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CS Professional · Banking and Insurance - Laws and Practice · Inspection, Investigation, Penalty and Appellate Procedure

IRDAI directs an Investigating Officer to investigate Zenith Insurance Ltd under section 33. Who bears the expenses of and incidental to the investigation?

The insurer bears the investigation expenses. Under section 33(9) they are defrayed by the insurer, rank in priority over its debts and are recoverable as an arrear of land revenue. IRDAI and the Central Government do not bear them.

  1. AIRDAI, from its own fund
  2. BThe Central Government
  3. CThe insurer, with priority over its debts and recoverable as an arrear of land revenueCorrect
  4. DThe Investigating Officer personally, recoverable later from IRDAI

Explanation

Section 33(9) states that all expenses of and incidental to an investigation are defrayed by the insurer or intermediary, have priority over the insurer's debts and are recoverable as an arrear of land revenue.

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