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CS Professional · Banking and Insurance - Laws and Practice · General and Health Insurance

Under Section 64M(1) of the Insurance Act, 1938, the Executive Committee of the General Insurance Council has a duty relating to expense limits. In which situation is that duty correctly described?

The Executive Committee of the General Insurance Council must meet at least once before 31 March every year to advise the Authority on the limits by which actual management expenses of the preceding year may exceed the prescribed limits. It advises only, and the Authority fixes the limits.

  1. AIt must meet at least once before 31 March every year to advise the Authority on the limits by which actual management expenses of the preceding year may exceed the prescribed limitsCorrect
  2. BIt must meet every quarter to fix the expense limits itself, binding on the Authority
  3. CIt must meet once before 30 June each year to approve each insurer's expense budget
  4. DIt must meet only when the Authority asks, with no fixed annual meeting

Explanation

Section 64M(1) casts a duty on the Executive Committee to meet at least once before 31 March every year to advise the Authority. The Authority, not the Committee, fixes the limits, having due regard to conditions in the preceding year.

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