IC26 - ASSOCIATE - Life Insurance Finance - 9

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Q 1. According to Adam Smith, what does the principle of "equitable" taxation aim for?

Equality and social justice to people.

Consistency and stability in tax payer’s bills.

Predictability in tax collection.

Lower cost of tax administration.

Efficiency in resource allocation.

Q 2. Which of the following insurance products are considered vulnerable in terms of product profile?

Term life insurance policies.

Whole life insurance policies.

Single premium products and ULIPs.

Endowment policies.

Health insurance policies.

Q 3. Who determines the estimation of liability against life policies?

IRDA

Chief Actuary (Appointed Actuary)

CEO of the insurance company

CFO of the insurance company

The policyholders' committee

Q 4. When does an entry to record bad debts occur?

In the year when allowance for doubtful debts is created

In the year when a debt becomes doubtful

In the year when a debt becomes bad

In the year when a provision for doubtful debts is created

In the year when a debt is written off as uncollectible

Q 5. What happens if the excess deposit is more than Rs 10?

It is credited to Short Remittance Account

It is refunded to the policyholder

It is transferred to the Policy Deposit Account

It is adjusted towards the first premium

It is forfeited

Q 6. What is the purpose of classifying commission payments into first-year commission, bonus commission, and renewal commission?

To identify expenses related to first-year business

To calculate tax deductions on commission payments

To determine agent license particulars

To prepare expense ratios

None of the above

Q 7. How is the fair value of listed equity securities and derivative instruments determined?

The highest of the last quoted closing price

The average of the last three quoted closing prices

The lowest of the last quoted closing price

The highest of the last quoted opening price

The average of the last three quoted opening prices

Q 8. Which aspect of budgeting is particularly emphasized in LIC's branch offices?

Preparation of revenue budget

Planning and performance budgeting

Increase in profit through business growth

Reduction of administration costs

Generating premium income

Q 9. What is the definition of "depreciable amount" according to Accounting Standard 6?

The estimated residual value of a depreciable asset

The current market value of a depreciable asset

The original cost of a depreciable asset

The carrying amount of a depreciable asset

The salvage value of a depreciable asset

Q 10. How can ratios be useful for auditors conducting audits?

They help in assessing the performance of the unit being audited

They minimize routine checking

They help in presenting the final results

All of the above

None of the above

Q 11. Which metric is used to calculate the average first premium per 1000 Sum Assured for individual policies in the life insurance industry?

Average F.Y.P. per 1000 Sum Assured (individual)

Conservation Ratio

Average first premium per 1000 Sum Assured (individual)

Cost of postage, telegram, and M.O. commission per in-force policy

Percentage of First Year Commission (individual) to First Year Premium (individual)

Q 12. What is the process of separating the proceeds from criminal activity through complex financial transactions called?

Placement

Layering

Integration

Concealment

Conversion

Q 13. What are the two effects of accrued income on profit and net assets?

Increase in income, decrease in net assets

Increase in income, increase in net assets

Decrease in income, increase in net assets

Decrease in income, decrease in net assets

No impact on profit and net assets

Q 14. Under which method is depreciation charged as a percentage of the written-down value of the asset?

Diminishing balance method

Annuity method

The sum of the years’ digit method

Sinking fund method

Straight-line method

Q 15. What type of scheme is used to fund the gratuity liability in the Group Gratuity Scheme?

Superannuation Scheme

Annuity Scheme

Provident Fund Scheme

Group Gratuity Scheme

Pension Fund Scheme



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