Insurance Regulatory Authority Quiz
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Insurance Regulatory Authority Quiz

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Questions and Answers

Which of the following powers allows the authority to conduct inspections and inquiries, including audits of insurers?

  • Levy fees or other charges
  • Delegate by written order to CPC members
  • Promote & Specify % of L & General Ins.
  • Conduct inspection, Investigation & inquiries (correct)

    • Levying fees or other charges is a supervisory power.

    True

    What document can be issued to confirm registration?

    Certificate of registration

    The authority can _____ or cancel registration when necessary.

    <p>suspend</p> Signup and view all the answers

    Match the following powers with their descriptions:

    <p>Appoint staff &amp; officers = Assign individuals to roles within the organization Hold &amp; acquire movable &amp; immovable property = Manage assets and resources Issue or certificate of reg = Provide formal acknowledgment of registration Regulate margin of solvency = Ensure financial stability of insurers</p> Signup and view all the answers

    What is a characteristic of Excess of Loss cover?

    <p>It provides maximum risk cover but not for wide fluctuations.</p> Signup and view all the answers

    Excess of Loss cover only applies when the total claims exceed a predetermined loss ratio.

    <p>True</p> Signup and view all the answers

    What is the purpose of a treaty in insurance?

    <p>To cover specific categories or portfolios of risks.</p> Signup and view all the answers

    The insurer has collected 1 crore and incurred claims of 80 lakh. If the actual loss is 70 lakh, the reinsurer covers the ______.

    <p>excess</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Excess of Loss = Maximum cover for abnormal fluctuations in specific years Treaty = Agreement to cover specific categories/portfolios of risks Proportional = Sharing risk based on a defined ratio Non-Proportional = Risk exceeding a certain limit shared by multiple insurers</p> Signup and view all the answers

    Which of the following is NOT a duty of the Insurance Regulatory & Development Authority?

    <p>Conducting audits of private companies</p> Signup and view all the answers

    The main function of the Insurance Regulatory & Development Authority includes promoting the growth of the insurance industry.

    <p>True</p> Signup and view all the answers

    What is one of the primary responsibilities of the Insurance Regulatory & Development Authority regarding policyholders?

    <p>Protecting the interests of policyholders</p> Signup and view all the answers

    The Insurance Regulatory & Development Authority regulates the ______ rates offered by insurers.

    <p>premium</p> Signup and view all the answers

    Match the following duties of the Insurance Regulatory & Development Authority with their descriptions:

    <p>Protecting the interests of policyholders = Ensuring that policyholders receive fair treatment and secure benefits Issuing guidelines for insurance products = Setting standards for product offerings and insurer behavior Promoting insurance awareness = Educating the public about insurance options and benefits Monitoring and regulating the industry = Overseeing the overall practices and financial practices of insurers</p> Signup and view all the answers

    What is one of the major advantages of the instrument?

    <p>Protection against risk of death</p> Signup and view all the answers

    The instrument allows for voluntary savings.

    <p>False</p> Signup and view all the answers

    What role does the instrument play in loan processing?

    <p>Quick loan processing</p> Signup and view all the answers

    The instrument helps in the ______ of financial risks.

    <p>mitigation</p> Signup and view all the answers

    Match the following functions with their descriptions:

    <p>Security = Provides a safe environment for funds Publicity drives = Conducts campaigns to raise awareness Resource mobilization = Assists in gathering financial resources Underwriting limits = Sets limits on financial assessments</p> Signup and view all the answers

    Which of the following is NOT a function of the instrument?

    <p>Personal banking services</p> Signup and view all the answers

    The instrument offers a high claim settlement ratio.

    <p>True</p> Signup and view all the answers

    What type of growth does the instrument promote?

    <p>Industrial growth</p> Signup and view all the answers

    What is the key requirement for the main insurance policy to avoid being void?

    <p>It must be legal.</p> Signup and view all the answers

    The reinsurer is liable if there is no valid contract between the company and basic insurance.

    <p>False</p> Signup and view all the answers

    What is the focus of the excess of loss method in non-proportional insurance?

    <p>Type of risk</p> Signup and view all the answers

    In proportional reinsurance, the _______ method involves a fixed percentage for sharing risk.

    <p>quota</p> Signup and view all the answers

    Match the types of reinsurance to their corresponding characteristics:

    <p>Quota Method = A fixed percentage sharing of risk Excess of Loss Method = Reinsurer pays when claims exceed a threshold Share Plus Method = Factors in geography and agreement time Non-Proportional Method = Premium depends on distribution of risk</p> Signup and view all the answers

    What is the primary function of insurance?

    <p>To provide protection against potential losses</p> Signup and view all the answers

    Insurance guarantees compensation for all types of losses regardless of circumstances.

    <p>False</p> Signup and view all the answers

    Name one function of insurance as described by Sir William Beveridge.

    <p>To provide protection</p> Signup and view all the answers

    Insurance helps to provide ___________ in the face of uncertainty.

    <p>certainty</p> Signup and view all the answers

    Match the following aspects of insurance with their descriptions:

    <p>Protection = Compensation if a loss occurs Certainty = Management of potential future risks Reality verification = Acknowledgment of misfortunes and losses Planning = Efforts to reduce probabilities of loss</p> Signup and view all the answers

    What was the initial contribution made by the Central Government of India to the paid-up capital of LIC?

    <p>₹5 crores</p> Signup and view all the answers

    Before 1999, the Life Insurance Corporation of India was the only public life insurance company in India.

    <p>True</p> Signup and view all the answers

    What is one of the aims of the Life Insurance Corporation of India?

    <p>Encourage and mobilize public savings</p> Signup and view all the answers

    The LIC was established by the Insurance Act _____

    <p>1956</p> Signup and view all the answers

    Match the following aims of LIC with their descriptions:

    <p>Assure full protection to policy holders = Providing financial security for policy holders Motivate savings habits = Encouraging individuals to save consistently Effectively utilize savings = Investing public savings for economic growth Create a liquid position = Ensuring availability of cash in the public sector</p> Signup and view all the answers

    What is one of the primary functions of insurance?

    <p>To provide certainty regarding losses</p> Signup and view all the answers

    Insurance has no impact on economic progress.

    <p>False</p> Signup and view all the answers

    What role does life insurance play in terms of savings in India?

    <p>Life insurance acts as a forced savings method.</p> Signup and view all the answers

    Marine insurance is ______ for foreign trade in India.

    <p>mandatory</p> Signup and view all the answers

    Match the following secondary functions of insurance with their descriptions:

    <p>Helps in economic progress = Allows entrepreneurs to focus on innovation Prevents losses = Minimizes risks through safety appliances Forced savings = Encourages saving habits among the public Promotes foreign trade = Mandatory cargo insurance for trade</p> Signup and view all the answers

    What is the principle of utmost good faith in insurance contracts?

    <p>Sellers must not mislead buyers about the transaction.</p> Signup and view all the answers

    Insurers must provide coverage for every detail disclosed by the insured.

    <p>False</p> Signup and view all the answers

    What principle requires that the proposer must provide material information to the insurance company?

    <p>Insurable interest</p> Signup and view all the answers

    The principle of _____ ensures that losses are compensated to the insured without profit.

    <p>indemnity</p> Signup and view all the answers

    Match the following principles with their descriptions:

    <p>Utmost good faith = Parties must act honestly and transparently in the contract Indemnity = Compensation without profit to the insured Subrogation = Insurer's right to claim after compensating the insured Mitigation of Loss = Obligation to minimize losses after an event</p> Signup and view all the answers

    Study Notes

    Insurance Regulatory & Development Authority (IRDA)

    • Chapter 3, 1999
    • Section 3 lays down procedure for establishing the authority
    • Duties
      • Promoting Growth of Insu Industry
      • Issuing Guidelines for Insu Mkt.
      • Monitor Fin. Health of Insu Co.
      • Regulating Agents & Intermediaries
      • Issuing Directions for settlement of Claims
      • Promote Insu awareness & Ed.
      • Implementing & enforcing legal framework
      • Monitoring & regulating Insu.
    • Functions
      • Formulate Code of Conduct, qualification or training of agents
      • Regulate & promote rates offered by insurers
      • Regulate Input of funds by Insu. Co.

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    Description

    Test your knowledge on the roles and responsibilities of the Insurance Regulatory & Development Authority. This quiz covers various aspects including powers, duties, and concepts related to insurance regulation and reinsurance. Perfect for students and professionals in the insurance industry.

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