1. Insurance regulator IRDAI has constituted a working group to update the norms for insurance surveyors. Who was appointed head of this group?

A. Harsh Kumar Bhanwala B. Mohammad Mustafa C. Uday Kotak D. Rana Kapoor E. Yegna Priya Bharat

2. ________ is an equity investment option offered directly from the underlying company. The investor does not receive quarterly dividends directly as cash; instead, the investor’s dividends are directly reinvested in the underlying equity.

A. Equity plan B. Dividend reinvestment plan C. Direct investment plan D. Shares plan E. Money investment plan

3. Which of the following statements is NOT correct?

A. IRDAI is a 10-member body. B. National Insurance Company Limited (NICL) was established in 1906 and nationalised in 1972. C. Agriculture Insurance Company of India Limited (AIC) is headquartered is in New Delhi. D. Headquarter of IRDAI is in Kolkata E. DICGC was established on 15 July 1978

4. Limit of an insurance company’s liability under a particular insurance policy is called ______.

A. Premium B. Surplus C. Accrual D. Sum Insured E. Product Liability

5. Why do individuals act in riskier ways after being insured?

A. Due to problem of adverse selection B. Due to problem of false confidence C. Due to problem of moral hazards D. Due to problem of screening costs E. Due to Grace Period

Answers and Explanations
1. Answer - Option E
Explanation -
Insurance Regulatory and Development Authority of India (IRDAI) has constituted a 7 member working group for updating the norms for insurance surveyors. The 7-member working group has been formed to address areas pertaining to licensing, renewal and IIISLA Membership in the context of the existing regulatory framework for Surveyors and Loss Assessors. The group will headed by Yegna Priya Bharat, Chief General Manager (Nonlife), IRDAI.
2. Answer - Option B
Explanation -
A dividend reinvestment program or dividend reinvestment plan (DRIP) is an equity investment option offered directly from the underlying company. The investor does not receive quarterly dividends directly as cash; instead, the investor’s dividends are directly reinvested in the underlying equity. It is an arrangement offered by companies to investors wishing to receive additional shares of company stock in lieu of cash dividend payments.
3. Answer - Option D
Explanation -
Headquarter of Insurance regulator IRDAI is in Hyderabad, Telangana, where it moved from Delhi in 2001.
IRDAI (Insurance Regulatory and Development Authority of India) is an autonomous, statutory body tasked with regulating and promoting the insurance and reinsurance industries in India. It was constituted by the Insurance Regulatory and Development Authority Act, 1999, an Act of Parliament passed by the Government of India. IRDAI is a 10-member body including the chairman, five full-time and four part-time members appointed by the government of India.
4. Answer - Option D
Explanation -
Limit of an insurance company’s liability under a particular insurance policy is called ‘Sum Insured’
5. Answer - Option C
Explanation -
Moral hazard refers to the case when people engage in riskier behavior with insurance than they would if they did not have insurance. For example, if you have health insurance that covers the cost of visiting the doctor, you may be less likely to take precautions against catching an illness that might require a doctor’s visit

1. A form of insurance that pays damages equal to the replacement value of damaged property minus depreciation is known by which of the following term?

A. Survival Benefit B. Actual Cash Value C. Surrender Value D. Sub-standard Value E. Limited Payment Value

2. What does ‘Co-insurance’ term mean in Health insurance?

A. Taking two insurance policies simultaneously B. Cost sharing agreement between insurer and insured C. Percentage premium of Health and Vehicle insurance D. Taking Property and Term Insurance E. Percentage of Health expenditure paid by policyholder

3. LIC of India was incorporated on 1st September, 1956 by amalgamating _______ companies by the Act of Parliament called Insurance Act, 1956.

A. 156 B. 234 C. 324 D. 243 E. 367

4. What do you understand by term ‘Premium Allocation Charges’ used in insurance sector?

A. Third-party insurance charge B. Charge by insurance firms to recover the initial expense C. CESS by union government D. Commission of Policy agent E. Surcharge appropriated by union government

5. Which of the following Insurance Company has launched a specialised insurance cover titled ‘Mumbai Local Train Cover’?

A. HDFC Standard Life Insurance B. Bajaj Finance Ltd. C. Kotak Life Insurance D. PNB MetLife Insurance E. Reliance Life Insurance

Answers and Explanations
1. Answer - Option B
Explanation -
In the property and casualty insurance industry, Actual Cash Value (ACV) is a method of valuing insured property, or the value computed by that method. Actual Cash Value (ACV) is not equal to replacement cost value (RCV). ACV is computed by subtracting depreciation from replacement cost.
2. Answer - Option B
Explanation -
Co-insurance is the Cost sharing agreement between an insurer and the insured.
In health insurance, Coinsurance is the amount, generally expressed as a percentage of costs of a covered health care service; an insured must pay against a claim after he has paid his deductible.
3. Answer - Option D
Explanation -
LIC of India was incorporated on 1st September, 1956 by amalgamating 243 Companies by the Act of Parliament called Insurance Act, 1956. LIC is governed by the Insurance Act 1938, LIC Act 1956, LIC Regulations 1959 and Insurance Regulatory and Development Authority Act 1999.
4. Answer - Option B
Explanation -
Every time you take up an insurance plan, the insurance company spends some amount of money on distributor fee, underwriting expenses of the policy as well as medical expenses. Premium allocation charges are levied as a certain percentage of the premium to offset for all such expenses. Premium allocation charges are deducted upfront and the remaining money gets invested in the chosen fund.
5. Answer - Option B
Explanation -
Bajaj Finserv, through its lending arm Bajaj Finance Ltd has launched a specialised insurance cover titled ‘Mumbai Local Train Cover’ for passengers travelling in local trains in Mumbai. The passengers will get an insurance cover of Rs 1 lakh against a payment of Rs 399 per annum.

1. Insurance policy lapses when the insured defaults on the payments of renewal premium beyond __________.

A. Exclusion Period B. Affiliation Period C. Grace Period D. Revival Period E. Waiting Period

2. Which insurance policy is designed to pay off a policyholder’s debt if the policyholder dies?

A. Whole life insurance B. Credit Life Insurance C. Universal Life Insurance D. Individual Life Insurance E. None of these

3. BNP Paribas Cardif partner of ________ recently sold 5 crore shares of the company for Rs 2,889 crore.

A. Aviva Life Insurance B. Bajaj Allianz Life Insurance C. Bharti AXA Life Insurance D. SBI Life Insurance E. HDFC Life Insurance

4. Which of the following principles of insurance does not apply to life insurance?

A. Utmost good faith B. Indemnity C. Contribution D. Both 2 and 3 E. Both 1 and 2

5. In June 2019 ______ was appointed new Secretary General of the General Insurance Council.

A. Usha Ananthasubramanian B. MN Sarma C. Alice Vaidyan D. Sanjeev Srinivasan E. Bhargav Dasgupta

Answers and Explanations
1. Answer - Option C
Explanation -
Insurance policy lapses when the insured defaults on the payments of renewal premium beyond a grace period. Insurance companies provide an option of reactivating the lapsed policy, within a specific period of time post the grace period.
2. Answer - Option B
Explanation -
Credit life insurance is a life insurance policy designed to pay off a borrower’s debt if that borrower dies. The face value of a credit life insurance policy decreases proportionately with an outstanding loan amount as the loan is paid off over time until both reach zero value.
3. Answer - Option D
Explanation -
BNP Paribas Cardif, the foreign partner of SBI Life Insurance, sold 5 crore shares of the company for Rs 2,889 crore. The sale was done at average price of Rs 577.93 per equity share.
4. Answer - Option D
Explanation -
Indemnity means the insured in case of loss against which the policy has been insured, shall be paid the actual cost of loss not exceeding the amount of the insurance policy.
In life insurance, principle of indemnity does not apply as there is no question of actual loss. The insurer is required to pay a fixed amount upon in advance in the event of accident, death or at the expiry of the fixed term of the policy. Thus, a contract of a life insurance is a contingent contract and not a contract of indemnity.
If one of the insurers pays the whole loss, he is entitled to contribution from other insurers. The principle of contribution is a corollary to the doctrine of indemnity. It applies to any insurance which is a contract of indemnity. So, it does not apply to life insurance.
5. Answer - Option B
Explanation -
MN Sarma, the former Chairman & Managing Director (MD) of United India Insurance will be the new Secretary General of the General Insurance Council. He will be supported by CR Vijayan, a former director of the GIC Re, who has been selected as the deputy Secretary General of the GI Council.