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

A general insurer receives a small claim of Rs 25,000 on a shop policy, below the amount specified under Section 64UM(4). Appointing an approved surveyor would cost an amount disproportionate to the claim. Which course is permitted by the Insurance Act, 1938?

The insurer may employ any other person who is not disqualified to survey the loss and pay a reasonable fee. Section 64UM(8) permits this for claims below the specified amount where using an approved surveyor would cause disproportionate expense relative to the claim.

  1. AThe insurer may employ any other person, not being a person disqualified, to survey the loss and pay a reasonable feeCorrect
  2. BThe insurer must still appoint an approved surveyor and absorb the expense
  3. CThe insurer may reject the claim for want of a survey
  4. DThe insurer may employ a person even if he is currently disqualified, if the fee is below Rs 5,000

Explanation

Sub-section (8) allows an insurer, for claims below the specified amount where an approved surveyor would involve disproportionate expense, to employ any other person who is not disqualified and pay a reasonable fee. A disqualified person cannot be used, and no fee-based exception exists.

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