IC26 Mock Test Sample 8
Actuarial valuation ensures an insurer can meet future claims and expenses. LIC budgeting differs as long-term plans focus on enterprise objectives (3 years), while short-term plans focus on annual performance targets. A rise in OER indicates excess expenses. Tax is a government levy on income, goods or activity. Money back policies give periodic lump sums. BRS reconciles cash book and pass book. Updated designated lists help prevent money laundering. FX shortfall is adjusted via policy deposit account. TDS is debited to Income-Tax Deducted A/c. Cash flow includes loan repayment and rights issue. Mediclaim under 80D covers self and spouse. Human resource valuation uses discounted wages model. Endowment pays on maturity or death. Acquisition costs are expensed as incurred.
Q1. What is the significance of Actuarial Valuation for life insurance policies?
A) It determines the investment potential of the policies
B) It calculates the premium for each policy
C) It ensures that the insurer can meet all future claims and expenses
D) It assesses the policyholder's creditworthiness
Q2. Difference between long-term and short-term plans in LIC budgeting?
A) Long-term plans focus on branch office profiles, while short-term plans are for performance
B) Long-term plans cover 3 years, short-term 1 year
C) Long-term plans involve selecting enterprise objectives, short-term focus on performance targets
D) Long-term plans reduce admin cost, short-term increase profit
Q3. Increase in Overall Expense Ratio (OER) indicates
A) Improved operational efficiency
B) Decrease in premium
C) Increase in deposits
D) Excess provision of expenses
Q4. Definition of tax is
A) Fee charged by individuals on personal income
B) Fee charged by government on product, income, or activity
C) Fee charged on goods/services
D) Fee charged on corporate income
Q5. Money back policy feature
A) Lump sum benefit at periodic intervals
B) Convert to endowment after 5 years
C) Premium ceases at age 70
D) Maximum insurance protection immediately
Q6. Purpose of Bank Reconciliation Statement
A) Calculate bad debts
B) Record interest
C) Reconcile cash book and pass book
D) Determine doubtful debts
Q7. Updated list of designated individuals/entities is maintained to
A) Identify beneficial owner
B) Determine true identity of customers
C) Establish ownership
D) Verify insurance policy holding
Q8. Shortfall due to forex rates is adjusted through
A) Discounted premium deposit
B) Policy deposit account
C) “X” charge created on policy
D) Premium forfeiture
Q9. TDS on commission payment is debited to
A) Commission on Reinsurance Accepted A/c
B) Income-Tax Deducted A/c
C) Bank Account
D) Commission on First Premium A/c
Q10. Items in cash flow statement include
A) 1, 2 and 3
B) 1, 2 and 4
C) 2, 3 and 4
D) 1 and 4
Q11. Mediclaim deduction under Sec 80D
A) Only 1
B) Only 2
C) Only 1 and 2
D) All 1, 2 and 3
Q12. Shortfall in premiums credited to
A) Long remittance account
B) Short remittance account
C) Policy deposit account
D) Proposal deposit account
Q13. Human resource valuation model based on PV of future earnings
A) Black Scholes model
B) Economic value model
C) Discounted wages model
D) Replacement cost model
Q14. Endowment policy TRUE statements
A) 1 and 4
B) 1 and 2
C) 1, 2 and 3
D) 1, 3 and 4
Q15. Wrong posting on credit instead of debit is
A) Posting on wrong side
B) Omission error
C) Undercasting error
D) Principle error
Q16. Policy loan ledger sheets prepared
A) For each portfolio
B) For each loan
C) Monthly
D) Yearly
Q17. Renewal commission provided on outstanding premiums
A) 2%
B) 5%
C) 7.50%
D) 10%
Q18. Claim payment accounting method
A) Deferral method
B) Accrual method
C) FIFO method
D) Netting method
Q19. Advance deposit is
A) Along with single premium
B) Along with renewal premium
C) Along with proposal form
D) Along with salary saving scheme premium
Q20. Acquisition costs in life insurance
A) Only 1
B) Only 2
C) Only 3
D) Both 1 and 2
