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 6 of 32

Discover more Topics under IC 14 Regulations of Insurance Business

Q51.
What are the triple benefits that a ULIP offers to investors?

a.

Housing benefits, investment, and retirement planning

b.

Insurance protection, investment, and income tax benefits

c.

Education benefits, savings, and travel discounts

d.

Health coverage, real estate investment, and tax deductions

Discuss
Answer: (b).Insurance protection, investment, and income tax benefits Explanation:A ULIP provides investors with the triple benefits of insurance protection, investment, and income tax benefits.
Q52.
How are the investment risks in ULIPs different from traditional insurance plans?

a.

They are lower in ULIPs than in traditional plans

b.

They are borne by the insurance company in ULIPs and by the policyholder in traditional plans

c.

They are not applicable in traditional plans

d.

They are borne by the government in ULIPs and by the policyholder in traditional plans

Discuss
Answer: (b).They are borne by the insurance company in ULIPs and by the policyholder in traditional plans Explanation:In ULIPs, the investment risks are borne by the policyholder / investor, whereas in traditional insurance plans, these risks are typically borne by the insurance company.
Q53.
How are ULIPs similar to mutual funds in terms of investment operations?

a.

ULIPs are not similar to mutual funds

b.

Both are government-regulated

c.

ULIPs have fixed returns, unlike the variable returns in mutual funds

d.

ULIPs can be referred to as mutual funds with insurance cover

Discuss
Answer: (d).ULIPs can be referred to as mutual funds with insurance cover Explanation:ULIPs can be considered similar to mutual funds with insurance cover, as both involve the allotment of units, and a Net Asset Value (NAV) is declared on a daily basis.
Q54.
What are the two major components of the premium on a ULIP?

a.

Insurance protection and investment only

b.

Investment and health coverage only

c.

Premium life cover and investment plus covering expenses

d.

Retirement benefits and savings only

Discuss
Answer: (c).Premium life cover and investment plus covering expenses Explanation:The premium on a ULIP consists of premium life cover, investment, and covering expenses like agent's commission, administrative costs, and statutory levies.
Q55.
What was the debate in 2010 regarding the regulation of ULIPs, and who were the two regulators involved?

a.

Whether ULIPs should be regulated by the government, and SEBI and IRDA were both involved

b.

Whether ULIPs should be regulated by RBI, and SEBI and IRDA were both involved

c.

Whether ULIPs should be regulated by SEBI or IRDA, with a dispute between the two regulators

d.

Whether ULIPs should be self-regulated, and SEBI and IRDA were both involved

Discuss
Answer: (c).Whether ULIPs should be regulated by SEBI or IRDA, with a dispute between the two regulators Explanation:In 2010, there was a debate over whether ULIPs should be regulated by IRDA, which historically regulated them as insurance products, or by SEBI due to the investment component. A dispute arose between the two regulators.
Q56.
What was the main issue in the dispute between SEBI and IRDA regarding ULIPs?

a.

The premium amounts of ULIPs

b.

The mandatory insurance element in ULIPs

c.

The investment component of ULIPs

d.

The marketing strategy of ULIPs

Discuss
Answer: (c).The investment component of ULIPs Explanation:The dispute between SEBI and IRDA primarily revolved around the investment component of ULIPs, with SEBI asserting that the 14 companies needed its approval to launch ULIPs.
Q57.
What was the role of the government in resolving the dispute between SEBI and IRDA regarding ULIPs?

a.

The government sided with SEBI and transferred regulation to SEBI

b.

The government issued an ordinance declaring ULIPs to be regulated by IRDA

c.

The government created a new regulatory body specifically for ULIPs

d.

The government stayed neutral and did not intervene in the dispute

Discuss
Answer: (b).The government issued an ordinance declaring ULIPs to be regulated by IRDA Explanation:The government intervened and issued an ordinance, declaring that ULIPs would continue to be regulated by IRDA, effectively resolving the dispute.
Q58.
What were the significant changes introduced by IRDA after the government intervention in 2010?

a.

ULIPs were completely abolished

b.

The cost structure of ULIPs was increased

c.

ULIPs were made more investor-friendly, with a major overhaul of their cost structure

d.

ULIPs were limited to only certain insurance companies

Discuss
Answer: (c).ULIPs were made more investor-friendly, with a major overhaul of their cost structure Explanation:After the government intervention, IRDA passed new guidelines resulting in a major overhaul of ULIPs, making them more investor-friendly by reducing the cost structure.
Q59.
What does a Unit represent in a Unit Linked Insurance Policy (ULIP)?

a.

A component of the fund in a ULIP

b.

A measure of the policyholder's life cover

c.

A fixed premium amount in a ULIP

d.

A regulatory body overseeing ULIP operations

Discuss
Answer: (a).A component of the fund in a ULIP Explanation:In a ULIP, a Unit is a component of the fund, and the policyholder's investment in the fund is denoted in the form of units.
Q60.
What is the primary factor determining the returns from a Unit Linked Insurance Plan (ULIP)?

a.

The premium amount paid by the policyholder

b.

The policyholder's age and health condition

c.

The performance of the fund in which the ULIP is invested

d.

The insurance company's profit margin

Discuss
Answer: (c).The performance of the fund in which the ULIP is invested Explanation:The returns from a ULIP are dependent upon the performance of the fund in which it is invested.
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