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

Bharat General Insurance Ltd. is paying commission at rates the Executive Committee of the General Insurance Council considers excessive. Which function of that Committee under the Insurance Act, 1938 applies?

The Executive Committee of the General Insurance Council can render advice to the Authority on controlling the expenses of insurers in the matter of commission and other expenses. This is its function under section 64L(1)(b); it has no power to cancel registration or fix binding rates.

  1. ATo render advice to the Authority in the matter of controlling insurers' expenses, including commission and other expensesCorrect
  2. BTo cancel the insurer's registration
  3. CTo fix the commission rates binding on all insurers
  4. DTo appoint special agents for the insurer

Explanation

Section 64L(1)(b) gives the Committee the function of advising the Authority on controlling insurers' expenses in the matter of commission and other expenses. It can also bring prejudicial conduct to the Authority's notice under clause (c), but it cannot cancel registration or fix binding rates.

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