What is The Premium Payment Regulation or Section 64 VB?
Section 64 VB is a section of the Insurance Act, 1938. Under this section, an insured is required to pay full premium (including stamp duty and service tax, as may be applicable) in advance for the insurance company to assume the risk. In respect of a ‘specific’ policy, the full premium is required to be paid before the movement of the goods i.e. commencement of the risk. Therefore, if insurance is required during inland transit from the factory / warehouse but the carrying vehicle has already left the premises, the insurance company, in view of the premium payment regulation, could refuse the coverage. Similarly, if the vessel has sailed but premium was not paid in advance, it would be difficult for the exporter to obtain any insurance coverage for the shipment. Under an open policy, the insurance company could agree to accept advance premium based on projected exports / shipments for a period say, 3 to 6 months depending on volume: it would be the responsibility of the exporter to en
