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

The IRDA Act, 1999 lists the Authority's powers and functions. Which of the following is correctly matched to the rural or social sector theme?

Section 14(2)(p) of the IRDA Act empowers the Authority to specify the percentage of life and general insurance business an insurer must undertake in the rural or social sector. The other clauses concern solvency, funding professional organisations and dispute adjudication, not rural obligations.

  1. ASection 14(2)(p): specifying the percentage of life and general insurance business to be undertaken by the insurer in the rural or social sectorCorrect
  2. BSection 14(2)(l): specifying the rural business percentage of each insurer
  3. CSection 14(2)(o): fixing the rural sector solvency ratio
  4. DSection 14(2)(m): setting crop insurance premium rates for farmers

Explanation

Clause (p) of section 14(2) gives the Authority power to specify the percentage of life and general insurance business to be undertaken in the rural or social sector. Clause (l) deals with margin of solvency, clause (o) with the percentage of premium income to finance professional organisations, and clause (m) with adjudicating disputes between insurers and intermediaries.

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