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

* As amended by Law Rev. Ord., 1939, Supp. Sched.
The provision~ of this Ordinance are not. affected by the Companies
Ordinance, 1932 : see No. 39 of 1932, s. 356.





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 insurance
business within the Colony in the following cases-'

(a) if he or it opens or maintains an office or agency within
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 ot 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 without the
Colony, shall hereafter be registered until such deposit or
deposits as would be required under this Ordinance if the com-
pany 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, has been made.

As amended by Law Rev. Ord., 1939, Supp. Sched.





(2) The deposit or deposits may be made by the subscribers
of the memorandum of association of the company or any of
them in the name of the proposed company and upon the incor-
poration 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 company
whether it carries on any busines's 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 Companies 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 authorized 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 has made
the deposit in question.

(4) If an insurance company carries on within the Colony
both fire and marine insurance business, a separate sum of 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) For the purposes of this Ordinance the office of Registrar
of Companies shall have perpetual succession. All moneys and

As amended by No. 14 of 1930 [17.10.30].
As amended by Law Rev. Ord., 1939, Supp. Sched.





securities which are or may be deposited with the Registrar of
Companies. under this Ordinance shall be deemed to be vested
in the Registrar of Companies for the time being, and the person
for the time being performing the duties of the office shall have
power to deal with the legal estate without any further transfer
or conveyance.

6.-(1) Every insurance company which carries on business
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 die 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.





(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 submitted to the share-
holders 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 under which
deposits shall be made, maintained, substituted, transferred,
withdrawn or made available for the liabilities of the insurance
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 insur-
ance companies, the auditing of the accounts of insurance
companies and the actuarial examination of the assets and
liabilities and financial conditions of insurance companies; and

(e) the fees to be payable in respect of acts done or docu-
ments filed or registered under this Ordinance.

(2) The regulations 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 summary conviction to a fine not exceeding five
hundred dollars.

As amended by Law Rev. Ord., 1939, Supp. Sched.





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 dernand 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 com-
plying 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 con-
tinues, 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 any
Ordinance relating to the registration of companies, 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 more newspapers as the Registrar of Companies may,
upon the applicaition of one or more policy holders or share-
holders, 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., 1932.

11-(1) Every insurance company which proves to the
satisfaction of the Registrar of Companies that it is maintaining
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 tinder any enactment in force in any British
possession or protectorate, shall be exempt to the extent of such
deposit from making a deposit under this Ordinance.

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

f As amended by Laiv Rev. Ord., 1939, Supp. Sched.





rupees, shall be deerned to be equivalent to ten Hong Kong
dollars.

FIRST SCHEDULE. [s. 7]

REGULATIONS.

Deposit.

1. One-half of the deposit may be in approved leasehold property
in the Colony of Hong Kong 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 Com-
panies for the approval of the Governor in Council.

3. The value of tiny 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. Any 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 transference 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.

17. If the insurance company is dissatisfied with any such requisi-
tion, it may appeal to the Governor in Council who shall thereupon





determine whether any further deposit is necessary, and if so to what
amount.

8. Subject to the provisions of section 6 (1) of the Fire and
Marine Insurance Companies Deposit Ordinance, 1917, an insurance.
company shall be entitled at any time to substitute approved securities
for any part of its existing deposit, and the provisions of these regula-
tions with regard to the original deposit shall apply mutatis 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
insurance company making 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 on the filing 'of every document with
the Registrar of Companies a fee of three dollars.

3. There shall be payable in respect of any deposit or substituted
deposit which takes the form of leasehold property or other securities
a fee of ten cents for every hundred dollars of accepted value.

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 fo rty cents per folio of seventy-two words.

6. There shall be payable for each search relating to an insurance
company a fee of one dollar.





SECOND SCHEDULE.

FORM NO. 1. [s. 6(a).]

Revenue account of the for the year ending ,19
in. respect of fire (and/or marine) insurance business.


Note I-Items in this account to be the net amounts after deduction of the
amounts paid in respect of reinsurances of the insurance com-
pany's risks.

Note 2.-If any sum has been deducted from the expenses of management
account and taken credit for in the balance sheet as an asset, the
sum so deducted to be separately shown in the above account,





FORm No. 2. [s.6 (1) (b)]

Profit and loss account of the for the year ending 19





FORM No. 3. [s. 6 (1)(c).]

Balance sheet of the on the 19


These items are included in the corresponding items in Form No. 1.
Note 1-A balance sheet in the above form must,be rendered in respect of
each separate fund for which separate investments are made.
Note 2-The balance sheet must state how the values of the securities are
arrived 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.
Note 3-If the insurance company carries on both fire and marine insurance
business and does not keep its fire and marine insurance funds
distinct, separate figures need not be given for the two classes of
funds or claims.
[Originally No. 32 of 1917. No. 14 of 1930. Law Rev. Ord., 1939.] 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. Accounts and balance sheets to be prepared and filed. Second Schedule. Form Nos. 1, 2, 3. Regulations. [cf. No. 39 of 1932., s. 130.] 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. Ordinacne No. 39 of 1932. Exemptions. [First Schedule contd.] [Second Schedule contd.] [Second Schedule contd.]

[Originally No. 32 of 1917. No. 14 of 1930. Law Rev. Ord., 1939.] 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. Accounts and balance sheets to be prepared and filed. Second Schedule. Form Nos. 1, 2, 3. Regulations. [cf. No. 39 of 1932., s. 130.] 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. Ordinacne No. 39 of 1932. Exemptions. [First Schedule contd.] [Second Schedule contd.] [Second Schedule contd.]

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