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 does Regulation 3 (3) of IRDA (Investment) Regulations, 2000 state about Unit Linked Life Insurance Business?

a.

It restricts insurers from investing in any marketable assets

b.

It mandates insurers to invest in approved categories of investments only

c.

It allows insurers to invest up to 50% of the fund in other than approved categories

d.

It prohibits investments in marketable assets for unit-linked policies

Discuss
Answer: (b).It mandates insurers to invest in approved categories of investments only Explanation:Regulation 3 (3) of IRDA (Investment) Regulations, 2000 states that insurers shall invest and at all times keep invested the segregated fund of unit-linked life insurance business as per the approved pattern of investment offered to and approved by the policyholders.
Q192.
Besides specific regulations for unit-linked insurance, which regulation pertains to the treatment of discontinued linked insurance policies?

a.

IRDA (Insurance Advertisements and Disclosures) Regulations, 2000

b.

IRDA (Protection of Policyholders' Interests) Regulations, 2002

c.

IRDA (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010

d.

Code of Conduct applicable to Insurance Agents

Discuss
Answer: (c).IRDA (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 Explanation:The regulation pertaining to the treatment of discontinued linked insurance policies is IRDA (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010.
Q193.
What are the minimum criteria expected of a ULIP product according to the circulars?

a.

Fixed insurance cover, short term nature, technical jargon, and non-transparency

b.

Reasonable insurance cover, linkage to premium payment, availability of targeted sum, and simplicity

c.

Variable premiums, long term nature, technical jargon, and complexity

d.

Variable benefits, short term nature, transparency, and non-disclosure

Discuss
Answer: (b).Reasonable insurance cover, linkage to premium payment, availability of targeted sum, and simplicity Explanation:The minimum criteria expected of a ULIP product include reasonable insurance cover with a linkage to the premium payment during the term of the contract, availability of a greater part of a targeted sum at the longer end, basic features of a life insurance contract, simplicity, transparency, and alignment of investment strategy to the long term nature of these contracts.
Q194.
What is the requirement for life insurance companies regarding the training of agents and intermediaries selling ULIP products?

a.

Periodical in-house training for all agents, regardless of the products they sell

b.

Specialized training for agents selling traditional insurance products

c.

Training on ULIP products only for new agents

d.

Refresher training for agents selling non-ULIP products

Discuss
Answer: (a).Periodical in-house training for all agents, regardless of the products they sell Explanation:Life insurance companies are required to provide periodical in-house training to all their insurance agents and intermediaries before they start soliciting insurance business. Separate training should be given to those authorized to sell ULIP products, including the basic features and inherent risks.
Q195.
What should be included in the curriculum of the training for agents and intermediaries selling ULIP products?

a.

Advanced investment strategies

b.

In-depth knowledge of traditional insurance products

c.

Basic features and inherent risks of ULIP products

d.

Sales techniques for non-ULIP products

Discuss
Answer: (c).Basic features and inherent risks of ULIP products Explanation:The curriculum of training for agents and intermediaries authorized to sell ULIP products must include the basic features and inherent risks of ULIP products.
Q196.
What documentation should life insurance companies maintain to demonstrate an informed decision in deciding a particular product?

a.

Comprehensive records of all policyholders

b.

General records of insurance products

c.

Appropriate documentation related to a specific product

d.

Records of all training sessions conducted

Discuss
Answer: (c).Appropriate documentation related to a specific product Explanation:Life insurance companies must maintain appropriate documentation related to a specific product to demonstrate an informed decision.
Q197.
What is necessary regarding educating policyholders under the ULIP contracts?

a.

One-time education at the policy initiation

b.

Continuous education on features, risk factors, and terminology

c.

Education on investment strategies only

d.

Education on premium payment methods

Discuss
Answer: (b).Continuous education on features, risk factors, and terminology Explanation:Life insurance companies must continuously educate policyholders regarding the features, risk factors, terminology, definitions of charges, etc., under the ULIP contracts.
Q198.
What is required regarding the unit price rounding off in ULIP contracts?

a.

It is optional for life insurance companies

b.

Rounding off should be avoided

c.

Uniform practice for rounding off the unit price

d.

Rounding off is not specified in the guidelines

Discuss
Answer: (c).Uniform practice for rounding off the unit price Explanation:Life insurance companies must follow a uniform practice for rounding off the unit price, as per the guidelines.
Q199.
What information should life insurers mention in sales brochures, prospectus, promotional material, and policy documents related to ULIP products?

a.

Statements of opinion on the performance of the fund

b.

Fund details, objectives, and investment strategy

c.

Only the minimum percentage of investments in different types

d.

Information on the general performance of the market

Discuss
Answer: (b).Fund details, objectives, and investment strategy Explanation:Life insurers are required to mention various funds offered, along with the details and objectives of each fund, the minimum and maximum percentage of investments in different types, and the investment strategy to help policyholders make informed investment decisions. Statements of opinion on the performance of the fund are not allowed.
Q200.
What must be mentioned on the top of each document, including the proposal form, related to ULIP products?

a.

Detailed list of charges

b.

Investment strategies only

c.

Information on risk control measures

d.

Disclaimer stating "IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER"

Discuss
Answer: (d).Disclaimer stating "IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER" Explanation:On the top of each document, including the proposal form, a disclaimer stating "IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER" must be mentioned.
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