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CS Professional · Banking and Insurance - Laws and Practice · Life Insurance

In a proceeding under section 61 of the Insurance Act, 1938 for reducing insurance contracts of an insolvent insurer, Arjun, a policyholder not party to the application, fears he will be affected. What is his position?

Arjun is entitled to be heard. Under section 61(3) of the Insurance Act, 1938, any person whom the Tribunal thinks likely to be affected by the reduction application has a right to be heard, and no prior permission or policy-size threshold applies.

  1. AHe has no standing because only the liquidator may be heard
  2. BHe is entitled to be heard if the Tribunal thinks he is likely to be affectedCorrect
  3. CHe must first obtain the Authority's permission to appear
  4. DHe may be heard only if he holds a policy above a prescribed sum

Explanation

Section 61(3) says any person whom the Tribunal thinks likely to be affected is entitled to be heard on the application. Applications may be made by the liquidator, the company, a policyholder or the Authority, but the right to be heard is wider.

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