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

In a concept check on Section 64L(1)(b), the Executive Committee of the General Insurance Council is asked about its role in controlling insurers' commission and other expenses. Which statement is correct?

The Committee renders advice to the Authority on controlling general insurers' commission and other expenses. Section 64L(1)(b) gives it only an advisory role; it does not itself fix commission limits, prosecute insurers or approve their budgets.

  1. AIt renders advice to the Authority on controlling such expensesCorrect
  2. BIt fixes the maximum commission payable by each insurer
  3. CIt prosecutes insurers who exceed expense limits
  4. DIt approves the insurers' annual budgets

Explanation

Section 64L(1)(b) gives the Committee an advisory function: to render advice to the Authority on controlling expenses of general insurers in respect of commission and other expenses. It does not fix limits, prosecute or approve budgets itself.

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