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CS Professional · Banking and Insurance - Laws and Practice · General and Health Insurance

Sagar Health Insurance Ltd, a new standalone insurer, is advised on the role of the General Insurance Council in expense control. Which statement is correct under Section 64L(1)?

Under Section 64L(1)(b), the Executive Committee of the General Insurance Council renders advice to the Authority on controlling the expenses of general insurers, including commission and other expenses. It is an advisory role and does not itself set binding rates or impose penalties.

  1. AThe Executive Committee renders advice to the Authority in controlling the expenses of general insurers in the matter of commission and other expensesCorrect
  2. BThe Executive Committee directly sets commission rates binding on all insurers without reference to the Authority
  3. CThe Executive Committee adjudicates penalties on insurers for expense breaches
  4. DThe Executive Committee approves the paid-up capital of insurers

Explanation

Section 64L(1)(b) makes it a function of the Executive Committee to render advice to the Authority in controlling insurers' expenses in the matter of commission and other expenses. It has no power to adjudicate penalties or set capital, which Section 6 handles through registration requirements.

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