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CS Professional · Banking and Insurance - Laws and Practice · Functions in Insurance and Compliance related thereto (Part IV)

A general insurer, Bharat Shield General, is seen by the Executive Committee of the General Insurance Council to be settling claims in a manner harmful to policyholders. Under Section 64L, what is the Committee's proper course?

The Committee should bring the insurer's prejudicial conduct to the notice of the Authority. Section 64L(1)(c) gives it this reporting function for general insurers acting against policyholders' interests, but it has no power to penalise directly.

  1. ABring the insurer's conduct to the notice of the AuthorityCorrect
  2. BImpose a penalty directly on the insurer
  3. CSuspend the insurer from the General Insurance Council by itself
  4. DWait for the insurer's auditor to report the matter

Explanation

Section 64L(1)(c) lets the Executive Committee bring to the notice of the Authority any insurer acting in a manner prejudicial to the interests of general insurance policyholders. The section gives it no power to penalise directly.

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