Skip to content

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

Under section 52A of the Insurance Act, 1938, the Authority believes that Zenith Life Insurance Ltd. is acting in a manner likely to prejudice life policyholders, which may delay claim payments. What may the Authority do?

The Authority may appoint an Administrator to manage the life insurer's affairs under its direction and control, after giving the insurer an opportunity to be heard. The power applies to insurers carrying on life insurance business, not general insurers.

  1. AAppoint an Administrator to manage the insurer under its direction and control, after giving the insurer an opportunity to be heardCorrect
  2. BAppoint an Administrator without any hearing
  3. CAppoint an Administrator only if the insurer carries on general insurance business
  4. DDirect the insurer to pay compensation to the Administrator's predecessor

Explanation

Section 52A(1) applies to an insurer carrying on life insurance business and allows appointment of an Administrator after giving the insurer an opportunity to be heard. The Administrator works under the Authority's direction and control, and the Authority fixes remuneration.

Did you get it right without looking?

One question tells you little. A timed set on Functions in Insurance and Compliance related thereto (Part III) shows your real accuracy, how long you take and where you lose marks.

Practise Functions in Insurance and Compliance related thereto (Part III)Free diagnostic mock

More Functions in Insurance and Compliance related thereto (Part III) questions