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CS Professional · Banking and Insurance - Laws and Practice · Life Insurance

Until 1956, many private insurers sold life policies in India. Under the Life Insurance Corporation Act, 1956, from the appointed day, what was the effect on a private insurer's registration certificate under the Insurance Act that authorised life insurance business?

The registration certificate ceased to have effect so far as it authorised life insurance business in India. Section 30 of the LIC Act gave the Corporation the exclusive privilege from the appointed day, so no private insurer's earlier certificate could support life business afterwards.

  1. AIt ceased to have effect in so far as it authorised life insurance business in IndiaCorrect
  2. BIt continued in force but only for policies already issued
  3. CIt was automatically converted into a licence to act as an agent of the Corporation
  4. DIt remained valid until the next annual renewal date

Explanation

Section 30 gives the Corporation the exclusive privilege from the appointed day and provides that any registration certificate held by an insurer immediately before that day ceases to have effect in so far as it authorises life insurance business in India. The other options invent continuation, conversion or renewal rules that the section does not contain.

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