Question

Under what conditions can an insurer invest in companies belonging to its promoters as laid down in the insurance Act?

Q: Answer-Under what conditions can an insurer invest in companies belonging to its promoters as laid down in...

Section 27C. Investment by insurer in certain casesAn insurer may invest not more than five per cent. in aggregate of his controlled fund or assets as referred to in sub-section 2 of section 27 in the companies belonging to the promoters, subject to such conditions as may be specified by the regulations.

A An insurer can invest up to 10% of its controlled fund in companies belonging to its promoters, without any specific conditions

B An insurer can invest an unlimited amount of its assets in companies belonging to its promoters, as long as it is approved by the board of directors

C An insurer may invest no more than 5% in aggregate of its controlled fund or assets in companies belonging to the promoters, subject to conditions specified by the regulations

D An insurer is prohibited from investing in companies belonging to its promoters under any circumstances

E An insurer may invest up to 50% of its controlled fund in companies belonging to its promoters if the companies are profitable.

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