IC26 LIFE INSURANCE FINANCE - 05
| Q1.Which risk is caused due to wide many factors with respect to securities like recession, natural calamities, structural changes in the economy, etc.? |
| Default risk |
| Market risk |
| Liquidity risk |
| Capital risk |
| Concentration risk |
| Q2.For a Whole Life Policy, which of these statements are INCORRECT? 1. There is no saving element 2. The maximum policy term is 10 years 3. Interest is also pa |
| Only 2 |
| Only 1 |
| Both 1 and 2 |
| Both 2 and 3 |
| All 1, 2 and 3 |
| Q3.With respect to investments in Government securities by an insurance company, which of the given options is NOT as per investment regulations issued by IRDA? |
| Life insurers shall invest not exceeding 35% of their surplus / investible sum in specified approved investments and other investments |
| Life insurers shall invest not exceeding 15% of their surplus / investible sum in housing and infrastructure. |
| Life insurers shall invest not less than 25% of their surplus / investible sum in Government securities |
| Life insurer shall invest not less than 50% of their surplus / investible sum in Government securities |
| Life insurers shall invest not less than 50% of their surplus / investible sum in Government securities or other approved securities (including above 25%) |
| Q4.An insurance company bought office space for Rs 40 lacs. What is the correct reason to classify it as capital expenditure? |
| This expenditure is incurred to maintain the existing capacity of an asset so that it can do its daily work |
| This expenditure is a part of regular income |
| This expenditure will result in long-lasting benefits for the insurance company |
| This expenditure is from an income which is earned from activities that are not ordinary activities of an entity |
| This cannot be classified as capital expenditure |
| Q5.Surendra Co. a chartered accountancy firm has completed five-year tenure as a joint auditor of ABC Life Insurance Company. What is the cooling period before which they cannot accept statutory audit responsibilities of ABC life insurance? |
| 1 year |
| 2 years |
| 3 years |
| 4 years |
| 5 years |
| Q6.The IFRS version of the Accounting Standards in India is notified by the __. |
| AMFI |
| SEBI |
| Ministry of Corporate Affairs |
| Reserve Bank of India |
| Accounting Standards Board of ICAI |
| Q7.With respect to the appointment of concurrent auditor of a life insurance company, which of the following statement(s) is/are correct? 1. A Concurrent auditor can be the internal auditor of the company but not the statutory auditor 2. A Concurrent auditor should be a Chartered Accountant 3. A Concurrent auditor performs the investment audit |
| Both 1 and 2 |
| Both 2 and 3 |
| Both 1 and 3 |
| All 1, 2 and 3 |
| Only 2 |
| Q8.In a life insurance company, what does a fall in the conservation ratio signify? |
| A lot of policies have been issued under long term plans |
| The management expenses are very high |
| There is the lapse of new business |
| High lapses |
| A lot of policies have been issued in the quarterly or half-yearly mode |
| Q 9. There were bad debts of Rs 1000 in the ledger. Mr. Rohit carried forward this to the Trial Balance as Rs 2000. Which error has been made by Mr. Rohit? |
| Omission Error |
| Overcasting error |
| Transposition error |
| Principle error |
| Posting error |
| Q10.Based on the given figures compute the Production Budget: Sales 58000 units, Opening inventory 7600 units, closing inventory 9200 units |
| 58000 |
| 56400 |
| 59600 |
| 49700 |
| 48100 |