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CMA Final · Risk Management in Banking and Insurance · Concept and Types of Health Insurance Policies

Section 40C of the Insurance Act, 1938, as given, imposes which duty on every insurer transacting insurance business in India, including health insurers?

Every insurer must furnish to the Authority the details of its expenses of management, in the manner and form specified by regulations. The section as given sets no fixed percentage limit; it is a reporting duty, and it covers health insurers.

  1. ATo cap expenses of management at a fixed percentage of premium stated in the section
  2. BTo furnish the Authority details of expenses of management in the manner and form specified by regulationsCorrect
  3. CTo pay expenses of management to the General Insurance Council
  4. DTo publish expenses of management only in a newspaper

Explanation

The substituted Section 40C requires insurers to furnish the Authority details of expenses of management in the manner and form specified by regulations. It states no fixed percentage cap, so option A is wrong.

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