34CPower of Authority to appoint additional directors

34C. Power of ¹[Authority] to appoint additional directors. -- ² (1) If the Authority is of opinion that in the public interest or in the interest of an insurer, or his policyholders it is necessary so to do, it may, from time to time, by order in writing, appoint, in consultation with the Central Government with effect from such date as may be specified in the order, one or more persons to hold office as additional directors of the insurer:

Provided that the number of additional directors so appointed shall not, at any time, exceed five or one-third of the maximum strength fixed for the Board by the articles of association of the insurer, whichever is less.

(2) Any person appointed as additional director in pursuance of this section,--

(a) shall hold office during the pleasure of the ¹[Authority], and subject thereto for a period not exceeding three years or such further periods not exceeding three years at a time as the ¹[Authority] may specify;

(b) shall not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the execution of the duties of his office or in relation thereto; and

(c) shall not be required to hold qualification shares of the insurer.

(3) For the purpose of reckoning any proportion of the total number of directors of the insurer, any additional director appointed under this section shall not be taken into account.