Cap. 403 Art. 5Classification of business of insurance and ancillary risks.

(1) Subject to the provisions of sub-article (2), for the purposes of this Act, business of insurance is divided into long term business and general business; and -

"long term business" means business of insurance of any of the classes specified in the Second Schedule, and

"general business" means business of insurance of any of the classes specified in Part I of the Third Schedule.

(2) An authorised insurance undertaking which has obtained an authorisation for a principal risk belonging to one class or group of classes as specified in the Third Schedule may also insure risks included in another class in the said Schedule without the need to obtain authorisation in respect of such risks provided that the risks fulfil all the following conditions:

(a) they are connected with the principal risk;

(b) they concern the object which is covered against the principal risk; and

(c) they are covered by the contract insuring the principal risk.

(3) Notwithstanding the provisions of sub-article (2), the risks included in classes 14, 15 and 17 in Part I of the Third Schedule shall not be regarded as risks ancillary to other classes: Provided that, legal expenses insurance as set out in class 17 may be regarded as a risk ancillary to class 18, where the conditions laid down in sub-article (2) and either of the following conditions are fulfilled:

(a) the main risk relates solely to the assistance provided for persons who fall into difficulties while travelling, while away from the home or their habitual residence; or

(b) the insurance concerns disputes or risks arising out of, or in connection with, the use of sea-going vessels.

(4) For the purposes of this article, a contract of insurance is to be treated as falling within the Second Schedule, notwithstanding the fact that it contains related and subsidiary provisions within general business class 1 or 2 of Part I of the Third Schedule to the Act, if its principal object is that of a contract falling within the Second Schedule to the Act and if such contract is effected or carried out by an undertaking authorised under article 7 to carry on long term business class 1.

(5) The competent authority may, by an Insurance Rules made for the purposes of this article, provide that general business contracts of insurance of a kind specified in the Insurance Rules, contain such conditions or include such requirements or arrangements as may be determined by such Insurance Rules.