Ramesh Singh Test : Insurance In India


10 Questions MCQ Test Indian Economy for UPSC CSE | Ramesh Singh Test : Insurance In India


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This mock test of Ramesh Singh Test : Insurance In India for UPSC helps you for every UPSC entrance exam. This contains 10 Multiple Choice Questions for UPSC Ramesh Singh Test : Insurance In India (mcq) to study with solutions a complete question bank. The solved questions answers in this Ramesh Singh Test : Insurance In India quiz give you a good mix of easy questions and tough questions. UPSC students definitely take this Ramesh Singh Test : Insurance In India exercise for a better result in the exam. You can find other Ramesh Singh Test : Insurance In India extra questions, long questions & short questions for UPSC on EduRev as well by searching above.
QUESTION: 1

Consider the following statements.

1. The life insurance business in the country was Nationalised by the government of India in 1956.

2. At the time no foreign companies were playing in the life segment of the insurance.

Which of these statements is/are correct?

Solution:

The life insurance business/industry in the country was nationalised by the Government of India in 1956 and a fully government-owned company, the Life Insurance Corporation of India (LIC) was set up (at that time 245 Indian and foreign companies were playing in the life segment of insurance). Opening of private life insurance companies was prohibited at that time.

QUESTION: 2

Consider the following statements.

1. The LIC was also called as an investment and reinsurance institution by the government.

2. The LIC had been the biggest investor in the government's process of planned development purchasing government securities.

Which of these statements is/are correct?

Solution:
  • The LIC was called an investment institution by the government. The nationalisation was motivated by twin objectives—first, to spread the message of life insurance for greater social security and secondly, to mobilise people’s savings (collected as premiums) for nation-building.

  • The LIC had been the biggest investor in the government's process of planned development purchasing government securities and equities of the big asset public sector undertakings.

QUESTION: 3

The General Insurance Corporation of India started operation with holding companies:

1. New India Insurance Company Limited

2. National Assurance Company Limited

3. Agriculture insurance company of India Limited

Which of these statements is/are correct?

Solution: In 1971, The government nationalised the private sector companies playing in the general insurance and a government company, the General Insurance Corporation of India (GIC) was formed in 1972. The GIC started operation on January 1. 1973 with its four holding companies: (i) National Insurance Company Ltd. (ii) New India Assurance Company Ltd. (ii) Oriental Fire and Insurance Company Ltd. (iv) United India Insurance Company Ltd.

QUESTION: 4

Consider the following statements.

1. Agriculture insurance company of India Limited was set up by the government of India in 1972.

2. Till the AICIL was not set up, the Agri-insurance responsibility of the government was being looked after by the LIC.

Which of these statements is/are correct?

Solution:
  • The public sector insurance company, Agriculture Insurance Company of India Limited (AICIL) was set up by the Government of India in December 2002 (commenced its business in April 2003).

  • This is a dedicated agri-insurance company Till the AICIL was not set up, the Agri - insurance responsibility of the government was being looked after by the General Insurance Corporation (GIC).

QUESTION: 5

Under the process of economic reforms an insurance Reforms Committee was set up in 1993 under the chairmanship of:

Solution:
QUESTION: 6

Which of the following was the recommendations of the committee under the chairmanship of ex RBI Governor RN Malhotra?

1. Decontrolling Insurance sector

2. Linking General Insurance Corporation of India and its four subsidiaries

3. Setting up a regulatory authority for the insurance industry

Which of these statements is/are correct?

Solution:

(i) Decontrolling insurance sector, i.e., allowing Indian as well as foreign private sector insurance companies to enter the sector (the government did it in 1999 passing the IRDA Act).

(ii) Restructuring the LIC and the GIC and cutting down the government's holding in them to 50 per cent

(iii) Delinking GIC and its four subsidiaries (which was done in 2000).

(iv) Discarding the system of licensing of surveyors by the controller of Insurance. (v) Restructuring the Tariff Advisory Committee.

(vi) Setting up a regulatory authority for the insurance industry (the IRDA set up in 2000).

QUESTION: 7

Consider the following statements.

1. The Insurance Regulatory and Development Authority was set up in the year 2000.

2. Insurance industry of India is presently regulated under the IRDA Act, 1999.

Which of these statements is/are correct?

Solution:
  • The Insurance Regulatory and Development Authority (IRDA) was set up in 2000 (the Act was passed in 1999) with one chairman and five members (two as full time and three as part-time members) appointed and nominated by the government.

  • Insurance industry of India is presently regulated under the Insurance Laws (Amendment) Act, 2015

QUESTION: 8

Consider the following statements.

1. Known as the GIC Re, it remained the only reinsurance company in the country till now.

2. Reinsurance industry is regulated by the IRDA in the country.

Which of these statements is/are incorrect?

Solution:
  • Known as the GIC Re, it remained the only reinsurance company in the country till now.

  • Over time, this emerged as a major player in the global reinsurance industry.

  • The reinsurance industry is regulated by the IRDA in the country. The reinsurance industry has a very low penetration in India.

QUESTION: 9

Consider the following statements.

1. DICGC was set up by merging the Deposit Insurance Corporation and the Credit Guarantee Corporation.

2. Today credit guarantee is the main function of deposit insurance and credit guarantee corporations.

Which of these statements is/are correct?

Solution:
  • DICGC was set up by merging the Deposit Insurance Corporation (1962) and the Credit Guarantee Corporation (1971) in 1978. While

  • With the financial sector reforms undertaken in the 1990s, credit guarantees have been gradually phased and the focus of the Corporation is veering to its core function of Deposit Insurance objective of averting panics, reducing system risk and ensuring financial stability.

 

 

 

QUESTION: 10

Which of the following statements best describe insurance penetration?

Solution: Insurance penetration is defined as the ratio of premium underwritten in a given year to the gross domestic product (GDP).