CHAPTER 394
INSURANCE ACT

[PRINCIPAL LEGISLATION]

ARRANGEMENT OF SECTIONS

   Section

Title

PART I
PRELIMINARY PROVISIONS

   1.   Short title.

   2.   Application.

   3.   Interpretation.

   4.   Administration of the Act.

PART II
ADMINISTRATION

   5.   Appointment and qualification of the Commissioner.

   6.   Functions and duties of the Commissioner.

PART III
CAPITAL AND OTHER REQUIREMENTS OF INSURERS OTHER THAN ASSOCIATIONS OF UNDERWRITERS

   7.   Application of Part III.

   8.   Insurer to be a resident company in Tanzania.

   9.   General and long term insurance business.

   10.   Separation of insurance and brokerage.

   11.   Capital requirement.

   12.   Margin of solvency.

PART IV
PROVISIONS CONCERNING INSURERS OTHER THAN ASSOCIATIONS OF UNDERWRITERS

   13.   Application of Part IV.

   14.   Registration of an insurer.

   15.   Exclusion of friendly societies.

   16.   Application for registration.

   17.   Registration requirements

   18.   Restriction on insurers whose officers are deemed unsuitable.

   19.   Grant of registration.

   20.   Cancellation of registration.

   21.   Prohibition after registration.

   22.   Retentions and reinsurances.

   23.   Amalgamation, sale and transfer.

   24.   Records and preservation of records.

   25.   Amendment of accounts, etc.

   26.   Audit of accounts of insurers.

   27.   Commissioner's powers in relation to commissions and deposit of funds and management expenses.

   28.   Valuation of assets and liabilities.

   29.   Change of financial year.

   30.   Annual returns.

   31.   Publication of authorised capital.

   32.   Powers, restriction and instruction on insurers.

   33.   Trusteeship of assets.

   34.   Preferred creditors of an insurer.

   35.   Insurers code of practice.

   36.   Classification.

PART V
ASSOCIATION OF UNDERWRITERS REGISTERED AS INSURERS

   37.   Application of Part V.

   38.   Commissioner to determine conditions for registration.

   39.   Association of underwriters liable to premium tax.

   40.   Association of underwriters to deposit sums or securities.

   41.   Premium received to be held in trust.

   42.   Audit of accounts of an association of underwriters.

PART VI
THIRD PARTY (RIGHTS AGAINST INSURERS)

   43.   Third party rights against insurers on bankruptcy.

   44.   Duty to give necessary information to third parties.

   45.   Settlement between insurers and bankrupt persons of no effect.

PART VII
REGISTRATION REQUIREMENTS OF INSURERS BROKERS, INSURANCE, AGENTS AND AGENTS FOR BROKERS

   46.   Insurance brokers, agents and agents for brokers to be registered.

   47.   Agents to act for one principal only.

   48.   Insurer's and broker's responsibilities for agents.

   49.   Registration of agents.

   50.   Broker's application for registration.

   51.   Restriction on broker's officers.

   52.   Registration requirements of insurance brokers.

   53.   Grant of broker's application.

   54.   Broker's capital requirements.

   55.   Broker's responsibility and insurance requirements.

   56.   Broker's records and right of access.

   57.   Broker's responsibility.

   58.   Broker's accounts.

   59.   Cancellation of registration.

   60.   Display of certificate of registration.

   61.   Financial year of broker.

   62.   Broker's amalgamation, sale and transfer.

   63.   Broker's annual returns to the Commissioner.

   64.   Insurance broker's code of conduct.

PART VIII
MANDATORY REINSURANCE CESSIONS

   65.   Reinsurance with international organisation.

   66.   Acceptance or decline of business by ZEP-RE.

   67.   Appeal by ceding institution.

   68.   Liability to cease on refusal.

   69.   Failure to comply.

PART IX
SPECIAL PROVISIONS RELATING TO LONG TERM (LIFE) AND OTHER POLICIES

   70.   Establishment of the National Reinsurance Corporation.

   71.   Life insurance tables or statements.

   72.   Insurance interest for life insurance.

   73.   Amalgamation and transfer of long term business.

   74.   Transfer powers of Commissioner for long term business.

   75.   Periodic actuarial investigation.

   76.   Establishment of statutory life insurance fund.

   77.   Application of assets of insurer with long term business.

   78.   Restriction on transaction with connected person.

   79.   Reinsurance contracts of long term insurance.

   80.   Allocations to policyholders.

   81.   Investment unit policies.

   82.   Life insurance of minors.

   83.   Value of certain assets.

   84.   Life policy effected by married persons.

   85.   Life policy on own life: Protection afforded during life.

   86.   Life policy on own life: Protection afforded on death.

   87.   Protection afforded in respect of life policy insuring the spouse or children.

   88.   Protection afforded in respect of life policy insuring spouse.

   89.   Selection of life policies in respect of which protection is afforded.

   90.   Partial realisation and partial conversion of life policies.

   91.   Provisions in case premium on life policy ceded or trust policy cannot be maintained.

   92.   Life policy ceded or premium paid with intent to benefit someone at the expense of a creditor.

   93.   Power to pay into court.

   94.   No deduction in respect of other life policies.

   95.   Proof of age.

   96.   Age incorrectly stated.

   97.   Suicide.

   98.   Military service.

   99.   Lost or destroyed life policy.

   100.   Life policy may include subsidiary benefits.

   101.   Discrimination between life policies, etc prohibited.

   102.   Non-forfeiture of life policies in certain cases of non-payment of premiums.

   103.   Paid-up policies.

   104.   Surrender of policies.

   105.   Cancellation of life policy within limited penalty.

   106.   Publication of bonus rates and unit values.

   107.   Advertisements and projected benefits.

PART X
MISCELLANEOUS PROVISIONS

   108.   Restriction on insurance having no insurance interest.

   109.   Time limit for payments of claim.

   110.   Fatal accidents.

   111.   Insurance to be held with Tanzania insurers.

   112.   Compulsory local brokerage.

   113.   Unlimited indemnities prohibited.

   114.   Commission only to brokers and agents.

   115.   Time limit on payment of premiums.

   116.   Days of grace.

   117.   Exemption.

   118.   Extension of time.

   119.   Production of documents and information.

   120.   Inspection of balance sheet by policyholder.

   121.   Restriction on use of words.

   122.   No advertisement before registration.

   123.   Service of process.

   124.   Enforcement of right of policyholders.

   125.   Appeals from Commissioner's decision.

   126.   Commissioner's right of inspection of documents.

   127.   Commission of inquiry.

   128.   Copies where documents produced to Commissioner.

   129.   Inspection of returns to the Commissioner.

   130.   Insolvency and winding up.

   131.   Continuation of business of insurer in liquidation.

   132.   Secondary companies.

   133.   False documents.

   134.   Fees.

   135.   Failure to remit premiums by employers.

   136.   Offences punishable by Commissioner.

   137.   Offences punishable by court.

   138.   General penalty.

   139.   Regulations and rules of court.

   140.   [Amendment of Cap. 349.]

   141.   [Repeal of R.L. Cap. 232.]

SCHEDULES

CHAPTER 394
THE INSURANCE ACT

An Act to make provision relating to the carrying on of insurance business and for related matters.

[1st March, 1997]
[G.N. No. 74 of 1997]

Acts Nos.
18 of 1996
9 of 2000
10 of 2001

PART I
PRELIMINARY PROVISIONS (ss 1-4)

1.   Short title

   This Act may be cited as the Insurance Act.

2.   Application

   (1) this Act shall extend to Tanzania Zanzibar as well as to Mainland Tanzania.

   (2) This Act applies to every insurer, broker or agent or every class of insurance business other than an insurer, broker or agent or class of insurance business which is exempted from these provisions by a statutory instrument made by the Minister under section 117.

   (3) Where an insurer, broker or agent or class of insurance business is exempted by an instrument under section 117 from some but not all of the provisions of this Act, the provisions other than the provisions in respect of which the exemption is made shall apply to that insurer, broker or agent or that class of insurance business, as the case may be.

   (4) The provisions of this Act shall not extend or apply to–

   (a)   any person registered in terms of any law relating to benefit societies, subject to the provisions of section 15; or

   (b)   a person or class of persons declared by the Minister by regulation to be exempt from the provisions of this Act; or

   (c)   a class of insurance business carried on by the Government of Tanzania or the Revolutionary Government of Zanzibar; or

   (d)   the Government of Tanzania or the Revolutionary Government of Zanzibar in respect of the collection and payment of insurance premiums governed by Part IX of this Act; or

   (e)   the Deposit Insurance Fund established by Part V of the Banking and Financial Institutions Act *.

3.   Interpretation

   In this Act, unless the context requires otherwise–

   "actuary" means a person who is a member or fellow of an institute, facility, society or association of actuaries approved by the Commissioner for the purposes of this Act;

   "adopted child" means a child adopted in accordance with the provisions of the Adoption of Children Act *, and reference in this Act to adoption shall be construed accordingly;

   "agent" means the same as "insurance agent" described in this Act;

   "agent for broker" means a person who transacts insurance business on behalf of a registered insurance broker;

   "agent for insurer" means a person who transacts insurance business on behalf of a registered insurer and shall have the same meaning as "insurance agent";

   "approved securities" means securities issued by the Government and the Bank of Tanzania and any other securities or investments which the Commissioner may approve;

   "associate" in relation to an applicant for registration as an insurer or broker includes–

   (a)   the spouse or minor son or daughter of that person;

   (b)   any company of which that person is a director;

   (c)   any person who is an employee or partner of that person; or

   (d)   if that person is a company–

      (i)   any director of that company;

      (ii)   any subsidiary of that company;

      (iii)   any director or employee of that subsidiary;

   "association of underwriters" means the association of underwriters registered as such by the Commissioner under this Act;

   "Bank of Tanzania" means the bank established under the Bank of Tanzania Act *;

   "bankruptcy" and "insolvency" has the meaning assigned to it by the Bankruptcy Act * or the relevant law applicable in Tanzania Zanzibar;

   "broker" means the same as "insurance broker" described in this Act;

   "chairman" in relation to an association of persons, includes the individual presiding over the board of directors or other governing body of this association;

   "child" includes a child born out of wedlock, a step child or an adopted child or in accordance with any enactment, whether within or outside Tanzania, in relation to the adoption of children;

   "commencement" or "effective date" means the date on which this Act comes into operation;

   "Commissioner" means the Commissioner of Insurance appointed under section 5(2);

   "Companies Act" includes the Companies Decree of Zanzibar *;

   "contingent obligation dependent on a human life" means–

   (a)   an obligation to pay to a particular person a certain sum of money or to provide for a particular person certain other benefits–

      (i)   on the occurrence of the death of a particular person or the birth of a child to a particular person at any time or within a specified period; or

      (ii)   in the event of a particular person continuing to live throughout a specified period; or

   (b)   an obligation assumed–

      (i)   until the death of a particular person; or

      (ii)   during a specified period or until the occurrence of the death of a particular person before the expiration of that period;

   "Controller" in relation to an applicant for registration as an insurer or broker, means–

   (a)   a Managing Director or Chief Executive of the applicant or of a body corporate of which the applicant is a subsidiary; or

   (b)   a person in accordance with whose directions or instructions the directors of the applicant or of a body corporate of which the applicant is a subsidiary are accustomed to act; or

   (c)   a person who either alone or with an associate or associates is entitled to exercise, or control the exercise of, one third or more of the votes at any general meeting or of any body corporate of which the applicant is a subsidiary;

   "Controller", of a person or body corporate, other than in relation to an applicant for registration or as an insurer or broker means–

   (a)   a Managing Director or Chief Executive of a body corporate which is a subsidiary of the person or body corporate;

   (b)   a person in accordance with whose directions or instructions the directors of a body corporate which is a subsidiary of the person or body corporate are accustomed to act; or

   (c)   a person who either alone or with an associate or associates is entitled to exercise, or control the exercise of, 15 percent or more of the votes at any general meeting of, or of a subsidiary of, a person or body corporate.

   "court", means any court having jurisdiction under the Act;

   "days of grace" means the period defined by section 116;

   "dependant", in relation to any person includes his surviving spouse and any of his parents, children and grandchildren;

   "deposit" means a deposit of money or anything having a monetary value which by virtue of the regulations made under this Act may be accepted as a deposit;

   "deposit administration policies" means a contract whereby–

   (a)   an insurer maintains a fund to which–

      (i)   is credited all amounts paid by the insured to the fund; and

      (ii)   is debited all amounts withdrawn from the fund to provide benefits in terms of the rules of the fund and any administrative and other expenses agreed upon between the insured and the insurer from time to time; and

      (iii)   any investment income and capital profits or losses when agreed upon between the insured and the insurer as being for the account of the fund; and

   (b)   the liability of the insurer to the insured, at any given time, as limited to the amount standing to the credit of the fund;

   "director" includes an individual occupying the position of director or alternate director of an association or persons or a member or alternate member of a committee of management or of any other governing body of an association of persons, by whatever name he may be called;

   "financial institution" means a bank registered as such under the Banking and Financial Institutions Act *;

   "financial year", in relation to an insurer means each period of twelve months at the end of which the balance of the accounts is struck, and includes any lesser or greater periods which the Commissioner shall approve;

   "friendly society" means an association of persons established with no share capital for the purpose of aiding its members or their dependants, where that association does not employ any person whose main occupation is the canvassing of other persons to become members of the association or the collecting of contributions or subscriptions from its members towards the funds of the association;

   "funeral policy" means a policy whereby the insurer assumes, in return for premium or the promise of a premium, an obligation to provide, on the death of any person, benefits, which consist principally of provision for the burial and funeral of that person or the grant to another person of some non-monetary benefit, whether or not the policy provides for–

   (a)   the payment at the option of the insurer or any other person of a sum of money instead of provision of a funeral or the grant of non-monetary benefit; or

   (b)   the payment of a sum of money in addition to the provision of a funeral or the grant of some non-monetary benefit;

   "general business" has the meaning assigned to it under section 36;

   "gross profits" means the chargeable income of the insurer as ascertained under Part II of the Income Tax Act *;

   "infant" or "infant child" means a person who, by reason of his youth, is under a legal disability;

   "insurance agent" means a person who solicits applications for insurance, collects moneys by way of premium and acting in accordance with his agents agreement and may find the registered insurer for whom he acts in the issue of insurance cover;

   "insurance broker" means a person, who acting with complete freedom as to his choice of undertaking and for commission or other compensation and not being an agent of the insurer, bring together, with a view to the insurance or reinsurance of risks, persons seeking insurance or reinsurance undertaking, carry out work preparatory to the conclusion of contracts of insurance or reinsurance, and, where appropriate, assists in the administration and performance of the contracts, in particular in the event of a claim;

   "insurance business" means the business of assuming the obligation of an insurer in any class of insurance whether defined in this section or not, which is not declared to be exempt from the provisions of this Act in terms of section 2(4)(c) and includes assurance and reinsurance and reassurance;

   "insurer" means a person carrying on an insurance business otherwise than as a broker or agent, and includes an association of underwriters who is not exempt from the provisions of this Act in term of section 2(2);

   "life insurance business" means the business of assuming the obligation of an insurer classified under section 36 as transacting long term business;

   "life insurance fund" means the fund established under section 76 to which the receipts of an insurer in respect of his life insurance business are carried;

   "life policy" means any contract of insurance made or agreed to be made by an insurer classified under section 36 as transacting long term business;

   "long term business" has the meaning assigned to it under section 36;

   "management expenses" means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not incurred in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;

   "manager", in relation to an applicant for registration as an insurer or broker includes an employee of the applicant (other than a controller), who, under the immediate authority of a director or chief executive of the applicant exercises managerial functions or is responsible for maintaining accounts or other records of the applicant not exclusively related to business conducted from a place of business outside Tanzania;

   "marriage" shall have the same meaning attributed to it by the Law of Marriage Act * or any other law;

   "member of the insurance industry" includes an insurer, broker, insurance agent of a broker, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settlement agent, whether registered under this Act or not;

   "Minister" means the Minister responsible for finance;

   "minor" means a person who, by reason of his youth, is under the legal disability;

   "owner", in relation to a policy, means the person who has the legal title to the policy;

   "policy", includes every writing whereby any contract of insurance is made or agreed to be made;

   "prescribed" means prescribed by regulations made in accordance with the provisions of this Act;

   "principal officer" means the person responsible for the daily management of the principal office in Tanzania of the insurer or broker;

   "reinsurance" means the effecting of insurance business as between insurers;

   "stock insurance company" means an insurance company with permanent share capital owned an controlled by in shareholders and includes a statutory corporation carrying on insurance business;

   "Tanzanian insurer" means an insurer incorporated and registered to transact business in Tanzania;

   "the insured" means a person effecting a contract of insurance with an insurer;

   "trustee" in relation to an estate in insolvency, includes an assignee or, as the case may be, a trustee in a deed of arrangement of the person having the conduct of an order of composition;

   "underwriter" includes any person named in a policy or other contract of insurance as liable to pay or contribute towards the payment of the sum secured by the policy or contract;

   "underwriter's liabilities", in relation to a member of an association of underwriters, means the liabilities of the insurance business of the member calculated in accordance with formulae fixed by the responsible body vested with the administration of the relevant insurance law.

4.   Administration of the Act

   (1) The Minister shall be responsible for formulation, development and implementation of the national policy on insurance in the United Republic.

   (2) In the performances of his functions under subsection (1) and generally under this Act, the Minister shall establish and maintain a system of close consultation and co-operation with the Minister of Finance in the Revolutionary Government of Zanzibar with a view to ensuring the evolution of an effective and sound administration of insurance business in the United Republic.

PART II
ADMINISTRATION (ss 5-6)

5.   Appointment and qualification of Commissioner

   (1) There shall be established an agency of the government to be known as the Insurance Supervision Department which, subject to the general supervision of the Minister, shall be charged with the responsibility to coordinate policy and other matters relating to insurance in the United Republic.

   (2) The agency shall be a body corporate with perpetual succession and a common seal and shall, subject to this Act, be–

   (a)   capable of suing and being sued in its corporate name;

   (b)   capable of borrowing money, acquiring and disposing of property; and

   (c)   capable of doing all other things which a body corporate may lawfully do.

   (3) There shall be appointed by the Minister a person who has adequate knowledge and experience or matters relating to the insurance industry, to be a Commissioner of Insurance who shall be the head and Chief Executive of the department referred to in subsection (1).

   (4) The Commissioner shall, subject to any direction of the Minister, be responsible for the general administration of this Act.

   (5) A person shall not be qualified to be appointed as the Commissioner or if already appointed shall became disqualified if–

   (a)   he or his spouse or dependent child is or becomes a director, officer, employee or own more than one percent of the issued shares, whether directly or indirectly, of a Tanzanian registered insurer, broker or agent; or

   (b)   he is adjudicated bankrupt, applied to take the benefit of any law for the relief of a bankrupt or insolvent debtors, compounds with his creditors or makes an assignment of his remuneration for their benefit.

   (6) Notwithstanding subsection (3), no act or omission by the Commissioner done or omitted bona fide for the purposes of or in pursuance of this Act shall be invalidated by reason only of any defect in his appointment.

   (7) The Minister shall, after consultation with the Minister for Finance of the Revolutionary Government of Zanzibar, appoint a Deputy Commissioner who shall, subject to any general or specific directions of the Minister and after such consultations as may be necessary perform in Zanzibar on behalf of the Commissioner the functions and duties of the Commissioner.

   (8) There shall be appointed such other staff as may be necessary for the efficient administration of this Act.

   (9) The expenses of and incidental to the administration of this Act shall be paid out of moneys provided by Parliament for that purpose or moneys derived from levies on premiums and commissions as the Commissioner may prescribe.

   (10) The Commissioner may, in relation to any particular function or matter or class of functions or matters, by writing under his hand, delegate any of his powers and functions under this Act (except his power of delegation), so that the delegated powers and functions may be exercised by the delegate with respect to the function or matter or class of functions or matters specified in the instrument of delegation.

   (11) Every delegation under subsection (9) shall be revocable at will and no delegation shall prevent the exercise of any power or function by the Commissioner.

   (12) No legal proceedings shall be instituted in any court against the Minister or Commissioner or any person authorised by the Minister or the Commissioner for anything done or intended to be done in good faith under this Act.

6.   Functions and duties of the Commissioner

   (1) subject to the provisions of this Act, the functions and duties of the Commissioner shall include–

   (a)   the registration and superintendence of the conduct of insurers, insurance brokers and agents;

   (b)   the formulation and enforcement of standards in the conduct of the business of insurance with which a member of the insurance business must comply;

   (c)   to recommend to the Minister regulations for the carrying out of Government policies relating to insurance;

   (d)   affording guidance to insurers to–

      (i)   the standardisation of contracts of compulsory insurance;

      (ii)   the deletion or amendment of obscure or ambiguous terms in contracts of insurance;

      (iii)   the deletion or amendment of items and conditions in contracts of insurance which are unfair or oppressive to policyholders;

      (iv)   the simplification or clarification of terms and conditions in contracts of insurance;

   (e)   performance of such other functions which are assigned to the Commissioner by this Act or any other duties which the Minister may by regulations prescribe.

   (2) The Minister shall by notice published in the Gazette establish a National Insurance Board whose function shall be–

   (a)   to provide advice and assistance to the Commissioner generally in the regulation and supervision of insurance business in the country;

   (b)   to provide advice to the Commissioner generally in the performance of his functions and duties under this Act;

   (c)   to consider and advise the Commissioner on any application for registration or any other case submitted to the Board by the Commissioner or the Minister;

   (d)   to advise the Commissioner on any measures to be taken in any case of contravention of this Act;

   (e)   to consider and advise the Minister in relation to any application for exemption made under section 117.

   (3) The members of the Board shall be not less than five and not more than seven and at least two of whom shall be persons who hail from either part of the United Republic, and in appointing them, the Minister shall ensure that at least two members have knowledge and experience in matters pertaining to insurance, law, finance, banking or social security.

   (4) The Commissioner shall, as soon as reasonably practicable after each year ending on the thirty-first day of December, furnish to the Minister a report on the working of the Act during that year together with copies or summaries and documents deposited with him under Parts IV and V during that year, and the Minister shall lay the report before the National Assembly as soon as practicable.

PART III
CAPITAL AND OTHER REQUIREMENTS OF INSURERS OTHER THAN ASSOCIATIONS OF UNDERWRITERS (ss 7-12)

7.   Application of Part III

   This Part shall apply only to insurers who are not associations of underwriters.

8.   Insurer to be a resident company in Tanzania Acts Nos. 8 of 1998 s. 44; 9 of 2000 s. 32">

   (1) No insurer may, after the coming into operation of this Act, be registered as an insurer in Tanzania unless he is a body corporate incorporated under the Companies Act * or any other law in the United Republic and is deemed to be resident in Tanzania and at least one third of the controlling interest, whether in terms of shares, paid up capital or voting rights are held by citizens of Tanzania, or at least one third of the members of the board of the company in question are citizens of Tanzania.

   (2) For the purposes of this section "citizens of Tanzania" includes a body corporate registered in Tanzania in which a citizen of Tanzania or the government holds the majority of the shares.

9.   General and long-term insurance business

   (1) An individual insurer may transact either or both general and long term insurance business.

   (2) Where an insurer carries on both general and long term insurance business, all the receipts of each of those classes of insurance business shall be entered in separate and distinct accounts.

10.   Separation of insurance and brokerage

   (1) No Tanzanian insurer shall register the transfer of more than five percent of his issued shares to–

   (a)   any person who owns or controls more than ten percent of the issued shares of any Tanzanian registered broker; or

   (b)   any body of persons directly or indirectly owned or controlled by a Tanzanian registered insurance broker.

   (2) No Tanzanian registered insurance broker shall register the transfer of more than five percent of the issued shares to–

   (a)   any person who owns or controls more than ten percent of the issued shares of any Tanzanian insurer; or

   (b)   any body of persons, directly or indirectly owned or controlled by a Tanzanian insurer.

   (3) No person, company or body of persons who has a legal or equitable interest in or who owns, controls, or is employed by–

   (a)   any Tanzanian registered insurance broker; or

   (b)   any Tanzanian insurer,

shall be employed as the manager, controller, director or principal officer of a Tanzanian insurer or registered broker respectively or enter into any management agreement with that person, company or body of persons.

   (4) Where at the coming into force of this Act an insurer or broker is in contravention of any of the provisions of subsections (1), (2) and (3) that insurer or broker may, notwithstanding the contravention, be registered under this Act for a period not exceeding two years.

   (5) The Commissioner may, by notice published in the Gazette, grant specific exemption to the provisions of this section under any terms and conditions where he decides that it is in the interests of the insurance industry and the public in general.

11.   Capital requirement

   (1) The Minister shall upon recommendation by the Commissioner and by notice published in the Gazette, prescribe the minimum paid up share capital to be maintained by a registered insurer.

   (2) For the purposes of subsection (1) the Minister may prescribe different amounts in respect of insurers transacting general business and insurers transacting long term business.

   (3) Every insurer shall transfer from its net profits of each year, before any dividend is declared and after the provision has been made for taxation, a sum not less than twenty percent–

   (a)   to the paid-up share capital of the insurer; or

   (b)   to a Capital Reserve Account which account may be reduced only for the purpose of increasing the paid-up share capital of the insurer.

   (4) An insurer shall not be required to transfer any part of its net profits if the aggregate of the paid-up capital and the Capital Reserve Account exceeds any sum prescribed by the Minister.

   (5) The Capital Reserve Account shall be wholly utilised not less frequently than every five years to increase the paid-up share capital of the insurer.

   (6) Any registered insurer who permits its paid-up share capital to be reduced to a level below that prescribed by the Minister or fails to increase capital in accordance with the requirements of subsection (3) commits an offence and shall in addition to any other penalty prescribed by this Act be liable to have its registration cancelled.

   (7) The Minister may by regulations prescribe the form in which paid-up share capital may be maintained by an insurer.

12.   Margin of solvency

   (1) No insurer may carry on business as an insurer unless he maintains in Tanzania at all times while he so carries on insurance business, a margin of solvency of not less than the amount which the Minister shall by regulations published in the Gazette prescribed.

   (2) The Regulations made under subsection (1) may prescribe the method of calculating the assets and liabilities of an insurer for the purposes of this section.

   (3) Any insurer acting in contravention of this section commits an offence and shall in addition to any penalty prescribed by this Act be liable to have its registration cancelled.

   (4) This section shall not apply to the National Insurance Corporation and the Zanzibar Insurance Company until after the expiration of two years from the commencement of this Act.

PART IV
PROVISIONS CONCERNING INSURERS OTHER THAN ASSOCIATIONS OF UNDERWRITERS (ss 13-36)

13.   Application of Part IV

   This Part shall apply only to insurers who are not associations of underwriters.

14.   Registration of an insurer

   (1) subject to the provisions of this Part, no person resident in Tanzania shall commence or carry on insurance business, unless he is registered as an insurer under this Act.

   (2) An insurer resident in Tanzania carrying on insurance business immediately before the commencement of this Act may, within three months after the commencement, make an application for registration under this Act, and may, until the grant or refusal of his application, continue to carry on his insurance business.

   (3) The Minister may exempt, in part or in the whole, any insurer from the provisions of this Act where the whole of the insurance business carried on by the insurer is carried on outside Tanzania.

   (4) Subject to the provisions of this Part, no person resident in Tanzania shall carry on reinsurance business unless he is registered as a reinsurer under this Act and in accordance with sections 17 and 22 of this Act.

15.   Exclusion of friendly societies

   The provisions of this Act shall apply to the provision of payment on death or permanent disability by friendly societies to its members or to the family of a member, duly registered under the law providing for the establishment of non-profit making societies, which do not afford benefits exceeding sum which the Minister may by regulation determine in the event of the death or permanent disability of a member.

16.   Application for registration

   (1) Every insurer applying to the Commissioner for registration or renewal of registration shall apply in the prescribed form and shall provide any additional documentation and information which the Commissioner may require.

   (2) The Commissioner may stipulate any amendments where he considers necessary to any documentation to ensure that they comply with the requirements of this Act.

17.   Registration requirements

   (1) An insurer seeking registration shall satisfy the Commissioner that–

   (a)   it is a company registered under the Companies Act * or any other law in the United Republic;

   (b)   it has a principal office in Tanzania;

   (c)   its controller, manager, principal officer and director who handle the day to day management of the company are all resident in Tanzania, and that;

   (d)   its controller, manager and principal officer are persons with sufficient business and insurance knowledge and experience.

   (2) The provisions of subsection (1) of this section shall apply, mutatis mutandis to the reinsurers.

18.   Restriction on insurers whose officers are deemed unsuitable

   No insurer may employ as its manager controller or principal officer any person who–

   (a)   has been adjudged an undischarged bankrupt in any country;

   (b)   has made an assignment to or arrangement or composition with creditors which has not been rescinded or set aside;

   (c)   has been convicted by a court in any country of an offence involving dishonesty; or

   (d)   is in the opinion of Commissioner an unfit person to hold the office.

19.   Grant of registration

   (1) If the Commissioner is satisfied that–

   (a)   the class or classes or insurance business in respect of which the application is made will be conducted in accordance with sound insurance principles; or

   (b)   the relevant capital requirements for insurers are adequate having regard to any regulations made in relation to them under section 11, have been complied with by the applicant; or

   (c)   the margin of solvency of the insurer is adequate having regard to any regulations made in relations to it under section 12; and

   (d)   the applicant complies with the requirements of Part III and IV of this Act,

he may grant the application for registration as an insurer and issue the prescribed registration certificate.

   (2) The Commissioner, in exercising his registration powers under subsection (1) in relation to any applicant intending to carry on insurance business in Tanzania Zanzibar, shall through the Minister, consult with the Minister responsible for Finance in the Revolutionary Government of Zanzibar.

   (3) If the Commissioner is not satisfied as to the matter referred to in subsection (1) on which he is required to be satisfied before granting an application he shall notify the applicant in writing of his intention to refuse to grant the application.

   (4) The Commissioner shall cause a notice of the grant of a registration certificate issued under this section to be published in the Gazette.

   (5) A copy of the certificate of registration issued under subsection (1) shall be conspicuously displayed to the public at each office of the insurer.

20.   Cancellation of registration

   If the Commissioner is satisfied that–

   (a)   the insurance business of the insurer is not being conducted in accordance with sound insurance principles; or

   (b)   the insurer has ceased to carry on insurance business in Tanzania; or

   (c)   the insurer has applied for and been granted exemption in terms of section 14(3); or

   (d)   the insurer has required in writing the cancellation of the registration; or

   (e)   a final judgment obtained in any court in Tanzania against the insurer remains unsatisfied for thirty days after the date of judgement; or

   (f)   the insurer is acting or has acted in contravention of any of the provisions of this Act,

he may give notice in writing to the insurer of his intention to–

   (i)   cancel the registration certificate of the insurer; or

   (ii)   cancel the registration in any of the classes of insurance business carried on by him in Tanzania.

21.   Prohibition after registration

   No insurer shall effect any new insurance policy or renew any expiring insurance policy after the expiration of a period of three working days from the date of receipt of the Commissioner's notification in writing of the cancellation of the registration of that insurer, or after the expiration of the extended time, not exceeding–

   (a)   a further three months which the Commissioner may; or

   (b)   twelve months which the Minister may,

in a special case in writing approve.

22.   Retentions and reinsurances

   (1) The Commissioner may by stipulating in writing to the insurer set limits within which a registered insurer may accept insurances of all or any class by–

   (a)   restricting the gross premium received by an insurer to a specified maximum in any one financial year; and

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