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.

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Regulations on Conduct of Business MCQs | Page 11 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q101.
When is the premium typically paid by the insured?

a.

At the end of the insurance contract

b.

Only once at the commencement of the contract

c.

At the commencement of the contract and later throughout the term at periodical intervals

d.

Only when a claim is made

Discuss
Answer: (c).At the commencement of the contract and later throughout the term at periodical intervals Explanation:The premium is typically paid by the insured at the commencement of the insurance contract and later throughout the term at periodical intervals as per the policy terms and conditions. This ensures continuous coverage under the insurance policy.
Q102.
What factors generally influence the insurance premium?

a.

The age of the insured

b.

The type of insurance product

c.

The location of the insured

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Various factors can influence the insurance premium, including the age of the insured, the type of insurance product, the location of the insured, and other risk factors. Insurance premium generally increases with an increase in risk.
Q103.
According to IRDA regulations, what are the approved methods for premium payment?

a.

Cash only

b.

Cheque or demand draft only

c.

Any recognised banking negotiable instrument, cash, postal money order, credit/debit card, cash deposit, bank guarantee, direct credits, online fund transfer, or any other methods approved by IRDA

d.

Only online fund transfer from the bank account through the internet

Discuss
Answer: (c).Any recognised banking negotiable instrument, cash, postal money order, credit/debit card, cash deposit, bank guarantee, direct credits, online fund transfer, or any other methods approved by IRDA Explanation:According to IRDA regulations, premium payment to an insurer may be made by any recognised banking negotiable instrument, cash, postal money order, credit/debit card, cash deposit, bank guarantee, direct credits, online fund transfer, or any other methods approved by IRDA. These methods provide flexibility and convenience to policyholders for paying their premiums.
Q104.
According to Section 64 VB of the Insurance Act, when does the risk on the part of the insurer begin?

a.

When the policyholder submits the proposal form

b.

When the insurer receives the premium

c.

When the policy is issued

d.

When the claim is settled

Discuss
Answer: (b).When the insurer receives the premium Explanation:According to Section 64 VB of the Insurance Act, the risk on the part of the insurer begins only after it receives the premium. This means that the insurer assumes the risk associated with the insurance policy only when the premium payment is received.
Q105.
What happens if the premium is not realized by the insurer for a general insurance policy?

a.

The policy remains in force

b.

The policy is treated as void ab initio

c.

The policyholder receives a grace period to pay the premium

d.

The policy is converted into a life insurance policy

Discuss
Answer: (b).The policy is treated as void ab initio Explanation:If the premium is not realized by the insurer for a general insurance policy, the policy shall be treated as void ab initio, meaning as if no policy existed. This emphasizes the importance of premium payment for the validity of insurance coverage.
Q106.
How is the treatment of non-realization of premium different for life insurance policies compared to general insurance policies?

a.

Life insurance policies remain in force

b.

Both types of policies are treated as void ab initio

c.

Life insurance policies depend on the terms and conditions of the policy

d.

Life insurance policies are immediately canceled

Discuss
Answer: (c).Life insurance policies depend on the terms and conditions of the policy Explanation:In the case of a life insurance policy, the continuance of risk or otherwise depends on the terms and conditions of the policy already entered into. This means that the treatment of non-realization of premium for life insurance policies varies based on the specific terms and conditions outlined in the policy.
Q107.
What does Section 64 VB of the Insurance Act specify regarding assumption of risk by insurers?

a.

Insurers can assume risk even without receiving the premium

b.

Insurers cannot assume any risk until the premium is received

c.

Insurers can assume risk only for policies with premiums payable outside India

d.

Insurers can assume risk for any insurance business without restriction

Discuss
Answer: (b).Insurers cannot assume any risk until the premium is received Explanation:Section 64 VB of the Insurance Act specifies that no insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by the insurer. This emphasizes the requirement of receiving the premium before assuming any risk.
Q108.
What provision does Section 64 VB (2) of the Insurance Act make regarding the assumption of risk by insurers when dealing with non-realizable premiums?

a.

Insurers can assume risk immediately after receiving the premium

b.

Insurers can assume risk even if the premium is not received

c.

Insurers are deemed to be on risk during the period between posting the cheque and its realization

d.

Insurers cannot assume risk until the premium is realized

Discuss
Answer: (c).Insurers are deemed to be on risk during the period between posting the cheque and its realization Explanation:Section 64 VB (2) of the Insurance Act deems insurers to be on risk during the period between posting the cheque and its realization, even if the premium is not yet realized. This provision aims to prevent any disadvantage to the insurer arising from delays in premium realization.
Q109.
How do IRDA regulations address the issue of non-realized premiums for general insurance policies?

a.

By treating the policy as void ab initio if the premium is not realized by the insurer

b.

By allowing insurers to assume risk regardless of premium realization status

c.

By providing a grace period for premium payment

d.

By requiring insurers to cover the risk until the premium is realized

Discuss
Answer: (a).By treating the policy as void ab initio if the premium is not realized by the insurer Explanation:IRDA regulations address the issue of non-realized premiums for general insurance policies by treating the policy as void ab initio if the premium is not realized by the insurer. This ensures that the policy is not enforceable from the very beginning if the premium is not received.
Q110.
How does the Motor Vehicles Act affect insurers' obligations regarding non-realized premiums?

a.

It absolves insurers from any liability for non-realized premiums

b.

It requires insurers to pay compensation to third parties regardless of premium realization

c.

It allows insurers to delay compensation until the premium is realized

d.

It mandates insurers to refund premiums if not realized within a certain period

Discuss
Answer: (b).It requires insurers to pay compensation to third parties regardless of premium realization Explanation:Under the Motor Vehicles Act, insurers do not have ‘non-receipt of premium or non-realization of cheque’ as a defense against payment of compensation to third parties. This means that insurers must pay compensation to third parties regardless of premium realization status, as mandated by the Act.
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