Section 3 of GIBNA : Section 3: Definitions

Explanation using Example

Imagine a scenario where the government decides to restructure the general insurance sector. In this process, two Indian insurance companies, 'InsureSafe' and 'SecureLife', which were previously operating separately, are to be merged into a single entity. According to Section 3(a) of The General Insurance Business (Nationalisation) Act, 1972, the newly merged entity will be referred to as the 'acquiring company'. Let's call this new entity 'UnitedInsure'.

The 'appointed day' for the merger, as per Section 3(b), is set by the Central Government and announced to be July 1, 2023. This is the date when the merger officially takes effect and is communicated through a notification in the Official Gazette.

After the merger, the 'board of directors' for UnitedInsure is established, and it functions as defined under the Companies Act, 2013, as referred to in Section 3(ba) and Section 3(c).

'UnitedInsure', being an Indian insurance company formed by the merger of two existing insurers, now carries on its business in accordance with the provisions of the General Insurance Business (Nationalisation) Act, 1972, and is subject to the same regulations and definitions as provided in the Insurance Act, 1938, and the Companies Act, 2013, as mentioned in Sections 3(p) and 3(q).