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 32 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q311.
Which types of insurance products are considered vulnerable in terms of risk?

a.

Term life insurance

b.

Whole life insurance

c.

Single premium products, ULIPs, and policy features like top-ups

d.

Health insurance

Discuss
Answer: (c).Single premium products, ULIPs, and policy features like top-ups Explanation:Vulnerable insurance products in terms of risk include single premium products, ULIPs (Unit Linked Insurance Plans), and policy features like top-ups and partial withdrawals. These products may pose higher risks due to factors such as complexity, volatility, or susceptibility to misuse.
Q312.
What calls for detailed due diligence according to KYC norms in insurance?

a.

Remittance beyond a premium threshold of Rs 1 lakh per annum

b.

Remittance beyond a premium threshold of Rs 50,000 per annum

c.

Remittance beyond a premium threshold of Rs 10 lakh per annum

d.

Remittance beyond a premium threshold of Rs 5 lakh per annum

Discuss
Answer: (a).Remittance beyond a premium threshold of Rs 1 lakh per annum Explanation:According to KYC norms in insurance, remittance beyond a premium threshold of Rs 1 lakh per annum calls for detailed due diligence. This requirement ensures that large premium transactions are thoroughly scrutinized to mitigate the risk of money laundering or fraudulent activities.
Q313.
When is it necessary to establish insurable interest according to KYC norms?

a.

When the insurance premium is paid by the person insured

b.

When the insurance premium is paid by persons other than the person insured

c.

When the insurance premium exceeds a certain threshold

d.

When the insurance policy is for a high-risk customer

Discuss
Answer: (b).When the insurance premium is paid by persons other than the person insured Explanation:KYC norms in insurance require establishing insurable interest when the insurance premium is paid by persons other than the person insured. This ensures that there is a legitimate reason for the insurance coverage and helps prevent fraudulent activities.
Q314.
How should payments be made according to KYC norms in insurance?

a.

Only through cash transactions

b.

Only through account payee cheques or e-payments

c.

Only through wire transfers

d.

Only through third-party payments

Discuss
Answer: (b).Only through account payee cheques or e-payments Explanation:According to KYC norms in insurance, all payments must be made after verification of the bona fide beneficiary through either account payee cheques or e-payments. This requirement helps ensure transparency and traceability of financial transactions.
Q315.
What should attract more attention and detailed checks from an Anti-Money Laundering (AML) perspective in insurance?

a.

Premium payments made by the person insured

b.

Frequent free-look cancellations and assignments to related parties

c.

Premium payments exceeding Rs 1 lakh per annum

d.

Payments to legal heirs in case of death benefits

Discuss
Answer: (b).Frequent free-look cancellations and assignments to related parties Explanation:Vulnerable areas like frequent free-look cancellations and assignments by the policyholder to a third party not related to him should attract more attention and detailed checks from an Anti-Money Laundering (AML) perspective in insurance. These activities may indicate attempts to misuse the insurance policy for illicit purposes.
Q316.
What should insurers be cautious about regarding payments on insurance contracts according to KYC norms?

a.

Allowing payments to any third parties

b.

Allowing payments only to superannuation/gratuity accumulations

c.

Allowing payments to legal heirs in case of death benefits

d.

Allowing payments only to persons with known criminal backgrounds

Discuss
Answer: (a).Allowing payments to any third parties Explanation:According to KYC norms in insurance, insurers should not allow payments on insurance contracts to third parties except in cases like superannuation/gratuity accumulations and payments to legal heirs in case of death benefits. This requirement helps prevent misuse of insurance funds for fraudulent or illegal activities.
Q317.
When does the risk commence if the premium is tendered by postal money order?

a.

Date when the money order is received

b.

Date on which the money order is booked

c.

Depends on the terms and conditions of the policy

d.

None of the above

Discuss
Answer: (b).Date on which the money order is booked Explanation:If the premium is tendered by postal money order, the risk typically commences on the date when the money order is booked, as per standard insurance practices.
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