Read the following passage carefully and answer the questions given below the passage.

An Irdai committee has suggested reduction in entry-level capital requirement for standalone micro-insurance companies to ₹20 crore from the current ₹100 crore with a view to accelerate expansion of this segment of insurance market in the country.The committee set up by the Insurance Regulatory and Development Authority of India (Irdai) to suggest steps to promote micro-insurance said that like other nations India too will need to attract multiple players if it wants to substantially increase insurance penetration.

"This is all the more urgent in the current context of the COVID-19 pandemic when millions of Indians, especially in the informal sector, have lost their livelihoods, are now leading more insecure lives and are falling back into poverty," the report of the committee said.It noted that for low-income families, calamities such as illnesses, accidents, death or the loss of assets often have very grave financial consequences. Such events can push these families deeper into poverty as their meagre resources get depleted.

Many get drawn into debt traps as they borrow beyond their means, sell productive assets, take children out of school or put them to work, compromise on food, or leave sickness untreated, it said.A 2013 report, cited by the panel, noted that the Indian micro-insurance sector has onlycovered 9 per cent of the overall population and 14.7 per cent of the potential micro-insurance market size in the country.India, like other countries, will need to improve access for multiple players if it wants to substantially increase insurance penetration.After discussions with organisations that have been providing micro-insurance, national and international experts, the committee has made several recommendations.

One of them is that "entry-level capital requirement for standalone micro-insurance entities should be reduced to ₹20 crore maximum from the current ₹100 crore".Also, risk-based capital (RBC) approach should be adopted to enable the progressive growth of the micro-insurance business while maintaining the highest prudential standards.

"Micro-insurance companies (as well as cooperatives and mutuals) should be allowed to act as composite insurers to transact both life and non-life business through a single entity. Their portfolios should have a balance of both life and non-life business" is another key suggestion made in the report.The report also suggested that Irdai and/or the central government may establish a Microinsurance Development Fund to support and promote the growth of this business across the country.

Irdai had constituted the committee in February 2020 consisting of members from NGOs, independent consultants and other persons having experience of working in financial inclusion and regulatory fields, to study the concept of standalone micro-insurance companies.

1. Find a suitable title for the passage.

a) Curtailment in entry-level capital requirement: On the suggestion ofIrdai Committee

b)Irdai panel for lower entry-level capital for micro-insurance companies

c)Augmentation in entry-level capital requirement: On the suggestion of Irdai Committee

d) Both (a) and (b)

e) Nine of these

2. Which of the following statements can be inferred from the passage?

a) India must implement new strategies to cope with the financial crisis resulted the ongoing pandemic.

b)The report of the Irdai committee has suggested that Irdai and/or the central government may establish a Microinsurance Development Fund

c)The committee set up by the Insurance Regulatory and Development Authority of India (Irdai) has suggested steps to promote micro-insurance

d) Both (a) and (c)

e) Both (b) and (c)

3. Which of the following statements is/are not true according to the passage?

a)Irdai had constituted the committee in January 2020 consisting of members from NGOs, independent consultants and other persons having experience of working in financial inclusion and regulatory fields

b)A 2013 report, cited by the panel, noted that the Indian micro-insurance sector has only covered 7 per cent of the overall population and 14.7 per cent of the potential micro-insurance market size in the country.

c)The committee suggested that entry-level capital requirement for standalone micro-insurance entities should be reduced to ₹50 crore maximum from the current ₹100 crore

d) None of the above

e) All of the above

4. Which of the following words can be used in place of “meagre” given in bold in the passage, without changing the meaning of the sentence?

a) beneficia

b) huge

c) abundant

d) sparse

e) None of these

5. Which of the following is the pair of synonyms of the word “accelerate” given in bold in the passage?

a) expedite: escalate

b) escalate: curtail

c)decelerate: boost

d) spur: snag

e) None of these

Answers :

1) Answer: D

Both (a) and (b) can be the title of the passage as both of these convey the main idea of the passage, the very first sentence of the passage will help us understand the main idea.

Option (c) can’t be its title s it gives the opposite idea.

2) Answer: E

If we read the 1^st and the 2^nd-last paragraph carefully, we will be able to understand that both (b) and (c) can be the inferences of the passage.

1^st paragraph: “An Irdai committee has suggested reduction in entry-level capital requirement for standalone micro-insurance companies to ₹20 crore from the current ₹100 crore with a view to accelerate expansion of this segment of insurance market in the country. The committee set up by the Insurance Regulatory and Development Authority of India (Irdai) to suggest steps to promote micro-insurance said that like other nations India too will need to attract multiple players if it wants to substantially increase insurance penetration.”

2^nd-lst paragraph: “"Micro-insurance companies (as well as cooperatives and mutuals) should be allowed to act as composite insurers to transact both life and non-life business through a single entity. Their portfolios should have a balance of both life and non-life business" is another key suggestion made in the report. The report also suggested that Irdai and/or the central government may establish a Microinsurance Development Fund to support and promote the growth of this business across the country.”

3) Answer: E

All the statements are false i.e. not true.

Last paragraph: “Irdai had constituted the committee in February 2020 consisting of members from NGOs, independent consultants and other persons having experience of working in financial inclusion and regulatory fields, to study the concept of standalone micro-insurance companies.”

1^st paragraph: “An Irdai committee has suggested reduction in entry-level capital requirement for standalone micro-insurance companies to ₹20 crore from the current ₹100 crore with a view to accelerate expansion of this segment of insurance market in the country.”

3^rd paragraph:A 2013 report, cited by the panel, noted that the Indian micro-insurance sector has only covered 9 per cent of the overall population and 14.7 per cent of the potential micro-insurance market size in the country.”

4) Answer: D

Meagre- (of something provided or available) lacking in quantity or quality.

“sparse” is the synonym of “meagre”, hence (d) is correct.

Other options are wrong as they convey opposite meaning.

5) Answer: A

Accelerate- increase in rate, amount, or extent/ expedite/escalate/boost

Only in (a) we have the pair of synonyms.

Hence (a) is correct.