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CS Professional · Banking and Insurance - Laws and Practice · General and Health Insurance

Vistaar Cooperative Society, registered under a State cooperative law, plans to carry on general insurance business in India. Considering Section 2C of the Insurance Act, 1938 as given, which statement is correct?

A cooperative society registered under State cooperative law is a permitted form of insurer under Section 2C(1)(b), and an insurance co-operative society may carry on any class of insurance business. No three-year exemption is needed, and it must use a word like insurance in its name.

  1. AIt is barred because only public companies may carry on insurance business
  2. BIt may carry on insurance only if it holds a Central Government exemption of up to three years
  3. CIt qualifies as a permitted form of insurer under clause (b), and an insurance co-operative society may carry on any class of insurance businessCorrect
  4. DIt may only act as an intermediary and must avoid the word insurance in its name

Explanation

Section 2C(1)(b) lists a society registered under cooperative law as a permitted form of insurer, and sub-section (3) allows an insurance co-operative society to carry on any class of insurance business. The exemption proviso is not needed. Sub-section (4) actually requires an insurer to use a word such as insurance in its name, so the last option is wrong.

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