Short Title and Commencement
The Insurance Act of 1991 of the Republic of New Lemuria, shall be more
commonly known as the "Insurance Act of 1991".
Further, the Insurance Act of 1991 will commence and shall come into force 90
days after ratification by the House of Elders of the Republic of New Lemuria.
(The Insurance Act of 1991 came into force and effect on January 1, 1992.)
In this Act, unless the context otherwise requires, the
following terms shall have the meanings so indicated and set forth below.
"Insurance Company" - means any company licensed for the
purpose of conducting insurance business within the Republic of New Lemuria,
"Republic of New Lemuria", or pursuant to license, outside the Republic of New Lemuria. The term
Insurance Company may be abbreviated herein as "the Company" or as context would
"Generally Accepted Accounting Principals" - means those
accounting principals generally referred to as "International Accounting
Standards" as drawn and prescribed by the American Institute of Certified Public
"Liquid Investments" - means and shall be defined as Cash,
Commercial Paper, Certificates of Deposits, Investment Grade Securities, and
other investments whose maturities are less than 90 days.
Authority to Grant Licenses
2.01 The Minister of Finance has the sole right to grant Insurance License/s,
regardless whether domestic or international.
Documents to be Provided with Application
2.02 The following list comprises supporting documents that must accompany
applications for Insurance License/s.
- Articles of Incorporation
- Audited Financial Statements Prepared in Accordance with Generally
Accepted Accounting Principles (GAAP) for the most Recent Fiscal Year End.
- Unaudited Financial Statements for the most recent quarterly period,
within 45 days of the end thereof, must also be submitted.
- Biographical Information / Resume of each member of Senior Management
and the Board of Directors.
- Business Plan.
- References, including:
- Bank Reference,
- Legal Counsel,
- Auditor/Accountant, and
- Three Business References.
- Disclosure of Past and Concurrent Legal Actions, including both civil
and criminal proceedings.
- Executed Application Document.
- Any other Materials reasonably requested by the Minister of Finance.
Denial of License and/or Revocation Thereof
2.03 The Minister of Finance may deny a license application or revoke any
such license only with cause. Licensee may request a judicial hearing in the
High Court regarding this matter, should Licensee believe that any such action
was unwarranted. The High Court shall have the final decision in over turning
any revocation or denial action by the Minister of Finance.
Restriction of Name "Insurance and/or Assurance" etc...
2.04 The use of the word "Insurance", and/or "Assurance", or any derivation
or abbreviation thereof, is prohibited from inclusion in the name of any
business without authority from the Minister of Finance. Such authority is
automatically extended with the extension of an Insurance License.
Authority to Change/Move Locations
2.05 Any Company may after 30 day prior notice being given to the Minister of
Finance, change or move its principal place/s of business. A Company may close a
location upon 14 day prior notice. A Company may open a new location provided
the Minister of Finance is given notice of such location within 14 days of the
Foreign Exchange Transactions
2.06 Company/s may participate in Foreign Exchange Transactions.
Restriction on Change of Control of Company
2.07 Changes in Control of a licensed Company, whether it be by change in
Stockholder/s or by change in Directorship, is subject to prior approval of the
Minister of Finance, which will not be unreasonably withheld.
Diversification of Company/s
2.08 Company/s desiring to diversify into industries other than Insurance
related businesses, are required to seek prior approval of the Minister of
Finance. Such authority shall not be unreasonably withheld.
Investment in Subsidiaries
2.09 Company/s may invest up to 90% of their capital in the securities of
subsidiary and affiliated corporations.
2.10 Any corporation or party doing business as an Insurance Company, without
a license or authority, is subject to both civil and criminal actions and
penalties at the discretion of the Minister of Finance.
2.11 Company/s are required to maintain an equity, exclusive of redeemable
preferred stock due in less than five years, equal to at minimum, 10% of future
benefits due Policyholders. Company's are also required to maintain an overall
equity of at minimum - 5% of gross capital/assets.
2.12 Company/s are required to maintain in the form of liquid investments, a
minimum of 5% of total capital.
Restriction on Dividends
2.13 Company/s are prohibited from paying any dividends, whether on preferred
or common stock, if the result of which would impair the Company's Capital.
2.14 Company/s must obtain prior Minister of Finance approval for any
transactions with affiliates which individually would exceed 50% of Assets.
Circumvention by means of technicality is prohibited.
Audit and Periodic Filings
Eligible Auditors and Examinations
3.01 Company/s are to employ only Auditors approved by the Minister of
Finance, for public and governmental filings. The Minister of Finance is
empowered to audit the accounts, books, and records of any Company, with or
without prior notice being given.
Requirement of Audited Annual Reports
3.02 Company/s are to file Audited Annual Financial Statements, prepared in
accordance with generally accepted accounting principles, (International
Accounting Principles as drawn and prescribed by the American Institute of
Certified Public Accountants.)
3.03 Company/s are required to file with the Minister of Finance, Semi-Annual
unaudited Financial Statements, prepared in accordance with generally accepted
Filing Dates of Reports
3.04 Annual Reports and Semi-Annual Reports required to be filed by Company/s
with the Minister of Finance are required to be so filed within 120 days of
fiscal year end and within 90 days of the end of the Company's Semi-Annual
Production of Documents
3.05 The Minister of Finance may require production of any documentation
related to the Company's operations or otherwise.
4.01 The Minister of Finance may compel the resignation of any officer or
director of a Company, upon presentation of cause, only in the protection of
4.02 Stockholders owning directly or indirectly more than 25%
of the voting securities of a Company must give notice on prescribed form/s
within 90 days thereof, to the Minister of Finance. In the event that such
shares are held in the name of a Nominee, the ultimate holder need not be
disclosed should such Nominee be a licensed Attorney/Solicitor representing such
Regulatory Approval of Director Appointment/s
4.03 The Minister of Finance shall not require the prior approval of the
appointment of new directors of any existing Company, provided such appointment
does not constitute a change in control of the respective Company.
Execution of Filings
4.04 All filings with the Minister of Finance must be signed by the
Secretary, Treasurer, and President of the respective Company and must be
prepared in the English Language.
Secrecy and Privacy
4.05 Pursuant to Constitutional Law, and rights thereunder,
Company/s are prohibited from extending or providing in any manner, disclosures
of information regarding any client or such clients accounts or business
affairs, unless prior approval of and from such client is given to the Company
for the specific purpose. Violation hereof is subject to criminal prosecution.
Business Hours of Company/s
4.06 The Minister of Finance requires a Company to be open
for Business One day, (12 Hours), during any single 7 day period. The Minister
of Finance requires that all Companies publish their respective hours for which
they are open to conduct business. This publication is to be made available to
all policyholders and to all other interested parties. All Companies are
required to file a copy of this publication with the Minister of Finance.
4.07 Company/s may close for extended holiday beyond 10 days, upon 3 day
prior written notice having been given to the Minister of Finance.
Prosecution of Violations Hereunder
4.08 The Minister of Finance may prosecute violations hereof in any Court of
Law in the Republic of New Lemuria.
Amendment and Alteration of These Statutes
4.09 The Minister of Finance may amend or alter these laws and statutes only
upon approval of the House of Elders.
4.10 Company/s may voluntarily liquidate upon 30 day prior notice being given
to the Minister of Finance. Such Company will be required to file dissolution
documents on prescribed forms or in prescribed format, and to file final
Regulatory Seizure of Operations and Assets
4.11 Minister of Finance may seize or take possession of any licensed Company
if it violates the statutes as promulgated hereunder flagrantly or violated
minimum capital requirements and failed to cure such within a reasonable period
4.12 The Minister of Finance may require a Company to liquidate.
Escheatment of Abandoned Property
4.13 All abandoned property, asset bearing accounts, dormant for more than
five years, securities with no current address for holder and any other "Lost"
or "Abandoned" assets is/are to be transferred to the Minister of Finance for
4.14 This Act is drawn to supplement the Corporation Ordinance of the
Republic of New Lemuria. Any conflict is in favor of this Act.
Application of These Statutes
4.15 All Companies having been previously licensed by the Minister of Finance
or its predecessor agency, shall be subject to the provisions of this Act, 120
days after implementation. Only those Companies whose original Charters and
Licenses granted them exclusive authority and rights to "Grandfathering" under
future legislation shall be entitled to such privilege.
4.16 Only licensed Companies are subject to these statutes. Unlicensed
Companies and Corporations deemed to be conducting business which would
otherwise be subject hereunder if so licensed, would and shall be deemed subject
to these statutes.
Public or Privately Held
4.17 Company/s may be publicly or privately owned.
Policyholders' Guaranty Fund
4.18 The Minister of Finance may implement a program to insure policyholders'
monies. Company/s may voluntarily apply for such insurance/guarantee. Such
insurance shall not be compulsory.
Application of the Securities Act of 1991
4.19 Companies are required to comply with the Securities Act of the Republic of New Lemuria of 1991. Any conflict therewith shall be in favor of this Act.
Minimum Capital Requirement
4.20 Companies must possess minimum shareholders' capital/equity of $25,000
USD, prior to conducting any business. Further, a given Company's investment in
non- tangible assets may not exceed 10% of total capital.
Appeal of Decisions to High Court
4.21 Company/s may appeal any Minister of Finance decision to the High Court
of the Republic of New Lemuria for review.
4.22 Companies are required to provide policyholders an Annual Report
regarding the respective Company's financial condition and its prior year
earnings. Such report, the contents thereof, may be presented in a condensed
format, drawn based upon audited financial reports prepared by the Company's
independent auditor/s. The Annual Report should include a management's
discussion of the Company's financial performance and the Company's business
plan and prospects for the forth coming year.
4.23 Company/s may participate in the underwriting of securities offerings in
a co-underwriter capacity, provided such partner is either a licensed bank or
securities dealer, in its respective jurisdictional domicile.
4.24 Company/s may not conduct retail brokerage operations with respect to
securities, unless licensed specifically therefor.
4.25 Company/s may not conduct Trust services, unless such Company possesses
or has obtained a license to transact such business in accordance with
applicable Trust Statutes.
Investment Advisory Services
4.26 Company/s may provide Investment Advisory Services.
4.27 Company/s may open foreign representative offices in addition to foreign
Administrative Services of Company
4.28 Company/s may conduct their administrative services and operations
elsewhere outside of the Republic of New Lemuria.
Notification of Wrong Doing
4.29 Company/s must notify the Minister of Finance of any violation or
conviction of wrong doing in any jurisdiction.
Domestic and International Insurance
4.30 Company/s licensed for domestic insurance operations are prohibited from
conducting international insurance business without first obtaining a license
4.31 Company/s licensed for International Insurance may conduct both Domestic
and International Insurance without restriction.
Company/s Business Authority
4.32 Company/s may make and do the following:
1. The making of or proposing to make, as an Insurer, an
insurance contract. 2. The making of or proposing to make, as guarantor or
surety, any contract of guaranty or suretyship as a vocation and not merely
incidental to any other legitimate business or activity of the guarantor or
surety. 3. The taking or receiving of any application for insurance. 4. The
receiving or collection of any premium, commission, membership fees,
assessments, dues or other consideration for any insurance or any part thereof.
5. Directly or indirectly acting as an agent for or otherwise representing or
aiding on behalf of another any person or insurer in the solicitation,
negotiation, procurement or effectuation of insurance or renewals thereof or in
the dissemination of information as to coverage or rates, or forwarding of
applications, or delivery of policies or contracts, or inspection of risks, a
fixing of rates or investigation or adjustment of claims or losses or in the
transaction of matters subsequent to effectuation of the contract and arising
out of it, or in any other manner representing or assisting a person or insurer
in the transaction of insurance with respect to subjects of insurance resident,
located or to be performed in the Republic of New Lemuria. The provisions of
this subdivision shall not operate to prohibit full-time salaried employees or a
corporate insured from acting in the capacity of an insurance manager or buyer
in placing insurance in behalf of such employer. 7. The doing of any kind of
insurance business specifically recognized as constituting the doing of an
insurance business within the meaning of the statutes relating to insurance. 8.
The doing or proposing to do any insurance business in substance equivalent to
any of the foregoing in a manner designed to evade the provisions of the
statutes. 9. Any other transactions of business in this jurisdiction by an
Restriction of Business Affairs
4.33 Company/s may not conduct any business which may from time to time be
prohibited by the Minister of Finance.
Company/s, Definition Thereof and Application Hereof
4.34 Insurance Company, the term thereof, shall include Title Insurance
Company/s, Casualty Insurance Companies, Life Insurance Company/s, Accident &
Health Insurance Company/s, Surety Company/s, in addition to those other firms
deemed an Insurance Company by the Minister of Finance.
4.35 This Act has been drawn and prepared by order of the House of Elders.
Fees - Collection Thereof
4.36 The Minister of Finance shall possess the authority to charge and
collect fees for the purpose of granting licenses hereunder in addition to
charging other fees necessary to fund the administration of this legislation.
The Minister shall have the authority to set fee rates and to prepare such
necessary fee schedules.
Table of Contents
Insurance Act of 1991
The Republic of New Lemuria
Introduction - Short Title and Commencement
- Authority to Grant Licenses
- Documents to be Provided with Application
- Denial of License and/or Revocation Thereof
- Restriction of Name - "Insurance"
- Authority to Change/Move Locations
- Foreign Exchange Transactions
- Restriction on Change of Control of Insurance Co.
- Diversification of Insurance Company's
- Investment in Subsidiaries
- Unlicensed Transactions/Operations
- Minimum Capital Requirement
- Minimum Liquidity
- Restriction on Dividends
- Affiliated Transactions
Audit and Periodic Filings
- Eligible Auditors
- Requirement of Audited Financial Statements
- Semi-Annual Reports
- Filing Date/s - Reports
- Production of Documents
- Unsuitable Management Personnel
- Significant Shareholders'
- Regulatory Approval of Director Appointment/s
- Execution and Preparation of Filings
- Secrecy and Privacy
- Business Hours of Insurance Company's
- Extended Holiday
- Prosecution of Violations
- Amendment and Alteration of These Statutes
- Voluntary Liquidation
- Regulatory Seizure of Operations and Assets
- Mandatory Liquidation
- Escheatment of Abandoned Property
- Application of the Business Corporation Ordinance
- Application of These Statutes
- Authority Hereof
- Public or Privately Held Status
- Policyholders' Guaranty Fund
- Application of the Securities Act
- Minimum Capital Requirement
- Appeal of Decisions to High Court
- Disclosure to Policyholders
- Securities Underwritings
- Securities Dealings
- Trust Operations
- Investment Advisory Services
- Foreign Offices and Branches
- Administrative Services
- Notification of Wrong Doing
- Domestic and International Insurance
- International Insurance
- Insurance Company's - Permitted Business
- Restriction of Business Affairs
- Insurance Company's
- Preparation Hereof
- Fee's - Collection Thereof
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