Skip to content

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

An insurer carries out an order of the Authority issued under the Insurance Act, 1938, and a shareholder alleges loss from this compliance. Under section 110D as reproduced, what is the legal position?

No person has any right, whether in contract or otherwise, to compensation for loss incurred because an insurer complied with an order or direction given under the Insurance Act, 1938. Section 110D bars such claims, so the shareholder's suit would fail.

  1. AThe shareholder may sue in contract for compensation
  2. BThe shareholder may claim compensation only through the General Insurance Council
  3. CNo person has any right, in contract or otherwise, to compensation for loss caused by the insurer's compliance with such an order or directionCorrect
  4. DThe shareholder may claim compensation only if the order was oral

Explanation

Section 110D states that no person has any right, whether in contract or otherwise, to compensation for loss incurred by reason of operation of specified sections or by an insurer's compliance with any order or direction under the Act. Hence a contractual or other claim fails.

Did you get it right without looking?

One question tells you little. A timed set on Functions in Insurance and Compliance related thereto (Part I) shows your real accuracy, how long you take and where you lose marks.

Practise Functions in Insurance and Compliance related thereto (Part I)Free diagnostic mock

More Functions in Insurance and Compliance related thereto (Part I) questions