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CS Professional · Banking and Insurance - Laws and Practice · Inspection, Investigation, Penalty and Appellate Procedure

After an inspection report on Kaveri Insurance Co. Ltd. (a company) shows serious irregularities, IRDAI wants to act under Section 33(6). Which course is consistent with the provision?

IRDAI may, after giving the insurer a reasonable opportunity to make a representation, direct any person to apply to the court for winding up a company insurer. Section 33(6)(c) applies whether or not registration has been cancelled, so cancellation is not a precondition.

  1. AOrder winding up directly, without any hearing, since the report is conclusive
  2. BCancel registration only after the insurer has been wound up by a court
  3. CDirect a person to apply to the court for winding up only if registration has first been cancelled
  4. DAfter giving the insurer a reasonable opportunity to make a representation, direct a person to apply to the court for winding up, whether or not registration has been cancelledCorrect

Explanation

Section 33(6) requires a reasonable opportunity for representation, then by written order the Authority may require action, cancel registration, or direct any person to apply to the court for winding up of a company, whether or not registration was cancelled under clause (b). The option making cancellation a precondition is wrong, and IRDAI itself does not wind up.

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