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CS Executive · Setting Up of Business, Industrial and Labour Laws · Financial Services Organization

Which statement correctly distinguishes the IFSC provisions in the three Acts (Insurance Act sections 118A, Banking Regulation Act 51A, RBI Act 57A) from section 2CA of the Insurance Act, 1938?

Section 2CA empowers the Central Government to notify that Insurance Act provisions do not apply, or apply with modifications, to insurers in a Special Economic Zone. Section 118A instead removes the insurance Authority's powers over an IFSC and vests them in the IFSCA.

  1. ASection 2CA lets the Central Government by notification disapply or modify the Insurance Act for insurers in a Special Economic Zone, whereas section 118A moves the Authority's powers in an IFSC to the IFSCACorrect
  2. BSection 2CA transfers the Insurance Authority's powers in an IFSC to the IFSCA, while section 118A empowers the Central Government to notify exceptions
  3. CBoth sections only allow the Central Government to apply the Act to an SEZ with no change of regulator
  4. DSection 2CA applies only to banks and 118A only to NBFCs

Explanation

Section 2CA is a notification power of the Central Government to say the Act does not apply, or applies with exceptions, modifications and adaptations, to insurers in an SEZ. Section 118A is a statutory carve-out shifting the Authority's powers to the IFSCA for IFSC matters. Option B reverses them.

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