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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 an inspection of the books of Suraksha Mutual Insurance Ltd, the Authority is considering ordering the insurer to take corrective action on a matter arising from the report. Under Section 33 of the Insurance Act, 1938, what must the Authority do before passing such an order?

The Authority must first give the insurer such opportunity to make a representation on the report as the Authority considers reasonable. Only then can it order corrective action, cancel registration or direct winding up. No government or court approval is required.

  1. AObtain prior approval of the Central Government
  2. BGive the insurer such opportunity to make a representation on the report as the Authority considers reasonableCorrect
  3. CWait for the insurer's general meeting to approve the action
  4. DObtain a court order permitting the action

Explanation

Section 33(6) lets the Authority act on a report only after giving the insurer such opportunity to make a representation as, in its opinion, seems reasonable. No Central Government or court approval is needed. A general meeting has no role in this step.

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