GENERAL KNOWLEDGE

Detailed explanation-1: -Note : Insurance companies are required to have a minimum paid-up equity capital of 1 billion rupees, whereas a minimum paid-up capital of 2 billion rupees has been prescribed for reinsurance companies. Which Health Insurance has launched (23rd Feb 2023) a new health insurance policy named ‘ReAssure 2.0’?

Detailed explanation-2: -If this application is made for the business of Life Insurance, General Insurance, or Health Insurance, there must be documentary evidence proving that the paid-up capital of the business is at least Rs. 100 crore.

Detailed explanation-3: -The cost of capital is the rate of return insurers have to pay for the equity they use. 1 The rate of return demanded depends on demand and supply of capital in general and the risk the business is involved in. A company that does not pay the rate of return demanded, will come under pressure from capital markets.

Detailed explanation-4: -To begin transacting insurance, must have capital of at least $1 million and surplus of at least $1 million. Thereafter, capital must be maintained (“unimpaired”) of at least $1 million. Also, subject to Risk Based Capital Act.