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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework in Insurance

The Central Government supersedes the Authority under section 19(1) of the IRDA Act, 1999 after a serious governance failure. To ensure continuity of insurance supervision, what does section 2B of the Insurance Act, 1938 permit?

The Central Government may, by notification in the Official Gazette, appoint a Controller of Insurance. That person serves until the Authority is reconstituted under section 19(3) of the IRDA Act, 1999, following supersession under section 19(1).

  1. AThe Central Government may appoint a Controller of Insurance by Gazette notification until the Authority is reconstitutedCorrect
  2. BThe Reserve Bank of India automatically takes over as insurance regulator permanently
  3. CThe Insurance Act, 1938 stands suspended until the Authority is reconstituted
  4. DThe largest insurer nominates a person to act as regulator

Explanation

Section 2B(1) provides that if the Authority is superseded under section 19(1) of the IRDA Act, the Central Government may appoint a Controller of Insurance by notification in the Official Gazette until the Authority is reconstituted under section 19(3). The other options have no basis in the Act.

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