in writing to the Minister through the Registrar and shall be accompanied by such documents and particulars as the Minister may require.

6. Minister may register or refuse application

(1) The Minister may, if satisfied that the carrying on of insurance business by the applicant will not be against the public interest, and subject to the provisions of section 4, direct the Registrar to register such applicant as an insurer, subject to such terms and conditions as he may think fit to impose.

(2) Whenever the Minister considers it to be in the public interest, he may refuse the registration of any insurer and any such decision shall be final.

(3) The Minister may refuse the registration of a local insurer if, in his opinion, any officer of the insurer is not a fit and proper person to be associated with insurance companies.

7. Notification of decision on application

The Registrar shall notify the applicant for registration as an insurer in writing whether it is proposed to register the applicant, or whether the application is refused and when an application is refused he shall not be required to give the reasons therefor.

8. Provisions for restricting registered insurers from writing new business and for securing proper conduct of business

(1) The Minister may prohibit a registered insurer from writing new policies in any class of insurance business or may restrict or limit the new policies which a registered insurer may write if he is satisfied that it is in the interest of the policy-holders or prospective policy-holders to do so.

(2) The Minister may require that a registered local insurer shall not make investments of a specified class and may in that case require such insurer to realise investments of that class within a specified period.

(3) The Registrar shall notify the registered insurer in writing of any decision made under the provisions of subsection (1) or (2) and shall state the reasons for the decision.

(4) A registered insurer shall comply with the terms of any prohibition or requirement notified to him in accordance with the provisions of this section.

9. Cancellation of registration

(1) The Minister may cancel the registration of an insurer -

(a) if the insurer has ceased to carry on an insurance business in Vanuatu; or

(b) if the insurer has not commenced business in Vanuatu within 2 years of registration; or

(c) at the request of the registered insurer or his liquidator, trustee or any manager or receiver appointed by the court; or

(d) if false, misleading or inaccurate information is given in an application or under the provisions of section 12, 17, 23 or 37; or

(e) if he is not satisfied that the free assets of the insurer are sufficient for the proper conduct of his insurance business; or

(f) if he is not satisfied that the insurance business of the insurer is being conducted in accordance with sound insurance principles; or

(g) if the insurer has contravened any of the provisions of this Act; or

(h) if the insurer does not fulfill the financial requirements of section 4.

(2) The cancellation shall be effective 15 days after the Registrar has given written notice to the insurer of the intention to cancel the registration.

10. Policies issued before refusal of application or cancellation of registration

An insurer whose application for registration has been refused or whose registration has been cancelled in accordance with the provisions of this Part shall continue to carry on business relating to policies issued by it prior to the date on which it was notified of such refusal or cancellation until the Registrar is satisfied that it has made suitable arrangements for its obligations under these policies to be met, but any such insurer shall forthwith prepare and furnish the information and other documents required under section 17.

11. Registered insurers to maintain principal office and appoint principal representative

(1) A registered insurer shall maintain a principal office in Vanuatu and shall appoint a principal representative and an alternate representative in Vanuatu each being resident in Vanuatu.

(2) A registered insurer shall notify the Registrar in writing of the situation of its principal office and the name of its principal and alternate representatives.

(3) If a registered insurer changes the situation of its principal office or appoints a new principal or alternate representative, it shall, forthwith, and in any case within 21 days of the change, give notice thereof to the Registrar in writing.

12. Control of advertisements

No advertisement shall be used by a registered insurer or insurance agent which, directly or by implication, has the capacity and tendency to mislead or deceive prospective policy-holders with respect to an insurer’s assets, corporate structure, financial standing, age or relative position in the insurance business, or in any other material respect.

13. Separate accounts for business other than insurance business of insurers

A registered insurer which carries on besides insurance any other business shall keep separate accounts in respect of its insurance business, and shall segregate the assets and liabilities of its insurance business from those of its other business.

14. Life assurance carrying on other business

(1) A registered insurer which carries on both life assurance business and other insurance business shall keep separate accounts in respect of its life assurance business.

(2) All receipts of a life assurer in respect of its life assurance business shall be carried to and form part of its life assurance fund.

(3) Payments from the life assurance fund of a registered insurer shall not be made directly or indirectly for any purpose other than those of its life assurance business, except insofar as such payments can be made out of any surplus disclosed on an actuarial valuation and certified by the actuary to be distributable otherwise than to policy-holders.

(4) Nothing in this section contained shall be deemed to require the investments of any life assurance fund to be kept separate from the investments of any other fund.

15. Security of life policy-holders

(1) The assets of the life assurance fund of a registered insurer –

(a) shall be absolutely the security of the life policy-holders as though the insurer carried on no business other than life assurance business;

(b) shall not be subject to any liabilities arising from contracts of the registered life assurer carrying on other business or insurance business to which it would not have been subject had the business of the insurer been only that of life insurance; and

(c) shall not be applied, directly or indirectly, for any purposes other than those to which the fund is applicable.

(2) In the winding-up of a life assurer the value of the liabilities and assets of its life assurance fund shall be ascertained separately from the value of any other liabilities or assets and no assets of the life assurance fund shall be applied to the discharge of any liabilities other than those towards life policy-holders except insofar as those assets exceed those liabilities.

16. Audit of accounts of registered insurers

(1) The accounts of a registered insurer shall be audited annually by an independent auditor. The auditor shall not be an employee or an officer of the insurer, nor financially interested in the insurer.

(2) The auditor of a registered insurer shall satisfy himself that the accounts of the insurer have been properly prepared in accordance with the books and records of the insurer and in accordance with sound accounting principles.

(3) The auditor of a registered insurer shall include in his certificate such particulars as may be prescribed by rules.

17. Accounts and balance sheets of registered insurers to be submitted

(1) A registered insurer shall, within 6 months of the end of each financial year, prepares and furnish to the Registrar –

(a) a certified copy of the audited balance sheet and accounts showing the financial position of all the insurance business of the insurer at the close of that year; and

(b) such other documents and information as the Registrar may require or as may be prescribed by rules and shall at the time of furnishing the balance sheet and accounts to the Registrar as required by paragraph (a) cause a summary thereof in a form previously approved by the Registrar to be published in the Gazette.

(2) A registered insurer shall furnish to the Registrar a copy of any report on the affairs of the insurer submitted to the policy-owners or shareholders of the insurer in respect of the financial year to which the balance sheet relates.

(3) A registered insurer liable under a life assurance policy shall, at the request of the owner, furnish him free of charge with a copy of the relevant revenue account, profit and loss account and balance sheet prepared by the insurer in terms of subsection (1) in respect of its last preceding financial year, and shall make available at the request of the policy-owner, for inspection at the insurer’s principal office a copy of the last actuarial report.

18. Separate or group accounts

All registered insurers who operate as separate entities which can be wound-up under local or foreign law shall render separate accounts but where they are associated together in a group the holding company shall also furnish to the Registrar consolidated accounts of the insurance business for the group as a whole.

19. Keeping of records by insurers

A registered insurer (other than an association of underwriters) constituted outside Vanuatu shall keep within Vanuatu and shall make available to the Registrar on request a record of all local policies in force or upon which liabilities are outstanding which have been issued by it showing its rights and obligations thereunder and recording the premiums received.

20. Periodical investigations to be made into financial position of life assurers

(1) A registered life assurer shall, not less than once in every 3 years, cause an investigation into its financial position, including a valuation of its liabilities to be made by an actuary:

Provided that the Minister may require a life assurer to cause such an investigation to be made at any time if he deems it to be in the public interest to do so.

(2) A life assurer shall, whenever its financial position is investigated with a view to a distribution of surplus or in compliance with subsection (1), prepare and furnish to the Registrar within 6 months of the date to which its accounts are made up, for the purposes of the investigation, a full report of the actuary by whom the investigation was made or an abstract thereof at the Registrar’s option, and a statement of its life assurance business at that date. The actuary shall also provide a statement of the assumption and the methods used in making the valuation.

21. Amalgamations and transfers of insurance business

No local insurer shall –

(a) amalgamate with any one or more insurers; or

(b) transfer its insurance business or a part thereof to, or take transfer of the insurance business or a part thereof from, another insurer,

unless the amalgamation, or, as the case may be, the transfer is sanctioned by the Minister.

PART 3 – PROVISIONS GOVERNING REGISTRATION, CANCELLATION OF REGISTRATION AND THE CARRYING ON OF INSURANCE BUSINESS BY MEMBERS OF ASSOCIATIONS OF UNDERWRITERS

22. Registration of associations of underwriters

(1) No member of an association of underwriters shall carry on insurance business in or from within Vanuatu unless registered or deemed to be registered under this section.

(2) The Minister may direct the Registrar to register as an insurer an association of underwriters but may refuse the registration of any particular association or syndicate of an association when he considers that such registration is not in the public interest.

(3) An application for registration submitted by an association of underwriters shall be made to the Minister through the Registrar and shall be accompanied by the following documents –

(a) a copy of its statutes or articles of association; and

(b) in the case of an association constituted outside Vanuatu a certificate stating that it has been established for at least 5 years, that the legislation of the place in which it is constituted provides for the regulation of an association of underwriters and that it is operating in accordance with that legislation,

and by such further information as the Minister may require.

(4) Any person, who, being a member of an association of underwriters, issues policies of insurance in or from within Vanuatu when such association is not registered or deemed to be registered under the provisions of this section shall be guilty of an offence and shall be liable on conviction to the penalties specified in section 52.

23. Documents and information relating to insurance business to be furnished to the Registrar

An association of underwriters registered in accordance with the provisions of section 22 shall within 6 months of the end of each financial year furnish to the Registrar –

(a) in the case of an association constituted outside Vanuatu –

(i) a certified copy of such returns relating to the insurance business year as are required to be made to the responsible public authority in the place in which the association is constituted;

(ii) a certificate, signed by the chairman or other presiding officer of the association stating whether the association has complied in respect of the preceding year with the requirements of the legislation for the regulation of associations of underwriters in the place in which it is constituted, and

(iii) the latest annual list of members and the names of its committee or other governing body;

(b) in the case of an association constituted within Vanuatu such documents and information as the Registrar may require.

24. Local policies to be governed by British law

(1) Every local policy issued by members of a registered association of underwriters shall contain a clause providing expressly that its validity, interpretation and effect and the rights and obligations of the parties to it are governed exclusively by English law as applicable within Vanuatu immediately before 30 July 1980 and that the Supreme Court shall have jurisdiction therein.

(2) Every insurer registered under this Part shall appoint and maintain a representative and an alternate representative each being resident in Vanuatu and duly authorised to accept service of any process.

25. Application of other sections

The provisions of sections 3(3), 7, 8, 9 with the exception of paragraph (h) of subsection (1) thereof, 10, 12 and 19 shall apply mutatis mutandis to associations of underwriters.

PART 4 – REGISTRATION AND CANCELLATION OF REGISTRATION OF INSURANCE AGENTS, BROKERS AND INSURANCE SALESMEN

26. Insurance agents, insurance brokers and insurance salesmen to be registered

(1) No person shall act as an insurance agent, insurance broker or insurance salesman unless he is registered under this Part.

(2) Every applicant for registration as an insurance agent, insurance broker or insurance salesman shall satisfy the Registrar –

(a) that he has knowledge of the insurance business adequate to give proper service to the public; and

(b) that he is of good character.

27. Application for registration

(1) An application to be registered as an insurance agent, insurance broker or an insurance salesman shall be made in writing to the Minister through the Registrar and shall be accompanied by such documents as may be required.

(2) The Minister may direct the Registrar to register an insurance agent, an insurance broker or an insurance salesman who has applied under subsection (1) and is qualified under section 26(2) and may refuse such registration when he considers that it would not be in the public interest.

(3) The Registrar shall notify the applicant in writing whether the application is accepted or rejected, and shall not be required to state the reasons for a refusal.

28. Cancellation of registration

(1) Subject to the provisions of subsection (2), the Minister may cancel the registration of an insurance agent, insurance broker or insurance salesman if he considers it in the public interest to do so and any such decision shall be final. The provisions of paragraphs (a), (b), (c) and (d) of section 9(1) shall also apply mutatis mutandis to insurance agents, insurance brokers and insurance salesmen.

(2) The Minister shall direct the Registrar to notify the insurance agent, insurance broker or insurance salesman, as the case may be, that it is proposed to cancel the registration under subsection (1) and shall not be required to state the reasons therefor.

29. Lists of registered insurance agents, brokers and salesmen to be maintained

(1) Each registered insurer shall maintain in its principal office an accurate list of all persons representing him as agents in Vanuatu and shall provide the Registrar on demand with a copy thereof.

(2) Each registered insurance agent and broker who employs an insurance salesman shall provide the Registrar on demand with full details of the employment of such salesman including a copy of any employment contract.

30. Insurance agent and broker to keep record of business

A registered insurance agent or insurance broker shall keep and make available to the Registrar on demand a record of all insurance business placed through him on property, lives and other risks in Vanuatu, including a record of all premiums and commissions paid in respect thereof:

Provided that any such agent or broker shall not be required to produce to the Registrar any record –

(a) made more than 3 years preceding the date of any demand therefore; and

(b) relating to any policy which is not in force, or upon which any liability is not outstanding, at that date.

31. Agents of insurer

Any registered insurance agent, or insurance broker or insurance salesman shall for the purpose of receiving any premium for a contract of insurance, be deemed to be the agent of the insurer and notwithstanding any conditions or stipulations to the contrary the registered insurer shall be deemed to have received any premium received by such agent, broker or salesman.

32. Paying over of premiums to insurer

A registered insurance agent or insurance broker or insurance salesman who acts in negotiating or renewing a contract of insurance with an insurer and receives payment of the premium for such a contract from the insured, shall be guilty of an offence if he fails to pay the premium over to the insurer within 30 days of the receipt by him of the premium or such shorter or longer period as may be agreed in advance by the insurer, less his commission and any other deductions to which by written consent of the insurer he is entitled, and shall be liable on conviction to the penalties specified in section 52:

Provided that if any person charged with an offence under the foregoing provisions of this section shall satisfy the court that he was prevented by illness or other cause beyond his control from due compliance with such provisions and has subsequently paid the premium to the insurer, the same shall be a good defence to the charge.

PART 5 – EXEMPTED INSURERS

33. Exempted insurers

(1) Any company to which this section applies may, upon application to the Minister under the provisions of section 5 to be registered as an insurer, if it so requests, be registered as an exempted insurer.

(2) This section applies to any company which is not empowered by the objects set forth in its memorandum of association –

(a) to insure any risks within Vanuatu;

(b) to solicit insurance business from the public within or beyond Vanuatu.

34. Provisions not applying to exempted insurers

The provisions of section 4, section 8, paragraphs (a), (b), (e), (f) and (h) of section 9(1), sections 13 to 32 (inclusive), sections 35, 38, 46, 47 and 48 shall not apply to or with respect to any exempted insurer.

PART 6 – GENERAL POWERS AND DUTIES

35. Minister may accept compliance certificates from external insurers

The Minister may waive or modify such of the requirements of Part 2 or Part 3 or of any rules as he thinks fit in the case of an external insurer –

(a) who furnishes annually a certificate issued by the insurance supervisory authority in the place in which the insurer is incorporated to the effect that he is complying with all the applicable insurance supervisory requirements of that authority; and

(b) who gives such further information regarding his business as the Minister may think relevant to the purposes of this Act.

36. Minister may extend periods specified for performance of acts

The Minister may, if he thinks fit extend the periods prescribed under this Act for the performance of any act.

37. Registrar may demand information

The Registrar may, for the purpose of carrying out the provisions of this Act, demand from a registered insurer, registered insurance agent, registered insurance broker or registered insurance salesman, or an applicant for registration as an insurer, insurance agent, insurance broker or insurance salesman, any document or information relating to any matter connected with his insurance business or transactions, and any such person shall comply with any such demand.

38. Registration and cancellation of registration to be notified in Gazette

The Registrar shall cause notice of registration or cancellation of registration or restriction under section 8 of an insurer or of an insurance agent or of an insurance broker to be published in the Gazette.

39. Investigation of the affairs of an insurer

(1) The Minister may appoint any public officer as an Inspector to investigate the affairs or any part of the affairs of a registered insurer if he is satisfied that such investigation would be in the best interest of the policy-holders or of persons who may become policy-holders.

(2) An Inspector appointed under subsection (1) may investigate the affairs of any other body corporate which is or has at any relevant time been the registered insurer’s subsidiary or holding company or a subsidiary of its holding company or a holding company of its subsidiary.

(3) It shall be the duty of the registered insurer under investigation and of all past and present officers of the registered insurer and of the related bodies corporate specified in subsection (2) to produce to the Inspector all books, records and documents relating to the registered insurer or body corporate under investigation which are in their custody or control, and otherwise to give to the Inspector all assistance in connection with the investigation which they are reasonably able to give.

(4) An Inspector may –

(a) examine on oath the officers and agents of the registered insurer or other body corporate under investigation in relation to its business and may administer an oath accordingly;

(b) if he thinks it necessary for the purpose of his investigation that a person whom he has no power to examine on oath should be so examined apply to the court, and the court may, if it sees fit, order that person to attend and be examined on oath before it on any matter relevant to the investigation.

(5) The Minister may, if he thinks fit, authorise the Registrar to recover from the registered insurer or other body corporate whose affairs are investigated under the provisions of this section all expenses properly incurred in connection with the investigation or in connection with the proceedings instituted as a result of the investigation.

40. Power of Registrar to petition for winding-up

The Registrar may present a petition for the winding-up of a registered insurer or its business within Vanuatu on any ground provided by and in accordance with the provisions of the Companies Act, Cap. 191.

PART 7 – MISCELLANEOUS PROVISIONS

41. Restriction on use of word "insurance"

No person other than a registered insurer or a registered insurance agent or a registered insurance broker shall have or use the word "insurance" or any derivative thereof, in the name under which such person is carrying on business.

42. Registered names

(1) Notwithstanding the provisions of section 6, the Registrar shall not register an applicant as an insurer if the name under which the applicant desires to be registered is identical to or so nearly resembles the name of a registered insurer as to be likely to be mistaken for it unless that registered insurer is being wound-up or being dissolved, or has ceased to carry on insurance business in or from within Vanuatu and consents to the registration of the applicant under the name in question.

(2) The Registrar shall not register an applicant as a local insurer if the name under which the applicant desires to be registered is calculated to suggest falsely that such local insurer has a special status in relation to or derived from the government of Vanuatu or has the official backing of or acts on behalf of the said government or any department or official thereof or is recognised in Vanuatu as a national or central insurer.

(3) The Registrar shall not register an applicant as an insurance broker if the name under which the applicant desires to be registered is likely to suggest that the applicant is an insurer.

(4) The Registrar shall not register an insurance agent if the name under which he desires to be registered is likely to suggest that he is an insurer or an insurance broker.

(5) The Registrar may refuse to register an applicant under a name which is likely to mislead policy-holders or which in the opinion of the Minister is for any reason undesirable.

(6) A registered insurer, insurance broker or insurance agent shall not change the name under which he is registered without the prior permission of the Minister.

43. Policies to be printed or typed in clearly legible letters

No registered insurer shall issue a policy the provisions of which, whatever their nature, are not printed or typed in clearly legible letters.

44. Policy not invalid owing to failure to comply with law

A policy issued by any person, whether before, on, or after the coming into force of this Act shall not be invalid by reason only that such person contravened or failed to comply with the provisions of any enactment in force applying to that policy.

45. Cancellation of policies

(1) No local policy shall be liable to cancellation except in accordance with the provisions of this section.

(2) A policy other than a life assurance, marine or aviation policy may be cancelled at any time by the insured named therein after giving to the insurer not less than 30 days’ notice in writing of the proposed cancellation by service in accordance with the provisions of section 49 or by registered post, and the insurer shall, upon the surrendering of the policy, refund the excess of any premiums paid over and above the customary short-rate premium for the period when the policy has been in force.

(3) A policy other than a life assurance, marine or aviation policy may be cancelled at any time by an insurer after giving to the insured named therein not less than 30 days’ notice in writing of the proposed cancellation by personal service or by registered post and upon refunding to the insured the excess of paid premium over and above the pro-rata premium for the time the policy has been in force, which refund shall accompany the notice.

(4) Notwithstanding the provisions of subsections (2) and (3), the insured and the insurer may agree at the time any policy of insurance referred to therein is issued that the same shall be incapable of cancellation, provided that a clause to such effect is included in the policy.

(5) A life assurance policy may be cancelled by the insurer in the event of non-payment of any renewal premiums due but only after notice in writing specifying the default and the intention of the insurer to cancel the policy has been given to the insured by personal service or by registered post:

Provided that a life assurance policy shall not be cancelled by reason only of the non-payment of a premium unless at least 28 days have elapsed since the premium became due.

(6) Any policy of insurance may be cancelled by the prior mutual consent in writing of the insurer and the insured.

46. Jurisdiction of local courts

Any provision contained in a local policy whereby the jurisdiction of the courts in Vanuatu is in any way ousted, circumscribed or avoided shall, to that extent be absolutely void and of no effect.

47. Borrowing powers of directors

The directors of a local insurer being a body corporate may exercise all the borrowing powers of the body corporate:

Provided that at no time may the undischarged amount of moneys to be borrowed or secured by the directors exceed 5 per cent of the assets of the body corporate without the written consent of the Minister.

48. Prohibition of loans to directors, etc.

A local insurer shall not, directly or indirectly, without the approval of the Registrar –

(a) lend any of its fund to any of its directors or officers or to the wife or child of any such director or officer; or

(b) enter into any guarantee or provide any security in connection with a loan to a person mentioned in paragraph (a) by any other person:

Provided that loans may be so made within the surrender value of a life policy issued by the insurer to such person.

49. Service of process upon registered insurers

(1) Any notice issued under any provisions of this Act and any process in legal proceedings may be served upon a person carrying on insurance business by leaving the same at the principal office of the insurer.

(2) If the principal office of a person carrying on insurance business cannot reasonably be found any notice served under this Act or process in any legal proceedings may be served by leaving the same at the office of the Registrar.

(3) Service of process upon the Registrar, in accordance with the provisions of subsection (2) shall be deemed to be service upon the insurer.

50. Persons acting on behalf of unregistered insurers

(1) Anyone who causes or solicits a person to enter into or to make application to enter into a contract of insurance with a person who is not a registered insurer shall be guilty of an offence and shall be liable on conviction to a fine of VT 300,000 or to imprisonment for 1 year, or to both such fine and imprisonment.

(2) Anyone who as agent or broker places insurance on property, lives or other risks within Vanuatu with a person carrying on insurance business within Vanuatu who is not a registered insurer shall incur personal liability on the policy as if he were the insurer.

(3) For the purposes of this section, any registered agent who places insurance with a member of a registered association of underwriters shall be deemed to place such insurance with a registered insurer.

51. False statements, etc.

If a person issues a document for any of the purposes of this Act which is false or misleading in any material respect, that person and every other person who took part in the preparation or issue of the document or who signed it, unless it is proved that the accused, if an individual, or that all the persons who acted on behalf of the accused, if he is not an individual, had no knowledge of the falsity or misleading character of the document when it was issued and had taken every reasonable precaution to ensure its accuracy, shall be guilty of an offence and shall be liable on conviction to a fine of VT 300,000 or to imprisonment for 1 year, or to both such fine and imprisonment.

52. General provisions relating to offences

(1) Any person who contravenes or fails or neglects to comply with any provision of this Act or of any rules shall be guilty of an offence and shall be liable on conviction in a case for which no specific penalty is otherwise provided in this Act, if the offender is an individual, to a fine of VT 200,000 or to imprisonment for 6 months, or to both such fine and imprisonment, or if the offender is not an individual, to a fine of VT 300,000.

(2) Where any offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of any director, manager, secretary or other similar officer or servant of the body corporate, he, as well as the body corporate, shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

53. Decisions not to be questioned in court

No decision of the Minister or the Registrar under the provisions of this Act shall be called into question in any court in any proceedings whatsoever.

54. Immunity of officials exercising powers

No action shall lie against the Registrar, the Deputy Registrar, any Assistant Registrar or Inspector in respect of any act done in good faith in exercise or purported exercise of any powers conferred by this Act.

55. Rules

The Minister may make rules prescribing anything which under this Act may be prescribed and generally for carrying into effect the objects of this Act, and without prejudice to the generality of the foregoing such rules may provide for –

(a) the exemption of a class of persons from any of the provisions of this Act;

(b) the exemption of a class or part of a class of insurance business from any of the provisions of this Act, subject to such terms and conditions as the Minister may see fit; and

(c) the number of copies and manner of certification of any documents required under the provisions of this Act to be furnished by an insurer.

56. Fees

Every company or person registered under the provisions of this Act shall upon such registration and upon each anniversary thereof, pay to the Registrar a fee in accordance with the following table –

TABLE

Table of Amendments (since the Revised Edition 1988)

The reader is advised that the Insurance Act 54 of 2005 was passed by Parliament, but not yet published nor commenced, prior to the appointed day for this Consolidation (31 March 2006). The Insurance Act 54 of 2005, once in effect, will replace the Insurance Act as published here.