Skip to content

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

Section 32B of the Insurance Act, 1938 requires every insurer to undertake life and general insurance business in the rural and social sectors. How is the extent of this obligation fixed?

The percentages are specified by the Authority (IRDAI) in the Official Gazette. Section 32B itself prescribes no fixed figure. It simply obliges every insurer to undertake the notified percentages of life and general insurance business in the rural and social sectors.

  1. APercentages specified by the Authority through an Official Gazette notificationCorrect
  2. BA fixed 10% of premium income prescribed in the section itself
  3. CPercentages decided by each insurer's board in its annual business plan
  4. DPercentages set by the Central Government in the Union Budget

Explanation

Section 32B states that every insurer shall undertake such percentages of life and general insurance business in the rural and social sectors as may be specified in the Official Gazette by the Authority. The section sets no fixed figure and leaves nothing to the insurer's board or the Budget.

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