Banking and Insurance - Laws and Practice · Functions in Insurance and Compliance related thereto (Part II)

Insurance Act 1938: Functions of Insurance Councils and Section 64L

Updated 11 October 2026 · Fact-checked

The Insurance Act, 1938 recognises a Life Insurance Council and a General Insurance Council. Each works through an Executive Committee. Under Section 64L, the General Insurance Council's Executive Committee advises insurers on conduct and service, advises the Authority on expenses, reports prejudicial insurers, and may collect fees under bye-laws.

Understand Insurance Act 1938: Functions of Insurance Councils

The Insurance Act, 1938 sets up two representative bodies of insurers. Under Section 64C, the Life Insurance Council represents insurers carrying on life insurance business in India. The General Insurance Council represents insurers carrying on general, health insurance business and re-insurance in India. Both are deemed to be constituted as the Councils under the Act.

A Council does not act through a large body. Section 64E says the authority of each Council is its Executive Committee. So when a question asks who acts, the answer is the Executive Committee.

The General Insurance Council's Executive Committee has three categories of members under Section 64F(2). Under clause (a), four are representatives of Council members, elected in their individual capacity. Under clause (b), one is an eminent person not connected with insurance business, nominated by the Authority. Under clause (c), four persons represent insurance agents, third party administrators, surveyors and loss assessors, and policyholders, nominated by the Authority. That makes nine members. One of the elected representatives is elected Chairperson. Note that the text reads "four persons to represent" these groups, so read the clause carefully before you list them.

Section 64L then lists the functions. They fall into three themes: standards (advise insurers on conduct, sound practice and efficient service to policyholders), expenses (advise the Authority on commission and other expenses), and policyholder protection (bring to the Authority's notice any insurer acting prejudicially to policyholders). A fourth clause covers incidental matters, notified with the Authority's approval.

The Authority here means the Insurance Regulatory and Development Authority of India. Earlier law named the Controller or the Central Government. Those words were replaced, so write "Authority" in your answers.

Key rules to remember

Section 64L(1)(a): standards and service: Aid and advise general insurers on standards of conduct, sound practice and efficient service to general insurance policyholders; Advisory role towards insurers. It does not bind them by itself.
Section 64L(1)(b): expenses: Advise the Authority on controlling insurers' commission and other expenses in India; The advice goes to the Authority, not to insurers.
Section 64L(1)(c): prejudicial conduct: Bring to the Authority's notice any insurer acting prejudicially to general insurance policyholders; A reporting duty. The Committee does not punish.
Section 64L(1)(d): incidental matters: Act in matters incidental to clauses (a) to (c), as notified by the General Insurance Council in the Gazette with the Authority's approval; Both the Gazette notification and the approval are needed.
Section 64L(2): fees: Collect fees laid down in the bye-laws from general insurers to discharge its functions; The Council may waive fees for a year by resolution; if the Authority approves it, no fees are collected for that year.
Section 64F(2): composition: Three categories: (a) 4 elected members + (b) 1 eminent person nominated by the Authority + (c) 4 persons nominated by the Authority to represent agents, TPAs, surveyors and loss assessors, and policyholders; Nine members in all. The Chairperson is one of the four elected representatives.
Section 64H: tenure: 3 years from the first meeting, then dissolution and reconstitution; Outgoing members continue until the new Committee is constituted.
Section 64M(1): annual meeting: The Executive Committee must meet at least once before 31 March every year; Purpose: advise the Authority on limits under the proviso to Section 40C(1).

How to solve Insurance Act 1938: Functions of Insurance Councils questions

Use this method for any question on the Councils or Section 64L. Answer in provision, facts, conclusion form.

1Identify which Council is involved: Life or General. Section 64L covers only the General Insurance Council's Executive Committee.
2State the base provision: Section 64C for the Councils, Section 64E for the Executive Committee as the authority, Section 64F for composition.
3Match the facts to the function: standards and service (a), expense advice (b), reporting a prejudicial insurer (c), incidental matters (d), or fees (sub-section 2).
4Check who the body speaks to. In (a) it advises insurers. In (b) and (c) it speaks to the Authority.
5Check any procedural condition, such as the Gazette notification and Authority's approval in (d), or the bye-laws for fees.
6Apply the facts to the clause and write a clear conclusion in one or two lines.
7Add a practical compliance point, for example how an insurer should respond to advice or keep records of fees paid.

Quickest way: Three-theme memory method for Section 64L

When to use it: Use it when you need to list the functions fast or decide which clause fits a short fact pattern.

Recall three words: Standards, Expenses, Reporting. These are clauses (a), (b), (c).
Add the fourth: Incidental matters, with Gazette notification and Authority approval.
Add the money point: Fees under bye-laws, with the waiver proviso.
For each word, note the audience: Standards go to insurers; Expenses and Reporting go to the Authority.
Write the clause letters in brackets in your answer to show precision.

Common mistakes in Insurance Act 1938: Functions of Insurance Councils

Applying Section 64L to the Life Insurance Council.
Students see 'Insurance Councils' and assume both are covered.
Fix: Section 64L names only the General Insurance Council's Executive Committee. Say this at the start of your answer.
Saying the Executive Committee can penalise an insurer that acts prejudicially.
Students confuse reporting with enforcement.
Fix: Clause (c) only lets it bring the case to the Authority's notice. Action lies with the Authority.
Writing 'Controller' or 'Central Government' instead of 'Authority'.
Older notes use the earlier wording.
Fix: The text now says 'Authority'. Use that word.
Forgetting that clause (d) needs both a Gazette notification and the Authority's approval.
Students remember only that incidental matters are allowed.
Fix: Write: notified by the General Insurance Council in the Gazette of India, with the Authority's approval.
Mixing up the composition: stating only four nominated members or omitting the eminent person.
The clauses are short and similar to the Life Committee's structure.
Fix: Learn the General Committee as 4 elected, 1 eminent person, and nominated representatives of agents, TPAs, surveyors and loss assessors, and policyholders. The Life Committee differs, so do not mix them.
Stating that fee waiver needs only a Council resolution.
Students stop reading the proviso at the resolution.
Fix: The resolution must be approved by the Authority before the Committee stops collecting fees for that year.

Worked examples

Example 1

List the functions of the Executive Committee of the General Insurance Council under Section 64L of the Insurance Act, 1938.

Show the solution

Provision: Section 64L(1) lists the functions. Section 64E makes the Executive Committee the authority of the Council.
Clause (a): to aid and advise general insurers on standards of conduct and sound practice, and on rendering efficient service to holders of general insurance policies.
Clause (b): to advise the Authority on controlling the expenses of such insurers in India, in the matter of commission and other expenses.
Clause (c): to bring to the Authority's notice any such insurer acting in a manner prejudicial to the interests of holders of general insurance policies.
Clause (d): to act in incidental or ancillary matters, as notified by the General Insurance Council in the Gazette of India with the Authority's approval.
Sub-section (2): to collect fees laid down in the bye-laws from general insurers, so that it can discharge its functions.

Answer: The Committee advises insurers on standards and service, advises the Authority on expenses, reports insurers acting against policyholders' interests, handles notified incidental matters, and collects bye-law fees.

Example 2

Suraksha General Insurance Ltd. is accused of repeatedly delaying claim payments to policyholders. A member of the Executive Committee of the General Insurance Council wants the Committee to impose a fine on it. Advise whether the Committee can do so.

Show the solution

Provision: Section 64L(1)(c) allows the Committee to bring to the Authority's notice an insurer acting in a manner prejudicial to the interests of holders of general insurance policies.
Facts: repeated delay in paying claims can reasonably be treated as conduct against policyholders' interests. The Committee may also advise on efficient service under clause (a).
Analysis: nothing in Section 64L gives the Committee power to impose a fine. Its role is to report to the Authority.
Conclusion: the Committee cannot fine the insurer. It can report the case to the Authority and advise on sound practice.
Practical point: the Committee should record the complaint and evidence before reporting.

Answer: No. Under Section 64L(1)(c) the Committee may only bring the matter to the Authority's notice. It may also advise the insurer on service standards under clause (a).

Exam tips

Begin every answer by naming the Council and the section: Section 64L covers the General Insurance Council only.
Write the functions with clause letters and the audience (insurers or Authority). It shows precision.
Learn Sections 64C, 64E, 64F and 64H together. Questions often combine composition, tenure and functions.
In case questions, end with a clear conclusion and one practical compliance point.
Use 'Authority', not 'Controller', when quoting the provision.

Practice questions from Functions in Insurance and Compliance related thereto (Part II)

Insurance Act 1938: Functions of Insurance Councils in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Insurance Act 1938: Functions of Insurance Councils: frequently asked questions

What does Section 64L of the Insurance Act, 1938 deal with?

It lists the functions of the Executive Committee of the General Insurance Council. These are advising insurers on standards and service, advising the Authority on expenses, reporting prejudicial insurers, and acting in notified incidental matters. Sub-section (2) allows it to collect fees under the bye-laws.

What is the General Insurance Council?

Under Section 64C it is the representative body of insurers carrying on general, health insurance business and re-insurance in India. It is deemed to be constituted as a Council under the Act. Its authority is its Executive Committee.

Can the Executive Committee punish an insurer under Section 64L?

No. Section 64L(1)(c) lets it only bring the case of a prejudicial insurer to the Authority's notice. Any action is for the Authority.

How long does the Executive Committee last?

Section 64H says three years from the date of its first meeting. It is then dissolved and a new Committee is constituted. Outgoing members continue to hold office and discharge duties until the new one is constituted.

Can the Council waive the fees collected by the Executive Committee?

Yes, by a resolution for any year, if the Council thinks fit. Once the Authority approves the resolution, the Committee must not collect fees for that year.