FIRE AND MARINE INSURANCE COMPANIES DEPOSIT ORDINANCE

FIRE AND MARINE INSURANCE COMPANIES DEPOSIT ORDINANCE

CHAPTER 34.

FIRE AND MARINE INSURANCE COMPANIES
DEPOSIT.

To provide for the mahing 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.

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 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 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 without
the Colony, shall hereafter be registered until such deposit
or deposits as would be required under this Ordinance 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,
has been made.

(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 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 company
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
Companies the sum of one hundred thousand dollars or securities to
that value.

(2) The deposit shall consist of securities of the following nature

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

(b)stocks, funds or securities, other than the security of a
charge on land by way of legal mortgage or otherwise,
authorized by the Trustee Act, 1925;

(c) any Government securities of the Colony.

(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 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 aiid
cause to be printed-

(a)a revenue account for the year in Form 1 in the Schedule;

(b)a profit and loss account in Form 2 in the Schedule; and

(c) a balance sheet in Form 3 in the 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 subsection

(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 subsection (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 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 subsection (3).

7. The Governor in Council may by regulations prescribe or
provide for-

(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;

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

(d)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 conditions of insurance companies;
and

(e)fees to be payable in respect of acts done or documents filed
or registered under this Ordinance.

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 of two thousand dollars.





9. If any audit or actuarial examination is ordered or prescribed
undet this Ordinance, aiid 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 of two thousand dollars.

10. Any insurance company which makes default in complying
with any of the requirements of this Ordinance shall be liable to a
penalty of two thousand dollars, or in the case of a continuing default
to a penalty of 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 any Ordinance relating
to the registration of companies, if default continues for a period of
three montihs 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 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.

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 under 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 rupees, shall
be deemed to be equivalent to ten Hong Kong dollars.





SCHEDULE.

FORM 1. [s. 6 (1) (a).]

Revenue account of the for the year ending 19

in respect of fire (and/or Marine) insurance busines.


Note 1.-Items in this account to be the net amounts after deduction of the
amounts paid in respect of reinsurances of the insurance company's
risks.
Note 2.-lf 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 2. [s. 6 (1) (b).]

Profit and loss account of the for the year ending , 19





FORM 3. 6 (1)

Balance sheet of the on the 19


These items are included in the corresponding items in Form 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 e1Tect 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 32 of 1917. Fraser 32 of 1917. 24 of 1940. 22 of 1950. Short title. Application of Ordinance. 9 Edw. 7, c. 49, s. 1. Meaning of carrying on business within the Colony. [s. 2 cont.] New companies. 9 Edw. 7, c. 49. S. 2 (3). Deposits. 9 Edw. 7, c. 49 s. 2. 24 of 1940, s. 2. (15 geo. 5, c. 19). Accounts and balance sheets to be prepared and filed. Schedule. Forms Nos. 1, 2, 3. [s. 6 cont.] Regulations. False statements and documents. 9 Edw. 7, c. 49, s. 24. 22 of 1950, Schedule. Obstructing audit or examination. 22 of 1950, Schedule. Penalties for non-compliance with Ordinance. 9 Edw. 7, c. 49, s. 23. 22 of 1950, Schedule. (Cap. 32.) Exemptions. [s. 6 (1) (a).] [s. 6 (1) (b).] [s. 6 (1) (c).]

Originally 32 of 1917. Fraser 32 of 1917. 24 of 1940. 22 of 1950. Short title. Application of Ordinance. 9 Edw. 7, c. 49, s. 1. Meaning of carrying on business within the Colony. [s. 2 cont.] New companies. 9 Edw. 7, c. 49. S. 2 (3). Deposits. 9 Edw. 7, c. 49 s. 2. 24 of 1940, s. 2. (15 geo. 5, c. 19). Accounts and balance sheets to be prepared and filed. Schedule. Forms Nos. 1, 2, 3. [s. 6 cont.] Regulations. False statements and documents. 9 Edw. 7, c. 49, s. 24. 22 of 1950, Schedule. Obstructing audit or examination. 22 of 1950, Schedule. Penalties for non-compliance with Ordinance. 9 Edw. 7, c. 49, s. 23. 22 of 1950, Schedule. (Cap. 32.) Exemptions. [s. 6 (1) (a).] [s. 6 (1) (b).] [s. 6 (1) (c).]

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