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Under Section 27 of the Insurance Act 1938, an insurer carrying on LIFE insurance business must invest at least what percentage of the prescribed sum in Government securities?
A{'text': '25 %', 'letter': 'A'}
B{'text': '20 %', 'letter': 'B'}
C{'text': '10 %', 'letter': 'C'}
D{'text': '50 %', 'letter': 'D'}
Answer & Solution
Correct answer: A. {'text': '25 %', 'letter': 'A'}
1. Section 27 prescribes how a life insurer must invest its assets.
2. The Act splits the prescribed sum across investment categories.
3. Twenty-five per cent of the said sum must be in Government securities (with another 25% in Govt or other approved securities).
_Source: Insurance Act 1938 (incorporating amendments till 2021), noc.irdai.gov.in — "twenty-five per cent. of the said sum in Government securities, a further sum equal to not less than twenty-five per cent. of the said sum in Government securities or other approved securities"_