Here we will see Section 2C of The Insurance Act.
2C. Prohibition of transaction of insurance business by certain persons.—
(1) Save as hereinafter provided, no person shall, after the commencement of the Insurance (Amendment) Act, 1950 (47 of 1950), begin to carry on any class of insurance business in India and no insurer carrying on any class of insurance business in India shall after the expiry of one year from such commencement, continue to carry on any such business unless he is—
(a) a public company, or
(b) a society registered under the Co–operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State relating to co–operative societies, or
(c) a body corporate incorporated under the law of any country outside India not being of the nature of a private company :
Provided that the Central Government may, by notification in the Official Gazette, exempt from the operation of this section to such extent for such period and subject to such conditions as it may specify, any person or insurer for the purpose of carrying on the business of granting superannuation allowances and annuities of the nature specified in sub–clause (c) of clause (11) of section 2 or for the purpose of carrying on any general insurance business :
Provided further that in the case of an insurer carrying on any general insurance business no such notification shall be issued having effect for more than three year at any one time.
Provided also that no insurer other than an Indian insurance company shall begin to carry on any class of insurance business in India under this Act on or after the commencement of the Insurance Regulatory and Development Authority Act,1999(41 of 1999).
Provided also an insurer, being an Indian Insurance Company, insurance co–operative society or, a body corporate referred to in clause (c) of this sub–section carrying on the business of insurance, may carry on any business of insurance in any Special Economic Zone as defined in clause (za) of section 2 of the Special Economic Zones Act, 2005(28 of 2005).
(2) Every notification issued under sub–section (1) shall be laid before Parliament as soon as may be after it is issued.
(3) Notwithstanding anything contained in sub–section (1), an insurance co–operative society may carry on any class of insurance business in India under this Act on or after the commencement of the Insurance (Amendment) Act, 2002(42 of 2002).