CS Professional · Banking and Insurance - Laws and Practice · Life Insurance
LIC has a branch in a country outside India that shows a surplus. Under Section 28 of the LIC Act as it now stands (sub-section (4), inserted in 2025), how must this surplus be utilised?
The surplus of a foreign branch or office is to be utilised in accordance with the laws of the country where that branch or office is situated. The Act does not require it to follow the Indian distribution percentages or be remitted to India.
- AIn accordance with the laws of that countryCorrect
- BIn accordance with a scheme approved by the Central Government
- CEntirely transferred to the Corporation's head office in India
- DDistributed equally between policyholders and members
Explanation
Sub-section (4) of Section 28 provides that where a branch or office of the Corporation is in a country outside India, the surplus of that branch or office is utilised in accordance with the laws of that country. It does not require transfer to India, a Central Government scheme or an equal split.
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