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 16 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q151.
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.
Q152.
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.
Q153.
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.
Q154.
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.
Q155.
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.
Q156.
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.
Q157.
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.
Q158.
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.
Q159.
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.
Q160.
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.
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