FIRE AND MARINE INSURANCE COMPANIES DEPOSIT ORDINANCE, 1917

FIRE AND MARINE INSURANCE COMPANIES DEPOSIT ORDINANCE, 1917

No. 32 of 1917.

An Ordinance to provide for the making of deposits by
certain persons, firms and companies carrying on fire
or marine insurance business.

[28th December, 1917.]

1. This Ordinance may be cited as the Fire and Marine
Insurance Companies Deposit Ordinance, 1917.

2.-(1) This Ordinance shall apply to all persons and
bodies of persons, whether incorporate or unincorporate,
whether established before or after the commencement of
this Ordinance, and whether established within or without
the Colony, who carry on any fire or marine insurance
business.

(2) Such persons and bodies of persons are hereinafter
referred to as insurance companies.

3. For the purposes of this Ordinance, a person or body of
persons shall be deemed to carry on fire or marine insurince
business within the Colony in the following cases

(a) if he or it opens or maintains an office or agency with-
in the Colony for the purpose of any fire or marine insurance
business, or within the Colony holds out himself or itself as
prepared to transact any such business;

(b) if, either directly or through an agent, he or it receives
within the Colony any application for a fire or marine
insurance policy, or receives within the Colony any premium
or other payment in respect of any fire or marine insurance
policy, whether such policy is or is not issued or payable
within the Colony, and whether he or it has or has not an
office within the Colony; or

(c) if he or it -undertakes or offers to undertake any fire or
marine risk within the Colony.

Provided that no person or body of persons shall be deemed
to carry on marine insurance business within the Colony by
reason only of the fact that such person or body of persons
acts as an agent for the purpose of settling claims under
contracts of marine insurance entered into wholly outside
the Colony in respect of goods consigned to the Colony.





4.-(1) No company which has amongst its objects the
carrying on of fire or marine insurance business, or of both
fire and marine insurance business, whether within or with-
out the Colony, shall hereafter be registered until such
deposit or deposits as would be required under this Ordi-
nance if the company was actually incorporated, and was
carrying on fire or marine insurance business, or both fire
and marine insurance business, as the case may be, within
the Colony, shall have been made.

(2) The deposit or deposits may be made by the sub-
scribers of the memorandum of association of the company,
or any of them, in the name of the proposed company, and
-upon the incorporation of the company shall be deemed to
have been made by, and to be part of the assets of, the
company.

(3) Every such deposit shall be maintained by the com-
pany whether it carries on any business within the Colony
or not.

5.-(1) Every insurance company which carries on
business within the Colony shall deposit and keep deposited
with the Registrar of Ginpanies the sum of one hundred
thousand dollars or securities to that value.

(2) At least one-half in value of the said deposit shall
consist of securities of the following nature:-

(a) fixed deposits in banks approved by the Governor in
Council ;

(b) British, Indian, or Colonial Government bonds or
stocks; or
(c) securities authorised by law for the time being in the
United Kingdom for the investment of trust funds.

(3) Every such deposit shall be held by the Registrar of
Companies in trust for the insurance company which shall
have made the deposit in question.
(4) If an insurance company carries on within the Colony
both fire and marine insurance business, a separate sum if
one hundred thousand dollars, or securities to that value,
Shall be deposited under this section in respect of each class
of business.





(5) Subject to the provisions of this Ordinance and to any
regulations for the time being in force thereunder, the
Governor in Council shall be the sole judge of the nature of
the securities to be accepted and of the value of any securities
deposited or proposed to be deposited under this Ordinance.
(6) Insurance companies carrying on business in the
Colony at the date of the commencement of this Ordinance
shall have a period of six months from such commencement
to make such deposit.

6.-(1) Every insurance company which carries on busi-
ness within the Colony shall at the expiration of each financial
year prepare and cause to be printed-
(a) a revenue account for the year in Form No. 1 in the
Second Schedule;
(b) a profit and loss account in Form No. 2 in the Second
Schedule; and

(c) a balance sheet in Form No. 3 in the Second Schedule.

(2) Every such account and balance sheet shall, if the
Governor in Council so orders, be audited by an auditor
approved by the Governor in Council.

(3) A copy of every such account and balance sheet shall
be filed with the Registrar of Companies within six months
after the close of the period to which the account or balance
sheet relates, and every such copy so filed shall be signed
by the following persons:-

(a) in all cases, by the auditor referred to in sub-section
(2) ;

(b) if the insurance company is a corporate body, by the
secretary or principal officer and two directors of the company,
such directors to include the chairman, and the managing
director if any;

(c) if the insurance company is not a corporate body, by
the three principal officers of the insurance company.

(4) If any question arises as to whether any particular
persons come within the descriptions referred to in sub-section

(3), it shall be lawful for the Registrar of Companies to direct
by what persons the copies to be filed shall be signed.

As amended by Law Rev. Ord., 1924.





(5) With every account and balance sheet so filed there
shall be filed with the Registrar of Companies a copy of
every report on the affairs of the insurance company sub-
mitted to the shareholders or policy holders of the insurance
company in respect of the financial year to which such
account or balance sheet relates, and a copy of every report
or letter which is referred to in any auditor's certificate
appearing on any account or balance sheet so filed, and every
such copy so filed shall be signed in the same manner as is
provided in the case of accounts and balance sheets by sub-
section (3).

7.-(1) It shall be lawful for the Governor in Council to
make regulations prescribing-
(a) the manner in which, and the conditions tinder which,
deposits shall be made, maintained, substituted, transferred,
withdrawn, or made available for the liabilities of the insur-
ance company;

(b) the manner of dealing with deposits generally;

(c) the nature. of the securities to be accepted, and the
manner of valuation of securities deposited or proposed to
be deposited;

(d) the filing of statements and other documents by
insurance companies, the auditing of the accounts of insurance
companies, and the actuarial examination of the assets and
liabilities and financial condition Of insurance companies;
and
(e) the fees to be payable in respect of acts done or
documents filed or registered under this Ordinance.
(2) The regulations contained in the First Schedule shall
be in force until rescinded or amended.

8. If any statement or other document required under
this Ordinance is false in any particular to the knowledge
of any person who signs it, or who files it or publishes it
in any other manner, that person shall be guilty of a
misdemeanor and shall be liable upon conviction on indict-
ment to fine and imprisonment or upon summary conviction
to a fine not exceeding five hundred dollars.

As amended by Law Rev. Ord., 1924.





9. If any audit or actuarial examination is ordered or
prescribed under this Ordinance, and any director, manager,
secretary, or other officer or agent of the insurance company
fails to produce to the auditor or examiner on demand any
account book or other document relating to the insurance.
company which it is in his power to produce or procure,
or obstructs such audit or examination in any other way, he
shall be guilty of a misdemeanor and shall be liable upon
conviction on indictment to fine and imprisonment or upon
summary conviction to a fine not exceeding five hundred
dollars.

10. Every insurance company which makes default in
complying with any of the requirements of this Ordinance
shall be liable to a penalty not exceeding one thousand
dollars, or, in the case of a continuing default, to a penalty
not exceeding five hundred dollars for every day- during
which the default continues, and every director, manager,
or secretary, or other officer or agent of the insurance
company, who is knowingly a party to the default shall be
liable to a like penalty; and, in the case of an insurance
company registered or existing under the Companies
Ordinance, 1911, if default continues for a period of
three months after notice of default by the Registrar of
Companies (which notice shall be published in one or inore
newspapers as the Registrar of Companies may, upon the
application of one or more policy holders or shareholders,
direct), the default shall be a ground on which the court
may order the winding-up of the insurance company, in
accordance with the Companies Ordinance, 1911.

11.-(1) Every insurance company which proves to the
satisfaction of the Registrar of Companies that it is main-
taining a deposit in respect of insurance business under any
enactment in force in the United Kingdom, or in respect of
fire or marine insurance business under any enactment in
force in any British possession or protectorate, shall be
exempt to the extent of such deposit from making a de-posit
under this Ordinance.

(2) For the purposes of this section, one pound sterling,
or five gold dollars, or ten Straits Settlements dollars, or

As amended by law rev. ord., 1924.





fifteen rupees, shall be deemed to be equivalent to ten
Hongkong dollars. '

FIRST SCHEDULE. [s. 7.]

REGULATIONS.

Deposit.

1. One-half of the deposit may be in approved leasehold property in the
Colony of Hongkong or in other approved securities.


2. If the insurance company proposes to make any part of the deposit
in leasehold property or other securities, it shall submit a list of such
leasehold property or securities to the Registrar of Companies for the
approval of the Governor in Council.

3. The value of any securities other than leasehold property shall be the
market value of the securities on the day on which they were submitted to
the Registrar of Companies, and the Governor in Council shall be the sole
judge of what the market value was in any particular case.

4. Ally part of the deposit which consists of leasehold property shall
take the form of a legal mortgage to the Registrar of Companies.


5. If any part of the deposit consists of securities other than leasehold
property, such document or documents shall be executed by or on behalf
of the insurance company as will either transfer the legal ownership to
the Registrar of Companies or as will enable him to complete such trans-
ference without any further concurrence on the part of any other person.

6. If at any time the Registrar of Companies is of opinion that any
leasehold property or other securities have fallen below the value at which
they were accepted, he shall call upon the insurance company to make a
further deposit in order to make up the deficiency.

7. If the insurance company is dissatisfied with any such requisition, it
may appeal to the Governor in Council who shall thereupon determine
whether any further deposit is necessary, and if so to what amount.

As amended by Law Rev. Ord., 1924.





8. Subject to the provisions of section 5 (1) of the Fire and Marine
Insurance Companies Deposit Ordinance, 1917, an insurance company shall
he entitled at any time to substitute approved securities for any part of its
existing deposit, and the provisions of these regulations with regard to the
original deposit shall apply mulatis mutandis to any such substituted
deposit.

9. If the deposit is partly in the form of leasehold property, such
property shall be insured in the name of the Registrar of Companies,
against the risk of loss by fire and typhoon, in such office or offices as the
Registrar of Companies may direct, for the full insurable value thereof.
Such property shall not be insured or re-insured with the insurauce
company makirg the deposit.

Fees.

1. All fees prescribed by these regulations shall be paid to the Registrar

of Companies by means of adhesive stamps.

2. There shall be payable ou the filing of every document with the
Registrar of Companies a fee of three dollars.

3. There shall bc payable in respect of any deposit or substituted
deposit which takes the forin of leasehold property or other securities a fee
of ten cents for every hundred dollar

4. There shall be payable for each certificate
issued by the Registrar of Companies a fee of five dollars.

5. There shall be payable for each copy signed by the Registrar of
Companies as being a true copy of a document filed with him a fee of forty
cents per folio of seventy-two words.

6. There shall be payable for cach search relating to an insurance corn-
pany a fee of one dollar.







paid in respect of re-insurances of the insurance company's risks.


and taken credit for in the balance sheet as an asset, the sum so
deducted to be separately shown in the above account.





FIRE AND MARINE INSURANCE COMPANIES DEPOSIT

NO. 32 OF 1917 2499







These items are included in the corresponding items in Form No. 1.


separate fund for which separate investments are made.


at, and a certificate must be appended signed by the same persons as
sign the balance sheet, to the effect that in their belief the assets set
forth in the balance sheet are in the aggregate fully of the value stated
therein, less any investment reserve fund taken into account.


business and does not keep its fire and marine insurance funds distinct,
separate figures need not he given for the two classes of funds or
claims.
[Originally No. 32 of 1917. Law Rev. Ord., 1924.] Short title. Application of Ordinance. 9 Edw. 7, c. 49, s. 1. Meaning of carrying on business within the Colony. New companies. 9 Edw. 7, c. 49, s. 2(3). Deposits. 9 Edw. 7, c. 49, s. 2. [cf. No. 11 of 1907, ss. 3(1), (5).] Accounts and balance sheets to be prepared and filed. Second Schedule. Forms Nos. 1, 2, 3. Regulations. First Schedule. False statements, and documents. 9 Edw. 7, c. 49, s. 24. Obstructing audit or examination. Penalties for non-compliance with Ordinance. 9 Edw. 7, c. 49, s. 23. Exemptions. [First Schedule contd.] [Second Schedule contd.]

[Originally No. 32 of 1917. Law Rev. Ord., 1924.] Short title. Application of Ordinance. 9 Edw. 7, c. 49, s. 1. Meaning of carrying on business within the Colony. New companies. 9 Edw. 7, c. 49, s. 2(3). Deposits. 9 Edw. 7, c. 49, s. 2. [cf. No. 11 of 1907, ss. 3(1), (5).] Accounts and balance sheets to be prepared and filed. Second Schedule. Forms Nos. 1, 2, 3. Regulations. First Schedule. False statements, and documents. 9 Edw. 7, c. 49, s. 24. Obstructing audit or examination. Penalties for non-compliance with Ordinance. 9 Edw. 7, c. 49, s. 23. Exemptions. [First Schedule contd.] [Second Schedule contd.]

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