KSLU Solved Question Papers
Insurance Law
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 8
2022 Oct Examination
munotes.in
Mumbai
B.A. LL.B. (Five Years) Sem 8 Insurance Law 2022 Oct Question Paper with Solutions
First published on munotes.in on 21 October 2026.
Published by munotes.in, Mumbai.
Model answers written and edited by the munotes.in editorial desk.
Passages from this volume may be quoted, in print, online or by an AI system, with credit: name munotes.in and link to this volume's page. The volume may not be reproduced as a whole. Full terms at munotes.in/content-license.
munotes.in is an independent study resource for students of Karnataka State Law University. It is not affiliated with Karnataka State Law University, and is not endorsed by it.
The University does not publish an official answer key for this paper. The answers in this volume are model answers, written to show how a full-mark answer is built. They are a study aid, not an authority on what an examiner marked.
The question paper reproduced here is the paper as set by Karnataka State Law University at the 2022 Oct examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2022 Oct examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2022 Oct examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 80 · 20 questions answered
Instructions printed on the paper
- N.B. (1) Answer all five units. (2) One Essay type question and short note/ problems is compulsory from each units. (3) Figures to the right indicate marks. (4) Answer should be written either in English or Kannada Completely.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)Discuss the history and development of Life Insurance in India.[10]
Answer
For full marks, cover: risk sharing before modern insurance; the first companies (Oriental Life, 1818; Bombay Mutual, 1870); the Indian Life Assurance Companies Act, 1912 and the Insurance Act, 1928; the Insurance Act, 1938; nationalisation in 1956 and the Life Insurance Corporation Act, 1956 (reasons and machinery); Rustom Cavasjee Cooper v. Union of India; the Malhotra Committee and the IRDA Act, 1999; the 2015 and 2025 amendments; a timeline.
Before modern insurance
India shared risks long before it had insurance companies. The joint family spread the cost of a death across the household. Village and caste funds met funeral costs. Ancient texts such as the Arthasastra discuss pooling losses. But none of this was insurance in the modern sense. There was no insurer taking risk as a business for a premium.
The first life offices
- 1818. The Oriental Life Insurance Company was set up at Calcutta. It is treated as the first insurance company in India. It was founded by Europeans, insured mostly European lives, and failed in 1834.
- Two markets. British offices charged Indian lives a heavy extra premium, treating them as poorer risks.
- 1870. The Bombay Mutual Life Assurance Society became the first Indian office to insure Indian lives at ordinary rates.
- The swadeshi years. Indian companies multiplied. By the 1930s there were well over a hundred Indian insurance offices, many of them small.
The first statutes
- Indian Life Assurance Companies Act, 1912. The first statute of general application. Life offices had to make deposits and have their liabilities valued periodically by an actuary.
- Indian Insurance Companies Act, 1928. Insurers had to file statistical returns with the Government.
- Insurance Act, 1938. The first comprehensive statute, and still the principal Act. It brought in registration of insurers, minimum capital, a separate life fund and prescribed investments. It also required actuarial valuation, limited commission and expenses, controlled agents, and set up a Controller of Insurance.
Nationalisation in 1956
Why. By the mid-1950s many life offices were small and badly managed. Some were run for their controllers rather than their policyholders, and families who had paid premiums for years lost everything. The State also wanted long-term savings for national development, and wanted insurance to reach villages and poorer people.
How. The Central Government took over the management of life business by Ordinance on 19 January 1956. The Life Insurance Corporation Act, 1956, in force from 1 July 1956, then created the Life Insurance Corporation of India. On the appointed day, the assets and liabilities of the "controlled business" of every insurer vested in it (section 7). Existing policies and contracts continued against the Corporation (section 9). Employees moved to it (section 11). Compensation was paid on fixed principles, with a Tribunal headed by a judge (sections 16 and 17).
The constitutional limit. Rustom Cavasjee Cooper v. Union of India, (1970) 1 SCC 248, the bank nationalisation case, struck down a law whose compensation was not just. It shows the limit within which such takeovers must work. The 1956 Act met it by fixing compensation on stated principles and giving a right to go to a Tribunal.
The public mandate. In Life Insurance Corporation of India v. Consumer Education and Research Centre, (1995) 5 SCC 482, the Supreme Court held that the Corporation is an instrumentality of the State. It struck down a condition that confined its cheapest policy to employees of Government bodies and reputed firms. A State insurer must design its products fairly for the public.
The monopoly years (1956 to 1999)
For over four decades the Corporation was the only life insurer in India. It spread life insurance widely and invested heavily in Government securities. But critics pointed to limited products, weak service and little competition.
Reopening the market
- 1994. The Malhotra Committee recommended that private insurers be allowed again, under an independent regulator.
- 1999. The Insurance Regulatory and Development Authority Act, 1999 set up the regulator and reopened the sector, with foreign holding capped at twenty-six per cent. Private life insurers entered from 2000.
- 2015. The Insurance Laws (Amendment) Act, 2015 raised the foreign cap to forty-nine per cent and reformed agents, nomination and section 45.
- 2021. The foreign cap rose to seventy-four per cent.
- 2026. The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 came into force on 5 February 2026. It allows foreign holding up to one hundred per cent (section 3AA of the Insurance Act).
Timeline
| Year | Event |
|---|---|
| 1818 | Oriental Life Insurance Company, Calcutta |
| 1870 | Bombay Mutual: Indian lives at ordinary rates |
| 1912 | Indian Life Assurance Companies Act |
| 1938 | Insurance Act, still in force |
| 1956 | Life insurance nationalised; LIC created |
| 1999 | IRDA Act; sector reopened |
| 2015 | Insurance Laws (Amendment) Act |
| 2026 | 2025 Act in force; foreign holding up to 100 per cent |
Conclusion. Life insurance in India grew from British offices in 1818 to Indian offices in the swadeshi years. It was regulated in 1912 and 1938 and nationalised into the Life Insurance Corporation in 1956. The IRDA Act, 1999 reopened it to private and foreign insurers. Rustom Cavasjee Cooper marks the constitutional limit on such takeovers, and Consumer Education and Research Centre the Corporation's public duty. Today a regulated, competitive market works under the 1938 Act as amended in 2015 and 2025.
The rest of the answers
The first answer is free. The rest come with the KSLU B.A. LL.B. Semester 8 solved papers.
You have read the question paper and its first answer in full. Buy the solved papers once and you can read every answer of every solved paper in this semester.
Solved papers: ₹499 Already bought it? Sign in
The question paper itself stays free.
Found an error in this volume? Report it and we will check it against the paper.