Skip to content

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

Mehta Insurance Ltd. proposes a scheme to wind up only its engineering class of business while continuing other classes. Under section 58 of the Insurance Act, 1938, what must the scheme provide for?

The scheme must provide for allocating and distributing assets and liabilities between the affected classes of business, protecting future rights of every class of policyholders, and setting out how the proposed part of the affairs will be wound up, as section 58(2) requires, subject to Tribunal confirmation.

  1. AOnly refund of premiums to policyholders
  2. BAllocation and distribution of assets and liabilities between the affected classes, future rights of every class of policyholders, and the manner of winding up the affected affairsCorrect
  3. CImmediate cancellation of all policies of all classes
  4. DTransfer of all assets to the Central Government

Explanation

Section 58(2) requires the scheme to provide for allocation and distribution of assets and liabilities between affected classes, including surplus, future rights of every class of policyholders, and manner of winding up. It is confirmed by the Tribunal, not limited to refunds.

Did you get it right without looking?

One question tells you little. A timed set on Functions in Insurance and Compliance related thereto (Part IV) shows your real accuracy, how long you take and where you lose marks.

Practise Functions in Insurance and Compliance related thereto (Part IV)Free diagnostic mock

More Functions in Insurance and Compliance related thereto (Part IV) questions