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 15 of 16

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Q141.
How often should major expenses like management fees be accrued for computation of NAV?

a.

Daily basis

b.

Weekly basis

c.

Monthly basis

d.

Annually basis

Discuss
Answer: (a).Daily basis Explanation:For computation of NAV on a daily basis, major expenses like management fees and other periodic charges should be accrued on a day-to-day basis.
Q142.
What is the regulatory requirement for insurers with Asset under Management (AUM) not exceeding Rs. 1000 crores regarding internal audit of investments?

a.

Conduct a quarterly internal audit

b.

Appoint a Chartered Accountant firm for concurrent audit

c.

Conduct an annual internal audit

d.

No internal audit required

Discuss
Answer: (a).Conduct a quarterly internal audit Explanation:Insurers having AUM not more than Rs. 1000 crores are required to conduct a Quarterly Internal Audit to cover both transactions and related systems.
Q143.
What is the role of the Audit Committee in the internal audit process?

a.

To conduct the internal audit

b.

To implement audit recommendations

c.

To prepare the audit report

d.

To appoint the auditor

Discuss
Answer: (b).To implement audit recommendations Explanation:The Audit Committee will examine the investment audit report, and the insurer shall implement all its recommendations.
Q144.
What is the requirement for reconciliation in the case of ULIP products for life insurers?

a.

Reconciliation with Investment Accounts and banks

b.

Units reconciliation with policy Admin. System on a day-to-day basis

c.

Reconciliation with Custodian Records

d.

Quarterly reconciliation with policy Admin. System

Discuss
Answer: (b).Units reconciliation with policy Admin. System on a day-to-day basis Explanation:In the case of ULIP products for life insurers, Units reconciliation with policy Admin. System should be ensured on a day-to-day basis.
Q145.
In what manner are shareholders' funds beyond the Solvency Margin treated in terms of investment?

a.

They are invested based on the pattern applicable to policyholders' funds

b.

They have a separate custody account with identified scrips

c.

They are excluded from any investment activities

d.

They are invested solely in government securities

Discuss
Answer: (b).They have a separate custody account with identified scrips Explanation:Shareholders' funds beyond the Solvency Margin shall have a separate custody account with identified scrips for both life insurers and general insurers.
Q146.
When should the insurer confirm the implementation of Internal/Concurrent Audit observations to the Authority?

a.

Along with the Quarterly Investment Returns

b.

In FORM 3

c.

In FORM 4

d.

In the annual audit report

Discuss
Answer: (c).In FORM 4 Explanation:The insurer shall, along with Quarterly Investment Returns filed with the Authority, confirm in FORM 4 that the Internal/Concurrent Audit observations, up to the quarter preceding the quarter to which the Returns are filed, are placed before the Audit Committee for its recommendation and action taken.
Q147.
Which of the following is a financial asset?

a.

Equity shares

b.

Debentures

c.

G-Secs

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Equity shares represent ownership in a company and are considered financial assets. Debentures are long-term debt instruments issued by companies, and they fall under the category of financial assets. G-Secs are debt securities issued by the government, and they are also classified as financial assets.
Q148.
___________ reflects volatility of return on an investment relative to market swings.

a.

Variance

b.

Alpha

c.

Beta

d.

Standard deviation

Discuss
Answer: (c).Beta Explanation:Beta reflects the volatility of return on an investment relative to market swings. A beta greater than 1 indicates higher volatility than the market, while a beta less than 1 suggests lower volatility.
Q149.
Which of the following Government securities are rooted with derivatives, such as call options and put options?

a.

Securities with embedded derivatives

b.

Zero coupon bonds

c.

Securities with variable coupon rates

d.

Securities with fixed coupon rates

Discuss
Answer: (a).Securities with embedded derivatives Explanation:These government securities have embedded derivatives, such as call options or put options. Embedded derivatives are components within a financial instrument that have characteristics of standalone derivatives.
Q150.
What is the maximum period of maturity for money market instruments?

a.

Two years

b.

One year

c.

Three years

d.

Five years

Discuss
Answer: (b).One year Explanation:Money market instruments are short-term debt instruments that have maturities typically ranging from overnight to one year. These instruments are designed for short-term funding and liquidity management.
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