Section 8: Restriction on composite insurance business

8. Restriction on composite insurance business (1) Subject to the other provisions of this section, no insurer other than a professional reinsurer shall carry on both long term and general insurance business. (2) The Commission shall not grant a licence in respect of— (a) long term insurance business to an insurer already engaging, or a person who has applied to be licensed to engage, in general insurance business; or (b) general insurance business to an insurer already engaging, or a person who has applied to be licensed to engage, in long term insurance business. (3) Notwithstanding subsections (1) and (2), the Commission may authorise an insurer to carry on both long term insurance business and general insurance business where— (a) either the long term insurance business or the general insurance business is restricted exclusively to reinsurance; (b) one class of insurance business is or will be incidental, in terms of premium income, to the principal insurance business of the insurer. (4) Where authorisation is granted under subsection (3), the insurer shall manage its long term insurance and general insurance business separately in such manner as may be determined by the Commission. (5) A person who contravenes this section shall commit an offence and shall, on conviction, be liable to a fine not exceeding 2 million rupees and to imprisonment for a term not exceeding 8 years. I15 – 13 [Issue 1] Insurance Act