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.

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Investment of Insurance Companies And IRDA Regulations MCQs | Page 13 of 16

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Q121.
What does Regulation 4 of the IRDA (Investment) (5th Amendment) Regulations 2013 specify for life insurance business?

a.

The premium rates for life insurance policies

b.

The manner of investments for life insurance business

c.

The types of policies offered by life insurers

d.

The maximum sum assured for a life insurance policy

Discuss
Answer: (b).The manner of investments for life insurance business Explanation:Regulation 4 outlines the manner of investments for life insurance business, specifying how insurers carrying on the business of life insurance in India should invest and keep invested their funds.
Q122.
According to Regulation 5, how should insurers carrying on Pension, Annuity, and group Business invest their assets?

a.

Only in government securities

b.

In any manner as per the discretion of the insurer

c.

In a manner specified in the regulation

d.

Exclusively in real estate investments

Discuss
Answer: (c).In a manner specified in the regulation Explanation:Regulation 5 specifies the manner in which insurers carrying on Pension, Annuity, and group Business should invest and keep invested their investment assets, without prejudice to certain provisions of the Insurance Act.
Q123.
What is the requirement for investment in Approved Investment for Unit-Linked Insurance Business as per Regulation 6?

a.

It should be more than 75% of segregated funds

b.

It should be less than 50% of segregated funds

c.

There is no specific requirement for Approved Investment

d.

It should be 100% of segregated funds

Discuss
Answer: (a).It should be more than 75% of segregated funds Explanation:Regulation 6 states that investment in Approved Investment for Unit-Linked Insurance Business should not be more than 75% of such funds in each segregated funds.
Q124.
What does Regulation 7 of the IRDA (Investment) (5th Amendment) Regulations 2013 specify for General Insurers (including Health Insurers)?

a.

Investment in real estate only

b.

The manner of investments for General Insurance Business

c.

No specific regulations for General Insurers

d.

Maximum premium rates for health insurance policies

Discuss
Answer: (b).The manner of investments for General Insurance Business Explanation:Regulation 7 outlines the manner of investments for General Insurers (including Health Insurers), specifying how they should invest and keep invested their investment assets.
Q125.
What is the significance of Regulation 7 of the IRDA (Investment) Regulations?

a.

To regulate the issuance of insurance policies

b.

To specify the maximum sum assured for life insurance policies

c.

To outline the manner of investments for General Insurers

d.

To set premium rates for health insurance policies

Discuss
Answer: (c).To outline the manner of investments for General Insurers Explanation:Regulation 7 specifies the manner of investments for General Insurers, providing guidelines on how they should invest and keep invested their investment assets.
Q126.
What does Regulation 8 specify for re-insurers carrying on reinsurance business in India?

a.

They are exempt from making investments

b.

They should invest in real estate only

c.

They should invest in the same manner as set out in Regulations 7

d.

They are not required to keep invested their investment assets

Discuss
Answer: (c).They should invest in the same manner as set out in Regulations 7 Explanation:Regulation 8 states that every re-insurer carrying on reinsurance business in India should invest and keep invested their investment assets in the same manner as set out in Regulations 7, which outlines the manner of investments for General Insurers.
Q127.
According to Regulation 9, what is the requirement for investments in instruments capable of being rated?

a.

Investments must not be rated

b.

Investments must be rated by any credit rating agency

c.

Investments must be rated by a credit rating agency registered under SEBI Regulations

d.

Investments must be rated by the Insurance Regulatory and Development Authority (IRDA)

Discuss
Answer: (c).Investments must be rated by a credit rating agency registered under SEBI Regulations Explanation:Regulation 9 specifies that all investments in assets or instruments, capable of being rated as per market practice, should be based on the credit rating of such assets or instruments. The rating must be done by a credit rating agency registered under SEBI (Credit Rating Agencies) Regulations 1999.
Q128.
What is the minimum rating required for corporate bonds or debentures to be considered as Approved Investments, according to Regulation 9?

a.

BBB

b.

A

c.

AA

d.

AAA

Discuss
Answer: (c).AA Explanation:Regulation 9 mentions that corporate bonds or debentures rated not less than AA or its equivalent would be considered as Approved Investments.
Q129.
In case investments of grade are not available to meet the requirements, what rating is considered for All India Financial Institutions, as per Regulation 9?

a.

AA

b.

A+

c.

BBB

d.

P1

Discuss
Answer: (b).A+ Explanation:In such cases, Regulation 9 states that the Investment Committee may approve investments in instruments carrying a current rating of not less than 'A+' or equivalent as rated by a credit rating agency registered under SEBI (Credit Rating Agencies) Regulations 1999.
Q130.
What is the significance of the note in Regulation 9 regarding credit ratings?

a.

It sets the maximum premium rates for insurance policies

b.

It outlines the investment strategy for insurance companies

c.

It provides guidelines on the credit ratings of investment instruments

d.

It specifies the minimum sum assured for life insurance policies

Discuss
Answer: (c).It provides guidelines on the credit ratings of investment instruments Explanation:The note in Regulation 9 provides guidelines on the credit ratings of investment instruments, specifying the requirements and considerations for investments capable of being rated.
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