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

Which statement about the use of the word 'insurance' in names under Section 2C(4) to (6) of the Insurance Act, 1938 is correct?

Section 2C(4) prohibits anyone other than an insurer from using words such as insurance, assurance or re-insurance in its name or business, and requires insurers to include at least one such word as specified by regulations. Intermediaries have only limited use under sub-section (5).

  1. ANo person other than an insurer may use words like 'insurance' or 'assurance' in its name or business, and an insurer must use at least one such word as specified by regulationsCorrect
  2. BAny registered company may use 'insurance' in its name freely
  3. COnly intermediaries may use the word 'insurance' in their names
  4. DInsurers are prohibited from using the word 'assurance'

Explanation

Section 2C(4) bars non-insurers from using the specified words and requires insurers to use at least one such word in their name as regulations specify. Intermediaries and associations may use certain words only to indicate the nature of their organisation and services, so the other options are wrong.

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