New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    Under the General Insurance Business (Nationalisation)

    Act after making provision for bad and doubtful debts, depreciation in assets, provident, superannuation, welfare, and other funds, debts due to the Government what is the requirement for every acquiring company?
    A The company is exempted from distributing profits Correct Answer Incorrect Answer
    B The company should distribute the balance of profit as dividends Correct Answer Incorrect Answer
    C The company must invest the balance of profit in government bonds Correct Answer Incorrect Answer
    D The company should create a reserve fund for future uncertainties Correct Answer Incorrect Answer
    E The company has the discretion to decide the utilization of profit Correct Answer Incorrect Answer

    Solution

    Section 20.   Balance of profit how to be utilised: (1) After making provision for bad and doubtful debts, depreciation in assets, provident, superannuation, welfare and other funds, debts due to Government and all other matters for which provision is necessary under any law or which are usually provided for by insurance companies, every acquiring company shall distribute the balance of profit as dividends.

    Practice Next