Question 1

Under Section 45 of the Insurance Act, 1938, within what period can an insurer repudiate a life insurance policy on the grounds of misstatement or non-disclosure?

Accepted Answer

Source: Insurance Act, 1938, Section 45. Section 45 provides that an insurer can repudiate a life insurance policy within 3 years from the date of issuance if the policyholder made any misstatement or non-disclosure of material facts. After 3 years, the policy becomes incontestable, and the insurer cannot repudiate it on these grounds.

Question 2

What is the maximum claim amount limit for disputes that can be resolved by the Insurance Ombudsman under IRDAI regulations?

Accepted Answer

Source: IRDAI Insurance Ombudsman Scheme, 2020 (as amended). The Insurance Ombudsman can entertain complaints where the amount of claim does not exceed Rs. 30 lakhs (Rs. 30,00,000). This limit was increased from Rs. 20 lakhs to Rs. 30 lakhs effective from 1st April 2023 to enhance consumer protection and reduce litigation burden.

Question 3

Under the Insurance Act, 1938, Section 39 governs which of the following?

Accepted Answer

Source: Insurance Act, 1938, Section 39. Section 39 of the Insurance Act, 1938 deals with the nomination of a person to receive the policy proceeds. A policyholder can nominate one or more persons to receive the insurance money in case of the policyholder's death. The nomination can be changed at any time before the policy matures or is surrendered.

Question 4

Which of the following is NOT a core function of IRDAI as per the IRDA Act, 1999?

Accepted Answer

Source: IRDA Act, 1999, Section 14. The core functions of IRDAI include: (1) issuing licenses to insurers and intermediaries, (2) regulating tariffs and premiums, (3) protecting policyholders' interests, (4) promoting insurance awareness, and (5) regulating investment of insurance funds. Setting interest rates on bank deposits is a function of the Reserve Bank of India (RBI), not IRDAI.

Question 5

In which year was the Insurance Regulatory and Development Authority (IRDAI) established, and where is its headquarters located?

Accepted Answer

Source: IRDA Act, 1999. The Insurance Regulatory and Development Authority was established on 1st April 1999 under the IRDA Act, 1999. Its headquarters is located in Hyderabad, Telangana, which serves as the regulatory hub for the Indian insurance sector.

Question 6

Which of the following is the primary objective of IRDAI as stated in the IRDA Act, 1999?

Accepted Answer

Source: IRDA Act, 1999, Preamble and Section 14. The primary objectives of IRDAI are: (1) to protect the interests of policyholders, (2) to regulate and develop the insurance industry, (3) to ensure financial stability of insurers, and (4) to promote insurance awareness. The protection of policyholder interests is the paramount objective, as stated in the preamble of the IRDA Act.

Question 7

Under Section 45 of the Insurance Act 1938, an insurer can repudiate a claim based on misstatement or concealment within a period of:

Accepted Answer

Source: Insurance Act 1938, Section 45. Section 45 provides that an insurer cannot repudiate a claim on the ground of misstatement or concealment after the expiry of 3 years from the date of issuance of the policy, except in cases of fraud. This is a critical consumer protection provision.

Question 8

Section 39 of the Insurance Act 1938 deals with which of the following aspects of an insurance policy?

Accepted Answer

Source: Insurance Act 1938, Section 39. Section 39 specifically governs the nomination of a person by the policyholder to receive the policy proceeds in the event of the policyholder's death. The policyholder has the right to nominate and can change the nomination at any time before maturity or surrender of the policy.

Question 9

The Insurance Ombudsman scheme in India covers complaints related to insurance policies up to a claim amount limit of:

Accepted Answer

Source: IRDAI Insurance Ombudsman Regulations 2020. The Insurance Ombudsman has jurisdiction to entertain complaints where the amount of claim does not exceed Rs. 30 lakhs (Rs. 30,00,000). This limit was revised upward from Rs. 20 lakhs in 2020 to enhance consumer protection.

Question 10

Under the IRDA Act 1999, which of the following is NOT a core function of IRDAI?

Accepted Answer

Source: IRDA Act 1999, Section 14. Core functions of IRDAI include: (1) issuing licenses to insurers and intermediaries, (2) regulating insurance business and tariffs, (3) protecting policyholders' interests, (4) promoting insurance awareness. Setting premium rates unilaterally for all products is NOT a core function — IRDAI regulates but does not directly set all premiums (insurers file rates for approval in non-life; life insurance is largely deregulated).

Question 11

The Insurance Regulatory and Development Authority (IRDAI) was established in which year, and what is its headquarters location?

Accepted Answer

Source: IRDA Act 1999. IRDAI was established on 1st April 1999 as a statutory body to regulate the insurance sector in India. The headquarters of IRDAI is located in Hyderabad, Telangana.

Question 12

Which of the following is a key responsibility of IRDAI as per the IRDA Act 1999?

Accepted Answer

Source: IRDA Act 1999, Section 14. IRDAI's key responsibilities include: (1) issuing licenses to insurers, agents, and brokers, (2) regulating insurance tariffs and rates, (3) ensuring solvency of insurers, (4) protecting policyholders' interests, and (5) promoting insurance awareness. All options listed are actual IRDAI responsibilities, but the question tests understanding of the regulatory scope.

Question 13

IRDAI's Tied Agent Regulations stipulate that a tied agent can represent a maximum of how many insurance companies?

Accepted Answer

Source: IRDAI Tied Agent Regulations 2023. A tied agent is permitted to represent a maximum of two insurance companies — one life insurer and one general/health insurer, or two general/health insurers. This restriction prevents conflicts of interest and ensures focused customer service.

Question 14

Under the Insurance Act 1938, Section 45 prescribes the period within which an insurer may repudiate a life insurance policy on the ground of misstatement or non-disclosure. What is this period?

Accepted Answer

Source: Insurance Act 1938, Section 45. An insurer may repudiate a life insurance policy on the ground of misstatement, concealment, or non-disclosure within two years from the date of issuance of the policy. After two years, the policy becomes incontestable except in cases of fraud.

Question 15

Under IRDAI's Solvency Margin Regulations, a general insurance company must maintain a solvency margin of not less than the higher of: (i) 20% of gross direct premiums earned, or (ii) a fixed amount. What is the fixed amount prescribed?

Accepted Answer

Source: IRDAI Solvency Margin Regulations 2016 (as amended). The fixed amount is Rs. 5 crore. General insurers must maintain solvency margin equal to the higher of 20% of gross direct premiums earned or Rs. 5 crore, whichever is greater. This ensures financial stability and policyholder protection.

Question 16

The Insurance Ombudsman scheme under IRDAI regulations permits a complainant to file a complaint within how many years from the date when the cause of action arose, subject to a maximum limit of 5 years from the date of the event?

Accepted Answer

Source: IRDAI Insurance Ombudsman Regulations 2020, Section 12. A complaint must be filed within one year from the date when the cause of action arose, provided the total period does not exceed five years from the date of the event giving rise to the cause of action. This dual-timeline structure balances consumer protection with insurer finality.

Question 17

Under the IRDA Act 1999, the Insurance Regulatory and Development Authority is constituted as a body corporate with a Chairperson and how many whole-time members?

Accepted Answer

Source: IRDA Act 1999, Section 3. The Authority comprises a Chairperson and four whole-time members (one member from life insurance, one from general insurance, one from health insurance, and one independent member). This composition ensures balanced representation across insurance sectors.

Question 18

Under IRDAI's Investment Regulations, life insurance companies are required to invest a minimum percentage of their funds in government securities and approved securities. What is this minimum percentage?

Accepted Answer

Source: IRDAI Investment Regulations 2016 (as amended). Life insurance companies must invest a minimum of 50% of their funds in government securities and other approved securities (including infrastructure bonds and social sector securities). This ensures capital preservation and supports government/social objectives.

GIC AO IRDAI & Regulations

IRDAI & Regulations— Rules & Concept

Key Points to Remember

Exam-Specific Tips

IRDAI & Regulations — Practice Questions

60-Second Revision — IRDAI & Regulations