📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Under the provisions related to reinsurance with Indian

    re-insurers, which of the following statements is most accurate?
    A The Authority may specify a uniform percentage, not exceeding 30% of the sum assured on each policy, to be re-insured with Indian re-insurers, regardless of the class of insurance Correct Answer Incorrect Answer
    B The Authority is empowered to specify the percentage of the sum assured on each policy that must be re-insured with Indian re-insurers, but this percentage cannot exceed 50% for any class of insurance Correct Answer Incorrect Answer
    C The Authority may notify different percentages, up to a maximum of 30% of the sum assured, for reinsurance with Indian re-insurers, and may also determine how this percentage is to be distributed among Indian re-insurers Correct Answer Incorrect Answer
    D The Authority can specify that all policies must be re-insured with Indian re-insurers at a fixed rate of 30% of the sum assured, without any variation across different classes of insurance Correct Answer Incorrect Answer
    E The Authority may impose reinsurance requirements up to 40% of the sum assured, distributed among Indian re-insurers as it deems appropriate. Correct Answer Incorrect Answer

    Solution

    Insurance Act Section 101A Re-insurance with Indian re-insurers: (2) For the purposes of sub-section (1), 3[the Authority] may, by notification in the Official Gazette: (a) specify the percentage of the sum assured on each policy to be re-insured and different percentages may be specified for different classes of insurance: Provided that no percentage so specified shall exceed thirty per cent. of the sum assured on such policy; and (b) also specify the proportions in which the said percentage shall be allocated among the Indian re-insurers.

    Practice Next
    More Other Laws and Acts Questions

    Relevant for Exams:

    ask-question