Section 27A of the Insurance Act, 1938 defines “Controlled Fund” for the purpose of investment of the funds of a life insurance company as under“Controlled Fund” means –

  (a) in case of any insurer specified in sub-clause (a) (ii) or sub-clause (b) of clause (9) of section 2 and carrying on life insurance business –

         i. all his funds, if he carries on no other class of insurance business;
         ii. all the funds appertaining to his life insurance business if he carries on some other class of insurance business also; and

  (b) in the case of any other insurer carrying on life insurance business –

         i. all his funds in India, if he carries on no other class of insurance business;
         ii. all the funds in India appertaining to his life insurance business if he carries on some other class of insurance business also;

but does not include any fund or portion thereof in respect of which the Authority is satisfied that such fund or portion thereof as the case may be, is regulated by the law of any country outside India or in respect of which the Authority is satisfied that it would not be in the interest of the insurer to apply the provisions of this section.

Thus, controlled fund for a life insurance companies will include traditional and unit linked life assurance funds (group, individual), annuity funds and shareholders fund.

All life insurers are hereby directed to furnish the detail of the Controlled Fund in the format attached (download .pdf) herewith. The said format will form part of the annual financial statements of life insurance companies.

This circular comes into effect from the financial year 2009-10.

Sd/-
(A Giridhar)
Executive Director