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

Bharat Agri Insurance Ltd earns most of its premium from crop insurance and also writes a small motor own-damage portfolio. Which statement correctly reflects Section 32D?

The Authority may exempt it by regulations if it is primarily engaged in agriculture insurance. The exemption is not automatic and depends on the Authority's regulations. The minimum percentage for third party motor risks is also fixed by regulations, not by reference to crop premium.

  1. AIt is automatically exempt because any agriculture business removes the obligation
  2. BThe Authority may by regulations exempt it if it is primarily engaged in agriculture insuranceCorrect
  3. CIt is exempt only if it is a re-insurer
  4. DIt must underwrite motor third party risks in the same share as its crop premium

Explanation

Exemption is not automatic. The proviso allows the Authority, by regulations, to exempt insurers primarily engaged in agriculture among other listed businesses. The word primarily matters, and the minimum percentage is set by regulations, not tied to crop premium.

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