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

A student claims that only LIC may sell life insurance in India today because Section 30 of the LIC Act, 1956 gave it exclusive privilege. Which statement correctly answers the claim?

The claim is incorrect. Section 30A provides that LIC's exclusive privilege ceased on commencement of the IRDA Act, 1999, and LIC thereafter carries on life insurance business in accordance with the Insurance Act, 1938, as applicable to it.

  1. ACorrect, because Section 30 has never been modified
  2. BIncorrect, because the exclusive privilege ceased on commencement of the IRDA Act, 1999, and LIC now carries on life business under the Insurance Act, 1938Correct
  3. CIncorrect, because the privilege now belongs to the Central Government
  4. DCorrect, but only for policies sold outside India

Explanation

Section 30A says the exclusive privilege of the Corporation ceases on and from commencement of the Insurance Regulatory and Development Authority Act, 1999. LIC thereafter carries on life business in accordance with the Insurance Act, 1938, as applicable to it. So the claim is wrong.

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