Insurance Sector in India: Quiz-1

1. What are the main functions performed by the IRDA?
[A]Protect the rights of policy holders
[B]Adjudication on insurance related matters
[C]Promoting insurance business
[D]All of these
Answer: All of these
Notes:
All of these The functions of IRDA are:
1. Protect the rights of policy holders
2. Provide registration certification to life insurance companies
3. Renew, Modify, Cancel or Suspend this registration certificate as and when appropriate.
4. Promoting efficiency in the conduct of insurance business;
5. Promoting and regulating professional organisations connected with the insurance and reinsurance business
6. Regulating investment of funds by insurance companies;
7. Adjudication of disputes between insurers and intermediaries or insurance intermediaries
2. If an insurance policy holder is not satisfied with the award of the insurance ombudsman, he / she can approach to__?
[A]Courts of law
[B] Consumer forums
[C]Either a or b
[D]The award of insurance ombudsman can not be challenged
Answer: Either A or B
Notes:
The Insurance Ombudsman is created by Government of India for individual policyholders to have their complaints settled out of the courts in an impartial, efficient and cost- effective way. There are 12 Insurance Ombudsman in different locations in India that an insured person can approach regarding their complaints related to insurance policy. If the policy holder is not satisfied with the award of the insurance ombudsman he can approach to other venues viz. Consumer Forums and Courts of law for redressal of his grievances.
3. Which one of the following is the example of Insurance depositories?
[A]Central Insurance Repository Limited (CIRL)
[B]Karvy Insurance repository Limited
[C]NSDL Database Management Limited
[D]All of these
Answer: All of these
Notes:
The term “Insurance Repository” means a company formed and registered under the Companies Act, 1956 and that has granted a certificate of registration by Insurance Regulatory and Development Authority (IRDA) of India for maintaining data of insurance policies in Electronic form on behalf of Insurers. The Insurance Repositories provides the ease of holding insurance policies issued in an electronic form. In 2013 ,IRDA has issued licences to five entities to act as Insurance depositories —
a) Central Insurance Repository Limited (CIRL).
b) NSDL Database Management Limited.
c) SHCIL Projects Limited.
d) Karvy Insurance repository Limited.
e) CAMS Repository Services Limited.
4. Which of the following is correct full form of IGMS with reference to insurance sector?
[A]Integrated Grievance Management System
[B]Internal Grievance Management System
[C]Important Grievance Management System
[D]Integral Grievance Management System
Answer: Integrated Grievance Management System
Notes:
IGMS stands for Integrated Grievance Management System. It is a grievance redress monitoring tool for IRDA.
5. Up to what extent, FDI in Insurance sector is allowed by the Government of India (GOI)?
[A]26%
[B]49%
[C]51%
[D]100%
Answer: 49%
Notes:
The Government of India (GOI) has allowed 49% Foreign Direct Investment (FDI) in the insurance sector.
6. Which Insurance policy gives holder the benefits of both Insurance and Investment?
[A]Term Insurance Policies
[B]Money-back Policies
[C]Unit-linked Investment Policies
[D]Pension Policies
Answer: Unit-linked Investment Policies
Notes:
A Unit-linked Investment Policies (ULIP) is a product offered by insurance companies gives investors the benefits of both insurance and investment under a single integrated plan, unlike a pure insurance policy which only provides financial cover without the added advantage of an investment.
7. Which among the following is the correct full form of ESIC?
[A]Employee’s State Insurance Corporation
[B]Employer’s State Insurance Corporation
[C]External State Insurance Corporation
[D]Exact State Insurance Corporation
Answer: Employee State Insurance Corporation
Notes:
Employee’s State Insurance Corporation (ESIC) is a self-financing health insurance and social security scheme for all Indian workers earning less than Rs.15000 per month as wages.
8. Under ESIC, Employer contribution rate and Employee contribution rate respectively is –
[A]4.75% & 1.75%
[B]1.75 % & 4.75%
[C]12% & 12%
[D]none
Answer: 4.75% & 1.75%
Notes:
Under Employee’s State Insurance Corporation (ESIC) , Employer contributes 4.75% and employee contributes 1.75% .
9. The process of identifying and classifying the degree of risk represented by a proposed insured. As per insurance sector, what does the term stands for?
[A]Underwriting
[B]Collateralized Mortgage Obligation
[C]Actuary
[D]Annuity
Answer: Underwriting
Notes:
Underwriting is the process by which an insurance company examines risk and determines whether the insurer will accept the risk or not, classifies those accepted and determines the appropriate rate for coverage provided.
10. A person who identifies, examines and classifies the degree of risk represented by a proposed insured in order to determine whether or not coverage should be provided and, if so, at what rate. In terms of insurance, what does a person stands for?
[A]Underwriter
[B]Merchant Banker
[C]Forex dealers
[D]Registrars
Answer: Underwriter
Notes:
Underwriter is a person who identifies, examines and classifies the degree of risk represented by a proposed insured in order to determine whether or not coverage should be provided and, if so, at what rate.