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

Suraksha General Insurance Ltd. has been settling health claims slowly and unfairly. Under the Insurance Act, 1938, the Executive Committee of the General Insurance Council brings this to the notice of the Authority. Which function of the Executive Committee does this represent?

The Executive Committee of the General Insurance Council reports to the Authority any general insurer acting prejudicially to policyholders' interests. It does not itself appoint administrators, remove managerial persons or fix expense limits; those powers rest with the Authority.

  1. ABringing to the Authority's notice any general insurer acting in a manner prejudicial to the interests of general policyholdersCorrect
  2. BAppointing an Administrator to manage the insurer's affairs
  3. CRemoving the insurer's chief executive officer from office
  4. DFixing the maximum expenses of management allowed for the insurer

Explanation

Section 64L(1)(c) lets the Executive Committee bring to the Authority's notice any general insurer acting prejudicially to policyholders. Appointing an Administrator is under section 52A and applies to life insurers, and the power to remove a CEO belongs to the Authority under section 34B. The Executive Committee only advises and reports; it does not appoint, remove or fix limits.

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