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CMA Final · Risk Management in Banking and Insurance · Introduction to Insurance Business

As per Section 32D of the Insurance Act, 1938, which insurers carrying on general insurance business may be exempted by the Authority, through regulations, from the minimum third party motor vehicle underwriting obligation?

Insurers primarily engaged in health, re-insurance, agriculture or export credit guarantee business can be exempted by the Authority through regulations. Section 32D otherwise requires every general insurer to underwrite the specified minimum percentage of motor third party risks. Size, age or ownership of the insurer is not a ground.

  1. AAny insurer whose gross premium is below the market average
  2. BInsurers that are newly registered, for their first five years
  3. CInsurers primarily engaged in health, re-insurance, agriculture or export credit guarantee businessCorrect
  4. DOnly public sector general insurers, on the Central Government's request

Explanation

Section 32D obliges general insurers to underwrite a minimum percentage of motor third party risks as specified by regulations. The proviso lets the Authority exempt, by regulations, insurers primarily engaged in health, re-insurance, agriculture or export credit guarantee. Small size, newness or public ownership is not a stated ground.

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