1. If a policyholder decides to terminate the policy before maturity, the amount which the insurance company will pay to the policyholder is known as _____.

A. Termination Value B. Maturity Value C. Pre-mature Value D. Surrender Value E. Holder Value

2. In which of the following years, the Life Insurance Companies Act, and the Provident Fund Act were passed?

A. 1870 B. 1912 C. 1938 D. 1950 E. 1956

3. ICR metric indicates a general insurer’s ability to pay claims. ‘I’ in ICR stands for_________.

A. Insured B. Incurred C. Interest D. Isolate E. Induce

4. LIC’s _________ is exclusively designed for male lives having Aadhaar Card issued by UIDAI.

A. Aadhaar Stambh Plan B. Aadhaar Shila Plan C. Aadhaar Shashakt Plan D. Aadhaar Vardaan Plan E. None of the above

5. ‘LIC should pay interest on delays in payment beyond 30 days’ was one of the recommendations of committee formed in the year 1993. It was headed by __________.

A. Y.V Reddy B. Jagdish Bhagwati C. Kaushik Basu D. R.N. Malhotra E. Bimal Jalan

Answers and Explanations
1. Answer - Option D
Explanation -
If a policyholder decides to terminate the policy before maturity, the amount which the insurance company will pay to the policyholder is known as surrender value.
2. Answer - Option B
Explanation -
In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by professional that analyses financial risk using mathematics, statistics and financial theories i.e. an actuary.
3. Answer - Option B
Explanation -
The Incurred claims ratio (ICR) metric indicates a general insurer’s ability to pay claims. It is calculated as the total value of all claims paid by the company divided by the total amount of premium collected in a financial year. For instance, an ICR of 70% implies that the company has spent 70 on claims for every Rs 100 collected as premium.
4. Answer - Option A
Explanation -
Aadhaar Stambh Plan is exclusively designed for male lives having Aadhaar Card issued by UIDAI financial support for the family in case of unfortunate death of the policyholder any time before maturity and a lump sum amount at the time of maturity for the surviving policyholder.
5. Answer - Option D
Explanation -
In 1993, Malhotra Committee, led by former secretary and RBI Governor, R.N. Malhotra, was formed to evaluate the Indian Insurance Industry and for recommending its future directions. It recommended that LIC should pay interest on delays in payment beyond 30 days.
Its other important recommendation were-

Government stake in the Insurance companies to be brought down to 50%.

Private companies with minimum paid up capital of Rs. 1 billion should be allowed to enter in industry.

Mandatory investment of LIC life fund in Government Securities to be reduced from 75 percent to 50 percent.

1. What is the maturity age of Whole life Insurance policy?

A. 50 years B. 60 years C. 75 years D. 100 years E. 120 years

2. Minimizing the risk associated with a loss due to unwanted events is called ____.

A. Insurable Risk B. Investment Risk C. Mitigation D. Reinstatement E. Reinsurance Risk

3. The process of determining the cost of an insurance policy based on the actual loss experience determined as an adjustment to the initial premium payment is termed as _______

A. Universal Life Insurance B. Unauthorized Reinsurance C. Unearned Premium D. Retrospective Rating E. None of these

4. Which body/official determines the risk coverage for calculation of premium for life insurance policies?

A. Actuary of the life insurance company B. IRDAI C. The chief executive of the life insurance company D. The board of directors of the life insurance company E. None of the given options is true

5. Which of the following is the amount which the insurance company has to pay before any bonuses are added?

A. Sum assured B. Compensation C. Maturity value D. Annuity E. None of the above

Answers and Explanations
1. Answer - Option D
Explanation -
Whole life insurance policy has a maturity age of 100 years. It provides life coverage until the death of the life assured. The policy stays in force throughout the life if the life assured pays the premium. If the life assured dies before the age of 100 years, the nominee receives the sum assured. Tax benefit and loans can be availed against whole life insurance policies.
2. Answer - Option C
Explanation -
Minimizing the risk associated with a loss due to unwanted events is called mitigation. It is an important factor which an insurance business should take into consideration so as to reduce the losses due to unwanted events.
3. Answer - Option D
Explanation -
An insurance policy with a premium that adjusts according to the losses experienced by the insured company, rather than according to an industry-wide loss experience is called Retrospective Rating.
4. Answer - Option A
Explanation -
Actuary of the life insurance company determines the risk coverage for calculation of premium for life insurance policies.
5. Answer - Option A
Explanation -
The sum assured is the amount of money an insurance policy guarantees to pay up before any bonuses are added. In other words, sum assured is the guaranteed amount the policy holder will receive. This is also known as the cover or the coverage amount and is the total amount for which an individual is insured.

1. Which insurance company won the ‘Non-Life Insurer of The Year Award 2019’?

A. Life Insurance Corporation B. Bharti Axa General Insurance C. Max Bupa Insurance Company D. ICICI Prudential Life Insurance E. HDFC Life

2. Which of the following is the amount of liability covered for an individual by insurance services?

A. Claim B. Coverage C. Deductible D. Death Benefit E. None of these

3. The Executive Council of Insurers (ECOI) was established under which of the following Rules/Act?

A. Life Insurance Corporation Act, 1956 B. General Insurance Business (Nationalization) Act, 1972 C. Insurance Ombudsman Rules, 2017 D. IRDAI Act, 1999 E. Redressal of Public Grievances Rules, 1998

4. Which of the following committees is associated with the insurance sector?

A. BD Shah Committee B. Bhagwati Committee C. Vipin Malik Committee D. RN Malhotra Committee E. Usha Thorat Committee

5. LIC has signed bancassurance agreement with which bank under which the lender bank will offer LIC’s insurance products at its branches?

A. SBI B. IDBI C. Allahabad Bank D. PNB E. HDFC

Answers and Explanations
1. Answer - Option B
Explanation -
Bharti Axa General Insurance won the ‘Non-Life Insurer of The Year Award 2019’.
The award was presented by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Bharti AXA General Insurance is a joint venture between Bharti Enterprises and French insurance company AXA.
Its headquarters is in Mumbai.
Sanjeev Srinivasan is the Chief Executive Officer and Managing Director (CEO & MD) of Bharti AXA General Insurance.
2. Answer - Option B
Explanation -
Coverage is the amount of liability covered for an individual by insurance services. It is the amount of money an insurance policy guarantees to pay before any bonuses are added
3. Answer - Option C
Explanation -
The Executive Council of Insurers (ECOI) was established under the Insurance Ombudsman Rules 2017.
ECOI was earlier known as the Governing Body of Insurance Council (GBIC).
ECOI is responsible for appointing the Insurance Ombudsman in India.
There are 17 Ombudsman Centres in India.
4. Answer - Option D
Explanation -
RN Malhotra Committee is associated with the insurance sector.
It was formed by the government of India in 1993 to recommend reforms in the insurance sector.
RN Malhotra is the former Governor of Reserve Bank of India (RBI).
The committee recommended that private companies should be allowed to enter into the insurance sector.
5. Answer - Option B
Explanation -
IDBI Bank and Life Insurance Cooperation (LIC) have signed a bancassurance agreement under which the lender bank will offer LIC’s insurance products at its branches.
The bank will become the preferred bank for LIC premium payments and also function as a premium point to boost the sale of LIC products as part of the service-level agreement, thereby gaining from fees and float income.