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

Suraksha General Insurance Ltd. has been paying commission and other expenses that the General Insurance Council's Executive Committee believes are excessive. Under the Insurance Act, 1938, what is the Executive Committee's role on this issue?

The Executive Committee of the General Insurance Council advises the Authority on controlling general insurers' commission and other expenses. It has no direct power to penalise, cancel registration, fix premiums or order refunds; its role is advisory to the Authority.

  1. ARender advice to the Authority on controlling insurers' commission and other expensesCorrect
  2. BDirectly penalise the insurer by cancelling its registration
  3. CFix the premium rates that the insurer must charge
  4. DOrder the insurer to refund commission to policyholders

Explanation

Section 64L(1)(b) makes it a function of the Executive Committee to render advice to the Authority on controlling the expenses of general insurers in the matter of commission and other expenses. The Committee has no power to cancel registration, fix rates or order refunds. Those distractors attribute powers the section does not give.

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