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

A loss assessment firm, Bharat Loss Assessors Pvt Ltd, has three directors. Two are members of the Indian Institute of Insurance Surveyors and Loss Assessors and hold the specified academic qualifications. The third director, who may also be called upon to assess losses, has the qualification but is not a member of the professional body. Under Section 64UM(1), what is the effect?

The company does not satisfy the requirement. The proviso to Section 64UM(1) says all partners, directors or other persons who may be called upon to survey or assess a loss must have the specified qualifications and be members of the professional body, so a majority is not enough.

  1. AThe company qualifies, because a majority of directors meet the conditions
  2. BThe company qualifies, because only one director needs membership
  3. CThe company does not satisfy the proviso, as all directors who may be called upon to survey or assess must meet both conditionsCorrect
  4. DThe company qualifies if the unqualified director only signs reports and does not visit sites

Explanation

The proviso to sub-section (1) requires all partners, directors or other persons who may be called upon to make a survey or assess a loss to fulfil both the qualification and membership requirements. A majority is not enough; the third director fails clause (b).

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