Rule 22 - GPF Policy Assignment
Original Rule Text
RULE 22- ASSIGNMENT OF POLICIES (1) The policy within six months after the first withholding of a subscription or withdrawal from the Fund in respect of the policy or in the case of an insurance company whose headquarters are outside India, within such further period as the Accounts Officer, if he is satisfied by the production of the completion certificate (interim receipt), may fix, shall-
(a) unless it is a policy effected by a male subscriber which is expressed on the face of it to be for the benefit of the wife of the subscriber, or of his wife and children or any of them, be assigned to the President as security for the payment of any sum which may become payable to the Fund under rule 27, and delivered to the Accounts Officer, the assignment being made by endorsement on the policy in Form (1) or Form (2) Or Form (3) of the Forms in the Second Schedule according as the policy is on the life of the subscriber or on the joint lives of the subscriber and the subscriber's wife or husband or the policy has previously been assigned to the subscriber's wife;
(b) if it is a policy effected by a male subscriber which is expressed on the face of it to be for the benefit of the wife of the subscriber or of his wife and children or any of them, be delivered to the Accounts Officer.
(2) The Accounts Officer shall satisfy himself by reference to the Insurance Company where possible, that no prior assignment of the policy exists.
(3) Once a policy has been accepted by an Accounts Officer for the purpose of being financed from the Fund, the terms of the policy shall not be altered nor shall the policy be exchanged for another policy without the prior consent of the Accounts Officer to whom details of the alteration or of the new policy shall be furnished.
(4) If the policy is not assigned and delivered, or delivered, within the said period of six months or such further period as the Accounts Officer may, under sub-rule (1), have fixed, any amount withheld or withdrawn from the Fund in respect of the policy shall, forthwith be paid or repaid, as the case may be, by the subscriber to the Fund, or, in default be ordered by the Accounts Officer to be recovered by deduction from the emoluments of the subscriber, by instalments or otherwise, as may be directed by the authority competent to sanction an advance for the grant of which special reasons are required, under sub-rule (2) of rule 12.
(5) Notice of assignment of the policy shall be given by the subscriber to the Insurance Company, and the acknowledgement of the notice by the Insurance Company shall be sent to the Accounts Officer within three months of the date of assignment.
Note 1.-Subscribers are advised to send notice of the assignment to the Insurance Company in duplicate, accompanied in cases in which the notice has to be sent to a company in Great Britain or Ireland, by a remittance of five shillings, which is the fee for the acknowledgement authorized by the Policies of Assurance Act, 1867.
Note 2 - Subscribers who proceed to Great Britain or Ireland on quitting the service are advised that under the English Stamp Law assignments or re-assignments are required to be stamped within 30 days of their first arrival in those countries. Otherwise penalty will be incurred under the Stamp Act, and difficulties may arise when the policy matures for payment.
What This Means
This rule explains the procedures you must follow if you use money from your General Provident Fund (GPF) to pay for a life insurance policy. The main idea is to ensure that if you're using your GPF for insurance, the policy is formally linked to the government as a security measure.
Generally, within six months of first using your GPF for the policy (or a slightly longer period if the insurance company is based outside India and your Accounts Officer agrees), you need to 'assign' the policy to the President of India. This means you legally transfer the rights of the policy to the President. This acts as a security in case you later owe money back to the GPF. You do this by endorsing the policy with a specific form and then giving the policy document to your Accounts Officer. However, if you are a male employee and the policy clearly states it's for the benefit of your wife, or your wife and children, you only need to deliver the policy to the Accounts Officer; you don't need to assign it to the President.
Once your Accounts Officer accepts your policy, you cannot change its terms or swap it for another policy without their prior permission. It's also crucial to inform your insurance company about this assignment and send proof of their acknowledgement to the Accounts Officer within three months of the assignment date. If you fail to assign or deliver the policy within the given timeframe, you will have to immediately repay the GPF amount used for that policy. If you don't repay, the amount will be recovered from your salary. The Accounts Officer will also verify with the insurance company that no prior assignments exist on the policy.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1If you use GPF funds for an insurance policy, you must generally assign the policy to the President of India as security.
- 2The assigned policy document must be delivered to your Accounts Officer within six months of the first GPF deduction or withdrawal for it.
- 3For policies clearly benefiting a male subscriber's wife or wife and children, only delivery to the Accounts Officer is required, not assignment to the President.
- 4You must notify the insurance company about the assignment and provide their acknowledgement to the Accounts Officer within three months of the assignment date.
- 5Once accepted by the Accounts Officer, the policy's terms cannot be altered, nor can the policy be exchanged, without their prior written consent.
- 6Failure to comply with the assignment and delivery deadlines will result in immediate repayment of the GPF amount used, or recovery from your salary.
- 7The Accounts Officer is responsible for verifying with the insurance company that no prior assignments exist on the policy.
Practical Example
Ms. Kavita Singh, a Senior Clerk in the Ministry of Health and Family Welfare, decides to take out a new life insurance policy for herself and uses a withdrawal of Rs. 50,000 from her General Provident Fund (GPF) to pay the initial premium in May 2023. According to Rule 22, she must now assign this policy to the President of India.
By November 2023 (within six months), Ms. Singh needs to complete the assignment process. She obtains the correct endorsement form (Form 1 from the Second Schedule, as it's a policy on her own life), fills it out, and signs it on the policy document itself. She then physically delivers the assigned policy to Mr. Rajesh Kumar, her Accounts Officer. Mr. Kumar will check with the insurance company, "Jeevan Suraksha," to ensure no previous assignments exist. Simultaneously, Ms. Singh sends a formal notice of assignment to Jeevan Suraksha. She must ensure that the acknowledgement of this notice from the insurance company reaches Mr. Kumar by February 2024 (within three months of the assignment). If Ms. Singh fails to assign and deliver the policy by November 2023, the Rs. 50,000 she withdrew from her GPF will be immediately due for repayment, and if she doesn't pay, it will be deducted from her salary.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Cross References
Frequently Asked Questions
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This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Test Your Knowledge
Question 1 of 3
Under Rule 22 of the General Provident Fund Rules, a life insurance policy is required to be assigned to whom as security for sums payable to the fund?