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

Himalaya General Insurance Co. is accused of acting in a way prejudicial to holders of general insurance policies through repeated claim-settlement delays. Under section 64L, what is the role of the Executive Committee of the General Insurance Council?

The Executive Committee can bring the insurer's prejudicial conduct to the notice of the Authority. Under section 64L it advises insurers and the Authority, but removal of managers or appointment of an Administrator belongs to the Authority.

  1. AIt may appoint an Administrator to run the insurer
  2. BIt may remove the chief executive officer of the insurer
  3. CIt may bring the insurer's conduct to the notice of the AuthorityCorrect
  4. DIt may impose a penalty of one crore rupees on the insurer

Explanation

Section 64L(1)(c) empowers the Executive Committee to bring to the notice of the Authority any insurer acting prejudicially to holders of general insurance policies. Appointing an Administrator (section 52A) and removing managerial persons (section 34B) are powers of the Authority, not the Committee.

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