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 11 of 20

Discover more Topics under IC 14 Regulations of Insurance Business

Q101.
What is one of the reasons for which an insurer's registration may be suspended?

a.

Furnishing information as required by the IRDA

b.

Making investments in the infrastructure or social sector

c.

Manipulating the insurance business

d.

Timely submission of periodical returns

Discuss
Answer: (c).Manipulating the insurance business Explanation:An insurer's registration may be suspended if it indulges in manipulating the insurance business.
Q102.
What may lead to the cancellation of an insurer's registration by the IRDA?

a.

Successful compliance with deposit provisions

b.

Periodic returns submission

c.

Business or class of business transfer to another insurer

d.

Timely payment of liabilities

Discuss
Answer: (c).Business or class of business transfer to another insurer Explanation:The registration of an insurer may be canceled if the business or a class of the business of the insurer has been transferred to any person or has been transferred to or amalgamated with the business of any other insurer.
Q103.
What condition may result in the IRDA canceling the registration of an insurer as a penalty?

a.

Prompt compliance with the excess of assets over liabilities

b.

Liquidation or insolvency of the insurer

c.

Successful cancellation of standing contracts

d.

Return of the entire deposit made in respect of the insurance business

Discuss
Answer: (b).Liquidation or insolvency of the insurer Explanation:The registration of an insurer may be canceled if the insurer is in liquidation or is adjudged insolvent.
Q104.
Under what circumstances can the IRDA cancel an insurer's registration at its discretion?

a.

Periodic returns not submitted

b.

Compliance with the Companies Act

c.

Successful claim settlement within three months

d.

Default in complying with any requirement of the Insurance Act or regulations

Discuss
Answer: (d).Default in complying with any requirement of the Insurance Act or regulations Explanation:The IRDA has the discretion to cancel the registration of an insurer if the insurer makes default in complying with, or acts in contravention of, any requirement of the Insurance Act or regulations.
Q105.
What may lead to the cancellation of an insurer's registration if the Central Government of India directs?

a.

Compliance with the Companies Act

b.

Timely payment of liabilities

c.

Successful compliance with deposit provisions

d.

Direction from the Central Government

Discuss
Answer: (d).Direction from the Central Government Explanation:The registration of an insurer may be canceled if the Central Government of India directs.
Q106.
What happens to the insurer's rights and liabilities in existing contracts after the cancellation of registration?

a.

All contracts are terminated

b.

Rights and liabilities continue as if cancellation had not taken place

c.

New contracts are prohibited

d.

Liability increases after cancellation

Discuss
Answer: (b).Rights and liabilities continue as if cancellation had not taken place Explanation:After the cancellation of registration, the insurer is prohibited from entering into new contracts, but all rights and liabilities in respect of contracts entered into before the cancellation continue as if the cancellation had not taken place.
Q107.
What action can the Authority take after the cancellation of registration if the insurer's affairs are not wound up?

a.

Apply to the court for winding up

b.

Extend the cancellation order

c.

Impose additional penalties

d.

Allow the insurer to continue business

Discuss
Answer: (a).Apply to the court for winding up Explanation:After the cancellation of registration, the Authority may, after the expiry of six months, apply to the court for an order to wind up the insurance company or to wind up the affairs of the company in respect of a class of insurance business unless the registration has been revived or an application for winding up has already been presented to the court.
Q108.
What conditions must an insurer fulfill within six months for the Authority to consider reviving registration after cancellation?

a.

Settle all outstanding claims

b.

Compliance with the Companies Act

c.

Compliance with deposit provisions

d.

Winding up of the insurance company

Discuss
Answer: (c).Compliance with deposit provisions Explanation:The Authority may revive the registration of an insurer if, within six months from the date of cancellation, the insurer makes the deposits as required.
Q109.
What is one of the conditions for the revival of an insurer's registration after cancellation?

a.

Increase in liabilities

b.

Extension of the cancellation order

c.

Acceptance of new applications

d.

Restoration of standing contract

Discuss
Answer: (d).Restoration of standing contract Explanation:The Authority may revive the registration if the insurer has his standing contract restored.
Q110.
What is the primary purpose of reinsurance?

a.

To eliminate competition among insurers

b.

To maximize profits for reinsurers

c.

To share risk among insurance companies

d.

To increase premiums for policyholders

Discuss
Answer: (c).To share risk among insurance companies Explanation:Reinsurance allows insurance companies to share risk by transferring a portion of their risk to another insurer (reinsurer).
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