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

An Indian insurer carries on insurance business in a Special Economic Zone. Under the Insurance Act, 1938, which power does the Central Government have regarding such an insurer?

The Central Government may, by notification, direct that any provisions of the Insurance Act do not apply to an insurer in a Special Economic Zone, or apply only with specified exceptions, modifications and adaptations. It acts through notification, not by amending the Act or by an executive order.

  1. AIt may, by notification, direct that any provisions of the Act do not apply, or apply only with specified exceptions, modifications and adaptationsCorrect
  2. BIt may amend the Act directly by an executive order without any notification
  3. CIt may exempt the insurer only from the Companies Act, 2013 but not from the Insurance Act
  4. DIt must apply every provision of the Act without any modification

Explanation

The Central Government may notify that any provisions of the Act shall not apply to such an insurer in an SEZ, or shall apply only with the exceptions, modifications and adaptations specified in the notification. It acts by notification and cannot amend the Act itself. Applying every provision without modification is not mandatory.

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