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

Under section 34B of the Insurance Act, 1938, the regulator proposes to remove the CEO of a general insurer. Before the final order, what must the regulator ensure?

The regulator must give the CEO a reasonable opportunity to make a representation against the proposed order. Section 34B(2) prohibits a removal order without it. Council approval, shareholder resolution or a criminal conviction is not a condition for removal.

  1. AThe CEO has been given a reasonable opportunity of making a representation against the proposed orderCorrect
  2. BThe General Insurance Council has approved the removal
  3. CThe insurer's shareholders have passed a resolution
  4. DThe CEO has been convicted by a court

Explanation

Section 34B(2) bars an order under sub-section (1) unless the director or CEO has had a reasonable opportunity to make a representation. No council approval, shareholder resolution or conviction is required. Option B is wrong because the Council has no role here.

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