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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework in Insurance

An applicant seeking registration as an insurer agrees to carry on general insurance business providing health cover to individuals. Under Section 3(2AA) of the Insurance Act, 1938, what is the effect of this undertaking?

The Authority shall give preference to registering such an applicant. Section 3(2AA) provides this preference for applicants agreeing, in the manner specified by regulations, to provide health cover. It does not waive the Section 3(2A) conditions or other obligations such as fees.

  1. AThe Authority must register it without any inquiry
  2. BThe applicant is exempt from the conditions in Section 3(2A)
  3. CThe Authority shall give preference to register the applicant and grant a certificate of registrationCorrect
  4. DIt need not pay the annual fee

Explanation

Section 3(2AA) directs the Authority to give preference to registering an applicant who agrees, in the form and manner specified by regulations, to carry on life or general insurance business providing health cover. It is a preference, not an exemption from the Section 3(2A) satisfaction requirements or other obligations.

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