|
Chapter Ten
Examination of the Companies Transactions
Article 59 - Without prejudice to the Authority's right of inspecting the books and records under article 51 of this Act, the Authority has to carry on periodical examination of insurance and reinsurance companies to ensure the soundness of the company's financial position, compliance with the provisions of the Act and technical bases to carry on insurance and reinsurance business.
The Authority may make comprehensive examination of the company's business if it has the causes to which it believes the rights of policyholders are at stake or that the company will be unable to meet its liabilities or its conduct of business proved that it is harmful to the insurance market or it contravened any of the provisions of this Act
This examination may also be carried out at the request of a number of shareholders representing not less that one tenth of the capital or by not less than five hundreds of policyholders of life assurance and capital redemption whose policies have been issued not less than three years ago.
The company shall furnish the Authority with any information, data, or documents it demands during the examination.
The examination shall be carried out according to the conditions and procedures of the executive regulation of this Act.
If the company's examination proved that the rights of policyholders are at stake or that the company is exposed to inability to meet its liabilities or that its business attitude proved to be harmful to the insurance market or that the company has contravened any of the rules of this Act the board of the Authority is authorised to take the corrective action and in particular:
a) To warn the company.
b) To limit the company's acceptance of new business, or renew its existing business in respect
of all or some classes of insurance which the company is authorised to transact.
c) To oblige the company to prepare the financial statements and annual accounts for periods
less than a year.
d) To invite the board of directors of the company to study and to take the required action to
eliminate the irregularities attributed to the company, in such case a representative of the
Authority or more shall attend the meeting of the board.
e) To appoint a controller in the board of directors of the company for a period determined by
the board of directors of the Authority.
The controller shall have the right to share the discussions of the board, and to express his views in the presented issues without having voting counted.
f) To allocate the distributable surplus to the shareholders or part of it to strengthen the net
assets of the company.
g) To amend the investment policies and reinsurance arrangements of the company.
h) To separate one or more of the executives of the company.
i) To disintegrate the board and appoint a delegator to run temporarily the company until the
appointment of the new board.
|
