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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 notices that Vidya General Insurance Co. is conducting its business in a way that harms holders of general insurance policies. Under Section 64L, what is the Committee's function in this situation?

The Committee must bring the matter to the notice of the Authority. Section 64L(1)(c) gives it a reporting role for insurers acting prejudicially to general policyholders; it has no power to cancel registration, penalise the insurer or remove its management.

  1. ATo bring the case to the notice of the AuthorityCorrect
  2. BTo cancel the insurer's registration directly
  3. CTo impose a monetary penalty on the insurer on its own
  4. DTo dissolve the insurer's board and appoint an administrator

Explanation

Section 64L(1)(c) says the Committee's function 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. The Section gives it no power to cancel registration, penalise or remove the board; those lie with the Authority.

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