Financial Services Supervision Law (Insurance), 5741-1981
חוק הפיקוח על שירותים פיננסיים (ביטוח), תשמ"א-1981
Published: 1981-04-23Consolidated Hebrew text as of 2026-07-26 · Last amended 2026-07-22✓ Amendment status checked against the Knesset legislation record on 2026-09-29
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Chapter IV: Supervision of Insurance Business
Section A: Restrictions on Management of Business
Equity capital§
35.
(a)The Minister of Finance, with the approval of the Finance Committee of the Knesset, may prescribe, for all insurers or for categories of insurers, provisions regarding the minimum equity capital required for the receipt of an insurer's licence.
(b)The Commissioner, after consultation with the Committee, may issue to all insurers or to categories of insurers, provisions regarding equity capital additional to the equity capital under subsection (a), required for maintaining an insurer's ability to fulfil its obligations, as well as provisions regarding the composition of the insurer's equity capital.
(c)The Commissioner shall submit to the Finance Committee of the Knesset notice of provisions as referred to in subsection (b), and those provisions shall take effect upon the expiry of thirty days from the date on which such notice was submitted, if by that time a member of the Finance Committee has not notified that that member seeks to object thereto (in this section – a demand for objection).
(d)Where a demand for objection has been submitted, the Finance Committee of the Knesset shall deliberate on it and shall decide whether to accept or reject it within thirty days from the date on which it was submitted; if the Finance Committee of the Knesset accepts the demand for objection, it shall deliberate on the objection within thirty days and upon completion of the deliberation shall decide whether to approve or reject the objection.
Provisions regarding management of business§
36.
(a)The Commissioner, after consultation with the Committee, may issue, generally or for categories of insurers, for all branches of insurance or for particular branches of insurance, provisions regarding –
(1)the types of assets that an insurer shall hold against its liabilities of each type, and the rates thereof in relation to the liabilities;
(2)the manner of holding the assets that an insurer holds against its liabilities;
(3)the cases in which an insurer may invest in a subsidiary of that insurer, in a holder of means of control therein, in another insurer or in an insurance agent;
(4)the obligation of an insurer to maintain insurance reserves and the methods of calculating them;
(5)engaging as an insurer outside Israel;
(6)the minimum rate of the portion of the risk to be borne by insurers in Israel;
(7)the maximum rate of the portion of the risk to be borne by an insurer;
(8)loans that an insurer may extend and guarantees that an insurer may give, and the rates thereof.
(b)(Repealed)
(c)The Commissioner may, for special reasons to be detailed, impose on a particular insurer for a specified period additional restrictions beyond those prescribed in Regulations under subsection (a).
(d)Without derogating from the provisions of subsections (a) and (c), an insurer shall not hold more than ten percent of a particular type of means of control in a significant real corporation; for the purposes of calculating the rate of holding as aforesaid, holdings of a financial body under the control of the insurer shall not be counted; in this subsection, "significant real corporation" and "financial body" – as defined in section 32a.
Application of provisions to provident funds in respect of yield-dependent insurance§
36a.
The provisions of sections 31 to 36 of the Provident Funds Supervision Law shall apply, with the necessary modifications, to yield-dependent insurance and to assets managed by an insurer to cover yield-dependent liabilities; the Minister of Finance may prescribe reliefs regarding the application of those sections to an insurer, by way of prescribing modifications and adjustments to the application of those provisions, in whole or in part, to an insurer, or by prescribing that those provisions, in whole or in part, shall not apply to an insurer.
Provisions regarding insurance premiums§
37.
(a)The Minister of Finance may prescribe in Regulations, for all branches of insurance or for particular branches of insurance, provisions regarding –
(1)the rates of insurance premiums and other payments that an insurer may collect from insureds, including maximum and minimum rates and payment of insurance premiums in instalments;
(2)the obligation of an insurer that sets insurance premiums on credit to notify the insured in advance, in the prescribed manner, of the insurance premiums on credit and the insurance premiums in cash, the rate of interest, calculated on an annual basis, embedded in the insurance premiums on credit, and the rates and dates of payment of the insurance premiums on credit.
(b)Regulations under subsection (a)(1) require the approval of the Finance Committee of the Knesset.
Provisions regarding interest on insurance benefits paid in foreign currency§
37a.
The Minister of Finance shall prescribe in Regulations, for all branches of insurance or for particular branches of insurance, provisions regarding the rates and method of calculating the interest to be added to insurance benefits paid in foreign currency or in Israeli currency calculated according to the value of a foreign currency pursuant to section 28(d) of the Insurance Contract Law, 5741-1981.
Provisions regarding insurance conditions§
38.
(a)The Commissioner, after consultation with the Committee, may issue, for all branches of insurance or for particular branches of insurance, provisions regarding the conditions of an insurance contract and their formulation; an arrangement that contravenes a condition that is required to be prescribed pursuant to Regulations made as aforesaid shall not be applied, and that condition shall be deemed to have been stipulated in its place, unless the arrangement is to the benefit of the insured; nothing in this provision shall derogate from the criminal liability of the insurer; provisions under this section shall be published in Reshumot (Official Gazette).
(b)Provisions under this section shall not contradict a provision that may not be derogated from by agreement under the Insurance Contract Law, 5741-1981.
Form of policy and highlighting of conditions§
39.
(a)The Commissioner, after consultation with the Committee, may issue, for all branches of insurance or for particular branches of insurance, provisions regarding the structure and form of an insurance policy, including provisions regarding the lettering in the policy, among them provisions regarding the minimum size of the letters referred to, the ratio between the letters and the area containing the information, and the manner of writing and presenting them, as well as a list of material conditions in the policy, their highlighting and manner of formulation, including the obligation to attach a separate document in respect thereof; provisions under this section shall be published in Reshumot (Official Gazette).
(b)The Commissioner may require an insurer to highlight a particular detail appearing in an insurance policy with special prominence in such form as the Commissioner may direct.
Introduction of an Insurance Plan or Amendment thereto§
40.
(a)An insurer wishing to introduce an insurance plan, or wishing to amend in an insurance plan the terms of insurance, the insurance premiums or any other matter directly relating to the insurance plan as directed by the Commissioner (in this section – an amendment to an insurance plan), shall give the Commissioner, 30 working days before the date on which it wishes to introduce the insurance plan or the amendment to the insurance plan, as the case may be (in this section – the requested date), notice of its intention to do so, which shall include the particulars as directed by the Commissioner and shall be submitted in the manner as directed (in this section – notice to the Commissioner).
(b)Where notice has been given to the Commissioner and the Commissioner or an employee subordinate to him has not notified, by the eve of the requested date, of his objection to the insurance plan, in whole or in part, or to the amendment to the insurance plan, in whole or in part, in respect of which the notice was given to him, the insurer may introduce the insurance plan or the amendment to the insurance plan, as the case may be, commencing on the requested date; where the Commissioner or an employee subordinate to him has notified of his objection to the insurance plan, in whole or in part, or to the amendment to the insurance plan, in whole or in part, by the said date, the insurer shall not introduce the insurance plan or the amendment to the insurance plan.
(c)Notwithstanding the provisions of subsections (a) and (b), the Commissioner may direct, with respect to certain branches of insurance, certain insurance plans or certain amendments to insurance plans –
(1)that notice to the Commissioner shall be given at a date earlier than the requested date;
(2)that notice to the Commissioner shall be given after the date of introduction of the insurance plan or the amendment to the insurance plan, as the case may be, all as the Commissioner shall direct;
(3)that where certain conditions as directed by him are met, there shall be no obligation to give the Commissioner notice of the introduction of an insurance plan or an amendment to an insurance plan;
(4)that an insurer shall not introduce an insurance plan or an amendment to an insurance plan except with the prior written approval of the Commissioner or where a condition as directed by the Commissioner is met.
(d)The Commissioner may, on his own initiative and at any time, direct an insurer to cease introducing an insurance plan or direct an insurer to introduce an amendment to an insurance plan, after having considered the possible harm to the insurer by reason of his direction as aforesaid and having regard to the totality of the conditions in the plan and the possibility of adapting it to such an amendment; where the Commissioner has so directed, the insurer shall cease introducing the insurance plan or shall introduce the insurance plan after effecting the amendment thereto, as the case may be, in accordance with the Commissioner's direction, commencing on the date of the giving of the direction or on a later date as directed by the Commissioner.
(e)
(1)Notwithstanding the provisions of subsection (d), the Commissioner may, for special reasons to be recorded, after having considered the possible harm to the insurer by reason thereof, direct an insurer as referred to in that subsection also with respect to policies issued under the insurance plan before the date of the giving of the direction, all as he shall direct;
(2)The Commissioner shall not so direct as referred to in paragraph (1) unless he has found that the insurance plan or a condition therein is oppressive or causes significant or substantial harm to the interests of the insured, all having regard to the totality of the conditions of the policy and the circumstances of the case, including the circumstances at the time of the conclusion of the insurance contract;
(3)Before the Commissioner so directs as referred to in paragraph (1), the insurer shall be given an opportunity to present its arguments, the Commissioner shall transmit to the Committee the insurer's arguments brought before him in writing or the main arguments, if the insurer presented its arguments before the Commissioner orally, and shall give his decision after consultation with the Committee;
(4)A direction under this subsection shall not apply to what was performed under the policy before the date of the giving of the direction.
(f)The Commissioner may direct, with respect to all branches of insurance, certain branches of insurance or certain insurance plans –
(1)provisions concerning insurance premiums in an insurance plan, except with respect to the rates of insurance premiums as referred to in section 37;
(2)provisions concerning the terms of insurance in an insurance plan and their formulation, which are not provisions establishing in an insurance plan the totality of its conditions.
(g)Provisions in an insurance plan that have been established pursuant to the provisions of this section shall not contradict a provision that may not be contracted out of under the Insurance Contract Law, 5741-1981, and if a contradicting provision as aforesaid has been established, it shall not be followed; where a different arrangement has been established in a direction of the Commissioner under this section, the different arrangement shall be deemed to have been established in place of the contradicting provision, unless that provision is to the benefit of the insured.
(h)The provisions under this section with respect to an insurance plan shall apply, with the necessary modifications and with such modifications as the Commissioner shall direct, with respect to a service document.
(i)In this section –
"working day" – any day of the week, excluding Friday, a day of rest as defined in section 18a(a) of the Law and Administration Ordinance, 5708-1948, and the eve of such a day of rest, the intermediate days of a festival and a day of rest established by legislation;
"service document" – a document attached to an insurance policy that includes conditions for the provision of services to the insured by a service provider;
"insurance plan" – a form of an insurance contract whose conditions have been determined in advance to serve as conditions for many contracts between an insurer and unspecified insured persons, and each of the following shall also be regarded as an insurance plan:
(1)an extension or restriction of coverage and special conditions offered to the general insured public or to unspecified segments thereof;
(2)insurance effected for a group of insured persons.
Acceptance of Business and Payment of Commission§
41.
(a)An insurer or insurance agent shall not accept insurance business through the mediation of a person unless that person holds an agent's licence and there is a written arrangement between them as referred to in section 30.
(b)An insurer or insurance agent shall not pay commission for mediation between any person and itself except to a person who holds an agent's licence.
(c)The provisions of subsection (b) do not prevent the payment of commission to the heirs of a deceased insurance agent in respect of life insurance effected through his mediation or in respect of other insurances that are renewed within two years of the date of his death.
(c1)The provisions of this section shall apply, with the necessary modifications, to a pension adviser, with respect to his occupation in mediation relating to a pension product included in the definition of "type of pension product" in the Pension Advice and Marketing Law, as if he were an insurance agent.
(d)The Minister of Finance, in consultation with the Committee, may prescribe by Regulations, generally or for categories of insurers or agents, for all branches of insurance or for certain branches of insurance, provisions concerning the maximum commission that an insurer is permitted to pay to an insurance agent.
(e)For the purposes of this section, "commission" – a commission, fee, participation in expenses, or any other benefit, all whether directly or indirectly.
(f)(Repealed)
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Contact Us →Section A-1: Organs and Other Office Holders in an Insurer
Application of Provisions of the Section§
41a.
In this Section, "insurer" – excluding a foreign insurer, unless the Minister has determined otherwise and subject to conditions as he shall determine.
Board of Directors of an Insurer§
41b.
The board of directors of an insurer (in this Section – the board of directors) shall comprise at least seven directors and no more than fifteen directors.
Appointment of a Director in an Insurer without a Controlling Shareholder in Special Cases§
41b1.
(a)Where a director has not been appointed in an insurer without a controlling shareholder or where his tenure has ceased for any reason, including the non-receipt of a permit under section 32(a1), the cancellation of an appointment as referred to in section 34(a)(4), the Commissioner's objection to an appointment under section 41j(a) or the cessation of tenure under section 41j(c), and as a result the number of directors has fallen below the minimum number established in section 41b, or the composition of the board of directors of the insurer has not met all the requirements of the law, the Commissioner shall direct the convening of the general meeting of the insurer within three months of the date of the giving of his direction or within a shorter period as directed by the Commissioner if he considers the circumstances of the matter to justify it, provided that it shall not be less than sixty days, for the purpose of appointing directors to complete the number of directors as required or to regulate the composition of the board of directors so that it meets all the requirements of the law, as the case may be.
(b)Where directors as required have not been appointed by the general meeting pursuant to the Commissioner's direction as referred to in subsection (a), the Commissioner shall again direct the convening of the general meeting of the insurer within sixty days of the date of the giving of his repeated direction; where directors as required have not been appointed even after the Commissioner's repeated direction, the committee for the appointment of directors in insurers without a controlling shareholder, appointed under section 41m, shall appoint the directors as required for the purpose of completing the number of directors or for the purpose of regulating the composition of the board of directors so that it meets all the requirements of the law, as the case may be.
(c)The term of office of a director appointed by the committee for the appointment of directors in an insurer without a controlling shareholder pursuant to the provisions of subsection (b) shall be until the date of the second annual general meeting following his appointment; for this purpose, "annual general meeting" – as defined in the Companies Law, 5759-1999.
Application of Provisions from the Companies Law§
41c.
(a)The provisions of sections 94(a), 97, 100, 114 to 117, 119(a), 146 to 153, 219(c) and 269 of the Companies Law, 5759-1999, shall apply to an insurer, with the necessary modifications pursuant to the provisions of this Law, as if it were a public company, and the provisions of subsections (a) and (b) of section 95 of that Law shall also apply to it, provided that for this purpose those subsections shall be read without the words "except pursuant to the provisions of section 121(c)".
(b)The Minister of Finance, in consultation with the Minister of Justice, may prescribe reliefs with respect to the application of the provisions of the sections listed in subsection (a) to an insurer, by way of prescribing modifications and adjustments to the application of those provisions, in whole or in part, to an insurer, or prescribing that those provisions, in whole or in part, shall not apply to it.
Actuary and Risk Manager§
41d.
(a)An insurer shall appoint an actuary for each branch of insurance in which the insurer engages, except for branches as determined by the Commissioner, and it is possible to appoint one actuary for several branches of insurance in which the insurer engages (in this Law – appointed actuary); the appointment of an appointed actuary and the termination of his tenure before the end of the appointment period shall require the prior approval of the board of directors.
(b)The functions of an appointed actuary are at least the following:
(1)to advise the board of directors and the general manager as to the extent of the insurance liabilities of the insurer in the branches of insurance for which he was appointed, and in an insurer that has been granted a licence as referred to in section 15(a1) – as to the actuarial balance of the pension provident fund under its management;
(2)to prepare or approve on behalf of the insurer a report, declaration or any other document that the insurer is required to submit under this Law and which the Commissioner has determined shall be prepared or approved by the appointed actuary;
(3)to transmit to the risk manager appointed pursuant to the provisions of subsection (c) information or reports as determined by the Commissioner, for the purpose of fulfilling the functions of the risk manager, for the branches of insurance for which the actuary was appointed;
(4)any other function as directed by the Commissioner.
(c)An insurer shall appoint a risk manager, and with respect to an insurer that has received a licence as referred to in section 15(a1) – shall also appoint a risk manager for each pension provident fund under the management of the insurer, and it is possible to appoint one risk manager for the insurer and for several provident funds as aforesaid; the appointment of a risk manager and the termination of his tenure before the end of the appointment period shall require the prior approval of the board of directors.
(d)The functions of a risk manager so appointed are at least the following:
(1)to advise the board of directors and the general manager as to the risks as directed by the Commissioner facing the insurer, and if he is a risk manager of a pension provident fund, as referred to in subsection (c) – as to such risks facing the members of the provident fund;
(2)any other function as directed by the Commissioner.
Investment Committees§
41e.
(a)The board of directors shall appoint investment committees as detailed below:
(1)an investment committee for the investment of the insurer's own capital and for the investment of funds to cover its insurance liabilities that are not yield-dependent liabilities (in this Law – non-yield-dependent investment committee);
(2)an investment committee for the investment of funds to cover the yield-dependent liabilities of the insurer (hereinafter – yield-dependent investment committee).
(b)Persons who are not directors of the insurer may also serve on the investment committees referred to in subsection (a).
(c)With respect to the yield-dependent investment committee, the provisions under section 11 of the Provident Funds Supervision Law shall apply; the Minister of Finance may prescribe reliefs with respect to the application of that section to an insurer, by way of prescribing modifications and adjustments to the application of the provisions of that section, in whole or in part, to an insurer, or prescribing that those provisions, in whole or in part, shall not apply to it.
Rules Concerning the Board of Directors, its Committees and the Non-Yield-Dependent Investment Committee§
41f.
(a)The Commissioner, after consultation with the Committee, may give directions on the following matters:
(1)the composition of the board of directors, as well as the appointment of board of directors committees and the non-yield-dependent investment committee (in this section – the investment committee), the number of members therein and their composition;
(2)qualification conditions of a director, a member of a board of directors committee and a member of an investment committee, and the Commissioner may direct additional qualification conditions, including accounting and financial expertise, required of an external director and of certain members of such committees;
(3)restrictions with respect to the appointment of a director, a member of a board of directors committee or a member of an investment committee, including restrictions by reason of their other occupations;
(4)the manner of appointment of a director and a member of an investment committee, and provisions concerning the cessation or expiry of their tenure;
(5)the quorum at meetings of the board of directors, a board of directors committee and an investment committee;
(6)the functions of the investment committee and decisions to be taken in such a committee, including decisions to be taken by a special procedure or a special majority to be determined, as well as dates or events at which the committee shall convene;
(7)matters to be discussed and decisions to be taken at the board of directors or a committee of its committees, and such decisions to be taken by a special procedure or a special majority to be determined.
(8)the working methods of the board of directors, a board of directors committee and an investment committee.
(b)(Repealed)
Auditor§
41g.
(a)An insurer shall appoint an auditor, and the provisions of sections 154 to 170 of the Companies Law, 5759-1999, shall apply to it as if the insurer were a public company, subject to the provisions of this section and with the necessary modifications.
(b)Where the auditor becomes aware, in the course of performing his function, of a material breach of a provision of the provisions under this Law or of an administrative instruction given thereunder, he shall give notice thereof, in writing, to the audit committee and to the general manager, and shall request the general manager's response within the period to be determined in the notice; where the general manager's response has not been received within the period so determined, or where the auditor has not been satisfied, after examining the general manager's response, that the breach is not a material breach, the auditor shall transmit to the Commissioner, notwithstanding the provisions of any law or agreement, notice of the breach together with the general manager's response, to the extent received.
Qualification Conditions§
41h.
The Minister of Finance may prescribe qualification conditions for an office holder, a general manager, a risk manager or an actuary in an insurer, as well as for a person engaged in investment management in an insurer or on its behalf, and may prescribe provisions concerning additional occupations during the period of their tenure or engagement in such a position, as well as prescribe, to the extent required for the protection of the insured, restrictions that shall apply to them upon the conclusion of the tenure or employment.
Prevention of Conflicts of Interest§
41i.
(a)A person whose other functions or occupations create or are likely to create a conflict of interest with the said function or which are such as to impair his ability to serve in that function shall not be appointed or serve as a director, a member of a committee, a general manager, an office holder or another position holder in an insurer.
(a1)Without derogating from the provisions of subsection (a), a person who controls a significant real corporation, a person related to such a controlling shareholder or an office holder in a significant real corporation shall not be appointed or serve as a director in an insurer that is a significant financial body; the Commissioner may give directions with respect to the continuation of tenure of a director during sale proceedings as referred to in section 32a(d); in this subsection –
"person related to a controlling shareholder" – a relative or partner of a controlling shareholder, or a person with a nexus as defined in section 240(b) of the Companies Law, 5759-1999, to the controlling shareholder;
"financial body" and "real corporation" – as defined in section 28 of the Law for the Promotion of Competition and Reduction of Concentration;
"significant financial body" – a financial body listed in the list of significant financial bodies published under section 29 of the Law for the Promotion of Competition and Reduction of Concentration;
"controlling shareholder", in a significant real corporation – including a holder of a controlling block as defined in the Companies Law, 5759-1999, in a significant real corporation in which there is no other controlling shareholder;
"significant real corporation" – a real corporation listed in the list of significant real corporations published under section 30 of the Law for the Promotion of Competition and Reduction of Concentration.
(b)The Minister of Finance may prescribe provisions aimed at preventing a possible conflict of interest of a director, a member of a committee, a general manager, an office holder and another position holder in an insurer, including provisions concerning other occupations in which they shall not be permitted to engage or actions which they shall not be permitted to perform, as well as declarations and reports that shall be required of them.
Approval of Appointment of an Office Holder§
41j.
(a)A person shall not serve as an office holder in an insurer unless notice has been given to the Commissioner at least sixty days before the commencement of the tenure, and the Commissioner has not notified within that period of his objection to the said appointment, or has notified that he does not object to the appointment.
(b)The Commissioner's decision to object to an appointment shall be given after the candidate has been given an opportunity to present his arguments, and he shall take into account in this regard the candidate's suitability for the proposed position, including his business experience, integrity, probity and connections, of any kind, with the insurer or with an office holder in the insurer.
(c)Where an office holder has been appointed and, after his appointment, additional or new particulars relevant to the considerations referred to in subsection (b) have come to light, the Commissioner may, after consultation with the Committee and after the office holder has been given an opportunity to present his arguments before it in the manner it has directed, direct the cessation of his tenure, by reason of such additional or new particulars.
(d)The provisions of this section shall also apply to the tenure of a director of an insurer as chairman of its board of directors, with the necessary modifications.
(e)In this section, "office holder" – a director, general manager and internal auditor, as well as any person as determined by the Commissioner; the Commissioner shall determine for each insurer which of the position holders in that insurer are required to obtain approval of their appointment, provided that his determination shall not include more than seven position holders in an insurer.
Nomination of candidates for the office of director in an insurer without a controlling shareholder§
41k.
(a)In an insurer without a controlling shareholder, the following provisions shall apply with respect to the nomination of candidates for the office of director:
(1)The committee for the appointment of directors in insurers without a controlling shareholder appointed under section 41m (in this section – the Committee) shall propose to the general meeting of the insurer candidates for the office of director;
(2)The Committee shall propose, in accordance with the provisions of paragraph (1), candidates for the office of director, equal in number to the maximum number of directors whose appointment is to be considered at the meeting;
(3)In addition to the Committee, only the following shall be entitled to propose to the general meeting of the insurer candidates for the office of director:
(a)the board of directors;
(b)a person holding more than two and a half per cent of a particular class of means of control in the insurer (in this section – a holder);
(c)two or three holders of means of control in the insurer, each of whom holds more than one per cent and not more than two and a half per cent of a particular class of means of control in the insurer, who together hold not less than two and a half per cent and not more than five per cent of a particular class of means of control as aforesaid (in this section – a holder group), provided that every member of the holder group has delivered to the insurer a report on its holdings as referred to in section 34a(a1)(1), and that for at least three months prior to the notice convening the general meeting there was no subsisting objection by that member of the holder group to disclosure as referred to in section 34a(a1)(1)(c);
(4)The board of directors shall not propose, in accordance with the provisions of paragraph (3), candidates for the office of director in a number exceeding the maximum number of directors whose appointment is to be considered at the meeting;
(5)A holder or a holder group, including every member of the holder group, shall not propose pursuant to the provisions of paragraph (3) more than one candidate for the office of director, and shall not propose additional candidates for the office of director as long as a director appointed pursuant to their proposal is serving, unless the Commissioner has permitted this in guidelines that he has prescribed and in accordance with those guidelines; the provisions of this paragraph shall not apply to the proposal of a candidate to replace a serving director who was elected pursuant to the proposal of the holder or the holder group, as the case may be;
(6)The calculation of the holding percentages of holders as referred to in paragraph (3) shall be made at the time of the dispatch of the nomination of the candidate for the office of director; however, for the purpose of tabling the nomination at the general meeting, the holders as aforesaid must hold the said holding percentages also at the record date within the meaning of section 182(b) and (c) of the Companies Law;
(7)An institutional body, a person who controls it and a person controlled by either of them shall not propose a candidate for the office of director in an insurer without a controlling shareholder and shall not be members of a holder group, and shall likewise not act to bring about the appointment of a particular director in such an insurer or to prevent his appointment; nothing in the provisions of this paragraph shall derogate from the right to vote at the general meeting in respect of the appointment of a director.
(b)The provisions of this section shall prevail over any conflicting provision in law.
Appointment, tenure and termination of tenure of directors in an insurer without a controlling shareholder§
41l.
(a)The following provisions shall apply with respect to the appointment of directors in an insurer without a controlling shareholder, their tenure and the termination of their tenure:
(1)A general meeting at which the appointment of directors or the termination of their tenure is on the agenda shall not be convened unless the insurer has published an advance notice thereof in the manner in which the notice convening a general meeting is published, at least 21 days before the publication of the notice convening the general meeting or at an earlier date as directed by the Commissioner, and the advance notice was delivered at the same time also to the committee for the appointment of directors in insurers without a controlling shareholder appointed under section 41m (in this section – the Committee);
(2)The board of directors shall not be entitled to appoint directors in an insurer without a controlling shareholder;
(3)An office holder in an insurer, other than an external director or an independent director acting within the framework of his service on the Committee, shall not act to bring about the appointment of a particular director or to prevent his appointment; however, a director shall be entitled to propose his own candidacy to the Committee and to the board of directors, and to propose other candidates to the board of directors;
(4)
(a)The term of office of a director who is not an external director shall be not more than three years, and he may be reappointed for additional terms of not more than three years each, provided that his cumulative terms of office do not exceed nine years;
(b)Notwithstanding the provisions of sub-paragraph (a), where an insurer has become an insurer without a controlling shareholder, a director serving therein on the eve of the insurer becoming an insurer without a controlling shareholder may continue in office until the next general meeting at which directors are to be appointed, but not later than the next annual meeting, even if his cumulative terms of office thereby exceed nine years;
(5)A director, other than an external director, whose term of office has ended and as a result the number of directors in the insurer has fallen below the minimum number prescribed in section 41b, or the composition of the board of directors does not meet all the requirements of law, may, with the approval of the Commissioner, continue in his position for a period of six months or until the number of directors is made up to the said minimum number or until the composition of the board of directors is made up so as to meet the requirements of law, as the case may be, whichever is earlier; where a director has decided to continue in his position pursuant to the provisions of this paragraph and the Commissioner's approval of the continuation of his tenure has been given, the director shall notify the insurer thereof; however, notwithstanding the continuation of his tenure as aforesaid, he shall be regarded for the purposes of section 41b1 as a director whose tenure has ended.
(b)The provisions of this section shall prevail over any conflicting provision in law.
(c)In this section, "general meeting", "annual meeting", "independent director" and "external director" – as defined in the Companies Law or in Regulations under section 41f.
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