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

The Executive Committee of the General Insurance Council notices that Nivesh General Insurance Ltd. is acting in a way that harms holders of general insurance policies. What does Section 64L(1) direct the Committee to do?

The Committee must bring the case to the notice of the Authority. Under Section 64L(1)(c), this is its function when a general insurer acts prejudicially to policyholders' interests. It cannot itself cancel registration or penalise the insurer, and the report goes to the Authority rather than the Central Government.

  1. ABring the case to the notice of the AuthorityCorrect
  2. BCancel the insurer's registration directly
  3. CFine the insurer under its bye-laws and report afterwards
  4. DRefer the matter to the Central Government for orders

Explanation

Section 64L(1)(c) says the Committee is to bring to the notice of the Authority the case of any such insurer acting in a manner prejudicial to the interests of general policyholders. It has no power to cancel registration, and the Authority, not the Central Government, is the recipient.

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