IRDA and its Licensing Functions MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on IRDA and its Licensing Functions, 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 and its Licensing Functions 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 and its Licensing Functions mcq questions that explore various aspects of IRDA and its Licensing Functions problems. Each MCQ is crafted to challenge your understanding of IRDA and its Licensing Functions 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 and its Licensing Functions MCQs are your pathway to success in mastering this essential IC 14 Regulations of Insurance Business topic.

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IRDA and its Licensing Functions MCQs | Page 1 of 20

Discover more Topics under IC 14 Regulations of Insurance Business

Q1.
What is the traditional love that Indians have, which insurance agents often leverage for selling insurance?

a.

Love for mutual funds

b.

Love for tax-saving insurance

c.

Love for cashback offers

d.

Love for free insurance

Discuss
Answer: (b).Love for tax-saving insurance Explanation:Insurance agents often use the traditional love that Indians have for insurance as a tax-saving device to promote their products.
Q2.
What is the primary benefit offered by Unit-Linked Insurance Plans (ULIPs)?

a.

Guaranteed investment returns

b.

Only insurance coverage

c.

Combined benefit of insurance and investment

d.

Free insurance for a lifetime

Discuss
Answer: (c).Combined benefit of insurance and investment Explanation:ULIPs provide a combination of insurance and investment, allowing policyholders to choose investment funds while also obtaining insurance coverage.
Q3.
What is the mortality charge associated with ULIPs?

a.

It is waived off for the first year

b.

It is the premium allocation charge

c.

It is levied for the insurance cover in ULIPs

d.

It is a one-time payment

Discuss
Answer: (c).It is levied for the insurance cover in ULIPs Explanation:The mortality charge in ULIPs is levied to cover the insurance component, indicating that the insurance isn't entirely free.
Q4.
In the context of insurance, what is the 'cashback' offer usually based on?

a.

Policy duration

b.

Premium allocation charge (PAC)

c.

Insurance coverage

d.

Agent's salary

Discuss
Answer: (b).Premium allocation charge (PAC) Explanation:Cashback offers are often based on a percentage of the premium allocation charge (PAC) that the agent might return to the policyholder.
Q5.
Why should one be cautious about accepting a cashback offer from an insurance agent?

a.

It is a one-time offer

b.

It is applicable every year

c.

It guarantees high returns

d.

It is a long-term benefit

Discuss
Answer: (a).It is a one-time offer Explanation:Cashback offers are usually provided only in the first year, and policyholders should consider the long-term implications of their investment rather than being swayed by a one-time cashback.
Q6.
What do IRDA's regulations for intermediaries primarily address in the insurance sector?

a.

Insurance product innovation

b.

Point of sale issues

c.

Marketing strategies

d.

Premium allocation charges

Discuss
Answer: (b).Point of sale issues Explanation:IRDA's regulations for intermediaries focus on addressing issues related to the point of sale in the insurance sector to protect the vulnerable public from unfair practices.
Q7.
What is the primary function of a Direct Insurance Broker according to IRDA regulations?

a.

Arranging reinsurance for direct insurers

b.

Acting on behalf of clients in life insurance only

c.

Carrying out specified functions in life or general insurance for remuneration

d.

Conducting insurance and reinsurance for clients simultaneously

Discuss
Answer: (c).Carrying out specified functions in life or general insurance for remuneration Explanation:A Direct Insurance Broker, licensed by the Authority, carries out specified functions either in the field of life insurance or general insurance or both on behalf of the clients for remuneration.
Q8.
What does a Reinsurance Broker specialize in according to IRDA regulations?

a.

Arranging insurance for clients

b.

Arranging reinsurance for direct insurers

c.

Acting as an intermediary for corporate agents

d.

Handling composite insurance policies

Discuss
Answer: (b).Arranging reinsurance for direct insurers Explanation:A Reinsurance Broker, for remuneration, arranges reinsurance for direct insurers with insurance and reinsurance companies.
Q9.
How is a Composite Broker defined in IRDA regulations?

a.

An insurance broker handling both life and general insurance

b.

An insurance broker licensed to act on behalf of clients for remuneration

c.

An insurance broker arranging insurance and reinsurance for clients

d.

An insurance broker holding a licence to act as an agent for insurers

Discuss
Answer: (c).An insurance broker arranging insurance and reinsurance for clients Explanation:A Composite Broker, licensed by the Authority, arranges insurance for its clients with insurance companies and/or reinsurance for its client/s for remuneration.
Q10.
What is the distinguishing feature of a Corporate Agent?

a.

Holds a licence to act as an insurance agent for multiple insurers

b.

Acts as an intermediary for reinsurance arrangements

c.

Arranges insurance and reinsurance simultaneously

d.

Holds a licence to act as an insurance agent for one life insurer or one general insurer

Discuss
Answer: (d).Holds a licence to act as an insurance agent for one life insurer or one general insurer Explanation:A Corporate Agent is defined as an entity holding a licence to act as an insurance agent either for one life insurer or a general insurer.
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