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 6 of 20

Discover more Topics under IC 14 Regulations of Insurance Business

Q51.
What is the requirement for Reinsurance Brokers and Composite Brokers regarding an 'Insurance Bank Account' according to Regulation 23?

a.

They must maintain an 'Insurance Bank Account' for all transactions

b.

They need to have a separate 'Insurance Bank Account' for reinsurance transactions only

c.

No specific requirement for an 'Insurance Bank Account'

d.

They can use any bank account for insurance transactions

Discuss
Answer: (b).They need to have a separate 'Insurance Bank Account' for reinsurance transactions only Explanation:Reinsurance Brokers and Composite Brokers shall ensure that 'insurance money' is held in an 'Insurance Bank Account' for reinsurance transactions only.
Q52.
Is professional indemnity insurance mandatory for corporate agents and individual agents as per Regulation 24?

a.

Yes, it is mandatory for both corporate agents and individual agents

b.

No, professional indemnity insurance is not required for either corporate agents or individual agents

c.

Only corporate agents need professional indemnity insurance

d.

Only individual agents need professional indemnity insurance

Discuss
Answer: (b).No, professional indemnity insurance is not required for either corporate agents or individual agents Explanation:Corporate agents and individual agents are not required to take professional indemnity insurance as per Regulation 24.
Q53.
What is the frequency of financial statement submission required for insurance brokers under Regulation 25?

a.

Quarterly

b.

Half-yearly

c.

Annually

d.

Biennially

Discuss
Answer: (b).Half-yearly Explanation:Every insurance broker shall submit a half-yearly un-audited financial statement to the Authority containing details of performance, financial position, etc., along with a declaration confirming the fulfilment of requirements of capital and deposit in accordance with the regulations.
Q54.
Is membership in the Insurance Brokers Association of India mandatory for corporate agents and individual agents?

a.

Yes, it is mandatory for both corporate agents and individual agents

b.

No, membership is not required for either corporate agents or individual agents

c.

Only corporate agents need to be members

d.

Only individual agents need to be members

Discuss
Answer: (b).No, membership is not required for either corporate agents or individual agents Explanation:There is no mandatory provision for corporate agents or individual agents to be members of the Insurance Brokers Association of India according to Regulation 20.
Q55.
What is the responsibility of an insurance agent regarding the needs of the prospective buyer according to IRDA regulations for Agents / Corporate Agents?

a.

Gather information through a process called 'Fact Finding' and recommend a product without considering the client's needs

b.

Disseminate information about insurance products but ignore the needs of the prospect

c.

Take into account the needs of the prospect while recommending a specific insurance plan

d.

Recommend the most expensive insurance plan to maximize commission

Discuss
Answer: (c).Take into account the needs of the prospect while recommending a specific insurance plan Explanation:According to Regulation 8(1)(c) of IRDA Licencing of Insurance Agents Regulations, 2000, and Regulation 7(2)(c) of IRDA Licensing of Corporate Agents Regulations 2002, every insurance agent should disseminate the requisite information about insurance products and take into account the needs of the prospect while recommending a specific insurance plan.
Q56.
What is the process recommended for insurance agents to analyze the client's requirement according to IRDA regulations?

a.

Randomly recommend insurance products to the client

b.

Use guesswork to determine the client's needs

c.

Ignore the client's requirement

d.

Gather all information through 'Fact Finding' and then recommend a product that best suits the client's requirement

Discuss
Answer: (d).Gather all information through 'Fact Finding' and then recommend a product that best suits the client's requirement Explanation:The agent should gather all information from the prospect and analyze his requirement through a process called 'Fact Finding' before recommending a product that best suits the client's requirement.
Q57.
What does the Code of Conduct prescribed by IRDA regulations for brokers emphasize regarding the suitability of a policy for the prospective client?

a.

Brokers should recommend the most expensive policy

b.

Brokers should only consider the commission earned

c.

Brokers should ensure that the policy proposed is suitable to the needs of the prospective client

d.

Brokers should prioritize their interests over the client's needs

Discuss
Answer: (c).Brokers should ensure that the policy proposed is suitable to the needs of the prospective client Explanation:According to the Code of Conduct prescribed by IRDA regulations for brokers, every insurance broker should ensure that the policy proposed is suitable to the needs of the prospective client.
Q58.
When were Third Party Administrators (TPAs) introduced by the IRDA?

a.

1995

b.

1998

c.

2001

d.

2005

Discuss
Answer: (c).2001 Explanation:TPAs were introduced by the IRDA in the year 2001.
Q59.
What is the core service of a TPA in the health insurance sector?

a.

Selling insurance policies

b.

Processing premium payments

c.

Facilitating cashless service at the time of hospitalization

d.

Handling legal disputes between insurers and policyholders

Discuss
Answer: (c).Facilitating cashless service at the time of hospitalization Explanation:The core service of a TPA is to ensure better services to policyholders, including facilitating cashless service at the time of hospitalization.
Q60.
What is the minimum paid-up capital requirement for a company to function as a TPA?

a.

Rs. 50 lakhs

b.

Rs. 75 lakhs

c.

Rs. 1 crore

d.

Rs. 2 crores

Discuss
Answer: (c).Rs. 1 crore Explanation:The minimum paid-up capital of a company functioning as a TPA shall be in equity shares amounting to Rs. 1 crore.
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