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

IRDAI issues a written order directing an Investigating Officer to examine the affairs of a life insurer. The insurer's general manager says that only the insurer's own employees can be asked for records, because its outsourced claims-processing vendor is a separate entity. Under Section 33 of the Insurance Act, 1938, what is the correct position?

The duty to produce books of account, registers, documents and the database extends to a service provider or contractor where the insurer has outsourced services. Section 33(3) expressly includes them alongside the insurer's managers and officers, so the outsourcing argument fails.

  1. AThe duty to produce books, registers, documents and the database extends to a service provider or contractor where services are outsourced by the insurerCorrect
  2. BThe duty applies only to the managing director and not to any other officer
  3. CThe vendor is exempt because outsourced functions are outside the Investigating Officer's powers
  4. DOnly the insurer's statutory auditor may be asked to produce records

Explanation

Section 33(3) places the duty to produce books, registers, other documents and the database on managers, managing directors and other officers of the insurer, including a service provider or contractor where services are outsourced. The claim that the vendor is exempt is therefore wrong.

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