KSLU Solved Question Papers
Insurance Law
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 8
2025 Jan Examination
munotes.in
Mumbai
B.A. LL.B. (Five Years) Sem 8 Insurance Law 2025 Jan Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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Model answers written and edited by the munotes.in editorial desk.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2025 Jan examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2025 Jan examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2025 Jan 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/problem is compulsory from each Unit. (3) Figures to the right indicate marks. (4) Answers 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)Explain the composition and functions of Insurance Regulatory and Development Authority.[10]
Answer
For full marks, cover: the IRDA Act 1999 and why an independent regulator was set up; establishment as a body corporate (section 3); composition and the expertise proviso (section 4); tenure, removal, pay and the cooling-off bar (sections 5 to 8); the duty and the functions in section 14 grouped by purpose; the 2026 information powers (sections 14A to 14E); regulations and Indian Express Newspapers.
Why the Authority was created
After nationalisation, almost all insurance in India was written by the Life Insurance Corporation and the public sector general insurers. A Government officer, the Controller of Insurance, supervised them. In 1994 the Malhotra Committee recommended opening the market to private insurers. It also recommended an independent regulator, because a market with public and private players needs a referee that belongs to neither side.
An Interim Insurance Regulatory Authority was set up by resolution in 1996. Parliament then passed the Insurance Regulatory and Development Authority Act, 1999. It came into force on 19 April 2000. The Authority is now called the Insurance Regulatory and Development Authority of India (IRDAI).
Establishment: section 3
The Authority is established by notification under section 3(1). Under section 3(2) it is a body corporate with perpetual succession and a common seal. This means it is a legal person separate from its members. It continues even when its members change. It can hold property, make contracts, and sue and be sued in its own name. Its head office is at Hyderabad.
Composition: section 4
Under section 4 the Authority consists of:
- a Chairperson;
- not more than five whole-time members; and
- not more than four part-time members.
All are appointed by the Central Government. They must be persons of ability, integrity and standing. They must have knowledge or experience in life insurance, general insurance, actuarial science, finance, economics, law, accountancy, administration, information technology, or another useful discipline. The words "information technology" were added by the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, in force from 5 February 2026.
The expertise proviso. The proviso applies to the Chairperson and the whole-time members. Among them there must be at least one expert each in life insurance, general insurance and actuarial science. An actuary uses statistics to price policies and value an insurer's liabilities. The proviso makes sure the regulator can check the insurers' own experts.
Independence: sections 5 to 8
- Tenure (section 5). The Chairperson and whole-time members hold office for five years or until the age of sixty-five, whichever is earlier, and may be reappointed. This is the 2025 wording. Part-time members serve up to five years.
- Removal (section 6). A member may be removed only on stated grounds. They are insolvency, physical or mental incapacity, conviction for an offence involving moral turpitude, a conflicting financial interest, or abuse of position. For the last two grounds he must first be heard.
- Pay (section 7). Salary and conditions of service cannot be varied to a member's disadvantage after appointment.
- Cooling-off (section 8). For two years after leaving office, the Chairperson and whole-time members need the Central Government's approval. Without it they cannot take Government employment or a post in an insurance company.
These rules let the regulator act against powerful insurers, public or private, without fear.
Functions: section 14
The duty. Section 14(1) gives the Authority the duty "to regulate, promote and ensure orderly growth of the insurance business and re-insurance business". It is both a regulator and a development body.
The list. Section 14(2) lists seventeen powers and functions in clauses (a) to (q). The list is "without prejudice to the generality" of the duty, so it is illustrative. They fall into five groups:
| Purpose | Clauses | What the Authority does |
|---|---|---|
| Licensing | (a), (c), (d) | Registers insurers; sets qualifications and codes for agents, intermediaries, surveyors and loss assessors |
| Policyholder protection | (b), (i) | Protects policyholders in assignment, nomination, insurable interest, claims and surrender value; regulates general insurance terms |
| Soundness | (h), (j), (k), (l) | Inspects and audits insurers; sets accounts; regulates investments and the solvency margin |
| Purpose | Clauses | What the Authority does |
|---|---|---|
| Enforcement | (m), (n) | Adjudicates disputes with intermediaries; imposes penalties under section 102 of the Insurance Act, 1938 |
| Development | (e), (f), (g), (o), (p), (q) | Promotes efficiency and professional bodies; levies fees; fixes rural and social sector obligations |
The new information powers: sections 14A to 14E
The 2025 Act inserted sections 14A to 14E from 5 February 2026. The Authority may collect policy and claim information from insurers (section 14A). It may direct insurers to file such information despite any secrecy agreement (section 14B). It may share a person's policy information with an insurer, but only with that person's consent (section 14C). The information is confidential (section 14D). These powers help the regulator fight fraud and duplicate claims.
Regulations and their limits
The Authority makes regulations under section 26 of the 1999 Act and section 114A of the Insurance Act, 1938. It cannot delegate the power to make regulations or to register an insurer (section 23).
Indian Express Newspapers (Bombay) Private Ltd. v. Union of India, (1985) 1 SCC 641, shows the limits of such delegated law. Customs notifications had replaced a full exemption on newsprint with a duty. Newspaper publishers challenged them. The Supreme Court held that subordinate legislation can be struck down on three grounds. It may go beyond the parent Act, conflict with another statute, or be manifestly arbitrary under Article 14. The Government was told to reconsider the levy. The same tests apply to every IRDAI regulation, so the regulator's rules must stay within its statute.
Conclusion. The IRDAI is an independent body corporate under section 3 of the IRDA Act, 1999. It has a Chairperson, up to five whole-time and four part-time members, with experts in life, general and actuarial work. Fixed tenure, limited grounds of removal, protected pay and the cooling-off bar keep it independent. Its duty under section 14 is to regulate, promote and ensure orderly growth of insurance, from licensing to penalties. Since 5 February 2026 it also controls policy and claim data under sections 14A to 14E.
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