Skip to content

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

An insurer, Kaveri General Insurance, loses business because it complied with an order given to it under the Insurance Act, 1938, and claims compensation in contract for the loss. What is the legal position under section 110D?

No compensation can be claimed. Section 110D bars any right, whether in contract or otherwise, to compensation for loss incurred by reason of an insurer's compliance with any order or direction given to it under the Insurance Act, 1938, so even a contractual promise does not help.

  1. ANo right to compensation exists for loss caused by compliance with such an order or directionCorrect
  2. BCompensation is payable if the contract expressly provided for it
  3. CCompensation is payable by the Central Government
  4. DCompensation is payable only if the Tribunal confirms the loss

Explanation

Section 110D provides that no person has any right, whether in contract or otherwise, to compensation for loss incurred by reason of the operation of the listed sections or by compliance by an insurer with any order or direction given under the Act. A contract term therefore cannot create such a right.

Did you get it right without looking?

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

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

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