Skip to content

CS Professional · Banking and Insurance - Laws and Practice · General and Health Insurance

A general insurer carrying on fire and marine business in India is asked about its regulatory obligation on expenses of management under the Insurance Act, 1938. Which statement matches the text of section 40C?

Section 40C requires every insurer to furnish to the Authority the details of expenses of management in the manner and form specified by regulations made under the Act. It sets no fixed percentage cap, and reporting is to the Authority rather than the Council.

  1. AThe insurer must furnish to the Authority the details of expenses of management in the manner and form specified by regulationsCorrect
  2. BThe insurer must obtain Government approval before incurring any management expenses
  3. CThe insurer need report expenses only to the General Insurance Council
  4. DThe insurer must cap expenses at a fixed percentage written in section 40C itself

Explanation

Section 40C requires every insurer transacting insurance business in India to furnish to the Authority the details of expenses of management in the manner and form specified by the regulations. It does not fix a percentage cap or require Government approval, and the report goes to the Authority, not the Council.

Did you get it right without looking?

One question tells you little. A timed set on General and Health Insurance shows your real accuracy, how long you take and where you lose marks.

Practise General and Health InsuranceFree diagnostic mock

More General and Health Insurance questions