Investment of Insurance Companies And IRDA Regulations MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Investment of Insurance Companies And IRDA Regulations, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Investment of Insurance Companies And IRDA Regulations 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 Investment of Insurance Companies And IRDA Regulations mcq questions that explore various aspects of Investment of Insurance Companies And IRDA Regulations problems. Each MCQ is crafted to challenge your understanding of Investment of Insurance Companies And IRDA Regulations principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Investment of Insurance Companies And IRDA Regulations MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

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Investment of Insurance Companies And IRDA Regulations MCQs | Page 10 of 16

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Q91.
What is a unique characteristic of the interest payment on Government Securities?

a.

Paid annually

b.

Paid quarterly

c.

Paid monthly

d.

Paid half-yearly

Discuss
Answer: (d).Paid half-yearly Explanation:Investors receive interest payment on the face value of government securities on a half-yearly basis.
Q92.
Do Government Securities attract Tax Deduction at Source (TDS)?

a.

Yes

b.

No

c.

May be Yes or No

d.

Can't say

Discuss
Answer: (b).No Explanation:Government securities do not attract TDS (Tax Deduction at Source).
Q93.
What are the two main types of income that an insurance company needs to consider when dealing with Government Securities?

a.

Operating income and financing income

b.

Revenue Income and Capital gains

c.

Dividend income and interest income

d.

Rental income and royalty income

Discuss
Answer: (b).Revenue Income and Capital gains Explanation:An insurance company needs to consider Revenue Income and Capital gains when dealing with Government Securities.
Q94.
How does the treatment of interest income from Government Securities depend on?

a.

Market demand

b.

Time and terms of purchase and sales of securities

c.

Government regulations

d.

Inflation rate

Discuss
Answer: (b).Time and terms of purchase and sales of securities Explanation:The treatment of interest income from Government Securities depends on the time and terms of purchase and sales of securities.
Q95.
What is the specific consideration for an insurance company when dealing with income from Government Securities?

a.

Political stability

b.

Time value of money

c.

Inflation rate

d.

Revenue Income and Capital gains

Discuss
Answer: (d).Revenue Income and Capital gains Explanation:Insurance companies need to specifically consider Revenue Income and Capital gains when dealing with income from Government Securities.
Q96.
What is the purpose of the Insurance Regulatory and Development Authority (Investment) Regulations 2000?

a.

To promote competition among insurance companies

b.

To protect the interests of policyholders' funds and interests

c.

To regulate premium rates

d.

To establish new insurance companies

Discuss
Answer: (b).To protect the interests of policyholders' funds and interests Explanation:The purpose of the Insurance Regulatory and Development Authority (Investment) Regulations 2000 is to protect the interests of policyholders' funds and interests.
Q97.
What is the meaning of "Investment Assets" according to the regulations?

a.

All assets owned by an insurance company

b.

Assets purchased by policyholders

c.

All investments made out of shareholders' funds and policyholders' funds

d.

Assets used for operational purposes

Discuss
Answer: (c).All investments made out of shareholders' funds and policyholders' funds Explanation:"Investment Assets" mean all investments made out of shareholders' funds and policyholders' funds, as specified in the regulations.
Q98.
What does "Money Market Instruments" include according to the regulations?

a.

Long-term bonds

b.

Equity shares of listed companies

c.

Short-term funds with maturity not more than one year

d.

Real estate investments

Discuss
Answer: (c).Short-term funds with maturity not more than one year Explanation:Money Market Instruments comprise short-term funds with maturity not more than one year, including various specified instruments such as Certificate of Deposits, Commercial Paper, Repos, Treasury Bills, and others.
Q99.
What is the role of the Cash Management System (CMS) in managing liquidity risks?

a.

Determine the availability of funds for investment

b.

Forecast portfolio returns

c.

Validate and accept commitments beyond fund availability

d.

Monitor changes in instrument ratings

Discuss
Answer: (a).Determine the availability of funds for investment Explanation:The Cash Management System (CMS) determines the funds available for investment at a particular point in time after considering all claim settlement obligations, other payments, and redemptions. The system should not allow validation or accepting any commitment beyond the availability of funds.
Q100.
What is the purpose of the System in monitoring and controlling Inter Fund Transfer transactions?

a.

To facilitate communication between Front Office and Back Office

b.

To determine fund-wise daily NAV

c.

To identify and manage credit risks

d.

To monitor and control transactions within funds

Discuss
Answer: (d).To monitor and control transactions within funds Explanation:The System should monitor and control Inter Fund Transfer transactions as per IRDA Circular ref IRDA-FA-02-10-2003-04. The Investment Committee may fix the Cut-off time for such transfers within the fund.
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