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CS Professional · Banking and Insurance - Laws and Practice · Concept of Insurance

Kaveri Re Ltd, a company incorporated in a foreign country, wants to operate in India. Under Section 2C of the Insurance Act, 1938 as amended, what may it do?

It may carry on only re-insurance, by setting up a branch in India exclusively for re-insurance business. Section 2C of the Insurance Act, 1938 bars a company incorporated outside India from any insurance business other than re-insurance, so direct life or general insurance is not permitted.

  1. ACarry on life insurance directly through a branch
  2. BCarry on any insurance business after registering a subsidiary
  3. CCarry on general insurance directly if exempted for one year
  4. DCarry on only re-insurance business, by establishing a branch in India exclusively for re-insuranceCorrect

Explanation

Section 2C(1)(c) allows a foreign-incorporated company engaged in re-insurance to operate by establishing an India branch exclusively for re-insurance. A proviso bars such foreign bodies from any insurance business other than re-insurance. Direct life or general insurance is therefore not available.

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