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

Aarogya Care Insurance Ltd is primarily engaged in health insurance business and does not underwrite motor third party risks. Under the Insurance Act, 1938, what is the position regarding the obligation to underwrite a minimum percentage of motor third party business?

The Authority (IRDAI) may, by regulations, exempt an insurer primarily engaged in health business from the minimum motor third party underwriting obligation. The exemption is not automatic and cannot be granted by the General Insurance Council.

  1. ANo exemption is possible for any insurer
  2. BThe Authority may by regulations exempt an insurer primarily engaged in health business from this obligationCorrect
  3. CThe General Insurance Council may grant the exemption by resolution
  4. DThe exemption applies automatically to all health insurers without any regulations

Explanation

Section 32D proviso allows the Authority, by regulations, to exempt insurers primarily engaged in health, re-insurance, agriculture or export credit guarantee business. The power lies with the Authority, not the Council, and it is exercised by regulations, not automatically.

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