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

The Executive Committee of the General Insurance Council must advise the Authority about the limits by which actual management expenses of general insurers may exceed the limits under section 40C. As per the Insurance Act, 1938, what is the timing of this duty?

The Executive Committee must meet at least once before 31 March every year to advise the Authority on the limits by which actual management expenses may exceed the section 40C limits. The Authority fixes the limits, considering the preceding year's conditions.

  1. AIt must meet at least once before the 31st day of March every yearCorrect
  2. BIt must meet at least twice a year, in June and December
  3. CIt must meet only when the Authority requests
  4. DIt must meet within 30 days of the close of each quarter

Explanation

Section 64M(1) makes it the Committee's duty to meet at least once before the 31st day of March every year to advise the Authority on fixing such limits. The Authority has regard to the conditions in general insurance business in the preceding year and may fix different limits for different groups of insurers. The other options invent frequencies not found in the section.

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