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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework in Insurance

After the IRDA Act, 1999, section 32B of the Insurance Act, 1938 was inserted and later amended. Which statement about section 32B as it now stands is correct?

Every insurer, life and general, must undertake percentages of business in the rural and social sectors as specified by the Authority in the Official Gazette. The 2014-15 amendment changed 'rural or social sector' to 'rural and social sectors', and the obligation is mandatory.

  1. AEvery insurer must undertake such percentages of life and general insurance business in the rural and social sectors as the Authority specifies in the Official GazetteCorrect
  2. BOnly life insurers must undertake rural business, at a fixed 10 percent set by Parliament
  3. CInsurers may choose voluntarily whether to serve rural or social sectors
  4. DThe Central Government, not the Authority, specifies the percentages for general insurers

Explanation

Section 32B, inserted w.e.f. 19-4-2000, obliges every insurer to undertake specified percentages of both life and general business. The percentages are specified by the Authority in the Official Gazette. The 2015 amendment replaced 'rural or social sector' with 'rural and social sectors'.

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