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

An approved surveyor's report assesses a motor-fleet loss of Rs 18 lakh for Kaveri Logistics. After reviewing the file, the insurer wishes to settle at Rs 16.5 lakh, citing a policy exclusion the surveyor treated differently. Which statement is correct under Section 64UM?

The insurer may settle at a figure different from the surveyor's assessment. Section 64UM(4) proviso preserves the insurer's right to pay or settle at a different amount, even though a report from an approved surveyor must first be obtained for claims at or above the specified amount.

  1. AThe insurer is bound to pay exactly the amount assessed by the surveyor
  2. BThe insurer may pay or settle at an amount different from the surveyor's assessmentCorrect
  3. CThe insurer may deviate only with prior IRDAI approval in every case
  4. DThe insurer must refer the matter to the Indian Institute of Insurance Surveyors and Loss Assessors

Explanation

The proviso to sub-section (4) states that the surveyor requirement does not take away or abridge the insurer's right to pay or settle at an amount different from that assessed by the approved surveyor. The report is mandatory to obtain, but not binding on the settlement figure.

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