Insurance Awareness Quiz for LIC AAO- Set 13

Insurance Awareness Quiz: We have created quiz questions on Insurance Awareness which are most important for insurance exams. These questions and answers will guide you in all insurance exams like LIC (AAO/ADO), NIACL assistant and AO, UIIC, IRDA and other Bank PO exams and all competitive exams. So attempt these multiple choice questions now based on the exam pattern syllabus.

1. The Life Insurance Business is defined in which section of the Insurance Act, 1938?
   A) Section 2(11)
   B) Section 3C(11)
   C) Section 1(11)
   D) Section 4A(11)
   
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   Option A
   Explanation: Section 2(11) of Insurance Act, 1938
2. Who appoints the member of Insurance Regulatory and Development Authority (IRDA)?
   A) RBI
   B) Government of India
   C) Special panel formed by the RBI
   D) None of the above
   
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   Option B
   
3. The IRDA board can consist of a maximum of how many members?
   A) 12
   B) 8
   C) 5
   D) 10
   
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   Option D
   Explanation: The Authority is a ten member team consisting of 
       (a)    a Chairman; 
       (b)    five whole-time members; 
       (c)    four part-time members, 
   (all appointed by the Government of India)
4. What is the minimum paid up equity capital requirement to carry insurance business in India?
   A) Rs 5 billion
   B) Rs 1 billion
   C) Rs 3 billion
   D) Rs 2 billion
   
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   Option C
   Explanation: A minimum paid up equity capital of rupees one billion (Rs. 100 crores) is required in case of an applicant which seeks to carry on the business of life insurance or general insurance.
5. The minimum shareholding limit of promoters / promoter group shall at all times be maintained at______________ percent of the paid up equity capital of the insurer.
   A) 50%
   B) 20%
   C) 32%
   D) 40%
   
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   Option A
   Explanation: Promoter includes Indian promoter and also includes a foreign investor who has taken a stake in the insurance company in such capacity
6. SEBI defines AIF as privately held and managed pool of investment fund. What does AIF stands for?
   A) Angel Investment Fund
   B) Alternative Investment Fund
   C) Abundant Investment Fund
   D) Applicable Investment Fund
   
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   Option B
   
7. The Private equity investors shall not hold more than _________ percent of the paid up equity share capital of the Indian insurance company.
   A) 15%
   B) 20%
   C) 5%
   D) 10% 
   
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   Option D
   
8. In case of an individual, the proposed shareholding in the paid up equity capital of the insurance company is capped at _____________ percent
   A) 10%
   B) 5%
   C) 20%
   D) 12%
   
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   Option A
   Explanation: Shareholders permitted 10 per cent or more in an insurance company will be subject to a minimum lock-in period of five years
9. The amount which the policy holder will get from the insurance company if he exits the policy before maturity is known as ____________
   A) Paid Up value
   B) Penetration Rate
   C) Surrendered value
   D) Annuity value
   
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   Option C
   
10. What is the minimum paid up equity capital requirement to carry Reinsurance business in India?
    A) Rs 1 billion
    B) Rs 2 billion
    C) Rs 2.5 billion
    D) Rs 1.5 billion
    
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    Option B
    Explanation: A minimum paid-up equity capital of Rs two billion (Rs. 200 crores) is necessary in case of a person carrying on exclusively the business of reinsurance.

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