IC24 Mock Test Sample 2
The Indian Contract Act and insurance laws define key legal principles such as valid contracts, agency, and assignment. A valid contract requires free consent, competent parties, lawful consideration, and proper communication. Judicial precedents act as an important source of law where statutes are silent. Insurance concepts include group insurance conditions, assignment types, warranties, and insurable interests. Laws like FEMA (1999) and PMLA regulate financial transactions and money laundering. Section 80C provides tax deductions, while Section 4 of PMLA prescribes penalties. Money laundering involves stages like layering. Endowment plans provide maturity benefits. Free consent is essential, and factors like coercion or fraud invalidate agreements.
1. Under which Section of the Act, any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent?
a) Section 183
b) Section 184
c) Section 185
d) Section 186
2. Section 10 of the Indian Contract Act states that all agreements are contracts if they are:
a) Made by free consent
b) Parties competent to contract
c) For a lawful consideration
d) All of the above
3. Which is an important source of law and serves as guidelines to deal with incidents in the absence of law?
a) Instance
b) Judicial precedents
c) Antecedent
d) None of these
4. Which of the following is the conditions for group insurance coverage?
a) Purpose of the group
b) Continued existence
c) Member selection
d) All of the above
5. Patents will be classified under what type of property?
a) Corporeal
b) Intellectual
c) Tangible
d) Movable
6. Which of the below option is true with regards to MWP Act cases?
Statement I: Death claims are settled in favour of nominees
Statement II: Death claims are settled in favour of trustees
a) I is true
b) II is true
c) Both I and II are true
d) Neither I nor II is true
7. Deduction from income shall be allowed under Section 80C of the Act of an amount up to ___________ paid or deposited in the previous year.
a) Rs. 1,50,000
b) Rs. 2,00,000
c) Rs. 5,00,000
d) Rs. 10,00,000
8. Punishment of Money Laundering Section 4 provides for rigorous imprisonment for a term of ___________ years and fine extending to __________ rupees.
a) 5 years and 5 lakhs
b) 3 to 10 years and 5 lakhs
c) 3 to 5 years and 10 lakhs
d) 8 years and 8 lakhs
9. In the process of Money Laundering, at which stage money undergoes a series of transactions so as to appear to have been received from legitimate sources?
a) Placement
b) Layering
c) Integration
d) None of these
10. The most important source of law in modern times is the _____________ i.e. the laws that are enacted by the Legislature.
a) Statute Book
b) Ancient Indian law
c) Srutis
d) Smritis
11. As per the recommendations of the committee on reforms in insurance sector, who has been asked to evolve a course suitable for the agency profession leading to diploma in life insurance salesmanship?
a) National Insurance Academy (NIA)
b) Insurance Regulatory and Development Authority (IRDA)
c) Insurance Institute of India (III)
d) Indian Institute of Risk Management (IIRM)
12. Under Section 38 of the Insurance Act, Assignment are classified into how many types?
a) One
b) Two
c) Three
d) Four
13. An absolute assignment, which is in writing, is a ________________. It takes effect from the date of notice to the insurer and enables the assignee to sue in his own name and to give a valid discharge.
a) Equitable assignment
b) Conditional assignment
c) Statutory assignment
d) None of these
14. A ________ in an insurance policy corresponds with a condition in any other contract, and a breach of it entitles the aggrieved party to repudiate all liability under the contract.
a) Representation
b) Consent
c) Warranty
d) None of these
15. The Foreign Exchange Management Act (FEMA) was passed in _________.
a) 1995
b) 1991
c) 1999
d) 1973
16. In which plans does the insurance company pay the life assured the promised sum assured and accumulated bonuses at the end of the tenure?
a) Money back plan
b) Return of Premium (ROP) plans
c) Annuities
d) Endowment and whole life plans
17. A contract of wager is void but not illegal. Say whether True or False.
a) True
b) False
18. Consent is not free when caused by:
a) Coercion
b) Undue influence
c) Fraud
d) All of these
19. In the US, who is the legal agent of the insured and does not have the same powers as a local agent although operating at the same level?
a) General agents
b) Soliciting agents
c) Brokers
d) None of these
20. Which of the below is an essential element of a contract?
a) There should be no consideration
b) The promisor and promise should be a major
c) There should be proposal, acceptance and communication
d) There should not be consensus ad idem
