Regulations on Conduct of Business MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Regulations on Conduct of Business, 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 Regulations on Conduct of Business 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 Regulations on Conduct of Business mcq questions that explore various aspects of Regulations on Conduct of Business problems. Each MCQ is crafted to challenge your understanding of Regulations on Conduct of Business 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 Regulations on Conduct of Business 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 Regulations on Conduct of Business. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Regulations on Conduct of Business knowledge to the test? Let's get started with our carefully curated MCQs!

Regulations on Conduct of Business MCQs | Page 10 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q91.
What is necessary regarding educating policyholders under the ULIP contracts?

a.

One-time education at the policy initiation

b.

Continuous education on features, risk factors, and terminology

c.

Education on investment strategies only

d.

Education on premium payment methods

Discuss
Answer: (b).Continuous education on features, risk factors, and terminology Explanation:Life insurance companies must continuously educate policyholders regarding the features, risk factors, terminology, definitions of charges, etc., under the ULIP contracts.
Q92.
What is required regarding the unit price rounding off in ULIP contracts?

a.

It is optional for life insurance companies

b.

Rounding off should be avoided

c.

Uniform practice for rounding off the unit price

d.

Rounding off is not specified in the guidelines

Discuss
Answer: (c).Uniform practice for rounding off the unit price Explanation:Life insurance companies must follow a uniform practice for rounding off the unit price, as per the guidelines.
Q93.
What information should life insurers mention in sales brochures, prospectus, promotional material, and policy documents related to ULIP products?

a.

Statements of opinion on the performance of the fund

b.

Fund details, objectives, and investment strategy

c.

Only the minimum percentage of investments in different types

d.

Information on the general performance of the market

Discuss
Answer: (b).Fund details, objectives, and investment strategy Explanation:Life insurers are required to mention various funds offered, along with the details and objectives of each fund, the minimum and maximum percentage of investments in different types, and the investment strategy to help policyholders make informed investment decisions. Statements of opinion on the performance of the fund are not allowed.
Q94.
What must be mentioned on the top of each document, including the proposal form, related to ULIP products?

a.

Detailed list of charges

b.

Investment strategies only

c.

Information on risk control measures

d.

Disclaimer stating "IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER"

Discuss
Answer: (d).Disclaimer stating "IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER" Explanation:On the top of each document, including the proposal form, a disclaimer stating "IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER" must be mentioned.
Q95.
What information must be provided to the policyholder related to investments, using the same font as an annual report?

a.

Details of market developments only

b.

Fund performance during the preceding financial year

c.

Risk control measures only

d.

Changes in interest rates only

Discuss
Answer: (b).Fund performance during the preceding financial year Explanation:The policyholder must be provided with full details related to investments, using the same font as an annual report, covering the fund performance during the preceding financial year, economic scenario, market developments, etc.
Q96.
According to para 14 of Part I of the circular issued by IRDA, when should unit statements be issued to policyholders?

a.

Only on policy anniversaries

b.

Only when a transaction takes place

c.

On every policy anniversary and when a transaction takes place

d.

Only during the maturity of the policy

Discuss
Answer: (c).On every policy anniversary and when a transaction takes place Explanation:Unit statements shall be issued on every policy anniversary and also as and when a transaction takes place, as per para 14 of Part I of the circular issued by IRDA.
Q97.
What does para 14.3 of Part I of the circular issued by IRDA state regarding unit statements?

a.

Unit statements are optional

b.

Unit statements shall be issued only during policy anniversaries

c.

Unit statements shall be issued on every policy anniversary and also as and when a transaction takes place

d.

Unit statements are not mandatory for ULIPs

Discuss
Answer: (c).Unit statements shall be issued on every policy anniversary and also as and when a transaction takes place Explanation:Para 14.3 of Part I of the circular issued by IRDA states that unit statements shall be issued on every policy anniversary and also as and when a transaction takes place.
Q98.
What should life insurance companies ensure when reporting past performance of funds in advertisements?

a.

High emphasis on past performance

b.

Use of technical jargon to convey sophistication

c.

Demonstrating a link between past performance and the future

d.

Clearly stating, in the same font, that past performance is not indicative of future performance

Discuss
Answer: (d).Clearly stating, in the same font, that past performance is not indicative of future performance Explanation:Life insurers are required to clearly state, in the same font, that past performance is not indicative of future performance when reporting past performance of funds in advertisements.
Q99.
What must be included in advertisements regarding the past performance of funds, if applicable?

a.

Compound annual returns for the previous three calendar years

b.

Corresponding benchmark index performance only

c.

Demonstrating a link between past performance and the future

d.

Compound annual returns for the previous five calendar years, expressing as a percentage rounded to the nearest 0.1%

Discuss
Answer: (d).Compound annual returns for the previous five calendar years, expressing as a percentage rounded to the nearest 0.1% Explanation:Advertisements, if including past performance, must show compound annual returns for the previous five calendar years, expressed as a percentage rounded to the nearest 0.1%.
Q100.
What information should an advertisement about Unit Linked products clearly distinguish?

a.

Distinction between different Unit Linked products

b.

Distinction between insurance agents and intermediaries

c.

Distinction between traditional Life Insurance products and Unit Linked products

d.

Distinction between premium and fund charges

Discuss
Answer: (c).Distinction between traditional Life Insurance products and Unit Linked products Explanation:An advertisement about Unit Linked products should clearly distinguish between traditional Life Insurance products and Unit Linked products so that prospective policyholders are not misled.
Page 10 of 32