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CS Professional · Banking and Insurance - Laws and Practice · Concept of Insurance

A scheme under Section 58 is being drafted for partially winding up the health class of Kaveri Insurance Co. Which content must the scheme provide for under Section 58(2)?

The scheme must allocate and distribute assets and liabilities, including any surplus, between the classes of business affected. It must also protect future rights of every class of policy-holders and set out the manner of winding up the relevant affairs, as Section 58(2) provides.

  1. AAllocation and distribution of assets and liabilities between the classes affected, including any surplus, and future rights of every class of policy-holdersCorrect
  2. BOnly the refund of the share capital to the promoters
  3. COnly the premium rates for the continuing classes
  4. DOnly the names of the liquidators and their fees

Explanation

Section 58(2) requires the scheme to provide for allocation and distribution of assets and liabilities between the affected classes (including surplus), future rights of every class of policy-holders, and the manner of winding up the affairs concerned. The other options are not the mandated content.

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