Skip to content

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

A general insurer's underwriting department has been charging commission and other expenses that appear excessive compared with peers. Under the Insurance Act, 1938, what is the function of the Executive Committee of the General Insurance Council regarding such expenses?

The Executive Committee of the General Insurance Council renders advice to the Authority on controlling the commission and other expenses of general insurers. It does not itself fix commission, cancel registration or sanction capital schemes; those are different powers of the Authority or its officers.

  1. ATo fix the commission payable by each insurer directly
  2. BTo render advice to the Authority on controlling insurers' expenses, including commissionCorrect
  3. CTo cancel the registration of the insurer for high expenses
  4. DTo sanction a scheme for the insurer's capital structure

Explanation

Section 64L(1)(b) makes the Committee an adviser to the Authority in controlling insurers' commission and other expenses. It has no power to fix commission directly or cancel registration. Sanctioning capital schemes belongs to an officer appointed by the Authority under section 6B, not the Committee.

Did you get it right without looking?

One question tells you little. A timed set on Functions in Insurance and Compliance related thereto (Part V) shows your real accuracy, how long you take and where you lose marks.

Practise Functions in Insurance and Compliance related thereto (Part V)Free diagnostic mock

More Functions in Insurance and Compliance related thereto (Part V) questions