The correct answer is: B. No agent can do insurance business without a valid licence under sec.42 of the Insurance Act 1938.
The Insurance Act 1938 is an Act of the Parliament of India to regulate the business of insurance in India. The Act provides for the licensing of insurance agents and prohibits any person from carrying on insurance business without a valid licence. Section 42 of the Act states that no person shall act as an insurance agent unless he is licensed by the Insurance Regulatory and Development Authority of India (IRDAI).
Option A is incorrect because an insurance agent must be licensed by the IRDAI, even if he is authorized by the insurer. Option C is incorrect because an insurance agent is not an employee of the insurance company. He is an independent contractor who is paid a commission on the premiums he collects. Option D is incorrect because a director of an insurance company cannot be an insurance agent. He is prohibited from doing so by Section 43 of the Insurance Act 1938.
Here is a brief explanation of each option:
- Option A: No licence is actually needed by the agent if he is authorised by the Insurer.
This option is incorrect because an insurance agent must be licensed by the IRDAI, even if he is authorized by the insurer. Section 42 of the Insurance Act 1938 states that no person shall act as an insurance agent unless he is licensed by the IRDAI.
- Option B: No agent can do insurance business without a valid licence under sec.42 of the Insurance Act 1938.
This option is correct because an insurance agent must be licensed by the IRDAI, in accordance with Section 42 of the Insurance Act 1938.
- Option C: An agent of insurance works for salary in an Insurance company.
This option is incorrect because an insurance agent is not an employee of the insurance company. He is an independent contractor who is paid a commission on the premiums he collects.
- Option D: A Director of an Insurance company can be an insurance Agent.
This option is incorrect because a director of an insurance company cannot be an insurance agent. He is prohibited from doing so by Section 43 of the Insurance Act 1938.