Policyholder Rights of Assignment,Nomination and Transfer MCQs

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

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Policyholder Rights of Assignment,Nomination and Transfer MCQs | Page 3 of 11

Discover more Topics under IC 14 Regulations of Insurance Business

Q21.
What recommendation does the Law Commission make regarding Section 38 of the Insurance Act?

a.

Section 38 should be repealed entirely.

b.

Section 38 should be retained without any modifications.

c.

Section 38 should be retained with modifications for greater clarity.

d.

Section 38 should be replaced with entirely new legislation.

Discuss
Answer: (c).Section 38 should be retained with modifications for greater clarity. Explanation:The Law Commission recommends retaining Section 38 with modifications for greater clarity.
Q22.
What recommendation is made regarding the terminologies "assignment" and "transfer" in Section 38?

a.

They should be removed entirely from Section 38.

b.

They should be used interchangeably to avoid confusion.

c.

Both terminologies should be retained and used alternatively for greater flexibility.

d.

They should be replaced with new terms to modernize the language.

Discuss
Answer: (c).Both terminologies should be retained and used alternatively for greater flexibility. Explanation:The recommendation suggests retaining both "assignment" and "transfer" in Section 38 and using them alternatively to enable greater flexibility.
Q23.
What proposal is suggested regarding partial assignment or transfer of a policy of insurance?

a.

The insurer's liability should not be limited in case of partial assignment or transfer.

b.

The policyholder should be entitled to further assign or transfer the residual amount payable under the same policy.

c.

A separate sub-section should be inserted to limit the insurer's liability to the amount secured by the partial assignment or transfer.

d.

Partial assignment or transfer of a policy should be prohibited.

Discuss
Answer: (c).A separate sub-section should be inserted to limit the insurer's liability to the amount secured by the partial assignment or transfer. Explanation:The recommendation proposes inserting a separate sub-section to indicate that in the case of partial assignment or transfer of a policy of insurance, the insurer's liability shall be limited to the amount secured by the partial assignment or transfer.
Q24.
How does the recommendation propose to extend the applicability of Section 38?

a.

By limiting its applicability to life insurance policies only.

b.

By restricting its applicability to certain types of non-life insurance policies.

c.

By extending its applicability to all personal lines of non-life insurance business.

d.

By making it applicable only to corporate insurance policies.

Discuss
Answer: (c).By extending its applicability to all personal lines of non-life insurance business. Explanation:The recommendation suggests extending the applicability of Section 38 to all personal lines of non-life insurance business.
Q25.
What safeguards are proposed to be built into Section 38 according to the recommendation?

a.

There is no proposal for adding safeguards.

b.

The policyholder's reasons for assignment should be kept confidential.

c.

The antecedents of the assignee should not be verified.

d.

The insurer should verify the credentials of the assignee at the cost of the insured, and if not satisfied, the insurer may decline to register the assignment.

Discuss
Answer: (d).The insurer should verify the credentials of the assignee at the cost of the insured, and if not satisfied, the insurer may decline to register the assignment. Explanation:The recommendation proposes building in safeguards by requiring the insurer to verify the credentials of the assignee at the cost of the insured. If the insurer is not satisfied, it may decline to register the assignment.
Q26.
What does Section 39 of the Insurance Act, 1938 allow the policyholder to do?

a.

Make changes to the premium payment schedule.

b.

Nominate beneficiaries to receive the policy benefits upon the policyholder's death.

c.

Request a refund of premiums paid.

d.

Transfer the policy to another insurance company.

Discuss
Answer: (b).Nominate beneficiaries to receive the policy benefits upon the policyholder's death. Explanation:Section 39 allows the policyholder to nominate one or more persons to whom the money secured by the policy shall be paid in the event of his death.
Q27.
What provision is made for nominations involving minors according to Section 39?

a.

Minors are not allowed to be nominated under any circumstances.

b.

Minors must appoint a guardian to receive the money secured by the policy.

c.

The policyholder may appoint a person to receive the money on behalf of the minor nominee.

d.

Minors can only be nominated if they are over the age of 16.

Discuss
Answer: (c).The policyholder may appoint a person to receive the money on behalf of the minor nominee. Explanation:If any nominee is a minor, the policyholder may appoint in the prescribed manner any person to receive the money secured by the policy in the event of his death during the minority of the nominee.
Q28.
How can a nomination be made effectual according to Section 39?

a.

By informing the beneficiary orally.

b.

By mailing a letter to the insurer.

c.

By endorsing the nomination on the policy and registering it with the insurer.

d.

By publishing it in a local newspaper.

Discuss
Answer: (c).By endorsing the nomination on the policy and registering it with the insurer. Explanation:Any nomination, to be effectual, shall be made by an endorsement on the policy communicated to the insurer and registered by him in the records relating to the policy.
Q29.
What happens to a nomination if the policy is transferred or assigned according to Section 39?

a.

The nomination remains valid regardless of the transfer or assignment.

b.

The nomination is automatically canceled.

c.

The nominee must consent to the transfer or assignment.

d.

The policyholder must notify the insurer of the transfer or assignment for the nomination to remain valid.

Discuss
Answer: (b).The nomination is automatically canceled. Explanation:A transfer or assignment of a policy made in accordance with Section 38 automatically cancels a nomination.
Q30.
What exception is provided regarding the cancellation of a nomination in case of assignment to the insurer who bears the rates on the policy?

a.

The nomination is canceled regardless of the circumstances.

b.

The nomination remains valid until the policy matures.

c.

The cancellation affects the rights of the nominee only to the extent of the insurer's interest in the policy.

d.

The policyholder must provide written consent for the cancellation.

Discuss
Answer: (c).The cancellation affects the rights of the nominee only to the extent of the insurer's interest in the policy. Explanation:The assignment of a policy to the insurer who bears the rates on the policy at the time of the assignment does not cancel a nomination but affects the rights of the nominee only to the extent of the insurer's interest in the policy.
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