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

Nirmaan Health Insurance Ltd. is a standalone health insurer. It argues it should be exempt from underwriting third party motor risks. Under the Insurance Act, 1938 text provided, which statement is correct?

The Authority may exempt a primarily health-focused insurer by regulations. Section 32D obliges general insurers to underwrite a minimum percentage of third party motor risks, but its proviso permits exemption for insurers primarily engaged in health, re-insurance, agriculture or export credit guarantee business.

  1. AEvery general insurer must underwrite the prescribed minimum percentage of third party motor business, with no exemption possible
  2. BOnly life insurers are required to underwrite third party motor risks
  3. CThe Authority may, by regulations, exempt an insurer primarily engaged in health, re-insurance, agriculture or export credit guarantee businessCorrect
  4. DThe Central Government by notification may exempt it for three years at a time

Explanation

Section 32D requires every general insurer to underwrite the minimum percentage of third party motor business specified by regulations. The proviso lets the Authority, by regulations, exempt insurers primarily engaged in health, re-insurance, agriculture or export credit guarantee. The three-year notification power belongs to Section 2C and is unrelated.

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