CS Professional · Banking and Insurance - Laws and Practice · General and Health Insurance
Under section 40C of the Insurance Act, 1938, what must every insurer transacting general, health insurance and re-insurance business in India do regarding expenses of management?
Every insurer must furnish to the Authority the details of its expenses of management, in the manner and form specified by regulations. The section does not fix a percentage cap or require approval from the General Insurance Council.
- AKeep expenses below a fixed percentage of premium stated in the section
- BFurnish details of expenses of management to the Authority in the manner and form specified by regulationsCorrect
- CObtain prior approval of the General Insurance Council for all expenses
- DReport expenses only to the Central Government annually
Explanation
Section 40C as substituted requires every insurer to furnish to the Authority the details of expenses of management in the manner and form specified by regulations. It does not itself fix a percentage limit or require Council approval.
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