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 20 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q191.
What action should be taken if there is a suspicion of a transaction being involved in illegal activity?

a.

The transaction should be continued as normal

b.

The transaction should be stopped immediately, and action should be initiated to apprehend the entities involved

c.

The transaction should be ignored unless further evidence is found

d.

The transaction should be reported to the authorities after a thorough investigation

Discuss
Answer: (b).The transaction should be stopped immediately, and action should be initiated to apprehend the entities involved Explanation:If there is a suspicion of a transaction being involved in illegal activity, the transaction should be stopped immediately, and action should be initiated to apprehend the entities involved.
Q192.
What is the purpose of analysing suspicious transactions and taking immediate action?

a.

To ensure the transaction is completed without interruption

b.

To trace the source of the transaction and apprehend the entities involved

c.

To gather evidence for future investigations

d.

To delay reporting to the authorities until further evidence is found

Discuss
Answer: (b).To trace the source of the transaction and apprehend the entities involved Explanation:The purpose of analysing suspicious transactions and taking immediate action is to trace the source of the transaction and apprehend the entities involved.
Q193.
What is the primary objective of KYC processes?

a.

To increase the paperwork for customers

b.

To ensure the financial institution's operations are clean and to serve customers better

c.

To impose unnecessary burdens on customers

d.

To collect excessive personal information about customers

Discuss
Answer: (b).To ensure the financial institution's operations are clean and to serve customers better Explanation:The primary objective of KYC processes, is to ensure that the financial institution's operations are clean so as to help serve customers better.
Q194.
Which of the following is NOT a purpose of collecting detailed customer information?

a.

Satisfying legal requirements for better customer relationship

b.

Monitoring the policy for possible abuse or illegal use

c.

To provide required services to the customers

d.

Identifying potential fraudulent activities within the company

Discuss
Answer: (d).Identifying potential fraudulent activities within the company Explanation:Identifying potential fraudulent activities within the company is not a purpose of collecting detailed customer information.
Q195.
What are the typical documents accepted as photo identity proof during the KYC process?

a.

Passport, driver's license, PAN card, voter identity card

b.

Passport, utility bills, bank statements, rental agreements

c.

Birth certificate, school ID, credit card statement, library card

d.

Social security card, health insurance card, employment contract, property deed

Discuss
Answer: (a).Passport, driver's license, PAN card, voter identity card Explanation:The typical documents accepted as photo identity proof during the KYC process include passport, driver's license, PAN card, voter identity card, among others.
Q196.
What can KYC deficiencies lead to?

a.

Improved customer relationship

b.

Lower legal risks for the financial institution

c.

Various business and legal risks

d.

Increased customer satisfaction

Discuss
Answer: (c).Various business and legal risks Explanation:KYC deficiencies can lead to various business and legal risks.
Q197.
What documents are typically accepted as address proof by insurance companies?

a.

Electricity Bill

b.

Bank passbook or post office saving passbook

c.

Telephone Bill

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Address proof is crucial for insurance companies to verify the residence of their customers. Documents such as electricity bills, bank passbooks, telephone bills, and lease agreements are commonly accepted proofs of address. These documents provide tangible evidence of where the customer resides, aiding in the KYC (Know Your Customer) process.
Q198.
Can a Passport be used as both photo ID proof and address proof?

a.

Yes

b.

No

c.

Only as photo ID proof

d.

Only as address proof

Discuss
Answer: (a).Yes Explanation:A passport is a versatile document that can serve as both photo ID proof and address proof. It contains the holder's photograph, personal details, and address, making it a comprehensive identification document accepted by insurance companies and other institutions.
Q199.
What is the purpose of the KYC process in insurance?

a.

To verify the financial status of customers

b.

To generate a new Policy Number

c.

To adhere to PMLA and AML guidelines

d.

To determine the purpose of insurance contracts

Discuss
Answer: (c).To adhere to PMLA and AML guidelines Explanation:The KYC (Know Your Customer) process in insurance serves the purpose of adhering to the Prevention of Money Laundering Act (PMLA) and Anti-Money Laundering (AML) guidelines. It involves verifying the identity of customers, their addresses, photographs, financial status, and the purpose of insurance contracts. This process is essential for ensuring transparency and combating financial crimes such as money laundering.
Q200.
Why is it important for insurance companies to verify the identity of their customers thoroughly?

a.

To prevent misuse of financial services by criminals

b.

To increase paperwork

c.

To discourage genuine customers

d.

To violate privacy rights

Discuss
Answer: (a).To prevent misuse of financial services by criminals Explanation:Insurance companies need to verify the identity of their customers thoroughly to prevent misuse of financial services by criminals. Criminals often attempt to maintain anonymity and use financial services with dubious identities for illegal activities like money laundering. By adhering to strict KYC procedures and verifying customer identities, insurance companies can mitigate the risk of being exploited for unlawful purposes.
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