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

The General Insurance Council's Executive Committee is considering a matter involving Bharat Shield General Insurance Ltd, which is allegedly acting in a manner prejudicial to the interests of general insurance policyholders. Under Section 64L, what is the Executive Committee's function here?

The Executive Committee of the General Insurance Council should bring the insurer's case to the notice of the Authority. Its role is advisory and reporting, so it cannot itself cancel registration, impose penalties or direct portfolio transfers.

  1. ATo bring the case of that insurer to the notice of the AuthorityCorrect
  2. BTo cancel the insurer's registration directly
  3. CTo impose a penalty on the insurer on its own authority
  4. DTo direct the insurer to transfer its portfolio to another insurer

Explanation

Section 64L(1)(c) makes it a function of the Executive Committee to bring to the notice of the Authority the case of any such insurer acting prejudicially to policyholders' interests. Cancelling registration or penalising is not among its functions.

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