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CMA Final · Risk Management in Banking and Insurance · Introduction to Insurance Business

Under the Insurance Act, 1938 (as reproduced), which of the following entities is among those permitted to begin or continue any class of insurance business in India under the general rule in section 2C(1)?

A public company may carry on insurance business in India under section 2C(1). The section lists public companies, co-operative societies, statutory bodies and foreign reinsurers with a reinsurance-only branch. Partnership firms, private companies and charitable trusts are not permitted entities.

  1. AA partnership firm registered under the Indian Partnership Act
  2. BA public companyCorrect
  3. CA private limited company with foreign shareholders
  4. DA trust registered for charitable purposes

Explanation

Section 2C(1) allows insurance business to be carried on only by a public company, a registered co-operative society, a statutory body established by an Act of Parliament, or a foreign reinsurer with an Indian reinsurance-only branch (including Lloyd's or its Members). A partnership firm, a private company or a charitable trust is not on that list, so only a public company qualifies.

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