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

For a financial year, the General Insurance Council passes a resolution to waive collection of the fees prescribed under its bye-laws from member insurers. The Authority has not yet approved the resolution. What is the correct position under the Insurance Act, 1938?

The waiver takes effect only after approval by the Authority. Under the proviso to section 64L(2), the Council may resolve to waive fees for a year, but the Executive Committee stops collecting fees for that year only where the Authority has approved the resolution.

  1. AThe Executive Committee must stop collecting fees immediately once the Council passes the resolution
  2. BThe Executive Committee stops collecting fees for that year only where the resolution has been approved by the AuthorityCorrect
  3. CThe Executive Committee may continue collecting fees only from insurers that voted against the resolution
  4. DThe waiver is valid only if passed by the Executive Committee and not by the Council

Explanation

The proviso to section 64L(2) lets the Council waive fees for a year by resolution, but the Executive Committee is barred from collecting only where the resolution has been approved by the Authority. Mere passing is not enough.

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