IRDA Functions and Insurance Councils MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on IRDA Functions and Insurance Councils, a fundamental topic in the field of IC 14 Regulations of Insurance Business. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our IRDA Functions and Insurance Councils MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of IRDA Functions and Insurance Councils mcq questions that explore various aspects of IRDA Functions and Insurance Councils problems. Each MCQ is crafted to challenge your understanding of IRDA Functions and Insurance Councils principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 14 Regulations of Insurance Business tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our IRDA Functions and Insurance Councils MCQs are your pathway to success in mastering this essential IC 14 Regulations of Insurance Business topic.

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IRDA Functions and Insurance Councils MCQs | Page 1 of 12

Discover more Topics under IC 14 Regulations of Insurance Business

Q1.
What legislation has the Government of India enacted to ensure the smooth functioning of the insurance business?

a.

Insurance Regulatory and Development (IRDA) Act, 1999

b.

Companies Act, 1956

c.

Insurance Act, 1938

d.

Banking Regulation Act, 1949

Discuss
Answer: (c).Insurance Act, 1938 Explanation:The Government of India has enacted the Insurance Act, 1938, for the smooth functioning of the insurance business.
Q2.
Under which section of the Insurance Act, 1938, are the Insurance Councils formed?

a.

Section 64A

b.

Section 64B

c.

Section 64C

d.

Section 64D

Discuss
Answer: (c).Section 64C Explanation:The Insurance Councils are formed under Section 64C of the Insurance Act, 1938.
Q3.
What is the role of the Insurance Regulatory and Development Authority (IRDA)?

a.

Selling insurance policies

b.

Regulating insurance industry

c.

Compensating policyholders

d.

Investing in financial markets

Discuss
Answer: (b).Regulating insurance industry Explanation:IRDA is a national agency of the Government of India responsible for regulating the insurance industry.
Q4.
How is insurance defined?

a.

A periodic payment for potential future losses

b.

A promise of compensation for past losses

c.

A tool of risk management

d.

An investment in financial markets

Discuss
Answer: (c).A tool of risk management Explanation:Insurance is defined as a tool of risk management.
Q5.
What financial relationship exists between the insured and the insurer in the context of insurance?

a.

Lender-borrower relationship

b.

Customer-service provider relationship

c.

Delicate financial relationship

d.

Collaborative partnership

Discuss
Answer: (c).Delicate financial relationship Explanation:There is a delicate financial relationship between the insured and the insurer in the context of insurance.
Q6.
What does an insurer agree to do in exchange for payments from the insured?

a.

Sell financial products

b.

Provide defined services

c.

Reimburse losses on covered events

d.

Invest in premium markets

Discuss
Answer: (c).Reimburse losses on covered events Explanation:An insurer agrees to reimburse losses of the insured on the occurrence of specific events covered in the insurance policy.
Q7.
What is premium in the context of insurance?

a.

Compensation paid by the insurer

b.

Consideration paid by the insured

c.

Financial loss of the insurer

d.

Defined amount of money provided by the insured

Discuss
Answer: (b).Consideration paid by the insured Explanation:Premium is the consideration paid by the insured to the insurer in the context of insurance.
Q8.
Who is an insured in the insurance context?

a.

A person selling insurance

b.

A company buying insurance policies

c.

A policyholder buying an insurance policy

d.

An insurer providing compensation

Discuss
Answer: (c).A policyholder buying an insurance policy Explanation:An insured (i.e., policyholder) is a person or entity buying the insurance policy.
Q9.
What is the purpose of the Insurance Regulatory and Development Authority (IRDA), as stated in the Preamble of the IRDA Act, 1999?

a.

To maximize profits of insurance companies

b.

To regulate and promote the orderly growth of the insurance industry

c.

To establish a monopoly in the insurance sector

d.

To minimize policyholders' interests

Discuss
Answer: (b).To regulate and promote the orderly growth of the insurance industry Explanation:The purpose of IRDA, as stated in the Preamble, is to regulate, promote, and ensure the orderly growth of the insurance industry.
Q10.
How did the IRDA Act impact existing legislation such as the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the General Insurance Business (Nationalisation) Act, 1972?

a.

It repealed them

b.

It led to amendments in these acts

c.

It had no impact on existing legislation

d.

It created conflicts between acts

Discuss
Answer: (b).It led to amendments in these acts Explanation:The IRDA Act led to amendments in the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the General Insurance Business (Nationalisation) Act, 1972.
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