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Ramesh Singh Test : Insurance In India


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

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Ramesh Singh Test : Insurance In India - 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?

Detailed Solution for Ramesh Singh Test : Insurance In India - Question 1

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.

Ramesh Singh Test : Insurance In India - 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?

Detailed Solution for Ramesh Singh Test : Insurance In India - Question 2
  • 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.

Ramesh Singh Test : Insurance In India - 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?

Detailed Solution for Ramesh Singh Test : Insurance In India - Question 3 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.

Ramesh Singh Test : Insurance In India - 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?

Detailed Solution for Ramesh Singh Test : Insurance In India - Question 4
  • 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).

Ramesh Singh Test : Insurance In India - Question 5

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

Ramesh Singh Test : Insurance In India - 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?

Detailed Solution for Ramesh Singh Test : Insurance In India - Question 6

(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).

Ramesh Singh Test : Insurance In India - 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?

Detailed Solution for Ramesh Singh Test : Insurance In India - Question 7
  • 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

Ramesh Singh Test : Insurance In India - 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?

Detailed Solution for Ramesh Singh Test : Insurance In India - Question 8
  • 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.

Ramesh Singh Test : Insurance 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?

Detailed Solution for Ramesh Singh Test : Insurance In India - Question 9
  • 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.

 

 

 

Ramesh Singh Test : Insurance In India - Question 10

Which of the following statements best describe insurance penetration?

Detailed Solution for Ramesh Singh Test : Insurance In India - Question 10 Insurance penetration is defined as the ratio of premium underwritten in a given year to the gross domestic product (GDP).

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