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The 'life insurance fund' under Section 10 of the Insurance Act 1938 shall be the security of:
A{'text': 'The life policyholders', 'letter': 'A'}
B{'text': 'The shareholders', 'letter': 'B'}
C{'text': 'The reinsurers', 'letter': 'C'}
D{'text': 'The Government', 'letter': 'D'}
Answer & Solution
Correct answer: A. {'text': 'The life policyholders', 'letter': 'A'}
1. Section 10 (read with Sec 11) carves out a protected fund for life policyholders.
2. The fund's assets are walled off from other business risks.
3. The life insurance fund shall be as absolutely the security of the life policy-holders as though it belonged to an insurer carrying on no other business than life insurance business.
_Source: Insurance Act 1938 (incorporating amendments till 2021), noc.irdai.gov.in — "The life insurance fund shall be as absolutely the security of the life policy-holders as though it belonged to an insurer carrying on no other business than life insurance business"_