Protection of Policyholder Interest MCQs

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

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Protection of Policyholder Interest. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

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Protection of Policyholder Interest MCQs | Page 1 of 8

Discover more Topics under IC 14 Regulations of Insurance Business

Q1.
What is the primary objective of the Insurance Regulatory and Development Authority (IRDA)?

a.

To maximize profits for insurance companies.

b.

To promote, regulate, and ensure orderly growth of the insurance business.

c.

To minimize transparency in insurance sales.

d.

To limit the information provided to policyholders.

Discuss
Answer: (b).To promote, regulate, and ensure orderly growth of the insurance business. Explanation:The primary objective of IRDA is to promote, regulate, and ensure orderly growth of the insurance business while protecting the interests of policyholders.
Q2.
What is emphasized regarding the provision of information to policyholders?

a.

Limited information should be provided to policyholders.

b.

Information should only be provided post-sale.

c.

Complete and clear information should be provided to policyholders.

d.

Information should be withheld from policyholders.

Discuss
Answer: (c).Complete and clear information should be provided to policyholders. Explanation:It is important for insurance companies to disclose all information to policyholders, ensuring fair treatment. Hence, complete and clear information should be provided to policyholders.
Q3.
Which regulations prescribe the duties and obligations of insurers and intermediaries, both pre- and post-sales?

a.

Insurance Regulatory and Development Authority Act, 1999

b.

Insurance Act, 1938

c.

IRDA (Protection of Policyholders’ Interests) Regulations, 2002

d.

Securities and Exchange Board of India (SEBI) regulations

Discuss
Answer: (c).IRDA (Protection of Policyholders’ Interests) Regulations, 2002 Explanation:The IRDA (Protection of Policyholders’ Interests) Regulations, 2002 prescribe the duties and obligations of insurers and intermediaries, both pre- and post-sales.
Q4.
What is the role of IRDA in comparison to SEBI?

a.

IRDA regulates the capital market, while SEBI regulates the insurance sector.

b.

IRDA and SEBI have no relation to each other.

c.

IRDA regulates the insurance sector, while SEBI regulates the capital market.

d.

IRDA and SEBI have the same regulatory responsibilities.

Discuss
Answer: (c).IRDA regulates the insurance sector, while SEBI regulates the capital market. Explanation:IRDA regulates the insurance sector, while SEBI regulates the capital market.
Q5.
What do ULIP products combine?

a.

Term insurance with mutual funds.

b.

Health insurance with stocks.

c.

Life insurance with investment in securities.

d.

Home insurance with real estate.

Discuss
Answer: (c).Life insurance with investment in securities. Explanation:ULIP products combine the benefits of life insurance with investment in securities.
Q6.
What does the term "cover" refer to in the insurance industry?

a.

The amount of money paid by the insured.

b.

An insurance contract that evidences the existence of an insurance contract.

c.

The physical protection provided by the insurance company.

d.

The policyholder's financial coverage limit.

Discuss
Answer: (b).An insurance contract that evidences the existence of an insurance contract. Explanation:In the insurance industry, "cover" refers to an insurance contract, whether in the form of a policy, cover note, Certificate of Insurance, or any other form, that evidences the existence of an insurance contract.
Q7.
What is the purpose of a proposal form in insurance?

a.

To make a claim for insurance benefits.

b.

To provide feedback to the insurer.

c.

To furnish all material information required by the insurer to decide whether to accept or decline the risk.

d.

To advertise insurance products to potential customers.

Discuss
Answer: (c).To furnish all material information required by the insurer to decide whether to accept or decline the risk. Explanation:A proposal form in insurance is used to furnish all material information required by the insurer to decide whether to accept or decline the risk, and in the event of acceptance, to determine the rates, terms, and conditions of the cover to be granted.
Q8.
What does "material" mean in the context of insurance?

a.

Non-essential information provided by the proposer.

b.

Information that is irrelevant to the insurance contract.

c.

All important, essential, and relevant information in the context of underwriting the risk.

d.

Information that is not required by the insurer.

Discuss
Answer: (c).All important, essential, and relevant information in the context of underwriting the risk. Explanation:In the context of insurance, "material" refers to all important, essential, and relevant information necessary for underwriting the risk by the insurer.
Q9.
Which of the following misrepresentations is considered material in life insurance?

a.

Misrepresentation about the insured's social status.

b.

Misrepresentation about the insured's financial status.

c.

Misrepresentation about the insured's health status.

d.

Misrepresentation about the insured's hobbies.

Discuss
Answer: (c).Misrepresentation about the insured's health status. Explanation:In life insurance, misrepresentation about the insured's health status is considered material to the insurance contract.
Q10.
What is included in a prospectus issued by an insurer?

a.

A summary of the insurer's financial performance.

b.

Information about the insurer's CEO.

c.

Details about the type and character of riders on the main product.

d.

The insurer's advertising campaigns.

Discuss
Answer: (c).Details about the type and character of riders on the main product. Explanation:A prospectus issued by an insurer includes details about the type and character of riders on the main product, indicating the nature of benefits flowing thereupon.
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