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

After receiving an Investigating Officer's report on a life insurer, IRDAI proposes to cancel the insurer's registration. Which statement correctly applies Section 33(6) and (8) of the Insurance Act, 1938?

IRDAI must first give the insurer a reasonable opportunity to make a representation on the report. It may then cancel registration, and the aggrieved insurer can appeal to the Securities Appellate Tribunal, as Sections 33(6) and 33(8) provide.

  1. AIRDAI must first give the insurer a reasonable opportunity to make a representation on the report, and any order passed can be appealed to the Securities Appellate TribunalCorrect
  2. BIRDAI may cancel registration without any opportunity to the insurer, and the only remedy is a writ petition
  3. CIRDAI can only require action on the report and has no power to cancel registration
  4. DThe insurer's appeal lies to the Central Government and not to the Securities Appellate Tribunal

Explanation

Section 33(6) lets the Authority, after giving such opportunity to make a representation as it considers reasonable, require action, cancel registration, or direct a winding-up application. Section 33(8) provides an appeal to the Securities Appellate Tribunal. The option denying a hearing or cancellation power is therefore wrong.

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