Question

What is the practice in India regarding reserves for unexpired risks in general insurance?

a.

Provide 50% on net premium for Fire and Miscellaneous Accident business and 100% on Marine business

b.

Provide 100% on net premium for Fire and Miscellaneous Accident business and 50% on Marine business

c.

Provide 50% on net premium for all types of general insurance business

d.

Provide 100% on net premium for all types of general insurance business

Answer: (a).Provide 50% on net premium for Fire and Miscellaneous Accident business and 100% on Marine business Explanation:In India, the practice regarding reserves for unexpired risks in general insurance is to provide 50% on net premium for Fire and Miscellaneous Accident business and 100% on Marine business. These percentages represent the maximum allowed in the computation of profits for general insurance companies as per the Indian Income Tax Act, 1961.

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Q. What is the practice in India regarding reserves for unexpired risks in general insurance?

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