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 31 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q301.
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.
Q302.
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.
Q303.
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.
Q304.
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.
Q305.
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.
Q306.
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.
Q307.
What legislative measures address the issue of customer identity verification in insurance?

a.

Prevention of Money Laundering Act (PMLA)

b.

Anti-Money Laundering (AML) guidelines

c.

Both a and b

d.

None of the above

Discuss
Answer: (c).Both a and b Explanation:The Prevention of Money Laundering Act (PMLA) and Anti-Money Laundering (AML) guidelines provide legislative measures to address the issue of customer identity verification in insurance. These regulations stipulate appropriate measures for determining the true identity of customers, including obtaining identification details, verifying addresses, photographs, financial status, and the purpose of insurance contracts. Compliance with these regulations is essential for insurance companies to combat financial crimes effectively.
Q308.
How are KYC norms applied in risk management?

a.

Randomly

b.

In a risk-based approach

c.

Without any consideration of risk

d.

Only for certain customers

Discuss
Answer: (b).In a risk-based approach Explanation:KYC (Know Your Customer) norms are applied in a risk-based approach in risk management. This means that the extent of caution exercised in each proposal is decided based on the risks identified in both customer profiles and product profiles.
Q309.
What are examples of low-risk customers in insurance?

a.

Non-residents

b.

High net worth individuals

c.

Salaried employees with well-defined salary structures

d.

Politically exposed persons (PEPs)

Discuss
Answer: (c).Salaried employees with well-defined salary structures Explanation:Low-risk customers in insurance include individuals and entities whose identities and source of funds can be easily verified, such as salaried employees with well-defined salary structures, people from lower economic strata, government departments, and government-owned companies.
Q310.
Which category of customers poses an inherently higher than average risk to insurance companies?

a.

Low risk customers

b.

Medium risk customers

c.

High risk customers

d.

All customers pose the same level of risk

Discuss
Answer: (c).High risk customers Explanation:High-risk customers pose an inherently higher than average risk to insurance companies. Examples include non-residents, high net worth individuals, trusts, charities, politically exposed persons (PEPs), and companies with close family shareholding or beneficial ownership.
Page 31 of 32