Open ↗(1) An operator registered under this Act prepare the statements of account and other statements required by Part I of the Second Schedule and lodge them with the Director General (together with any prescribed fee) and Part III of that Schedule, so far as relevant to those statements, shall have effect with respect to their form and contents and to the time and manner in which they are to be lodged.
(2) An operator registered under this Act shall have its accounts audited for each accounting period for which statements of account are prepared in accordance with subsection (1), and when those statements are lodged with the Director General there shall be lodged with them a certificate of the auditor as required by Part I of the Second Schedule.
(3) The audit required by subsection (2) shall be made by a person who—
(a) has a place of business in Malaysia;
(b) is for the time being authorized under section 8 of the Companies Act 1965, to be the operator's auditor or an auditor of companies generally;
(c) has for the time being the approval of the Director General to act for the purposes of this section.
(4) The documents to be lodged with the Director General under this section for any accounting period of an operator shall be accompanied by copies of any report submitted to the members of the operator with respect to ments so submitted this Act t shall not this sectir
(5) W] subsectic Languag section : and sha original
Open ↗(1) under 1 shall hi into th fund c cated thereo with t. fee) si relatir as are Part docul and ( are 1 (2. anni opel (: doc dor TeS
AKta 316 - Alro [Pt. III, S. 41-42] respect to that period and (if it is not among the docuso lodged) by any statement of accounts so submitted with respect to that period; but references in this Act to documents lodged with the Director General shall not be taken to include documents required by this section to accompany documents so lodged. and shall be certified to be a true translation of the original by the translator. 42. (1) Subject to this section, an operator registered under this Act in respect of family solidarity business shall have an investigation made by a qualified actuary into the financial condition of that part of the takaful fund of its family solidarity business specifically allocated for payment of takaful benefits and a report thereon made to it by the actuary, and shall be lodged with the Director General (together with any prescribed fee) such abstract of the actuary's report and certificate relating thereto and such statements as to that business as are required by Part II of the Second Schedule and Part III of that Schedule, so far as relevant to those documents,shall have effect with respect to their form and contents and to the time and manner in which they are to be lodged.
(2) Investigations under subsection (1) shall be made annually at the end of each accounting period as the operator may determine.
(3) References in this Act to documents lodged with the Director General shall not be taken to include documents required documents so lodged. by this section to accompany
(4) Where an operator registered under this Act in respect of family solidarity business-
(a) has an actuarial investigation made into the family solidarity business for which it maintains a takaful fund under this Act (whether with or without any other family solidarity business carried on by it); and
[Pt. III, S. 42-431 Power to require returns under sections 41 and 42 to be rectified.
(b) the investigation is not made to comply with subsection (1) or with any provision as to returns in the law relating to takaful in a country outside Malaysia, but the results of the investigation are made public, then the operator shall, as to the lodging of documents with the Director General, comply with the requirements of subsection (1) as in the case of an investigation under* that subsection.
Open ↗(1) If it appears to the Director General that any document lodged in accordance with sections 41 and 42 is in any particular unsatisfactory, incomplete, inaccurate or misleading or that it does not comply with the requirements of this Act, the Director General may by notice in writing require such explanations as he considers necessary to be made by or on behalf of the operator within such time (not less than fourteen days) as is specified in the notice.
(2) The Director General may, after considering the explanations referred to in subsection (1), or if such explanations have not been given by or on behalf of the operator within the time specified in that subsection, reject the document or give such directions as he thinks necessary for its variation within such time (not less than one month) as is specified in the directions.
(3) Directions given under subsection (2) with respect to any document may require such consequential variations of any other document lodged by the operator under sections 41 and 42 as may be specified in the directions.
(4) Where directions are given under subsection (2), any document to which they relate shall be deemed not to have been lodged until it is re-submitted with the variations required by the directions, but the operator shall be deemed to have submitted the document within the time limited by the Second Schedule if it is resubmitted as aforesaid within the time limited by the directions.
Open ↗(1) right, operat 41 or than appli PI ment Seco tion (2 of 1 offi wit sul pa d +1
CLangkah - Laugnen [Pt. III, S. 44-45] 44. (1) Any participant of an operator shall have a Additional right, on applying to the operator, to be sent by the provisions operator at an address supplied by him copies of docuas to returns under ments lodged by 41 or 42, and to have the copies despatched not later than fourteen days after the operator receives the application: Second Schedule, or to a document of any other description except the last lodged of that description.
(2) Any person shall have the right, on payment of the prescribed fee, at any time during working hours of the office of the Director General, to inspect at that office any document lodged by an operator to comply with section 41 or 42 and any document required by subsection (4) of section 41 to accompany the documents so lodged, and make a copy of the whole or any part of it: Provided that the right shall not extend to any document excepted from this subsection by Part I of the Second Schedule, or to documents of any other description lodged more than ten years previously.
(3) In any proceedings a certificate signed by the Director General that a document is one lodged by an operator to comply with section 41 or 42, or one that accompanied documents so lodged, shall be admissible as evidence of the facts certified.
(4) Where an operator fails to comply with section 41 or 42, the operator shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding twenty thousand ringgit and to a daily fine not exceeding two hundred ringgit.
Open ↗(1) Subject to subsection (3), where an operator is Returns of registered under this Act in respect of either class of changes in takaful business, the operator shall from time to time, particulars. until the operator ceases to be so registered, notify the Director General in writing of any change affecting the operator's registration particulars, and shall do so within three months of the change taking place.
Investigation of affairsof operator. [Pt. III, S. 45-46)
(2) Where the change consists in the amendment of any document, or the replacement of any document by a new document, the operator shall furnish the Director General with a copy of the document showing the amendments or, as the case may be, with a copy of the new document.
(3) This section shall have effect subject to any prescribed exceptions, and the Director General may in any particular case dispense (either unconditionally or subject to any conditions) with the furnishing of information under this section about any matter.
(4) In this section "registration particulars" means the documents and information furnished by the operator to comply with subsection (3) of section 8 when applying to be registered in respect of the class of business in question, or furnished by the operator to comply with this section in respect thereof.
Open ↗(1) The Director General may institute an investigation into the whole or any part of the business carried on by an operator registered under this Act, if it appears to the Director General—
(a) that the operator is or likely to become unable to meet its obligations;
(b) that the operator has failed to comply with any provisions of this Act relating to takaful funds;
(c) that the operator, having been given notice under section 33, has not, within one month thereafter furnished the required information fully and satisfactorily;
(d) that the operator has failed to comply with any provisions of section 41, 42 or 45;
(e) that the expanditure or any class of expenditure incurred in procuring, maintaining or administering any takaful business of the operator is unduly high in relation to the income derived from contributions; () that the method by which any income or expenditure of the operator is apportioned between takaful funds or between a takaful fund and any other fund or account is inequitable; or
(g) th
(2) Befc section, th a notice pletion o operator the priot dispose + operator. Notwi purpose limitedt
(i) im
(ii) mı
(iii) i
(iv)
Akfa 316 - Altto [Pt. III, S.46)
(g) that any information in the possession of the Director General calls for such an investigation.
(2) Before instituting an investigation under this section, the Director General shall serve on the operator a notice in writing specifying that before the completion of any investigation under this section the operator shall not under any circumstances save with the prior written approval of the Director General dispose of any assets vested in or accruing to the operator. Notwithstanding the generality of the above for the purpose of this section, assets include but are not limited to-
(i) immovable assets and
(ii) movable assets ...
(iii) investments
(iv) company and other investments any land, building fixtures; any furniture, equipments, books, periodicals and any other movable items. any motor vehicles, vessels, ships, aircrafts and other means of conveyance of whatever description including any tractor, bulldozers and any other type of light and heavy machinery as well as tools and appliances; any federal, state and local government securities including securities of any quasi-government bodies or agencies; any stocks and shares whether quoted in any stock exchange or unquoted;
[Pt. III, S. 46]
(v) cash ... any cash deposited in any bank, lending institution or placed with other bodies or agencies for whatever period either on current or deposit account including any determinable amount of cash in hand;
(vi) other assets any outstanding contributions, commission and other debts or payment due and payable and rights contractual or otherwise accruing to or vested in the operator.
(3) Ihe Director General may himself make the investigation or may appoint an inspector to make it and report the results of it to him.
(4) The Director General may appoint an auditor (other than the auditor who prepares statements of account or other statements of the operator under section 41), an actuary, or any other suitable person to be an inspector to carry out the investigation under this section and the cost of such an investigation shall be paid by the operator.
(5) In making an investigation under this section, the Director General or inspector may require
(a) the operator, or any person having the custody thereof on behalf of the operator;
(b) any person who is or has at any time been or acted as a director, actuary, auditor, officer, servant or agent of the operator; or
(c) any past or present participant of the operator, to produce for his inspection, and allow him to have access to and to copy the whole or any part of, any bpokat, z, cognts, er Keps in Malaydia or esot tre (including documents evidencing the operator's title to any assets): Provided that a requirement under this subsection shall extend only to documents relating to business ca th aI tr S1
Venceganan [Pt. III, S. 46-47) carried on by the operator in Malaysia, or evidencing the operator's title to assets held for the purposes of any such business.
(6) In making an investigation under this section, the Director General or inspector may require any such individual as is specified in subsection (5) to attend before him examined on oath with respect to the operator's business, and for the purposes of this subsection may administer oaths.
(7) If any person refuses or fails, when required to do so under subsection (5) or (6), to produce any document in his custody or power or to attend for or submit to examination by the Director General or inspector, or to answer any question put to him on such examination, the Director General or inspector may certify the refusal under his hand to the High Court; and the High Court may thereupon enquire into the case, and after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, punish the offender in like manner as if he had been guilty of contempt of the High Court.
Open ↗(1) Where the Director General is satisfied that Powers of the affairs of an operator are being conducted in a manner likely to be detrimental to the public interest, to issue the interests of the participants, or the interests of the directions. operator, such directions to the operator as he considers necessary and may in particular require the operator-
(a) to take such action or engage such management personnel as may be necessary to enable operator to conduct its business accordance with sound takaful principles;
(b) to remove any of its directors whom the Director General considers not a fit and proper person to remain a director;
(c) to take action as to the disposal or recovery of its assets;
(d) to take steps for the recovery by the operator of sums appearing to the Director General to have been illegally or improperly paid;
[Pt. III, S. 47-48) General provisions as to winding up.
(e) to cease renewal or cease issue of certificates of the classes of business to which the direction relates; F) to make such arrangements with respect to re-takaful as the Director General specifies.
(2) The Director General may modify or cancel any direction issued under subsection (1) and in so doing may impose such conditions as he thinks fit.
(3)An direction issued under subsection (1) shall be guilty of an offence and shall be liable, on conviction, to a fine not exceeding twenty thousand ringgit or to imprisonment for a term not exceeding six months or to both and to a further fine of four thousand ringgit tor every day during conviction. S2EN
Open ↗(1) The persons who may petition under the Companies Act 1965 for the winding up of an operator registered under this Act, or for the continuance of the winding up of such an operator subject to the supervision of the Court, shall include the Director General.
(2) The Director General shall be a party to any proceedings under the Companies Act 1965, relating to the winding up of such an operator, and the liqui dator in such a winding up shall give him such information as he may from time to time enquire about the affairs of the operator.
(3) For the purposes of any proceedings under the Companies Act 1965, for the winding up of such an operator by the Court, the contingent and prospective liabilities of the operator in respect of certificates shall, in determining whether it is unable to pay its debts, be estimated in accordance with the regulations; and evidence that the operator was insolvent at the last accounting period for which statements of account have been lodged with the Director General under section 41 shall be evidence that the operator continues unable to pay its debts.
(4) If the Minister submits to the Rules Committee proposals for making special provision under section 372 of the Companies Act 1965, in relation to operators registered under this Act or any description of such operators, the Committee may by rules under that sectio! or su thinks
(5) virtue in rel X of meeti wind
(6) this: Act up ( valu or n with by t P by Ger reg ope Ien cer
Open ↗a i op sa
vaaueu Clangkcah - Laugkah, 100r [Pt. III, S. 48-491 section give effect to the proposals, either as submitted subject to such modifications as the Committee thinks fit.
(5) Proposals under subsection (4), and rules made by virtue thereof, may provide for modifying or excluding, in relation to operators so registered, provisions of Part X of the Companies Act 1965, requiring the holding of meetings or otherwise relating to the procedure in a winding up.
(6) In the winding up of an operator registered under this Act; subsection (2) of section 291 of the Companies Act 1965 (which applies bankruptcy rules in the winding up of insolvent companies) shall apply to the valuation of liabilities in respect of certificates; but in any such winding up, whether the operator is insolvent or not, those liabilities shall be estimated in accordance with the regulations and, as regards matters not fixed by the regulations, on a basis approved by the Court: Provided that in a member's voluntary winding up the basis to be adopted as regards matters not fixed by the regulations may be approved by the Director General instead of by the Court.
(7) References in this section to an operator registered under this Act shall extend also to an operator which has ceased to be so registered but remains under any liability in respect of Malaysian certificates. 49. (1) Where the Director General gives an operator Special a direction under subsection (1) (e) of section 47, the PorYakaful operator may be wound up by the Court under the operators Companies Act 1965 as if it has suspended its business directed to cease for a whole year (or, in the case of a winding up under Division 5 of Part X of that Act, as if it had ceased business. to carry on business).
(2) Where the Director General gives an operator a direction as aforesaid but, on a petition for the operator to be wound up by the Court, the Court is satisfied that the operator will be able to pay its debts in full within twelve months or such longer period as the Court thinks reasonable, the Court may (if it thinks it) order the affairs of the operator to be wound up only as regards the takaful fund maintained for the class of business to which the direction relates.
[Pt. III, S. 49]
(3) An order under subsection (2) for a limited winding up shall be of the same effect as an order for the operator to be wound up generally, except so far as this section otherwise provides.
(4) Where such an order is made, the powers of the liquidator shall be exercisable only for the purpose of applying the assets of the relevant takaful fund (including the deposit under this Act) in discharging the liabilities to which they are applicable, together with the costs, charges and expenses incurred in the winding up; but the operator shall from time to time, as the Court may direct, make such additions to those assets as are required to secure that they are sufficient for the purpose or shall, if the Court so directs, discharge any of those liabilities out of other assets.
(5) In the winding up of an operator under such an order, the Companies Act 1965 shall have effect subject to the following modifications:
(a) section 214 (or, as the case may be, section 316) and other sections so far as they relate to contributories shall not apply;
(b) section 222 shall apply after, as it applies before, the making of the winding up order, and subsection (3) of section 126 shall not apply; and
(c) sections 223, 224, 272, 283 and 293 to 299 shall not apply.
(6) Where such an order is made, the Court may at any time, on the application of the liquidator or of any person who might petition for the operator to be wound up, substitute an order for the operator to be wound up generally, and give such directions as the Court thinks fit as to matters in progress under the previous order, and, subject to any such directions, the winding up shall for all purposes connected with the substituted order be deemed to have commenced at the time of the application for that order.
Akfa 316 _Altta Dadah Berbahay 'Langkah - Laugkal I0nA [Pt. III, S. 50-51]
Open ↗(1) Where a society registered under the Co- Co-operaoperative Societies Act, is an operator registered under this Act, no proceedings for the dissolution or winding up of the society shall be taken under Part VII of that Act except with the consent of the Director General and in accordance with such conditions, if any, as he sees fit to attach to that consent.
(2) Notwithstanding—
(a) section 57 of the Co-operative Societies Act 1948, or section 59 of the Co-operative Societies Ordinances of Sabah and Sarawak, as the case may be; or
(b) subsection (1) of section 314 of the Companies Act 1965, any such society which is an operator registered under this Act shall be deemed to be an unregistered company within the meaning of Division 5 of Part X of the Companies Act 1965, and may be wound up by the Court accordingly under that Act: Provided that in any such winding up
(a) the provisions of the Companies Act 1965 shall apply with the substitution for references to the Registrar of Companies and the register under that Act of references to the Registrar and register under the Co-operative Societies Act;
(b) the provisions of the Co-operative Societies Act, which govern the disposal of any surplus, shall apply, subject to aný necessary modifications, as they apply where a society is wound up under that Act.
(3) Where a society has ceased to be an operator registered under this Act, but remains under any liability in respect of Malaysian certificates, this section shall apply as if the society were an operator so registered.
Open ↗(1) The whole or part of the takaful business of an Schemesfor operator registered under this Act may be transferred transfer of to another operator registered in respect of the class or business. classes of business to be transferred, if the transfer is
[Pt. III, S. 51] effected by a scheme under this section, but shall not be transferred except by such a scheme: Provided that no scheme shall transfer any takaful business of society registered under the Co-operative Societies Act except to another society so registered, nor transfer to such a society any business except that of another.
(2) Any operator registered under this Act shall by virtue of this section have power to make such a transfer by a scheme under this section, and the directors shall have authorıty on behalf of the operator to arrange for and do all things necessary to give effect to such a transfer; and this subsection shall apply notwithstanding the absence of the power or authority under the constitution of the operator or any limitation imposed by its constitution on its powers or on the authority of its directors.
(3) A scheme under this section may provide for the business in question to be transferred to a body not registered as an operator under this Act in respect of the relevant class of business (including a body not yet in existence), if the scheme is so framed as to operate only in the event of the body becoming so registered.
(4) A scheme under this section for the transfer of any takaful business may extend to the transfer with it of any other business not being takaful bușiness, where the other business is carried on by the operator as ancillary only to the takaful business transferred.
(5) A scheme under this section may include provisions for matters incidental to the transfer thereby effected, and provision for giving effect to that transfer, and in particular—
(a) for any property, rights or liabilities of the transferor (including assets comprised deposit under this Act or in a takaful fund) to vest, by virtue of the scheme and without further or other assurance, in the transferee; and
(b) for the registration by the transferee of certificates, for the amounts to be included in respect of those certificates in the transferee's takaful fund and for other matters arising under this Act out of the transfer. (1 unl par by wit bir
Open ↗for
(Langkah - Langkah [Pt. III, S. 51-52]
(6) A scheme under this section shall be of no effect unless confirmed by the High Court, but may be prepared and submitted for confirmation to the High Court by any of the operators concerned; and if so confirmed, the scheme shall have effect according to its tenor notwithstanding anything in the foregoing sections and be bindingon anyperson thereby affected. 52. (1) Before an application is made to the High Court Confirmafor confirmation of a scheme under section 51- schemes.
(a) a copy of the scheme shall be lodged with the Director General together with copies of the actuarial and other reports (if any) upon which the scheme is founded;
(b) not earlier than one month after the copy is so lodged notice of the intention to make the application (containing such particulars as are prescribed) shall be published in the Gazette and in not less than two newspapers approved by the Director General; and
(c) for a period of fifteen days after the publication of the notice a copy of the scheme shall be kept at each office in Malaysia of every operator concerned, and shall be open to inspection by all members and participants of such an operator who are affected by the scheme.
(2) The Director General may cause a report on the scheme to be made by a qualified actuary independent of the parties to the scheme and, if he does so, shall cause a copy of the report to be sent to each of the operators concerned.
(3) Copies of the scheme and any such report as is mentioned in subsection (1) (a) or (2), or summaries approved by the Director General of the scheme and any such report, shall, except so far as the High Court upon application made in that behalf otherwise directs, be transmitted by the operators concerned, at least
Documents to be filed when scheme confirmed. IPt. III, S. 52-53] fifteen days before application is made for confirmation of the scheme, to every participant affected by the scheme.
(4) An application to the Court with respect to any matter connected with the scheme may, at any time before confirmation by the Court, be made by the Director General or by any person who in the opinion of the Court is likely to be affected by the scheme.
(5) The Court may confirm the scheme without modification or subject to modifications agreed to by the operators concerned, or may refuse to confirm the scheme.
(6) The operators concerned shall be jointly and severally liable to reimburse to the Director General any expenses incurred by him under this section in connection with any scheme or proposed scheme (subject to any order of the Court as to costs); and a scheme shall include provision as to how that liability is, as between the operators, to be borne.
Open ↗(1) (a) Where by a scheme under section 51 takaful business of an operator is transferred to another, the transferee shall within one month after the scheme takes effect, lodge with the Director General-
(i) statements of the assets and liabilities of each operator concerned as at the time immediately before the transfer, signed on behalf of the operator and, in the case of the transferor, indicating whether the transfer is of the whole of the transferor's business and, if not, the extent to which the transferor's assets and liabilities relate to the business transferred;
(ii) a copy of the scheme as confirmed by the Court, and a certified copy of the order of the Court confirming the scheme;
(111) copies of any actuarial or other reports upon which the scheme was founded (being reports made sınce a copy of the scheme was lodged under subsection (1) of section 52); and (1 (b a pa OI I (2 51 / an wit! *Central Bank to b responsibl for admin stration, t of this Act, and Governol of Centra Bank to General Takaful. C
Akfa 316 - Aleto 198г [Pt. III-IV, S. 53-54]
(iv) a statutory declaration made by the chairman of directors of the transferee, or by its principal officer,fully setting forth every paymentmad or to be made to any person whatsoever or account of the transfer, and stating that, to the best of his belief, no other payment beyona those so set forth has been, or is to be, made on account thereof by or with the knowledge of any operator concerned.
(b) In paragraph (a) (iv) references to the making of a payment include references to the transfer of property or rights of any description.
(2) On the confirmation of a scheme under section 51 each of the operators concerned shall (unless it is an unincorporated company) file a copy of the scheme with the Registrar of Companies or, in the case societies registered under the Co-operative Societies Act, with the Registrar under that Act.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
