IC26 - ASSOCIATE - Life Insurance Finance - 5

Find More Mock Tests Here


Q 1. Which of the following is an example of a high-risk customer according to KYC norms?

Government departments and Government-owned companies.

Salaried employees.

Non-residents.

Charities.

Individuals belonging to lower income groups.

Q 2. What is the purpose of source documents in accounting?

To prove the occurrence of a transaction or event.

To prepare financial statements.

To identify, record, and analyze financial dealings.

To report business transactions to external users.

To categorize transactions as capital or revenue expenditure.

Q 3. What is the purpose of recording canceled cheques in the credit column of the cheques canceled register?

To increase the bank balance

To decrease the bank balance

To track the canceled cheques

To record fresh cheque issuance

None of the above

Q 4. What happens if the deposit amount is less than the required premium?

The shortfall is collected from the policyholder

The deposit is refunded to the policyholder

The excess is credited to the Short Remittance Account

The deposit is transferred to the Policy Deposit Account

The deposit is forfeited

Q 5. When are Career Agents paid stipends in the insurance industry?

After 1 year of training

After 6 months of training

During the first two years of training

After 3 years of training

Only after completing their training

Q 6. Which accounting standard is specifically mentioned for preparing the Cash Flow Statement?

AS 1 (Presentation of Financial Statements)

AS 3 (Cash Flow Statements)

AS 17 (Segment Reporting)

AS 10 (Accounting for Fixed Assets)

AS 5 (Net Profit or Loss for the Period, Prior Period Items, and Changes in Accounting Policies)

Q 7. What is the main focus of budgeting in an insurance company?

Increasing the profit by reducing administration costs

Maximizing sales of insurance policies

Generating premium income

Manufacturing products

Controlling management expenses

Q 8. Which of the following is not dealt with under Accounting Standard 10?

A. Forests and plantations

B. Expenditure on real estate development

C. Livestock (Domesticated animals)

D. Mineral rights and exploration expenditure on oil and gas

E. None of the above

Q 9. What does the Average First Premium Per 1000 Sum Assured ratio fall indicate?

Increase in operational efficiency

Change in product-mix

Rise in quarterly mode policies

All of the above

None of the above.

Q 10. Which ratio assesses the cost of printing and stationery per in-force policy in the life insurance industry?

Average Medical Fees per 1000 Medical Sum Assured

Percentage of Medical Sum Assured to Total Sum Assured

Cost of printing and stationery per in-force policy

Overall Expense Ratio

Percentage of SSS Sum Assured to total Sum Assured (individual)

Q 11. What is the primary purpose of the KYC process?

To identify, validate, and verify the customer's information.

To monitor policy for possible abuse or illegal use.

To develop a good customer relationship.

To collect the customer's photograph, identification proof, and address proof.

To determine the true identity of all customers.

Q 12. What is the reason for disagreement in the balance between the cash book and bank passbook when cheques are issued?

Cheques are not credited

Cheques are not presented

Bank charges and interest on overdraft

Direct credit and bank interest

Standing order payments

Q 13. Which method results in a constant charge over the asset's useful life?

Diminishing balance method

The sum of the years’ digit method

Straight-line method

Annuity method

Sinking fund method

Q 14. What is the difference between First Premium and First Year's Premium?

First Premium is paid monthly, while First Year's Premium is paid yearly.

The first Premium is the initial installment, while the First Year's Premium is the total paid in the first year.

The first Premium is paid by the policyholder, while the First Year's Premium is paid by the beneficiary.

First Premium covers only the first month, while First Year's Premium covers the entire year.

First Premium is paid for renewals, while First Year's Premium is for new policies.

Q 15. What is the accounting entry for payment of ICU hospitalization benefits?

Outstanding claims on Hospitalisation Benefits- For other than ICU-paid

Outstanding claims on Hospitalisation Benefits- For ICU-paid

Repurchase of unit capital for ICU

Repurchase of unit capital premium account for ICU

Repurchase of unit capital for Hospitalization



Find More Mock Tests Here