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

Suraksha General Insurance Ltd. has been allowing agents very high commission and expenses. Under the Insurance Act, 1938, which body's Executive Committee is tasked with advising the Authority on controlling insurers' expenses in the matter of commission and other expenses?

The Executive Committee of the General Insurance Council advises the Authority on controlling the commission and other expenses of insurers carrying on general insurance business, as provided in Section 64L(1)(b) of the Insurance Act, 1938.

  1. AThe Executive Committee of the General Insurance Council, for insurers carrying on general insurance businessCorrect
  2. BThe Executive Committee of the Life Insurance Council, for all insurers
  3. CThe board of the insurer itself, with no advice to the Authority
  4. DThe Central Government through a notification under Section 116

Explanation

Section 64L(1)(b) provides that the Executive Committee of the General Insurance Council renders advice to the Authority on controlling expenses of general insurers in matters of commission and other expenses. The Life Insurance Council is not given this function for general insurers. Section 116 deals with exemption of foreign insurers, not expense control.

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