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

Under Section 32D of the Insurance Act, 1938 (as in the given text), an insurer primarily engaged in health business stands in what position regarding the minimum third party motor insurance obligation?

The Authority may exempt a primarily health insurer from the minimum third party motor underwriting obligation, but only by regulations. The exemption is not automatic; the proviso to Section 32D gives the Authority this power.

  1. AIt must underwrite double the specified percentage
  2. BThe Authority may, by regulations, exempt it from the obligationCorrect
  3. CIt is automatically exempt without any regulation
  4. DIt must underwrite it only for life policies

Explanation

The proviso to Section 32D lets the Authority, by regulations, exempt insurers primarily engaged in health, re-insurance, agriculture or export credit guarantee. The exemption is not automatic, so option C is wrong.

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