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    Question

    Under what conditions can an insurer invest in companies

    belonging to its promoters as laid down in the insurance Act?
    A An insurer can invest up to 10% of its controlled fund in companies belonging to its promoters, without any specific conditions Correct Answer Incorrect Answer
    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 Correct Answer Incorrect Answer
    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 Correct Answer Incorrect Answer
    D An insurer is prohibited from investing in companies belonging to its promoters under any circumstances Correct Answer Incorrect Answer
    E An insurer may invest up to 50% of its controlled fund in companies belonging to its promoters if the companies are profitable. Correct Answer Incorrect Answer

    Solution

    Section 27C. Investment by insurer in certain casesā€”An 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.

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