Section 18 of The General Insurance Business (Nationalisation) Act, 1972 in hindi
- (1)The functions of the Corporation shall include--
- (a)the carrying on of any part of the general insurance business, if it thinks it desirable to do so;
- (b)aiding, assisting and advising the acquiring companies in the matter of setting up of standards of conduct and sound practice in general insurance business and in the matter of rendering efficient service to holders of policies of general insurance;
- (c)advising the acquiring companies in the matter of controlling their expenses including the payment of commission and other expenses;
- (d)advising the acquiring companies in the matter of the investment of their funds;
- (e)issuing directions to acquiring companies in relation to the conduct of general insurance business: 1[Provided that all the functions of the Corporation specified in this sub-section, on and from the commencement of the General Insurance Business (Nationalisation) Amendment Act, 2002, shall be performed by the Central Government.]
- (2)In issuing any directions under sub-section (1), the 2[Central Government] shall keep in mind the desirability of encouraging competition amongst the acquiring companies as far as possible in order to render their services more efficient.
Summary
- The Corporation was originally tasked with carrying out general insurance business and advising the acquiring companies.
- Its advisory duties included helping companies set standards of conduct, deliver efficient service, control expenses like commissions, and manage their investments.
- The Corporation also had the power to issue direct orders to acquiring companies on how to run their business.
- When issuing directions, the focus must be on encouraging competition between the acquiring companies to make them more efficient.
- Since a 2002 amendment, all these functions of the Corporation have been taken over and performed entirely by the Central Government.
Practical examples
FAQ
1. Does the Corporation still issue directions to the acquiring companies?
No, following an amendment in 2002, the Central Government now performs all the functions that were originally assigned to the Corporation in this section.
2. Why does the government issue directions to these companies?
The main goal is to encourage competition among them to ensure their services remain efficient for the public.
3. Can the government advise companies on where to put their money?
Yes, advising acquiring companies on the investment of their funds is one of the specific listed functions.
Test yourself
Q1.Under Section 18 of The General Insurance Business (Nationalisation) Act, 1972, who currently performs the functions of advising acquiring companies and issuing directions to them, following the 2002 amendment?
Q2.Under Section 18 of The General Insurance Business (Nationalisation) Act, 1972, what must be kept in mind when issuing directions to the acquiring companies?
Q3.Under Section 18 of The General Insurance Business (Nationalisation) Act, 1972, which of the following is specifically listed as an area where advice should be given to acquiring companies?
Q4.Under Section 18 of The General Insurance Business (Nationalisation) Act, 1972, can the entity in charge carry on the general insurance business itself?