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.

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Regulations on Conduct of Business MCQs | Page 19 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q181.
What risks does a financial institution or economy with poor anti-money laundering (AML) regime face?

a.

Decreased influence of criminal organizations

b.

Enhanced reputation and integrity

c.

Stability and efficiency in functioning

d.

Threats to reputation and integrity, which can shake stability and deter efficient functioning

Discuss
Answer: (d).Threats to reputation and integrity, which can shake stability and deter efficient functioning Explanation:A financial institution or economy with poor anti-money laundering (AML) regime risks its reputation and integrity, which can shake stability and deter efficient functioning.
Q182.
How can criminal proceeds entering the financial system affect its stability?

a.

By strengthening its integrity

b.

By enhancing its efficiency

c.

By weakening its stability

d.

By promoting ethical standards

Discuss
Answer: (c).By weakening its stability Explanation:Criminal proceeds entering the financial system can weaken its stability.
Q183.
What is one of the major threats posed by money laundering, especially post 9/11 attacks?

a.

Cybersecurity breaches

b.

Economic recession

c.

Financing of terrorism

d.

Political instability

Discuss
Answer: (c).Financing of terrorism Explanation:One of the major threats posed by money laundering, especially post 9/11 attacks, is the financing of terrorism.
Q184.
How has technology contributed to concerns regarding money laundering and terrorism financing?

a.

By reducing the anonymity of transactions

b.

By increasing transparency in financial dealings

c.

By enabling faceless dealings where the actual persons involved can remain anonymous

d.

By facilitating easier detection of suspicious transactions

Discuss
Answer: (c).By enabling faceless dealings where the actual persons involved can remain anonymous Explanation:Technology has increased concerns regarding money laundering and terrorism financing by enabling faceless dealings where the actual persons involved can remain anonymous.
Q185.
Which legislations were enacted in India in the late 1980s to address drug trafficking and related money laundering activities?

a.

The Prevention of Money Laundering Act (PMLA) 2002

b.

The Narcotics and Psychotropic Substances Act (NDPS), 1985

c.

The Foreign Exchange Management Act (FEMA) 1999

d.

The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988

Discuss
Answer: (b).The Narcotics and Psychotropic Substances Act (NDPS), 1985 Explanation:The legislations enacted in India in the late 1980s to address drug trafficking and related money laundering activities include The Narcotics and Psychotropic Substances Act (NDPS), 1985 and The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988.
Q186.
When was the Prevention of Money Laundering Act (PMLA) 2002 brought into force?

a.

July 1, 2002

b.

July 1, 2005

c.

January 1, 2000

d.

January 1, 2005

Discuss
Answer: (b).July 1, 2005 Explanation:The Prevention of Money Laundering Act (PMLA) 2002 was brought into force from July 1, 2005.
Q187.
What are the objectives of the Prevention of Money Laundering Act (PMLA)?

a.

Prevention, control, and combating of drug trafficking

b.

Prevention, control, and combating of terrorist financing

c.

Prevention, control, and combating of activities concerning money laundering

d.

Prevention, control, and combating of tax evasion

Discuss
Answer: (c).Prevention, control, and combating of activities concerning money laundering Explanation:The objectives of the Prevention of Money Laundering Act (PMLA) include prevention, control, and combating of activities concerning money laundering.
Q188.
According to Reserve Bank of India (RBI) guidelines, what transactions should banks and financial institutions maintain records of?

a.

Only cash transactions exceeding Rs. 10 lakhs

b.

Only suspicious transactions

c.

Cash transactions exceeding Rs. 10 lakhs and other suspicious transactions

d.

All transactions regardless of value

Discuss
Answer: (c).Cash transactions exceeding Rs. 10 lakhs and other suspicious transactions Explanation:According to Reserve Bank of India (RBI) guidelines, banks and financial institutions should maintain records of cash transactions exceeding Rs. 10 lakhs and other suspicious transactions.
Q189.
What constitutes a suspicious transaction in insurance?

a.

Transactions involving large sums of money

b.

Transactions that are disclosed promptly by customers

c.

Transactions that exhibit unusual behavior or raise concerns about money laundering

d.

Transactions involving routine policy changes

Discuss
Answer: (c).Transactions that exhibit unusual behavior or raise concerns about money laundering Explanation:A suspicious transaction in insurance constitutes transactions that exhibit unusual behavior or raise concerns about money laundering.
Q190.
Which of the following is NOT listed as an example of a suspicious transaction in insurance?

a.

Early termination of a product, especially at a loss

b.

Routine requests for change of address

c.

A transfer of the benefit of a product to an apparently unrelated third party without valid considerations

d.

Attempts to use a third party cheque to make a proposed purchase of a policy

Discuss
Answer: (b).Routine requests for change of address Explanation:Routine requests for change of address are not listed as an example of a suspicious transaction in insurance.
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