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

An insurer declines to act on an assignment endorsement because it believes the assignment is meant for trading of the policy. Which statement is correct under the Act?

The insurer must record its reasons for refusal in writing and communicate them to the policyholder within thirty days of the notice of assignment. The aggrieved person then has thirty days from receiving that communication to prefer a claim to the Authority.

  1. AIt may refuse without giving reasons
  2. BIt must record reasons in writing and communicate them to the policyholder within thirty days of the noticeCorrect
  3. CThe aggrieved person may appeal to the Authority within ninety days
  4. DIt must refer the matter to the Authority before refusing

Explanation

Section 38(3) requires the insurer to record reasons in writing and communicate them not later than thirty days from the policyholder's notice. An aggrieved person may prefer a claim to the Authority within thirty days of receiving the communication, not ninety.

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