Section 22: Remedial measures

22. Remedial measures (1) Where the solvency margin of an insurer is less than that required to be maintained, or the insurer is otherwise in contravention of section 15 or of the solvency rules, the insurer shall not— (a) without the written approval of the Commission, assume any new risks of any kind, or underwrite or renew any insurance policy; (b) declare or distribute any bonus or dividend to its shareholders; (c) in the case of an insurer organised as a foreign company, remit any money out of Mauritius in the form of profits. I15 – 21 [Issue 1] Insurance Act (2) (a) Subject to paragraph (b), no insurer shall declare or distribute any bonus or dividend to its shareholders, or remit any profits out of Mauritius where the declaration or distribution, or the transfer of money out of Mauritius, as the case may be, results or is likely to result in reducing the solvency margin to less than that required to be maintained. (b) An insurer may declare or distribute a bonus or dividend, or emit a profit as specified in paragraph (a) where the actuary has certified that, in so doing, the insurer shall remain in a financially sound position in accordance with section 14 (1), taking due account of the proposed operations of the insurer in the 12 months following the proposed declaration, distribution or transfer. (3) Where the solvency margin of an insurer is less than that required to be maintained, the insurer shall make good the deficiency without delay. (4) Where the Chief Executive is informed by an officer as required under section 14 (3), or where the Chief Executive reasonably suspects, that an insurer is failing to comply, or is likely to fail to comply, with section 14, the Chief Executive may direct the insurer to furnish him with— (a) information relating to the nature and causes of the failure, or to such matters as may in the opinion of the Chief Executive, lead to the likely failure; (b) a report by the actuary of the insurer on its state of solvency or on such matters as may be requested by the Chief Executive; (c) a plan acceptable to the Chief Executive for restoring the insurer’s business to a financially sound position. (5) Where the Chief Executive has received the information or the plan referred to in subsection (4), he may, without prejudice to any of his other powers under this Act— (a) direct the insurer to adopt the plan or course of action proposed or such other course of action acceptable to the Chief Executive that will bring the insurer into compliance with, or prevent it from being in contravention of, section 14; (b) authorise any modification of the course of action referred to in paragraph (a) which the Chief Executive deems appropriate; (c) where it is reasonably necessary in the interests of the policy holders of the insurer, at any time and notwithstanding any step already taken by the Chief Executive in accordance with paragraphs (a) and (b), take such measures as are appropriate including, issuing a direction, appointing an administrator or conservator, revoking the licence of the insurer or applying for the winding up of the insurer. (6) In considering any decision under this section, the Chief Executive may consult the auditor and actuary of the insurer. [Issue 1] I15 – 22 Revised Laws of Mauritius (7) Where he is satisfied that there is reasonable ground to suspect that the insurer does not meet the required solvency margin, or otherwise fails to comply with section 14, a Judge in Chambers may, on appl inting an administrator or conservator, revoking the licence of the insurer or applying for the winding up of the insurer. (6) In considering any decision under this section, the Chief Executive may consult the auditor and actuary of the insurer. [Issue 1] I15 – 22 Revised Laws of Mauritius (7) Where he is satisfied that there is reasonable ground to suspect that the insurer does not meet the required solvency margin, or otherwise fails to comply with section 14, a Judge in Chambers may, on application by the Commission— (a) make an order restraining an insurer from contravening this section or a direction of the Chief Executive under this section; (b) order compliance with a direction made by the Chief Executive in enforcing the provisions of this Part; (c) make such other order as he may think fit. (8) An insurer shall be deemed to be unable to pay its debts where it fails for a continuous period of 3 months to meet the required solvency margin. (9) Where an insurer contravenes subsection (2), any person who, being at the time of the resolution a director of the insurer, voted for or consented to a resolution— (a) authorising payment or distribution of a dividend or bonus; (b) consenting to a remission of profits outside Mauritius, shall be jointly and severally liable to restore to the insurer any amount so paid, distributed or remitted and not otherwise recovered by the insurer. [S. 22 amended by s. 12 of Act 16 of 2007 w.e.f. 28 September 2007.]