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CS Executive · Setting Up of Business, Industrial and Labour Laws · Financial Services Organization

A Special Economic Zone houses Kaveri Insurance Co-operative Society, which carries on insurance business. Under the Insurance Act, 1938, what can the Central Government do about the Act's provisions for such an insurer?

The Central Government may, by notification, direct that any provisions of the Act do not apply to such an SEZ insurer, or apply only with specified exceptions, modifications and adaptations. This power comes from Section 2CA of the Insurance Act, 1938.

  1. AOnly the Authority can exempt the insurer from the Act, and the Central Government has no role
  2. BThe Central Government may by notification direct that any provisions do not apply, or apply only with specified exceptions, modifications and adaptationsCorrect
  3. CThe Central Government may amend the Act in the SEZ without any notification
  4. DThe Act applies in full to every SEZ insurer and cannot be modified for it

Explanation

Section 2CA lets the Central Government, by notification, direct that any provisions of the Act shall not apply to such an insurer in an SEZ, or shall apply only with exceptions, modifications and adaptations specified in the notification. The Authority is not given this power, and the Act is not rigid for SEZs.

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