Dear Friends,

As you are aware that IRDAI is the Regulator for insurance sector and its main objective is to create a competitive environment in insurance sector, it development ,regulation and protection of policyholders and investors.

In initial stage Government was the appellate authority against orders of IRDAI on certain sections of the Insurance Act, 1938, while appeal can be filed before respective High Courts.

On 23^rd February ,2016 Government has issued rules which provides appeal against decisions of IRDAI to lie with Securities Appellate Tribunal(SAT),set up the SEBI Act, 1992.

Further the Government on the recommendation of the Financial Sector Legislative Reform Commission Report which seeks to bring all financial regulators under judicial oversight of SAT, while converting SAT into Financial Sector Appellate Tribunal (FSAT). 

LET’S CONSIDER SOME OF THE NEW PROVISIONS.

SECTION 3(2C) OF INSURANCE ACT,1938 : Any person aggrieved by the decision of the Authority refusing registration may, within thirty days from the date on which a copy of the decision is received by him, appeal to the Securities Appellate Tribunal.

SECTION 21(2)OF INSURANCE ACT,1938 : The Securities Appellate Tribunal may, on the application of an insurer and after hearing the Authority, cancel any order made by the Authority under clause (d) of sub-section (1) or may direct the acceptance of such a return which the Authority has declined to accept, if the insurer satisfies the Tribunal that the action of the Authority was in the circumstances unreasonable:   Provided that no application under this sub-section shall be entertained unless it is made before the expiration of four months from the date when the Authority made the order or declined to accept the return.

SECTION 33(8) IN THE INSURANCE ACT, 1938: Any insurer or intermediary or insurance intermediary aggrieved by any order made under this section may prefer an appeal to the Securities Appellate Tribunal.

SECTION 37A(4C)– Power of Authority to Prepare Scheme of Amalgamation;  Any member or shareholder aggrieved by the assessment of compensation made by the Authority under sub-section (4A) may within thirty days from the publication of such assessment prefer an appeal to the Securities Appellate Tribunal.

SECTION 110 IN THE INSURANCE ACT, 1938 Appeal to Securities Appellate Tribunal (1) Any person aggrieved-   (a)by an order of the Authority made on and after the commencement of the Insurance Laws (Amendment) Act, 2015, or under this Act, the rules or regulations made thereunder; or   (b)by an order made by the Authority by way of adjudication under this Act, may prefer an appeal to the Securities Appellate Tribunal having jurisdiction in the matter.   (2)Every appeal made under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order made by the Authority is received by him and it shall be in such a form and be accompanied by such fees as may be prescribed:   Provided that the Securities Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.   (3)On receipt of an appeal under sub-section (1), the Securities Appellate Tribunal may, after giving parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, conforming, modifying or setting aside the order appealed against.   (4)The Securities Appellate Tribunal shall make available copy of order made by it to the Authority and parties.   (5)The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of receipt of appeal.   (6)The procedure for filing and disposing of an appeal shall be such as may be prescribed.   (7)The provision contained in section 15U, section 15V, section 15W, section 15Y and section 15Z of the Securities and Exchange Board of India Act, 1992 shall apply to the appeals arising out of the provisions of this Act, as they apply to the appeals under the Securities and Exchange Board of India Act, 1992 (15 of 1992).

IRDAI has framed Insurance (Appeal to Securities Appellate Tribunal) Rules,2016 dated 17^th February,2016  for appeal against orders of IRDAI.

 SALIENT FEATURES OF RULES ARE

RULE 3. Form and procedure of appeal.—

(1) A memorandum of appeal shall be in Form 1 and may be filed in person before the registry of the Appellate Tribunal or sent by registered post addressed to the Registrar.

(2) A memorandum of appeal sent by post shall be deemed to have been presented in the registry on the day it was received in the registry.

RULE 4. Appeal to be in writing.—

(1) Every appeal, application, reply, representation or any document filed before the Appellate Tribunal shall be typewritten, cyclostyled or printed neatly and legibly on one side of good quality paper of foolscap size in double space and separate sheets shall be stitched together and every page shall be consecutively numbered and filed in the manner provided in sub-rule (2).

(2) The appeal under sub-rule (1) shall be presented in five sets in a paper book along with an empty file size envelope bearing full address of the respondent and in case the respondents are more than one, then sufficient number of extra paper books together with empty file size envelope bearing full addresses of each respondent shall be furnished by the appellant.

(3) Every appeal shall be verified by the party as provided in Form-2.

RULE 5. Presentation and scrutiny of memorandum of appeal.—

(1) The Registrar shall endorse on every appeal the date on which it is presented under rule 3 or deemed to have been presented under that rule and shall sign endorsement.

(2) If, on scrutiny, the appeal is found to be in order, it shall be duly registered and given a serial number.

(3) If an appeal on scrutiny is found to be defective and the defect noticed is formal in nature, the Registrar may allow the appellant to rectify the same in his presence and if the said defect is not formal in nature, the Registrar may allow the appellant such time to rectify the defect as he may deem fit and where such appeal has been sent by post and found to be defective, the Registrar may communicate the defects to the appellant and allow the appellant such time to rectify the defect as he may deem fit.

(4) If the appellant fails to rectify the defect within the time allowed in sub-rule (3), the Registrar may, by order, and for reasons to be recorded in writing, decline to register such memorandum of appeal and communicate the order to the appellant within seven days thereof.

(5) An appeal against the order of the Registrar under sub-rule (4) shall be made within fifteen days of receiving of such order to the Presiding Officer concerned in his chamber, whose decision thereon shall be final.

RULE 6. Fee.—

(1) Every memorandum of appeal shall be accompanied with a fee as provided in sub-rule (2) and such fee may be remitted in the form of crossed demand draft drawn on any nationalized bank in favour of “The Registrar, Securities Appellate Tribunal” payable at the station where the registry is located.

(2) The amount of fee payable shall be –

(i) in respect of appeal against an order made by the Authority by way of adjudication under the Act, as provided in the Table below, namely :-

TABLE

Sl. No. (1)                  Amount of penalty imposed (2)                         Amount of fees payable (3)

1.                                Less than Rs. 100000/-                                                    Rs. 5000/-

2.                                More than  Rs. 100000 less than Rs. 5000000/-        Rs. 10000/-

3.                                More than Rs. 50 L                                                             Rs. 10000/- Plus Rs.

5000/- for each of Rs. 1 Lakh maximum Rs. 1.50 L

 (ii) in respect of an appeal against any other order made by the Authority under the Act, or the rules or regulations made thereunder, or under the Insurance Regulatory and Development Authority Act 1999 (41 of 1999), shall be rupees five thousand only.

RULE 7. Contents of memorandum of appeal.—

(1) Every memorandum of appeal filed under rule 3 shall set forth concisely under distinct heads, the grounds of such appeal without any argument or narrative, and such ground shall be numbered consecutively and shall be in the manner provided in sub rule (1) of rule 4.

(2) It shall not be necessary to present separate memorandum of appeal to seek interim order or direction if in the memorandum of appeal, the same is prayed for.

RULE 8. Documents to accompany memorandum of appeal.—

(1) Every memorandum of appeal filed in five sets shall be accompanied with copies of the order, one of which shall be certified copy, against which the appeal is filed.

(2) Where a party is represented by authorised representative, a copy of the authorisation to act as the authorised representative and the written consent thereto by such authorised representative shall be appended to the appeal.

RULE 9. Plural remedies.—A memorandum of appeal shall not seek relief or reliefs therein against more than one order unless the reliefs prayed for are consequential.

RULE 10. Notice of appeal to the respondent.—

(1) A copy of the memorandum of appeal and paper book shall be served by the Registrar on the respondent as soon as they are registered in the registry, by hand delivery, or by Registered Post or Speed Post.

RULE 11. Filing of reply to the appeal and other documents by the respondent.—

(1) The respondent may file five complete sets containing the reply to the appeal along with documents in a paper book form with the registry within one month of the date of service of the notice on him of the filing of the memorandum of appeal.

(2) Every reply, application or written representation filed before the Appellate Tribunal shall be verified by the party as provided in Form-2.

 (3) A copy of every application, reply, document or written material filed by the respondent before the Appellate Tribunal shall be forthwith served on the appellant, by the respondent.

(4) The Appellate Tribunal may, in its discretion, on application by the respondent allow the filing of reply referred to in sub-rule (1) after the expiry of the period referred to therein.

RULE  12. Date of hearing to be notified.—The Appellate Tribunal shall notify the parties the date of hearing of the appeal in such manner as the Presiding Officer may by general or special order direct.

RULE 13. Hearing of appeal.—

(1) On the day fixed or on any other day to which the hearing may be adjourned, the appellant shall be heard in support of the appeal and the Appellate Tribunal shall, then, if necessary, hear the respondent Authority or its authorized representative against the appeal, and in such case the appellant shall be entitled to reply and during the course of the hearing of appeal, the written arguments could be supplemented by time-bound oral arguments.

(2) In case the appellant does not appear in person or through an authorized representative when the appeal is called for hearing, the Appellate Tribunal may dispose of the appeal on merits: Provided that where an appeal has been disposed of as provided above and if the appellant appears afterwards and satisfies the Appellate Tribunal that there was sufficient cause for his non-appearance when the appeal was called for hearing, the Securities Appellate Tribunal may, by order, set aside the ex-parte order and restore the appeal.

RULE 14. Dress regulations for the representatives of the parties.—

(1) Every authorized representative, other than a relative or regular employee of the party shall appear before the Appellate Tribunal in his professional dress if any, and if there is no such dress, a male, in a suit or buttoned-up coat over a pant or national dress that is a long buttoned up coat on dhoti or churidar pyjama or in any other sober dress, and a female, in a coat over white or any other sober coloured saree, or in any other sober dress.

(2) All other persons appearing before the Appellate Tribunal shall be properly dressed in sober attire.

RULE 15. Order to be signed and dated.—

(1) Every order of the Appellate Tribunal shall be signed and dated by the Presiding Officer and other Members constituting the Bench.

(2) The Appellate Tribunal shall have powers to pass interim orders or injunctions, subject to reasons to be recorded in writing, which it considers necessary in the interest of justice.

(3) The order shall be pronounced in the sitting of the Appellate Tribunal by the Presiding Officer or by the Member if so authorised.

RULE 16. Publication of orders.—The orders of the Appellate Tribunal, as are deemed fit for publication in any authoritative report or the press may be released for such publication on such terms and conditions as the Presiding Officer may lay down.

RULE 17. Communication of orders.—A certified copy of every order passed by the Appellate Tribunal shall be communicated to the Authority and to the parties.

RULE 18. Orders and directions in certain cases.—The Appellate Tribunal may make such orders or give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice.

DISCLAIMER: the article presented here is only for sharing information with readers. In case of necessity do consult with professionals.

AUTHOUR: FCS Deepak P. Singh [ B.Sc. FCS, LLB, AIII, CIAFP]/cs.deepakpsingh@gmail.com

Sources: https://thc.nic.in/Central%20Governmental%20Rules/Insurance%20(Appeal%20to%20Securities%20Appellate%20Tribunal)%20Rules,%202016..pdf