(1)Every insurer shall re-insure with Indian re-insurers such percentage of the sum assured on each policy as may be specified by thethe Authority with the previous approval of the Central Government under sub-section (2).(2)For the purposes of sub-section (1),the Authority may, by notification in the Official Gazette,--(a)specify the percentage of the sum assured on each policy to be re-insured and different percentages may be specified for different classes of insurance:Provided that no percentage so specified shall exceed thirty per cent. of the sum assured on such policy; and(b)also specify the proportions in which the said percentage shall be allocated among the Indian re-insurers.(3)Notwithstanding anything contained in sub-section (1), an insurer carrying on fire insurance business in India may, in lieu of re-insuring the percentage specified under sub-section (2) of the sum assured on each policy in respect of such business, re-insure with Indian re-insurers such amount out of the first surplus in respect of that business as he thinks fit, so however that, the aggregate amount of the premiums payable by hi m on such re-insurance in any year is not less than the said percentage of the premium income (without taking into account premiums on re-insurance ceded or accepted) in respect of such business during that year.Explanation.-- For the purposes of this sub-section, the year 1961 shall be deemed to me an the period from 1 st April to-the 31 st December of that year.(4)A notification under sub-section (2) may also specify the terms and conditions in respect of any business of re-insurance required to be transacted under this section and such terms and conditions shall be binding on Indian re-insurers and other insurers.(5)No notification under sub-section (2) shall be issued except after consultation with the Advisory Committee constituted under section 101B .(6)Every notification issued under this section shall be laid before each House of Parliament, as soon as may be, after it is made.(7)For the removal of doubts, it is hereby declared that nothing in sub-section (1) shall be construed as preventing an insurer from re-insuring with any Indian re-insurer or other insurer the entire sum assured on any policy or any portion thereof in excess of the percentage specified under sub-section (2).(8)In this section,--(i)"policy" means a policy issued or renewed on or after the 1 st day of April, 1961 , in respect of general insurance business transacted in India and does not include a re-insurance policy; and(ii)"Indian re-insurer" means an Indian insurance company which has been granted a certificate of registration under sub-section (2A) of section 3 by the Authority to carry on exclusively the re-insurance business in India.
