CS Professional · Banking and Insurance - Laws and Practice · Functions in Insurance and Compliance related thereto (Part V)
Sunrise Fincare Pvt Ltd, a private limited company in Pune, plans to begin selling life insurance policies in its own name as an insurer. Under the Insurance Act, 1938 (as amended in 2025), why can it not do so?
It cannot, because Section 2C(1) limits insurance business to a public company, a registered co-operative society, a statutory body created by an Act of Parliament, or a foreign reinsurer's branch for reinsurance. A private limited company is not in any of these categories.
- AAn insurer must be a public company, a registered co-operative society or a statutory body of the specified kind, and a private company is not one of theseCorrect
- BOnly a company with a registered office in Mumbai can insure
- CA private company may insure only if it sells general insurance
- DA private company may insure if it first pays a fee to the General Insurance Council
Explanation
Section 2C(1) permits insurance business only by a public company, a co-operative society registered under the specified laws, a statutory body established by an Act of Parliament, or a foreign reinsurer's Indian branch for reinsurance only. A private limited company falls in none of these categories. The General Insurance Council fee has nothing to do with eligibility.
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