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.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Regulations on Conduct of Business. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Regulations on Conduct of Business knowledge to the test? Let's get started with our carefully curated MCQs!

Regulations on Conduct of Business MCQs | Page 24 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q231.
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.
Q232.
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.
Q233.
What provision does Section 64 VB (2) of the Insurance Act make regarding the assumption of risk by insurers when dealing with non-realizable premiums?

a.

Insurers can assume risk immediately after receiving the premium

b.

Insurers can assume risk even if the premium is not received

c.

Insurers are deemed to be on risk during the period between posting the cheque and its realization

d.

Insurers cannot assume risk until the premium is realized

Discuss
Answer: (c).Insurers are deemed to be on risk during the period between posting the cheque and its realization Explanation:Section 64 VB (2) of the Insurance Act deems insurers to be on risk during the period between posting the cheque and its realization, even if the premium is not yet realized. This provision aims to prevent any disadvantage to the insurer arising from delays in premium realization.
Q234.
How do IRDA regulations address the issue of non-realized premiums for general insurance policies?

a.

By treating the policy as void ab initio if the premium is not realized by the insurer

b.

By allowing insurers to assume risk regardless of premium realization status

c.

By providing a grace period for premium payment

d.

By requiring insurers to cover the risk until the premium is realized

Discuss
Answer: (a).By treating the policy as void ab initio if the premium is not realized by the insurer Explanation:IRDA regulations address the issue of non-realized premiums for general insurance policies by treating the policy as void ab initio if the premium is not realized by the insurer. This ensures that the policy is not enforceable from the very beginning if the premium is not received.
Q235.
How does the Motor Vehicles Act affect insurers' obligations regarding non-realized premiums?

a.

It absolves insurers from any liability for non-realized premiums

b.

It requires insurers to pay compensation to third parties regardless of premium realization

c.

It allows insurers to delay compensation until the premium is realized

d.

It mandates insurers to refund premiums if not realized within a certain period

Discuss
Answer: (b).It requires insurers to pay compensation to third parties regardless of premium realization Explanation:Under the Motor Vehicles Act, insurers do not have ‘non-receipt of premium or non-realization of cheque’ as a defense against payment of compensation to third parties. This means that insurers must pay compensation to third parties regardless of premium realization status, as mandated by the Act.
Q236.
In what circumstances is the full premium required to be paid before the commencement of risk for a specific policy?

a.

For any type of insurance policy

b.

Only for marine cargo insurance policies

c.

Only for motor vehicle insurance policies

d.

For a 'specific' policy, such as for only one kind of property at one location of the insured

Discuss
Answer: (d).For a 'specific' policy, such as for only one kind of property at one location of the insured Explanation:The full premium is required to be paid before the commencement of risk for a 'specific' policy, such as for only one kind of property at one location of the insured. This ensures that coverage is in place before the insured property is exposed to any risk.
Q237.
In which cases are there relaxations to the provisions of Section 64VB of the Insurance Act?

a.

Only for motor vehicle insurance policies

b.

Only for marine cargo insurance policies

c.

In cases of certain categories of insurance specified in Rule 59 of Insurance Rules

d.

In all cases of insurance policies

Discuss
Answer: (c).In cases of certain categories of insurance specified in Rule 59 of Insurance Rules Explanation:Relaxations to the provisions of Section 64VB of the Insurance Act are applicable in cases of certain categories of insurance specified in Rule 59 of Insurance Rules. These categories include policies issued to Government and Semi-Government Bodies, Sickness Insurance, Group Personal Accident Insurance, among others.
Q238.
What is the purpose of the Memorandum of Exchange Control Regulations relating to General Insurance in India?

a.

To regulate the export of insurance policies

b.

To facilitate the import of insurance policies

c.

To govern general insurance business written in India under the Foreign Exchange Management Act

d.

To regulate the sale of insurance policies to foreign entities

Discuss
Answer: (c).To govern general insurance business written in India under the Foreign Exchange Management Act Explanation:The purpose of the Memorandum of Exchange Control Regulations relating to General Insurance in India is to govern general insurance business written in India under the Foreign Exchange Management Act. These regulations provide guidelines for exchange control regulations applicable to general insurance transactions.
Q239.
What document should insurers insist on when issuing policies expressed in foreign currency against premium payable in foreign currency?

a.

Insurance certificate

b.

Bank encashment certificate

c.

Foreign exchange certificate

d.

Premium receipt

Discuss
Answer: (b).Bank encashment certificate Explanation:Insurers should insist on submission of a bank encashment certificate when issuing policies expressed in foreign currency against premium payable in foreign currency. This certificate serves as proof that the premium has been received by foreign exchange remittance through banking channels or in rupees derived by sale of foreign exchange to an authorized dealer.
Q240.
What is the requirement for persons, firms, and companies resident in India regarding taking insurance cover with insurance companies in foreign countries?

a.

Prior permission from the Reserve Bank of India

b.

Approval from the General Insurance Business (Nationalisation) Act, 1972

c.

Permission from the Ministry of Finance

d.

Consent from the Insurance Regulatory and Development Authority (IRDA)

Discuss
Answer: (a).Prior permission from the Reserve Bank of India Explanation:Persons, firms, and companies resident in India are not permitted to take insurance cover with insurance companies in foreign countries without the prior permission of the Reserve Bank of India. Additionally, permission from the Government of India under the General Insurance Business (Nationalisation) Act, 1972, is also required in such cases.
Page 24 of 32