CMA Intermediate · Corporate Accounting and Auditing · Accounts of Banking, Electricity and Insurance Companies
Under Section 11 of the Insurance Act, 1938 (as substituted in 2015), which of the following must every insurer keep as separate accounts?
Section 11(2) of the Insurance Act, 1938 requires every insurer to keep separate accounts relating to the funds of shareholders and the funds of policyholders, so that the two sets of funds are not mixed in the books.
- AAccounts of life business and accounts of general business
- BAccounts relating to funds of shareholders and accounts relating to funds of policyholdersCorrect
- CAccounts of Indian business and accounts of foreign business
- DAccounts of revenue items and accounts of capital items
Explanation
Section 11(2) requires every insurer to keep separate accounts relating to funds of shareholders and policyholders. The other pairings are not what the sub-section prescribes.
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