JAIIB Exam 2025 – IE&IFS Important Questions MCQs Quiz-26

20/03/2025

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JAIIB Exam 2025 IE&IFS Important Questions MCQs Quiz-26

JAIIB Exam Quiz 2025: The JAIIB exam is scheduled for 2025 by IIBF. Here, we are providing JAIIB IE&IFS MCQ-based quizzes on a regular basis. You can attempt the quizzes regularly to prepare for the upcoming JAIIB exam. The quizzes will be provided module-wise and unit-wise. You can attempt the JAIIB IE&IFS quizzes from the links below and improve your preparation by practicing regularly. These quizzes will help you boost your score in the JAIIB exam and guide you to clear the exam on your first attempt.

Q.1 Which of the following statements best explains the historical roots of insurance in India as per ancient texts?
A) Insurance in India was first introduced by the British, with no prior historical precedent.
B) Ancient Indian texts like Yagnavalkya’s Dharma Shastra and Kautilya’s Artha Shastra mentioned pooling of resources for redistribution during calamities, which can be seen as a precursor to modern insurance.
C) The concept of insurance in India emerged solely from Western financial practices.
D) Early Indian insurance practices were limited to personal wealth protection and had no connection with trade or calamity relief.

Q.2 Which of the following statements correctly describes the early development of the life insurance business in India?
A) The first life insurance company in India was the Bombay Mutual, established in 1871.
B) Life insurance in India started only after the enactment of the British Insurance Act in 1870.
C) Indian insurance companies dominated the market in the 19th century, facing little competition from foreign companies.
D) The Oriental Life Insurance Company, established in 1818 in Calcutta, was the first life insurance company in India but failed in 1834.

Q.3 Which of the following legislative measures was the first to regulate life insurance business in India?
A. The Indian Life Assurance Companies Act, 1912
B. The Insurance Act, 1938
C. The Indian Insurance Companies Act, 1928
D. The British Insurance Act, 1870

Q.4 What was the key outcome of the nationalization of the life insurance sector in India in 1956?
A) The Life Insurance Corporation of India (LIC) was established, consolidating 245 Indian and foreign insurers.
B) The government allowed private players to compete with LIC immediately after its formation.
C) The nationalization led to a decline in life insurance coverage across the country.
D) Principal Agencies were reintroduced to regulate the insurance sector more effectively.

Q.5 Which of the following statements is true regarding the nationalization of general insurance in India?
A) The General Insurance Business (Nationalisation) Act of 1972 led to the creation of a single state-owned general insurance company.
B) The General Insurance Corporation of India (GIC) was formed in 1973 to oversee the nationalized general insurance sector.
C) The Insurance Act of 1968 nationalized the general insurance sector in India.
D) The nationalization of general insurance resulted in the formation of two major companies under government control.

Q.6 What was the primary purpose of establishing the Insurance Regulatory and Development Authority (IRDA) in India?
A) To nationalize the insurance sector and eliminate private competition.
B) To regulate and develop the insurance industry, promote competition, and enhance customer satisfaction.
C) To merge life and general insurance sectors into a single regulatory framework.
D) To replace the Life Insurance Corporation (LIC) as the sole provider of insurance in India

Q.7 Which of the following was a key reform introduced by IRDA in the Indian insurance sector in 2000?
A) Foreign companies were completely restricted from investing in the Indian insurance sector.
B) The Insurance Act, 1938 was repealed to create a new regulatory framework.
C) Foreign companies were allowed to own up to 26% in Indian insurance firms.
D) The General Insurance Corporation of India (GIC) was privatized.

Q.8 What significant change did the IRDAI introduce on 2nd September 2019 regarding foreign direct investment (FDI) in the insurance sector?
A) It restricted FDI in insurance intermediaries to 49%.
B) It allowed 100% FDI in insurance intermediaries.
C) It reduced FDI in insurance intermediaries from 74% to 26%.
D) It mandated that all insurance intermediaries must be fully owned by Indian entities

Q.9 Which of the following statements best describes the concept of insurance penetration?
A) It measures the percentage of the population covered under insurance.
B) It is the ratio of total insurance premium to the Gross Domestic Product (GDP).
C) It calculates the number of insurance policies sold in a given year.
D) It represents the total revenue generated by insurance companies

Q.10 How is insurance density measured in the insurance industry?
A) As the ratio of total insurance premium to GDP.
B) As the percentage of people with active insurance policies in a country.
C) As the per capita insurance premium, typically expressed in US dollars.
D) As the total number of insurance claims settled in a financial year.

Q.11 Which of the following was the first statutory measure to regulate the insurance business in India?
A) The Insurance Act, 1938
B) The LIC Act, 1956
C) The Indian Life Assurance Companies Act, 1912
D) The General Insurance Business Nationalisation Act, 1972

Q.12 What was the primary objective of the Indian Insurance Companies Act, 1928?
A) To nationalize the life and general insurance sector in India.
B) To regulate the conduct of private insurance companies.
C) To enable the government to collect statistical information on life and non-life insurance business.
D) To establish the Insurance Regulatory and Development Authority (IRDA).

Q.13 What was one of the key provisions of the Life Insurance Corporation Act, 1956?
A) It allowed private players to enter the life insurance market immediately.
B) It nationalized the life insurance sector and created the Life Insurance Corporation (LIC) with a capital contribution from the Government of India.
C) It mandated that LIC must charge the highest possible premium to maximize government revenue.
D) It abolished the concept of actuarial calculations in life insurance.

Q.14 What does Section 37 of the LIC Act, 1956 ensure?
A) It allows LIC to freely invest its funds without any government oversight.
B) It provides a government guarantee for sums assured and bonuses under LIC policies, except for ULIPs.
C) It restricts LIC from investing in the stock market.
D) It mandates the privatization of LIC after 1999.

Q.15 Which of the following was a key objective of the General Insurance Business (Nationalisation) Act, 1972?
A) To privatize the general insurance sector in India and encourage foreign investment.
B) To nationalize the general insurance business and prevent the concentration of wealth as per Article 39(c) of the Indian Constitution.
C) To merge all general insurance companies into a single state-owned corporation.
D) To establish the Insurance Regulatory and Development Authority (IRDA) for regulating the insurance sector.

Q.16 What is the key difference between an insurance agent and an insurance broker under IRDA regulations?
A) An agent can represent multiple insurance companies, whereas a broker can only represent one.
B) An agent represents a specific insurance company, whereas a broker can work with multiple insurers and advise clients independently.
C) Both agents and brokers can provide discounts to policyholders as per IRDA regulations.
D) Brokers charge a commission from policyholders, whereas agents provide advice free of cost

Q.17 According to IRDA regulations, which of the following actions would be considered a violation of Section 41 of the Insurance Act, 1938?
A) An insurance broker advising a client on multiple insurance policies.
B) An insurance agent collecting renewal premiums from policyholders.
C) An insurance intermediary offering a discount to a potential policyholder to induce them to purchase a policy.
D) A corporate agent representing a single insurance company for both life and general insurance.

Q.18 What was the primary reason for introducing mandatory cessions in the Indian reinsurance market?
A) To encourage insurers to seek reinsurance from foreign markets for better risk diversification.
B) To ensure that Indian insurers retained as much premium as possible within the domestic market.
C) To eliminate the role of General Insurance Corporation (GIC) as a reinsurer.
D) To allow ceding companies to transfer 100% of their risk to foreign reinsurers.

Q.19 How did the General Insurance Business (Nationalisation) Amendment Act, 2002, impact the role of GIC in the Indian reinsurance market?
A) It reinforced GIC’s monopoly over the reinsurance sector in India.
B) It converted GIC into a national reinsurer and ended its supervisory role over its subsidiaries.
C) It mandated that all Indian insurers must exclusively obtain reinsurance from GIC.
D) It restricted the entry of foreign reinsurers into the Indian market.

Q.20 Which of the following is NOT a function of an Insurance Repository in India?
A) Maintaining insurance policies in electronic form on behalf of insurers.
B) Selling and underwriting insurance policies to customers.
C) Acting as a single point of service for all e-policies held by a policyholder.
D) Enhancing efficiency and transparency in the issuance and maintenance of insurance policies

Q.21 Which of the following statements about an e-Insurance Account (eIA) is FALSE?
A) A policyholder can open multiple e-Insurance Accounts with different insurance repositories.
B) An e-Insurance Account provides a unique account number and login credentials to access e-policies.
C) e-Insurance Accounts are offered free of cost to applicants.
D) An authorised representative of an e-Insurance Account holder has only access rights and is not entitled to policy benefits unless designated as a nominee or assignee

Answer:

Q1: B
Q2: D
Q3: A
Q4: A
Q5: B
Q6: B
Q7: C
Q8: B
Q9: B
Q10: C
Q11: C
Q12: C
Q13: B
Q14: B
Q15: B
Q16: B
Q17: C
Q18: B
Q19: B
Q20: B
Q21: A