Skip to content

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

Section 103 of the Insurance Act, 1938 prescribes the consequence for a person who carries on insurance business without a certificate of registration under section 3. Which is correct?

A person carrying on insurance business without a certificate of registration under section 3 is liable under Section 103 to a penalty not exceeding Rs 25 crore and also imprisonment which may extend to ten years. Both penalty and imprisonment apply.

  1. APenalty up to Rs 25 crore and imprisonment up to ten yearsCorrect
  2. BPenalty up to Rs 25 lakh and imprisonment up to one year
  3. COnly a penalty up to Rs 10 crore, with no imprisonment
  4. DOnly imprisonment up to three years, with no penalty

Explanation

Section 103 provides for a penalty not exceeding rupees twenty-five crores and imprisonment which may extend to ten years. The lakh figure and the penalty-only or imprisonment-only options misstate the provision.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Insurance Business shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Insurance BusinessFree diagnostic mock

More Introduction to Insurance Business questions