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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework in Insurance

Suraksha Life Insurance Ltd, an Indian insurer, has been operating since 2012. Its compliance head asks whether the insurer must undertake any share of its business in rural and social sectors after the IRDA Act, 1999 came into force. Under the Insurance Act, 1938, who specifies the percentages of life and general insurance business to be undertaken in these sectors?

The Authority (IRDAI) specifies the percentages. Under section 32B of the Insurance Act, 1938, every insurer must undertake the percentages of life and general business in rural and social sectors that the Authority specifies in the Official Gazette.

  1. AThe Central Government through a notification in the Official Gazette under the Companies Act
  2. BThe insurer's own board by a resolution each year
  3. CThe Authority, by specifying the percentages in the Official GazetteCorrect
  4. DThe Controller of Insurance appointed by the Central Government every year

Explanation

Section 32B of the Insurance Act, 1938 requires every insurer, after the commencement of the IRDA Act, 1999, to 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 board and the Controller have no such role in fixing the percentages.

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