42. Licensing of insurance agents. 2[
The Controller or an officer authorised by him in this behalf shall, in the prescribed manner and on payment of the prescribed fee which shall not be more than 3[ twenty five rupees], issue to any person making an application in the prescribed manner a licence to act as an insurance agent for the purpose of soliciting or procuring insurance business: Provided that--
in the case of an individual, he does not suffer from any of the disqualifications mentioned in sub- section (4), and
in the case of a company or firm, any of its directors or partners does not suffer from any of the said disqualifications, and the company or firm was immediately before the 1st day of August, 1957 , holding a certificate issued under section 42A entitling it to act as a principal agent for the purpose of procuring insurance business: Provided further that in the case of a company or firm the licence under this sub- section shall be issued only for the purpose of soliciting or procuring general insurance business.]
A licence issued under this section shall entitle the holder to act as an insurance agent for any 4[ insurer.
5[ A licence issued under this section, after the commencement of the Insurance (Amendment) Act, 1950 (47 of 1950 ), shall remain in force for a period of three years only from the date of issue, but shall, 6[ if the applicant, being an individual does not, or being a company or firm any of its directors or partners does not, suffer from any of the disqualifications mentioned in clauses (b), (c) and (d) of sub- section (4)] and the application for renewal of the licence reaches the issuing authority at least thirty days before the date on which the licence ceases to remain in force, be renewed for
a period of three years at any one time on payment of the prescribed fee which shall not be more than 1[ twenty- five rupees], and an additional fee of a prescribed amount, not exceeding 2[ ten rupees] by way of penalty, if the application for renewal of the licence does not reach the issuing authority at least thirty days before the date on which the licence ceases to remain in force.
No application for the renewal of a licence under this section shall be entertained if the application does not reach the issuing authority before the licence ceases to remain in force: Provided that the Controller may, if satisfied that undue hardship would be caused otherwise, accept any application in contravention of this sub- section on payment by the applicant of a penalty of 3[ seventy- five rupees].]
The disqualifications above referred to shall be the following:--
that the person is a minor;
that he is found to be of unsound mind by a Court of competent jurisdiction;
that he has been found guilty of criminal misappropriation or criminal breach of trust or cheating 4[ or forgery or an abetment of or attempt to commit any such offence] by a Court of competent jurisdiction:
1[ Provided that, where at least five years have elapsed since the completion of the sentence imposed on any person in respect of any such offence, the 2[ Controller] shall ordinarily declare in respect of such person that his conviction shall cease to operate as a disqualification under this clause;]
that in the course of any judicial proceeding relating to any policy of insurance or the winding up of an insurance company or in the course of an investigation of the affairs of an insurer it has been found that he has been guilty of or has knowingly participated in or connived at any fraud, dishonesty or misrepresentation 3[ against an insurer or an insured].
4[ If it be found that an insurance agent being an individual is, or being a company or firm contains a director or partner who is, suffering from any of the disqualifications mentioned in sub- section (4), then, without prejudice to any other penalty to which he may be liable, the Controller shall, and if the insurance agent has knowingly contravened any of the provisions of this Act may, cancel the licence issued to the agent under this section.]
1[ The authority which issued any licence under this section may issue a duplicate licence to replace a licence lost, destroyed or mutilated on payment of the prescribed fee which shall not be more than one rupee.]
5[ Any person who acts as an insurance agent without holding a licence issued under this section to act as such shall be punishable with fine which may extend to fifty rupees, and any insurer or any person acting on behalf of an insurer, who appoints as an insurance agent any person not licensed to act as such or transacts any insurance business in India through any such person, shall be punishable with fine which may extend to one hundred rupees.
Where the person contravening sub- section (7) is a company or a firm, then, without prejudice to any other proceedings which may be taken against the company or firm, every director, manager, secretary or other officer of the company, and every partner of the
firm who is knowingly a party to such contravention shall be punishable with fine which may extend to fifty rupees.]