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 19 of 20

Discover more Topics under IC 14 Regulations of Insurance Business

Q181.
What is the policy regarding the maximum retention for general insurers?

a.

No maximum retention limit

b.

Maximum retention is fixed by the IRDA

c.

General insurers can determine their own maximum retention

d.

General insurers can maintain the maximum possible retention commensurate with their financial strength and volume of business

Discuss
Answer: (d).General insurers can maintain the maximum possible retention commensurate with their financial strength and volume of business Explanation:General insurers are allowed to maintain the maximum possible retention commensurate with their financial strength and volume of business.
Q182.
Under what circumstances does the IRDA have the power to ask a General Insurer to justify its retention policy?

a.

Whenever the IRDA feels necessary

b.

Only if the general insurer faces financial difficulties

c.

Only if there is a complaint from policyholders

d.

When deemed necessary by the IRDA, irrespective of financial difficulties

Discuss
Answer: (d).When deemed necessary by the IRDA, irrespective of financial difficulties Explanation:The IRDA has the power to ask a General Insurer to justify its retention policy when deemed necessary, irrespective of financial difficulties.
Q183.
What is the requirement for general insurers in terms of outstanding claims provision for reinsurance arrangements?

a.

Provisions are not required

b.

Provisions are made based on loss information advices

c.

Provisions are made on an actuarial estimation basis

d.

Provisions are made based on loss information advices or actuarial estimations, whichever is convenient

Discuss
Answer: (d).Provisions are made based on loss information advices or actuarial estimations, whichever is convenient Explanation:Every general insurer is required to make outstanding claims provision for every reinsurance arrangement accepted based on loss information advices received from Brokers / Cedants. In cases where such advices are not received, provisions are created on the basis of actuarial estimations.
Q184.
What provision is required to be made by every general insurer for Incurred But Not Reported (IBNR) claims on the reinsurance accepted portfolio?

a.

No provision is required

b.

Provision is made based on loss information advices

c.

Provision is made on an actuarial estimation basis

d.

Provision is made only for reported claims

Discuss
Answer: (c).Provision is made on an actuarial estimation basis Explanation:Every general insurer is required to make an appropriate provision for Incurred But Not Reported (IBNR) claims on the reinsurance accepted portfolio, and this provision is made on an actuarial estimation basis.
Q185.
In the case of insurance (individual) agent, the agents licence is granted / renewed for a period of ________ years.

a.

One

b.

Two

c.

Three

d.

Five

Discuss
Answer: (c).Three Explanation:An insurance agent’s licence is granted / renewed for a period of 3 years.
Q186.
What is the fee charged by the Authority to issue a duplicate copy of licence to Corporate Agents?

a.

Rs 10

b.

Rs 50

c.

Rs 500

d.

Rs 1,000

Discuss
Answer: (b).Rs 50 Explanation:The authority, on payment of a fee of Rs 50, issues a duplicate licence to replace a licence, which is lost, destroyed, or mutilated.
Q187.
Which of the following is not a fundamental objective of reinsurance of life and non-life insurances?

a.

Minimise retention within the country

b.

Develop adequate capacity

c.

Secure the best possible protection for the reinsurance costs incurred

d.

Simplify the administration of business

Discuss
Answer: (a).Minimise retention within the country Explanation:One of the fundamental objectives of reinsurance of life and non-life insurances is to maximize retention within the country.
Q188.
Which of the following describes a reinsurance broker?

a.

He / She is licensed by the Authority to act as such, for a remuneration carries out the functions as specified under regulation 3 either in the field of life insurance or general insurance or both on behalf of the clients.

b.

An insurance broker who, for remuneration, arranges reinsurance for direct insurers with insurance and reinsurance companies.

c.

An insurance broker who, for the time-being licensed by the Authority to act as such, for a remuneration arranges insurance for its clients with insurance companies and / or reinsurance for its client/s

d.

All of the above

Discuss
Answer: (b).An insurance broker who, for remuneration, arranges reinsurance for direct insurers with insurance and reinsurance companies. Explanation:Option A describes a direct broker. Option C describes a composite broker.
Q189.
What the minimum qualification that the applicant for an insurance agent is required to possess for the areas that have a population of less than 5,000?

a.

Pass in the 10th standard

b.

Pass in the 12th standard

c.

Pass in a graduate-level exam.

d.

No minimum qualification is required.

Discuss
Answer: (a).Pass in the 10th standard Explanation:For becoming an insurance agent, the minimum qualification the applicant must have for areas that have a population of 5,000 people or more is a pass in the 12th standard. At other places, the minimum qualification is a pass in the 10th standard.
Q190.
Fill in the blank by choosing the correct option. In the case of an insurance broker, the Principal Officer and persons soliciting and procuring business are required to undergo at least _________ hours of theoretical and practical training from an institution recognized by the Authority.

a.

10

b.

100

c.

200

d.

500

Discuss
Answer: (b).100 Explanation:In the case of an insurance broker, the Principal Officer and persons soliciting and procuring business are required to undergo at least 100 hours of theoretical and practical training from an institution recognized by the Authority.
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