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 8 of 16

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Q71.
What is the maximum limit for investment in immovable property under Section 27A(1)(n) of the Act for general insurers?

a.

2% of Investment assets

b.

5% of Investment assets

c.

7% of Investment assets

d.

10% of Investment assets

Discuss
Answer: (b).5% of Investment assets Explanation:Investment in immovable property covered under Section 27A(1)(n) of the Act should not exceed, at the time of investment, 5% of the Investment Assets in the case of general insurers.
Q72.
What is the exposure limit for financial and insurance activities for all insurers?

a.

15% of investment assets

b.

20% of investment assets

c.

25% of investment assets

d.

30% of investment assets

Discuss
Answer: (c).25% of investment assets Explanation:The exposure limit for financial and insurance activities stands at 25% of investment assets for all insurers.
Q73.
How should investments in Fixed Deposits and Certificate Deposits of a scheduled bank be made?

a.

In compliance with Section 27A (9) and Section 27B (10) of the Insurance Act

b.

Without any regulatory restrictions

c.

Subject to exposure limits for financial and insurance activities

d.

Through private placement

Discuss
Answer: (a).In compliance with Section 27A (9) and Section 27B (10) of the Insurance Act Explanation:Investments in Fixed Deposits and Certificate Deposits of a scheduled bank should be made in terms of the provisions of Section 27A (9) and Section 27B (10) of the Insurance Act. Such investments would not be deemed as exposure of financial and insurance activities.
Q74.
What type of information is required to be submitted by insurers to the Authority according to Regulation 10?

a.

Investment portfolio details

b.

Internal and concurrent audit reports

c.

Policyholder benefits status

d.

Market analysis reports

Discuss
Answer: (b).Internal and concurrent audit reports Explanation:According to Regulation 10, insurers are required to submit the Internal/Concurrent Audit Report of the previous quarter with comments of the Audit Committee of the Board on various serious and serious points, along with the status of implementation of Audit Committee recommendations.
Q75.
When should returns for the quarter ending March be submitted, and when should they be resubmitted with audited figures?

a.

Within 15 days of the end of the quarter

b.

Within 30 days of the end of the quarter

c.

Within the period stipulated based on provisional figures and later resubmitted with audited figures within 15 days of adoption of accounts by the Board of Directors

d.

Within 45 days of the end of the quarter

Discuss
Answer: (c).Within the period stipulated based on provisional figures and later resubmitted with audited figures within 15 days of adoption of accounts by the Board of Directors Explanation:Returns for the quarter ending March shall be filed within the period stipulated based on provisional figures and later resubmitted with audited figures within 15 days of adoption of accounts by the Board of Directors.
Q76.
What does Regulation 11 allow the Authority to do?

a.

Request additional information from insurers

b.

Conduct audits of insurers

c.

Impose fines on insurers

d.

Suspend the licenses of insurers

Discuss
Answer: (a).Request additional information from insurers Explanation:Regulation 11 allows the Authority, by general or special order, to require insurers to provide such other information in such a manner, intervals, and time limit as may be specified therein.
Q77.
What does Regulation 12 pertain to?

a.

Returns to be submitted by insurers

b.

Additional information required from insurers

c.

Duty to report extraordinary events in the investment portfolio

d.

Regulatory provisions for investments of insurance companies

Discuss
Answer: (c).Duty to report extraordinary events in the investment portfolio Explanation:Regulation 12 mandates that every insurer shall report to the Authority forthwith the effect or the probable effect of any event coming to his knowledge, which could have a material adverse impact on the investment portfolio and consequently on the security of policyholder benefits or expectations.
Q78.
Who are the mandatory members of the Investment Committee according to Regulation 13 (A)?

a.

Chief Executive Officer, Chief of Finance, and Chief of Investment Division

b.

Two non-executive directors, Chief Executive Officer, Chief of Finance, Chief of Investment Division, and Appointed Actuary (if employed)

c.

Chief Executive Officer, Chief of Investment Division, and Appointed Actuary (if employed)

d.

Chief of Finance, Chief of Investment Division, and Appointed Actuary (if employe

Discuss
Answer: (b).Two non-executive directors, Chief Executive Officer, Chief of Finance, Chief of Investment Division, and Appointed Actuary (if employed) Explanation:According to Regulation 13 (A), every insurer shall constitute an Investment Committee, which shall consist of a minimum of two non-executive directors of the insurer, the Chief Executive Officer, Chief of Finance, Chief of Investment Division, and where an approved actuary is employed, an Appointed Actuary.
Q79.
What is the purpose of the Investment Policy mentioned in Regulation 13 (B)?

a.

To guide the insurer in marketing its investment products

b.

To ensure compliance with SEBI regulations only

c.

To establish a model code of conduct for investment operations

d.

To guide the insurer in making investment decisions and ensure compliance with various regulations and guidelines

Discuss
Answer: (d).To guide the insurer in making investment decisions and ensure compliance with various regulations and guidelines Explanation:The Investment Policy is drawn up to guide the insurer in making investment decisions. It ensures compliance with various regulations, including SEBI regulations, and addresses issues related to liquidity, prudential norms, exposure limits, stop-loss limits, and other internal controls of investment operations.
Q80.
What does the Board of Directors review on a quarterly basis according to Regulation 13 (B-iv)?

a.

The investment policy of both life and non-life insurers

b.

The monitoring of fund-wise and product-wise performance

c.

The compliance with SEBI regulations

d.

The insider trading prevention measures

Discuss
Answer: (b).The monitoring of fund-wise and product-wise performance Explanation:The Board shall review on a quarterly basis the monitoring of fund-wise and product-wise performance as per Regulation 13 (B-iv).
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