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CS Professional · Banking and Insurance - Laws and Practice · Life Insurance

A student claims that LIC still enjoys the exclusive privilege of carrying on life insurance business in India because Section 30 of the LIC Act, 1956 has never been repealed. Which statement correctly describes the legal position?

Section 30A ended LIC's exclusive privilege from the commencement of the IRDA Act, 1999, notwithstanding Section 30. LIC thereafter carries on life insurance business in accordance with the Insurance Act, 1938. Section 30 remaining on the statute book does not preserve the monopoly.

  1. ASection 30A ended LIC's exclusive privilege from the commencement of the IRDA Act, 1999, and LIC now operates under the Insurance Act, 1938Correct
  2. BThe exclusive privilege continues for policies above a prescribed sum assured
  3. CThe exclusive privilege ceased only for general insurance business, not life
  4. DThe exclusive privilege ceased only when the Central Government issued a separate notification in 2005

Explanation

Section 30A provides that, notwithstanding anything in the LIC Act, the exclusive privilege shall cease on and from the commencement of the IRDA Act, 1999. LIC thereafter carries on life insurance business in accordance with the Insurance Act, 1938. Hence the student's inference from non-repeal is wrong.

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