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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 cases—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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