52. Prohibition of business of dividing principle
52. Prohibition of business on dividing principle. — No insurer shall commence any business upon the dividing principle, that is to say, on the principle that the benefit secured by a policy is not fixed but depends either wholly or partly on the result of a distribution of certain sums amongst policies becoming claims within certain time-limits, or on the principle that the premiums payable by a policyholder depend wholly or partly on the number of policies becoming claims within certain timelimits:
Provided that nothing in this section shall be deemed to prevent an insurer from allocating bonuses to holders of policies of life insurance as a result of a periodical actuarial valuation either as reversionary additions to the sums insured or as immediate cash bonuses or otherwise.
Amendment notes (1)
- Subs w.e.f. 26-12-2014 . Subs. by Act 5 of 2015, s. 59, for sections 52 and 52A (w.e.f. 26-12-2014).