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

The IRDAI believes a life insurer, Himalaya Life Ltd, is acting in a manner likely to prejudice life policyholders. Under Section 52A, what may the Authority do?

The Authority may, after giving the life insurer an opportunity to be heard, appoint an Administrator to manage its affairs under the Authority's direction and control. The Authority fixes his remuneration and may cancel the appointment and appoint someone else.

  1. AAfter giving the insurer an opportunity to be heard, appoint an Administrator to manage its affairs under the Authority's direction and controlCorrect
  2. BAppoint an Administrator immediately without any hearing
  3. CAsk the Central Government to appoint the Administrator, who will act independently of the Authority
  4. DDirect the General Insurance Council to take over management

Explanation

Section 52A(1) allows the Authority, after giving the insurer an opportunity to be heard, to appoint an Administrator who manages affairs under the Authority's direction and control. The hearing is required, so the no-hearing option fails, and the Authority itself appoints.

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