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 9 of 16

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Q81.
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.
Q82.
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.
Q83.
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.
Q84.
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.
Q85.
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.
Q86.
What change has the government approved regarding LIC's investment cap?

a.

The investment cap remains unchanged at 20%.

b.

LIC can now invest up to 30% of the capital in a single company.

c.

LIC's investment cap is reduced to 15%.

d.

LIC's investment cap is increased to 25%.

Discuss
Answer: (d).LIC's investment cap is increased to 25%. Explanation:The government of India has given approval for LIC to increase its investment in companies up to 25% of the capital from the current 20% under special circumstances.
Q87.
How long is the tenure of the Reliance Infrastructure NCOs in which LIC invested?

a.

5 years

b.

8 years

c.

10 years

d.

11 years

Discuss
Answer: (b).8 years Explanation:The Rs. 600-crore NCO issue of Reliance Infrastructure, in which LIC invested, bears a coupon rate of 11.75% p.a. for an 8-year period.
Q88.
What type of investment opportunity do NCDs provide for debt investors like LIC?

a.

Low-risk investment

b.

Convertible into equity shares

c.

High-interest earning opportunity

d.

Short-term investment

Discuss
Answer: (c).High-interest earning opportunity Explanation:Financial analysts believe that NCDs (Non-Convertible Debentures) provide good opportunities for debt investors like LIC to earn high interest in investment, especially when banks tighten their investment process in the slowing economy.
Q89.
What competitive advantage do issuers have when offering NCDs to LIC?

a.

Lower interest rates

b.

Tax incentives

c.

Higher interest rates than banks

d.

Guaranteed returns

Discuss
Answer: (c).Higher interest rates than banks Explanation:A 10.8% to 11% per annum interest rate is considered a very competitive rate, enabling issuers to get their NCDs subscribed by LIC for high interest. This is highlighted in comparison to banks, which are borrowing at the rate of 9.5% and making investments at a rate of 11% or more.
Q90.
What is the maximum allowable exposure to venture funds and AIFs combined for a life insurance company?

a.

2%

b.

3%

c.

5%

d.

10%

Discuss
Answer: (b).3% Explanation:The overall exposure to venture funds and AIFs combined should not exceed 3% of the respective fund in the case of a life insurance company.
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