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 23 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q221.
Why is it important for insurance companies to have adequate screening procedures when hiring employees and agents?

a.

To increase paperwork

b.

To discourage genuine employees

c.

To prevent misuse of the insurance sector by money launderers

d.

To limit the number of employees and agents

Discuss
Answer: (c).To prevent misuse of the insurance sector by money launderers Explanation:It is important for insurance companies to have adequate screening procedures when hiring employees and agents to prevent misuse of the insurance sector by money launderers. Proper screening helps ensure that individuals with questionable backgrounds or intentions are not able to infiltrate the system and exploit it for illicit activities.
Q222.
What is the role of employees and agents in effective compliance with Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) programs?

a.

They handle customer complaints

b.

They process claims

c.

They collect premiums

d.

They provide face-to-face interaction with customers and may identify suspicious activities

Discuss
Answer: (d).They provide face-to-face interaction with customers and may identify suspicious activities Explanation:The role of employees and agents in effective compliance with AML/CFT programs is to provide face-to-face interaction with customers and may identify suspicious activities. They are in a position to access information about customers, which can provide leads on suspicious financial transactions, making their training on AML/CFT crucial.
Q223.
Why is it important for employees and agents to be properly trained on AML/CFT?

a.

To increase paperwork

b.

To discourage genuine employees

c.

To bring about awareness on possible misuse of the financial system by money launderers

d.

To limit the number of employees and agents

Discuss
Answer: (c).To bring about awareness on possible misuse of the financial system by money launderers Explanation:It is important for employees and agents to be properly trained on AML/CFT to bring about awareness on possible misuse of the financial system by money launderers. This training helps them recognize suspicious activities and take appropriate action to prevent illicit financial transactions.
Q224.
How are premiums typically collected by insurance companies in India?

a.

In arrears

b.

At the time of claim settlement

c.

In advance at the time of admission of a member to the group

d.

Only through bank transfers

Discuss
Answer: (c).In advance at the time of admission of a member to the group Explanation:Premiums are typically collected by insurance companies in India in advance at the time of admission of a member to the group. This ensures that funds are available to settle claims of members who suffer losses, as a fund is created from the premiums collected.
Q225.
What is premium in the context of insurance?

a.

The amount paid by the insurer to the insured

b.

The amount paid by the insured to the insurer for bearing the risk

c.

The amount paid by the insured to the government

d.

The amount paid by the insured to the broker

Discuss
Answer: (b).The amount paid by the insured to the insurer for bearing the risk Explanation:In the context of insurance, premium refers to the amount paid by the insured to the insurer for bearing the risk associated with the insurance product. It is the price paid by the insured for the coverage provided by the insurance policy.
Q226.
When is the premium typically paid by the insured?

a.

At the end of the insurance contract

b.

Only once at the commencement of the contract

c.

At the commencement of the contract and later throughout the term at periodical intervals

d.

Only when a claim is made

Discuss
Answer: (c).At the commencement of the contract and later throughout the term at periodical intervals Explanation:The premium is typically paid by the insured at the commencement of the insurance contract and later throughout the term at periodical intervals as per the policy terms and conditions. This ensures continuous coverage under the insurance policy.
Q227.
What factors generally influence the insurance premium?

a.

The age of the insured

b.

The type of insurance product

c.

The location of the insured

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Various factors can influence the insurance premium, including the age of the insured, the type of insurance product, the location of the insured, and other risk factors. Insurance premium generally increases with an increase in risk.
Q228.
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.
Q229.
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.
Q230.
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.
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