Insurance Institute of India Licenciate Exam questions and answers Regulation of Insurance Business

IC 14 – Regulation of Insurance Business – Model Questions
I. Select the appropriate answer to complete the sentence (Checking learning - Direct)
i. Insurance business is transacted in India primarily as per the provisions of:
a. Insurance Regulatory and Development Authority Act, 1999
b. Insurance Act, 1938
c. Life Insurance Corporation Act, 1956
d. Employees State Insurance Act, 1948
e. Motor Vehicles Act 1938


Ans: b. Insurance Act, 1938.


ii. Section 64 C of the Insurance Act, 1938 contains provisions relating to:
a. Insurance Regulatory and Development Authority
b. Life Insurance Corporation of India
c. The Life Insurance Council
d. General Insurance Corporation of India
e. Tariff Advisory Committee


Ans: c. The Life Insurance Council


II. State which of the statements is/are correct (Checking learning - Direct)
i. Functions of the Executive Committee of the General Insurance Council includes:
a. To advise and assist general insurers
b. To underwrite general insurance business
c. To advise and assist life insurance companies
d. To settle all complicated general insurance claims
e. To audit all general insurance companies


Ans: a. To advise and assist general insurers


ii. As per IRDA Regulations, insurers should ensure that their advertisements present a correct picture. This provision is most important in the case of:
a. The Government
b. Insurance Regulatory and Development Authority
c. Auditors
d. Policyholders
e. Shareholders


Ans: d. Policyholders


III. Answer the questions below by selecting the correct answer: (Checking learning - Direct)
i. Which provision of the Insurance Act 1938 specifies about nomination by policyholder?
a. Section 38
b. Section 39
c. Section 40
d. Section 41
e. Section 45


Ans: b. Section 39


ii. Which Regulation of IRDA provides for a Grievance Redressal Procedure?
a. IRDA (Policyholders’ Interests) Regulations, 2002
b. IRDA (Meetings) Regulations, 2000
c. IRDA (Regulation of Indian Insurance Companies) Regulations, 2000
d. IRDA (Reinsurance Advisory Committee) Regulations, 2001
e. IRDA (Micro-insurance) Regulations, 2005


Ans: a. IRDA (Policyholders’ Interests) Regulations, 2002


IV. Fill in the Blanks using the appropriate word(s) (Checking understanding - Indirect)
i. Redressal of Public Grievances Rules, 1998 created the system of ____
a. Insurance Agency
b. Insurance Surveyors
c. Insurance Ombudsman
d. State Commission
e. Consumer Forum


Ans: c. Insurance Ombudsman


ii. The technique of making small deposits in various financial institutions so that they do not attract the attention of legal/ enforcement authorities is called ______
a. Phishing
b. Smurfing
c. Internet surfing
d. Know Your Customer
e. Subrogation


Ans: b. Smurfing


V. Select the expanded form of the abbreviation given (Checking understanding - Indirect)
i. Select the expanded form of AML as used in insurance
a. Anti-Money Laundering
b. Anti-Money Lending
c. Adjuster of Monetary Losses
d. Averages of Marine Losses
e. Adjustment of Motor Losses


Ans: a. Anti-Money Laundering


ii. Select the expanded form of ULIP used in insurance
a. Unit Linked Investment Policy
b. Universal Life Insurance Policy
c. Umbrella Life Insurance Policy
d. Unit Linked Insurance Policy
e. Underwriting Linked Insurance Policy


Ans: d. Unit Linked Insurance Policy


VI. Select the word(s) that most closely matches the given term. (Checking understanding - Indirect)
i. Which of the following terms matches closest with ‘Rebates’?
a. Financial Inducement
b. Investment Planning
c. Infrastructure Bonds
d. Assignment of Policy
e. Transfer of Policy


Ans: a. Financial Inducement


ii. Which of the following terms matches closest with ‘Nomination’?
a. Loss of Property Documents
b. Loss of Merchandise
c. Loss of Life
d. Loss of Baggage
e. Loss of Passport


Ans: c. Loss of Life


VII. Which of the following terms is dissimilar to the other four options? (Find the odd-man out?) (Checking application of learning)
i. Which of the following authorities is dissimilar to the other four?
a. District Forum
b. State Commission
c. National Commission
d. Law Commission
e. Ombudsman


Ans: d. Law Commission


ii. Which of the following types of nominations is dissimilar to the other four?
a. In favour of spouse
b. In favour of minor child
c. In favour of major child
d. In favour of adopted child
e. In favour of insurance agent


Ans: e. In favour of insurance agent