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

A general insurer pays commissions to its distribution channels that appear unusually high. Under section 64L, what is the role of the Executive Committee of the General Insurance Council regarding commission and other expenses?

The Executive Committee of the General Insurance Council advises the Authority on controlling insurers' expenses, including commission and other expenses, under section 64L(1)(b). It is an advisory role; it does not fix binding rates, cancel agents' registration or impose penalties on insurers.

  1. ATo render advice to the Authority in controlling the expenses of such insurers in the matter of commission and other expensesCorrect
  2. BTo fix the commission rates binding on all insurers directly
  3. CTo cancel the registration of agents who receive high commission
  4. DTo adjudicate and penalise the insurer for excess commission

Explanation

Section 64L(1)(b) states that the Committee renders advice to the Authority in controlling expenses of insurers in the matter of commission and other expenses. It does not itself fix binding rates, cancel registrations or penalise; the decision-making power remains with the Authority.

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