Indian Insurance Regime on Trading of Insurance Policies

  • Sundar Kishore and P. Hariharan
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  • Sundar Kishore

    Student at Alliance University, Bangalore, India

  • P. Hariharan

    Student at Alliance University, Bangalore, India

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Trading of Life Insurance Policy is a relatively new kind of business which has entered India. This has tapped into the whole new market for insurance trading in the secondary in the market which was not present earlier in India and has generated a huge income and has made a substantial contribution to the growth of the economy. But the latest development in this sector has restricted the growth of the sector. This paper discusses about several aspects that revolve around the legality of trading of life insurance policy, in India. The very reason for regulating the insurance sector is to provide social security to the policyholders; however, the statute fails to consider other aspects, which are the financial security and development through the trading of such policy. This paper will discuss the historical background for the S. 38 of the Life Insurance Act of 1938, which allowed for the assignment of life insurance policies. However, this particular section has brought in many changes following the 2015 amendment, which has affected the whole sector of trading policies. Restrictions have been imposed on the transfer or assignment of life insurance policies, which has affected the secondary market, which is essential for any country to develop its economy. India is by this step losing out on opportunities to improve the country’s economy because when the value of the product in the secondary market rises, its value in the primary market rises as well. This paper will look into the background of the application of section 38 of the Insurance act of 1938 and contentions opposing the validity of the provision. This paper will also discuss the reasons favouring the existence of such provision with help of decided case laws and other opinions from various scholars.


Research Paper


International Journal of Law Management and Humanities, Volume 5, Issue 4, Page 914 - 923


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