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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework in Insurance

Surya Mutual Insurance Co-operative Society, a society registered under a State co-operative societies law, wants to carry on life insurance business in India. Considering section 2C(1) and 2C(3) of the Insurance Act, 1938, which statement is correct?

It can carry on the business. Section 2C lists a society registered under co-operative societies law as an eligible form, and sub-section (3) allows an insurance co-operative society to carry on any class of insurance business in India, so conversion to a company is not needed.

  1. AIt cannot, because only public companies may carry on insurance business
  2. BIt can, only if converted into a private company
  3. CIt can, only as a reinsurer through a foreign branch
  4. DIt can, because a society registered under a co-operative societies law is an eligible form, and an insurance co-operative society may carry on any class of insurance businessCorrect

Explanation

Section 2C(1)(b) lists co-operative societies registered under the Co-operative Societies Act, 1912 or State co-operative laws as eligible forms. Section 2C(3) also permits an insurance co-operative society to carry on any class of insurance business in India. Hence the first option is wrong.

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