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 14 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q131.
How does the basic equity principle apply to unit transactions in ULIPs?

a.

It ensures the interests of policyholders remain unaffected by transactions.

b.

It prioritizes the interests of insurers over policyholders.

c.

It maximizes profits for policyholders.

d.

It allows for fluctuations in NAV based on unit transactions.

Discuss
Answer: (a).It ensures the interests of policyholders remain unaffected by transactions. Explanation:The basic equity principle in ULIPs ensures that the interests of policyholders who are not involved in unit transactions remain unaffected.
Q132.
Why is it important to have uniform cut-off timings for allocation and redemptions in ULIPs?

a.

To increase insurer profits

b.

To simplify operational procedures for insurers

c.

To enable policyholders to verify prices allocated or redeemed

d.

To discourage policyholders from making transactions

Discuss
Answer: (c).To enable policyholders to verify prices allocated or redeemed Explanation:Uniform cut-off timings for allocation and redemptions in ULIPs enable policyholders to verify the prices allocated or redeemed.
Q133.
How should insurers expedite the clearing of outstanding premium cheques received from policyholders?

a.

By delaying the clearance process

b.

By ignoring the cheques altogether

c.

By ensuring timely redemption of units

d.

By investing the cheques in high-risk assets

Discuss
Answer: (c).By ensuring timely redemption of units Explanation:Insurers should expedite the clearing of outstanding premium cheques received from policyholders by ensuring timely redemption of units.
Q134.
Why is it important to have uniform nomenclature for charges in ULIPs?

a.

To confuse policyholders

b.

To make comparison with peer products difficult

c.

To increase transparency for policyholders

d.

To simplify charge structures for insurers

Discuss
Answer: (c).To increase transparency for policyholders Explanation:Having uniform nomenclature for charges in ULIPs increases transparency for policyholders and makes it easier for them to understand the various charges.
Q135.
What is the minimum guaranteed return offered on the maturity date for all ULIP pension/annuity products?

a.

2.5 percent per annum

b.

4.5 percent per annum

c.

6.5 percent per annum

d.

8.5 percent per annum

Discuss
Answer: (b).4.5 percent per annum Explanation:All ULIP pension/annuity products offer a minimum guaranteed return of 4.5 percent per annum on the maturity date.
Q136.
What option does the insured have regarding partial withdrawals in the accumulating phase of unit linked pension/annuity products?

a.

Partial withdrawals are allowed without any restrictions

b.

Partial withdrawals are allowed with a maximum limit of one-third of the accumulated fund value

c.

Partial withdrawals are allowed with a maximum limit of two-thirds of the accumulated fund value

d.

Partial withdrawals are not allowed

Discuss
Answer: (d).Partial withdrawals are not allowed Explanation:In the accumulating phase of unit linked pension/annuity products, no partial withdrawals are allowed.
Q137.
What is the cap on overall charges levied by life insurance companies under ULIP plans for insurance contracts with a tenure of 10 years or less?

a.

125 basis points

b.

200 basis points

c.

225 basis points

d.

250 basis points

Discuss
Answer: (c).225 basis points Explanation:For insurance contracts with a tenure of 10 years or less, the difference between the gross and net yields shall not exceed 225 basis points.
Q138.
Which charges are exempted from calculating the net yield for ULIP plans?

a.

Fund Management charges

b.

Policy administration charges

c.

Mortality and Morbidity charges

d.

Surrender charges

Discuss
Answer: (c).Mortality and Morbidity charges Explanation:Mortality and Morbidity charges are exempted from calculating the net yield for ULIP plans.
Q139.
Why were the limits on overall charges revisited in the year 2010?

a.

To increase charges for policyholders

b.

To align charges with the discontinuance, lapsation, and surrender behavior of policyholders

c.

To decrease transparency in charge structures

d.

To simplify operational procedures for insurers

Discuss
Answer: (b).To align charges with the discontinuance, lapsation, and surrender behavior of policyholders Explanation:The limits on overall charges were revisited in 2010 to align charges with the discontinuance, lapsation, and surrender behavior of policyholders.
Q140.
What does Regulation 3 (1) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002 require regarding riders attached to a life policy?

a.

Riders must bear the nature and character of the main policy

b.

Riders must be independent of the main policy

c.

Riders must only be attached to participating policies

d.

Riders must only be attached to non-participating policies

Discuss
Answer: (a).Riders must bear the nature and character of the main policy Explanation:Regulation 3 (1) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002 mandates that riders attached to a life policy must bear the nature and character of the main policy, whether it is participating or non-participating. This ensures consistency and alignment between the main policy and its riders.
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