Skip to content

CS Professional · Banking and Insurance - Laws and Practice · Concept of Insurance

Suraksha Mutual Life Ltd., an Indian life insurer, argues that rural and social sector business is optional and depends on its own commercial judgement. Under the Insurance Act, 1938 as given in the official text, which statement is correct?

Every insurer must undertake the percentages of life and general insurance business in rural and social sectors that the Authority specifies in the Official Gazette. The duty is mandatory, covers both life and general insurers, and the insurer cannot set its own percentage.

  1. AThe insurer must undertake the percentages of life and general insurance business in rural and social sectors that the Authority specifies by notification in the Official GazetteCorrect
  2. BThe insurer may undertake such business only if the Central Government separately directs it each year
  3. CThe obligation applies only to general insurers and not to life insurers
  4. DThe insurer decides its own percentage, and the Authority may only record it

Explanation

Section 32B says every insurer shall undertake such percentages of life and general insurance business in the rural and social sectors as the Authority specifies in the Official Gazette. The duty is mandatory and covers both life and general business. The option claiming self-determined percentages ignores the Authority's power to specify them.

Did you get it right without looking?

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

Practise Concept of InsuranceFree diagnostic mock

More Concept of Insurance questions