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CS Professional · Banking and Insurance - Laws and Practice · Functions in Insurance and Compliance related thereto (Part V)

Metro Surety Services Ltd, an Indian firm that is not an insurer, wants to register under the name 'Metro Insurance Solutions' and run its business under it. Which statement matches Section 2C(4) of the Insurance Act, 1938?

A person who is not an insurer cannot use words such as insurance, assurance or re-insurance, or their derivatives, in its name or business. Only insurers, and intermediaries or associations indicating the nature of their organisation under the regulations, have limited exceptions, so Metro cannot adopt the name.

  1. AAny company may use the word 'insurance' if it has a net worth above Rs 100 crore
  2. BOnly the Central Government may use words such as 'insurance' in a name
  3. CNo person other than an insurer may use words like 'insurance' or 'assurance' in its name or business, subject to the intermediary and association provisionsCorrect
  4. DThe word 'insurance' may be used freely but 're-insurance' may not

Explanation

Section 2C(4) bars non-insurers from using 'insurance', 'insurer', 'assurance', 're-insurance', 'insurance company' or derivatives in their name or in connection with their business. Sub-sections (5) and (6) allow limited use by intermediaries and associations only to indicate the nature of the organisation. Metro is neither, so it cannot use the name.

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