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

The Authority is satisfied that the CEO of Orion Life Insurance Ltd. is conducting affairs detrimentally to policyholders, and any delay would harm them. While it considers his representation, which action may it take under the Insurance Act, 1938, section 34B?

The Authority may direct that, pending consideration of his representation, the CEO shall not act as CEO or take part in the insurer's management. This interim power applies where delay would harm policyholders; removal itself needs recorded reasons and a hearing.

  1. ADirect that pending consideration of the representation the CEO shall not act as CEO or take part in the management of the insurerCorrect
  2. BRemove him with no reasons recorded and no chance to represent
  3. CFix compensation payable to him for loss of office
  4. DBar him from management of any insurer for ten years

Explanation

The proviso to section 34B(2) lets the Authority, where delay would be detrimental, direct that pending the representation the person shall not act or take part in management. Removal needs reasons in writing and an opportunity to represent. No compensation is payable under 34B(7), and the bar cannot exceed five years.

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