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

Bharat General Insurance Ltd wishes to discharge its section 32B obligations by selling policies only to urban salaried employees. Under section 32C of the Insurance Act, 1938, which persons must its obligations cover?

The obligations must cover rural residents, workers in the unorganised or informal sector, economically vulnerable or backward classes, and other categories specified by the Authority's regulations. Section 32C also says such policies include crop insurance, so urban salaried-only sales do not suffice.

  1. APersons in the rural sector, workers in the unorganised or informal sector, economically vulnerable or backward classes, and other categories specified by the Authority's regulationsCorrect
  2. BOnly government employees in notified districts
  3. COnly corporate customers with turnover below a threshold
  4. DOnly persons holding bank accounts opened under a government scheme

Explanation

Section 32C requires insurers to discharge the section 32B obligations by providing policies to persons residing in the rural sector, unorganised or informal sector workers, economically vulnerable or backward classes and other categories specified by Authority regulations, including crop insurance. Urban salaried-only sales would not satisfy this.

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