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

Several general insurers complain that one competitor is mis-handling claims and acting against policyholders' interests. Under section 64L of the Insurance Act, 1938, what can the Executive Committee of the General Insurance Council do in this situation?

The Executive Committee can bring the matter to the notice of the Authority. Under section 64L(1)(c), it reports insurers acting in a manner prejudicial to holders of general insurance policies, but it cannot itself cancel registration or levy penalties.

  1. ACancel the competitor's registration directly
  2. BBring to the notice of the Authority the case of any insurer acting in a manner prejudicial to the interests of general insurance policyholdersCorrect
  3. CImpose a monetary penalty on the competitor
  4. DSettle the pending claims of the competitor from its own funds

Explanation

Section 64L(1)(c) empowers the Executive Committee to bring to the Authority's notice any such insurer acting prejudicially to policyholders. It has no power to cancel registration or fine; those lie with the Authority.

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