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

A student summarises Section 32D as follows. Which summary is accurate?

The accurate summary is that every general insurer must underwrite a minimum percentage of third party motor risks specified by regulations, while the Authority may exempt insurers primarily engaged in health, re-insurance, agriculture or export credit guarantee business.

  1. AOnly life insurers must underwrite a fixed share of motor third party risks, set by the Council
  2. BEvery general insurer must underwrite a minimum percentage of motor third party risks set by regulations, subject to exemption by the Authority for specified types of insurerCorrect
  3. CEvery insurer must underwrite motor third party risks equal to 50 per cent of its premium, with no exemption
  4. DGeneral insurers must underwrite motor third party risks only when the Authority issues an individual order to them

Explanation

Section 32D applies to insurers carrying on general insurance business, with the percentage specified by regulations. The proviso permits the Authority to exempt insurers primarily in health, re-insurance, agriculture or export credit guarantee. The other options invent a life insurer duty, a fixed 50 per cent, or an order-based trigger.

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