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

Bharat Re, an Indian insurance company, carries on insurance business in a Special Economic Zone (SEZ). Under the Insurance Act, 1938, which statement about the Central Government's power is correct?

The Central Government may notify that Insurance Act provisions do not apply to such an insurer in an SEZ, or apply only with specified exceptions, modifications and adaptations. No annual approval is required, and modified application is expressly allowed.

  1. AIt may by notification direct that provisions of the Act do not apply to such an insurer in the SEZ, or apply only with specified exceptions, modifications and adaptationsCorrect
  2. BIt may exempt the insurer only after the Authority's annual approval
  3. CIt may apply the Act to the insurer only without any modification
  4. DIt may direct this only for insurers outside the SEZ

Explanation

Section 2CA lets the Central Government, by notification, direct that 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 no-modification option contradicts clause (b).

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