Skip to content

CMA Final · Risk Management in Banking and Insurance · Insurance Intermediaries

Under the Insurance Act, 1938, as provided in Section 40, who may be paid remuneration or reward, by way of commission or otherwise, for soliciting or procuring insurance business in India?

Only an insurance agent, an intermediary or an insurance intermediary may be paid remuneration or reward for procuring insurance business in India, and that too in the manner specified by the regulations. Section 40(1) of the Insurance Act, 1938 prohibits such payment to any other person.

  1. AAny person who introduces a client, if the insurer approves in writing
  2. BOnly an insurance agent or an intermediary or insurance intermediary, in the manner specified by the regulationsCorrect
  3. COnly employees of the insurer, but not agents
  4. DAny person, if the commission does not exceed one lakh rupees

Explanation

Section 40(1) bars payment of any remuneration or reward for procuring insurance business to anyone except an insurance agent, intermediary or insurance intermediary, in the manner specified by the regulations. The one lakh rupee figure relates to the penalty limit, not a permitted commission cap.

Did you get it right without looking?

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

Practise Insurance IntermediariesFree diagnostic mock

More Insurance Intermediaries questions