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

After IRDAI removes the CEO of Bharat General Insurance Ltd. for poor claim practices, it appoints a replacement under section 34B. For how long can the appointed person hold office in the first instance?

A person appointed by the Authority in place of a removed CEO holds office during the Authority's pleasure and for a period not exceeding three years, extendable by periods of up to three years at a time. Five years is the bar on the removed person.

  1. ASubject to the Authority's pleasure, for a period not exceeding three yearsCorrect
  2. BSubject to the Authority's pleasure, for a period not exceeding five years
  3. CFor a fixed term of one year only
  4. DUntil the next annual general meeting of the insurer

Explanation

Section 34B(6)(a) says the person appointed holds office during the pleasure of the Authority and for a period not exceeding three years, with extensions of up to three years at a time. The five-year figure is the maximum bar on the removed person under 34B(3), a different provision, so it is wrong here.

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