The Life Insurance Corporation Act, 1956

(1) This Act may be called the Life Insurance CorporationAct, 1956. (2) It shall come into force on such date 1as the Central Government may, by notification in theOfficial Gazette, appoint.

In this Act, unless the context otherwise requires,-- (1) appointed day means the date on which the Corporation is established under section 3; 1[(1a) Audit Committee means the Committee constituted under section 19C; (1b) Board of Directors or Board means the collective body of the directors appointed ornominated or deemed as such under section 4; (1c) Chairperson means the Chairperson referred to in clause (a) of sub-section (2) of section 4; (1d) Chief Executive means,-- (i) during the initial period, the Chairperson referred to in sub-clause (i) of clause (a) ofsub-section (2) of section 4; (ii) after the initial period, the Chief Executive Officer and Managing Director; (1e) Chief Executive Officer and Managing Director means the Chief Executive Officerand Managing Director referred to in clause (b) of sub-section (2) of section 4; (1f) Companies Act means the Companies Act, 2013 (18 of 2013); (1g) court means Court as defined in clause (29) of section 2 of the Companies Act, 2013(18 of 2013;] (2) composite insurer means an insurer carrying on in addition to controlled business any other kindof insurance business; (3) controlled business means-- (i) in the case of any insurer specified in sub-clause (a) (ii) or sub-clause (b) of clause (9) ofsection 2 of the Insurance Act and carrying on life insurance business-- (a) all his business, if he carries on no other class of insurance business; (b) all the business appertaining to his life insurance business, if he carries on any other classof insurance business also; (c) all his business, if his certificate of registration under the Insurance Act in respect ofgeneral insurance business stands wholly cancelled for a period of more than six months on the19th day of January, 1956; (ii) in the case of any other insurer specified in clause (9) of section 2 of the Insurance Act andcarrying on life insurance business-- (a) all his business in India, if he carries on no other class of insurance business in India; (b) all the business appertaining to his life insurance business in India, if he carries on anyother class of insurance business also in India; (c) all his business in India if he certificate of registration under the Insurance Act in respectof general insurance business in India stands wholly cancelled for a period of more than sixmonths on the 19th day of January, 1956. Explanation.-- An insurer is said to carry on no class of insurance business other than lifeinsurance business, if in addition to life insurance business, he carries on only capital redemptionbusiness or annuity certain business or both; and the expression business appertaining to his lifeinsurance business in sub-clauses (i) and (ii) shall be construed accordingly; (iii) in the case of a provident society, as defined in section 65 of the Insurance Act, all itsbusiness; (iv) in the case of the Central Government or a State Government, all life insurance businesscarried on by it, subject to the exceptions specified in section 44; (4) Corporation means the Life Insurance Corporation of India established under section 3; 1[(4a) director means a director appointed or nominated or deemed as such under section 4;; (4b) financial statement, in relation to the Corporation, includes; (i) a balance-sheet as at the end of the financial year; (ii) a profit and loss account for the financial year; (iii) cash flow statement for the financial year; (iv) a statement of changes in equity, if applicable; and (v) any explanatory note annexed to, or forming part of, any document referred to insub-clause (i) to sub-clause (iv);; (4c) fully diluted basis shall mean, in relation to the percentage holding of the CentralGovernment on such basis, the total number of shares held by the Central Government expressed as apercentage of the total number of shares of the Corporation that would be outstanding if all possiblesources of conversion are exercised; (4d) independent director means an independent director referred to in clause (g) of sub-section(2) of section 4; (4e) initial period means the period of three years reckoned from the date on which theprovisions of section 130 of the Finance Act, 2021 shall come into force;; (5) Insurance Act means the Insurance Act, 1938 (4 of 1938); (6) insurer means an insurer as defined in the Insurance Act who carries on life insurance businessin India and includes the Government and a provident society as defined in section 65 of the InsuranceAct; 1[(6a) Managing Director means a Managing Director referred to in clause (c) of sub-section (2) ofsection 4; 2[(7) member means every person holding shares of the Corporation and whose name is entered inthe register of members maintained under clause (a) of sub-section (1) of section 5B; (7a) Nomination and Remuneration Committee means the Committee constituted under section19B; (7b) notification means a notification published in the Official Gazette, and the expression notifyshall be construed accordingly;] (8) prescribed means prescribed by rules made under this Act; 1[(8a) special resolution means a resolution for which the intention to propose the same as a specialresolution has been duly specified in the notice given to members for calling a general meeting, and thevotes cast in favour of the resolution by members are not less than three times the number of votes, if any,cast against the resolution;] (9) Tribunal means a Tribunal constituted under section 17 and having jurisdiction in respect of anymatter under the rules made under this Act; 3[(10) unless there is anything repugnant in the subject or context, all the words and expressions usedherein but not defined and defined in the Insurance Act, 1938 (4 of 1938) or in the Companies Act, 2013(18 of 2013) shall have the meanings respectively assigned to them in the said Acts.9563

(1) With effectfrom such date as the Central Government may, by notification in the Official Gazette, appoint, thereshall be established a Corporation called the Life Insurance Corporation of India. (2) The Corporation shall be a body corporate having perpetual succession and a common seal withpower subject to the provisions of this Act, to acquire, hold and dispose of property, and may by its namesue and be sued.

1[4. Board of Directors.--(1) The general superintendence and direction of the affairs and businessof the Corporation shall vest in its Board of Directors, which may exercise all such powers and do all suchacts and things as may be exercised or done by the Corporation and are not by this Act expressly directedor required to be done by the Corporation in general meeting. (2) The Board of Directors of the Corporation shall consist of the following directors, not exceedingeighteen, of whom at least one shall be a woman, namely:-- (a) a Chairperson of the Board, to be appointed by the Central Government, who shall,-- (i) during the initial period, be a whole-time director of the Corporation; and (ii) after the initial period, be from amongst the non-executive directors nominated or to benominated by the Central Government; (b) after the initial period, a Chief Executive Officer and Managing Director, who shall be awhole-time director of the Corporation to be appointed by the Central Government: Provided that where no Chief Executive Officer and Managing Director is appointed beforeexpiry of the initial period, the individual holding office as Chairperson shall be deemed to have beenappointed as the Chief Executive Officer and Managing Director on and from the date of such expiry; (c) Managing Directors, not exceeding four, to be appointed by the Central Government, whoshall be whole-time directors of the Corporation; (d) an officer of the Central Government not below the rank of a Joint Secretary to theGovernment of India, to be nominated by the Central Government; (e) an individual to be nominated by the Central Government, who has special knowledge orpractical experience in actuarial science, business management, economics, finance, human resources,information technology, insurance, law, risk management, or any other field the special knowledge orpractical experience of which would be useful to the Corporation in the opinion of the CentralGovernment or who represent the interests of policyholders; (f) where the total holding of members other than the Central Government in the paid-up equitycapital of the Corporation is (a) not more than ten per cent., one individual; (b) more than ten per cent., two individuals, who shall be elected by and from amongst such members and in such manner as may be specified byregulations, to be appointed by the Board; and (g) such number of independent directors, not exceeding nine, to be recommended by theNomination and Remuneration Committee and appointed by the Board. (3) An independent director of the Corporation shall, in relation to the Corporation, meet the samecriteria of independence as an independent director of a company is required to meet in relation to thecompany under sub-section (6) of section 149 of the Companies Act: Provided that such a director shall also meet, in addition to the aforesaid criteria, any criteria that theNomination and Renumeration Committee may formulate regarding qualifications, positive attributes andindependence: Provided further that every such director shall at the first meeting of the Board in which heparticipates as a director and thereafter at the first meeting of the Board in every financial year orwhenever there is any change in the circumstances which may affect his status as an independent director,give a declaration that he meets the criteria of independence under this sub-section and that he is notaware of any circumstance or situation, which exist or may reasonably be anticipated, that could impair orimpact his ability to discharge his duties with an objective independent judgment and without anyexternal influence. (4) An individual appointed by the Board as a director under clause (f) or clause (g) of sub-section (2)shall hold office up to the date of the next annual general meeting or the last date on which the annualgeneral meeting should have been held, whichever is earlier, and shall hold office beyond such date onlyif his appointment is approved at the annual general meeting. (5) Before an individual is appointed or nominated as a director under sub-section (2), the CentralGovernment or the Nomination and Remuneration Committee, as the case may be, shall satisfy itself thatsuch an individual as a director shall have no financial or other interest as is likely to affect prejudiciallythe exercise or performance by him of the functions of a director: Provided that the Board shall satisfy itself from time to time with respect to every director other thana director nominated under clause (d) of sub-section (2) that he has no such interest: Provided further that, for the purposes of this sub-section, any individual who is, or whoseappointment or nomination or election is proposed and who has consented to be a director, shall furnishsuch information as the Central Government or the Nomination and Remuneration Committee or theBoard, as the case may be, may require. (6) Notwithstanding anything contained in sub-section (2), on and from the appointed date, anindividual appointed under section 4 who is eligible to be or remain a director under section 4A and who,immediately before such appointed date, held the office of a member of the Corporation (i) in the capacity as the Chairman of the Corporation, shall be deemed to be a director and theChairperson under sub-clause (i) of clause (a) of sub-section (2); (ii) in the capacity as a Managing Director of the Corporation, shall be deemed to be a directorand a Managing Director under clause (c) of sub-section (2); (iii) and is an officer of the Central Government not below the rank of a Joint Secretary to theGovernment of India in the Department of Financial Services, shall be deemed to be a directornominated under clause (d) of sub-section (2); (iv) and has been in office for a duration which is the longest amongst members other thanmembers referred to in clauses (i), (ii) and (iii), shall be deemed to be a director nominated underclause (e) of sub-section (2): Provided that every such individual shall hold office until expiry of the term, if any, specified atthe time of his appointment as a member of the Corporation, or until a director appointed ornominated, as the case may be, under sub-section (2) in place of such an individual assumes office: Provided further that any act or proceeding of the collective body of members constituting theCorporation under section 4 before the appointed date, shall be deemed to be an act or proceeding, asthe case may be, of the Board. Explanation.--For the purposes of this sub-section, - (a) notwithstanding anything contained in clause (7) of section 2, the expression membershall mean a member appointed to the Corporation constituted under section 4 as it stood beforethe coming into force of section 130 of the Finance Act, 2021; (b) appointed date means the date on which the provisions of section 130 of the FinanceAct, 2021 shall come into force.

1[4A. Disqualification to be director.--An individual shall not be eligible to be or remain a directorif, -- (a) he is of unsound mind and stands so declared by a competent court; (b) he is an undischarged insolvent; (c) he has applied to be adjudicated as an insolvent and his application is pending; (d) he has been convicted by a court of any offence, whether involving moral turpitude orotherwise, and sentenced in respect thereof to imprisonment for not less than six months and a periodof five years has not elapsed from the date of expiry of the sentence: Provided that if an individual has been convicted of any offence and sentenced in respect thereofto imprisonment for a period of seven years or more, he shall not be eligible to be a director; (e) an order disqualifying him to be a director has been passed by a court or the NationalCompany Law Tribunal constituted under section 408 of the Companies Act, and the order is in force; (f) he has not paid any calls in respect of any shares of the Corporation held by him, whetheralone or jointly with others, and six months have elapsed from the last day fixed for the payment ofsuch call; (g) he attracts any disqualification for being a director of a company under the provisions of subsection (2) of section 164 of the Companies Act, subject to such exceptions thereto as the CentralGovernment may, by notification, specify; (h) he is a salaried government official, other than an individual nominated director under clause(d) of sub-section (2) of section 4; (i) he is an insurance agent or an intermediary or an insurance intermediary; (j) he is an employee of the Corporation, other than the Chief Executive or a Managing Director,or of its subsidiary or associate company; (k) he is a director of a subsidiary or an associate company of the Corporation and is other thanthe Chief Executive or a Managing Director; (l) he is an employee or a director or a promoter of any insurer carrying on life insurance businessanywhere in the world, other than the Corporation or its subsidiary or associate company, or of anyholding company, subsidiary or associate company of such an insurer; (m) he absents himself from all the meetings of the Board held during a period of twelve months,with or without seeking leave of absence of the Board: Provided that the disqualifications referred to in clauses (d) and (e) shall continue to apply even ifan appeal or petition has been filed against the order of conviction or disqualification.