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

Kaveri Health Assurance Ltd is a standalone health insurer, and no other class of business forms part of its operations. The IRDAI has specified by regulations a minimum percentage of third-party motor risks that general insurers must underwrite. Under section 32D of the Insurance Act, 1938, what is Kaveri's position?

The obligation applies to every general insurer, but the Authority may by regulations exempt an insurer primarily engaged in health business. The exemption is not automatic and is not granted by the General Insurance Council. So Kaveri qualifies for exemption only through the Authority's regulations.

  1. AIt must underwrite the same minimum percentage as every other insurer
  2. BIt is automatically exempt because it is a health insurer
  3. CThe Authority may, by regulations, exempt an insurer primarily engaged in health business from this obligationCorrect
  4. DOnly the General Insurance Council can grant it an exemption

Explanation

Section 32D imposes the obligation on every insurer carrying on general insurance business. The proviso lets the Authority exempt, by regulations, insurers primarily engaged in health, re-insurance, agriculture or export credit guarantee business. The exemption is not automatic, and it comes from the Authority, not the Council.

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