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IC-38 Corporate Agent / SP study materials
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IC-38 Corporate Agent / SP practice questions

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Question 1Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Under the IC-38 corporate agent training requirements, what is the minimum number of hours of practical training an individual must complete before appearing for the corporate agent examination?

  1. 25 hours
  2. 50 hours Correct answer.
  3. 100 hours
  4. 75 hours

Explanation

Candidates attached to a corporate agent are required to complete a minimum of 50 hours of practical training in life, general, or health insurance as applicable before being permitted to appear for the IC-38 examination. This training requirement ensures baseline product and regulatory knowledge.

Question 2Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

The IC-38 examination is conducted by which body as the designated certification authority for insurance agents in India?

  1. National Stock Exchange
  2. Insurance Institute of India Correct answer.
  3. Institute of Chartered Accountants of India
  4. Securities and Exchange Board of India

Explanation

The Insurance Institute of India is the body that designs and conducts the IC-38 online examination for corporate agents and their specified persons. It functions under the framework laid down by the insurance regulator.

Question 3Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

For a corporate agent, who is required to pass the IC-38 examination in order to be authorised to solicit insurance business?

  1. Only the directors of the corporate agent company
  2. Only the compliance officer of the corporate agent
  3. Every specified person engaged in solicitation on behalf of the corporate agent Correct answer.
  4. Only the principal officer of the corporate agent

Explanation

A corporate agent must ensure that each specified person who solicits or procures insurance business on its behalf holds a valid certification by passing the IC-38 examination. The principal officer is separately responsible for overall compliance but the certification obligation extends to all soliciting personnel.

Question 4Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

What is the validity period of the certificate of an insurance agent, including a specified person of a corporate agent, after which renewal is required?

  1. Three years Correct answer.
  2. One year
  3. Five years
  4. Two years

Explanation

The certificate of registration issued to an insurance agent is valid for three years from the date of issue. Renewal must be applied for before expiry to continue soliciting business lawfully.

Question 5Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which document must a corporate agent obtain from a prospect before recommending or selling an insurance policy, and which records the prospect's needs and suitability?

  1. Know your customer form
  2. Customer information sheet
  3. Needs analysis and suitability assessment form Correct answer.
  4. Beneficiary nomination form

Explanation

Before recommending a product, the corporate agent must carry out a documented needs analysis and suitability assessment for the prospect. This record evidences that the recommendation was appropriate to the prospect's circumstances and requirements.

Question 6Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent's licence is granted by which authority?

  1. The Ministry of Corporate Affairs
  2. The Insurance Regulatory and Development Authority of India Correct answer.
  3. The Insurance Institute of India
  4. The insurer with whom the corporate agent has an agreement

Explanation

Corporate agents must be licensed by IRDAI, the insurance regulator, before they can solicit or procure insurance business for any insurer. The insurer agreement is a separate commercial arrangement and does not itself confer the licence.

Question 7Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

In the context of the IC-38 examination, what does the term 'specified person' refer to?

  1. An individual employed or appointed by a corporate agent who solicits and procures insurance business on its behalf Correct answer.
  2. A surveyor appointed to assess a claim
  3. A person nominated by the policyholder to receive the policy proceeds
  4. An officer of the insurer who underwrites risks

Explanation

A specified person is an individual engaged by a corporate agent to solicit and procure insurance business on its behalf, and such a person must meet the certification and training requirements. The term does not refer to policy beneficiaries, underwriters, or surveyors.

Question 8Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which of the following best describes the mode of delivery of the IC-38 examination for corporate agents?

  1. A written descriptive paper evaluated manually
  2. A group discussion followed by an interview
  3. A viva voce conducted by the insurer
  4. An online computer-based test with objective questions Correct answer.

Explanation

The IC-38 examination is administered as an online, computer-based test consisting of objective multiple-choice questions. Results are generated electronically, allowing the candidate to know the outcome promptly.

Question 9Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent appoints a new employee to solicit life insurance policies. Which action must the corporate agent take before the employee begins soliciting business?

  1. Ensure the employee passes the IC-38 examination and completes the prescribed training Correct answer.
  2. Register the employee with the Ministry of Corporate Affairs
  3. Obtain the insurer's verbal approval for the employee
  4. Obtain a separate licence from IRDAI in the employee's name

Explanation

Every individual who solicits business for a corporate agent must first pass the IC-38 examination and complete the prescribed practical training. Only after certification may the person lawfully solicit insurance business.

Question 10Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent's licence is due to expire in 30 days and the entity has already submitted a complete renewal application. What is the correct position regarding continuation of business?

  1. The corporate agent may continue to solicit business indefinitely without renewal
  2. The corporate agent may continue by paying a penalty after expiry
  3. The corporate agent must stop soliciting business immediately on expiry until renewal is granted
  4. The corporate agent may continue only if renewal is applied for and granted as per the prescribed process before expiry Correct answer.

Explanation

A corporate agent must apply for renewal within the prescribed period before expiry so that the licence remains valid and business can continue lawfully. Continuing to solicit on an expired licence without renewal is a compliance violation.

Question 11Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

While advising a prospect, a specified person of a corporate agent recommends a unit-linked policy without disclosing the applicable charges and the risk that returns are not guaranteed. Which principle has been violated?

  1. The principle of subrogation
  2. The principle of utmost good faith requiring full and fair disclosure to the customer Correct answer.
  3. The principle of indemnity applicable to life insurance
  4. The principle of contribution

Explanation

Utmost good faith requires the agent to make full and fair disclosure of material facts, including charges and the non-guaranteed nature of unit-linked returns, so the customer can make an informed decision. Indemnity, subrogation, and contribution are general insurance doctrines not relevant here.

Question 12Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A customer pays a premium of Rs. 50,000 in cash to a specified person of a corporate agent. What is the correct handling requirement?

  1. The specified person may use the cash to pay commission to other agents
  2. The specified person may retain the cash and remit it monthly
  3. The specified person must issue a proper receipt and remit the amount to the insurer without delay as per prescribed norms Correct answer.
  4. The specified person may deposit the cash in a personal account temporarily

Explanation

Premium collected from a customer must be receipted and remitted promptly to the insurer in accordance with prescribed norms; it is not the agent's money. Retaining, pooling, or diverting premium is a serious breach of conduct.

Question 13Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent wishes to act for two life insurers at the same time. What is the correct position under the corporate agency framework?

  1. A corporate agent may tie up with insurers only after obtaining customer consent for each insurer
  2. A corporate agent may tie up only with general insurers
  3. A corporate agent may tie up with one life insurer, one general insurer, and one health insurer as permitted, subject to the prescribed conditions Correct answer.
  4. A corporate agent may freely tie up with any number of life insurers

Explanation

The corporate agency framework permits a corporate agent to have arrangements with one insurer in each segment, such as one life, one general, and one health insurer, subject to prescribed conditions. Unlimited multiple tie-ups within the same segment are not permitted.

Question 14Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which of the following is an example of mis-selling that a corporate agent must avoid?

  1. Providing a benefit illustration signed by the customer
  2. Assuring guaranteed returns on a unit-linked product where returns are market-linked Correct answer.
  3. Comparing the features of two products at the customer's request
  4. Explaining the exclusions and waiting period of a health policy

Explanation

Assuring guaranteed returns on a market-linked product is a misrepresentation and constitutes mis-selling. Accurate disclosure of exclusions, fair comparison, and documented benefit illustrations are legitimate practices.

Question 15Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

What is the primary purpose of the 'free look period' in a life insurance policy?

  1. To allow the policyholder to review the terms and return the policy for a refund if dissatisfied Correct answer.
  2. To allow the agent to revise the premium after issue
  3. To allow the insurer to cancel the policy at will
  4. To allow the nominee to claim before maturity

Explanation

The free look period gives the policyholder a prescribed window after receiving the policy document to review its terms and return it if dissatisfied, subject to conditions, receiving a refund of premium as per norms. It protects customers from uninformed purchases.

Question 16Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent receives a complaint from a policyholder about a delayed claim settlement. What is the appropriate first step?

  1. Advise the customer to cancel the policy immediately
  2. Promise the customer a settlement amount to calm them
  3. Ignore the complaint as claims are solely the insurer's responsibility
  4. Advise the customer to approach the insurer's grievance redressal mechanism and assist with the complaint Correct answer.

Explanation

The corporate agent should guide the customer to the insurer's grievance redressal process and assist in documenting and escalating the complaint. The agent must not make promises about claim outcomes or discourage the customer from using official channels.

Question 17Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which of the following statements about the 'know your customer' requirement for a corporate agent is correct?

  1. KYC must be completed for every proposal as per the prescribed norms before policy issuance Correct answer.
  2. KYC is required only for unit-linked policies
  3. KYC is required only when a claim arises
  4. KYC is optional for policies below Rs. 1 lakh sum assured

Explanation

KYC verification is mandatory for all proposals in accordance with the prescribed norms and must be completed before the policy is issued. It supports anti-money-laundering compliance and customer identification.

Question 18Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A specified person of a corporate agent signs a proposal form on behalf of an illiterate prospect without recording the prospect's thumb impression or the required attestation. What is the consequence?

  1. The insurer must honour the claim regardless of the defect
  2. The policy is automatically void and premium is forfeited
  3. The proposal is defective and may be rejected or the claim disputed, exposing the agent to disciplinary action Correct answer.
  4. The defect is cured automatically on payment of the first premium

Explanation

Proposal forms must be completed accurately, and where a prospect cannot sign, the prescribed alternative attestation such as a thumb impression must be properly recorded. Non-compliance creates a defective proposal, may lead to rejection or claim disputes, and exposes the agent to disciplinary action.

Question 19Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

What does the term 'cooling-off' or free look period entitle a policyholder to when a policy is purchased through a corporate agent?

  1. A refund of the full premium without any deduction whatsoever
  2. An automatic increase in the sum assured
  3. A waiver of all future premiums
  4. A refund of premium as per prescribed norms if the policy is returned within the free look period Correct answer.

Explanation

Within the free look period the policyholder may return the policy and receive a refund computed as per prescribed norms, which may include deductions for expenses or risk cover. The entitlement is not an unconditional full refund.

Question 20Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent's principal officer is responsible for which of the following?

  1. Personally underwriting every policy issued
  2. Setting the premium rates for the insurer's products
  3. Adjudicating claims on behalf of the insurer
  4. Ensuring overall compliance with the corporate agency regulations and overseeing specified persons Correct answer.

Explanation

The principal officer is the designated individual responsible for the corporate agent's overall compliance with regulatory requirements, including oversight of specified persons and their conduct. Underwriting, pricing, and claim adjudication are functions of the insurer.

Question 21Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which of the following best explains why the IC-38 examination includes a module on insurance law and regulation?

  1. To enable agents to draft legislation for the insurance sector
  2. To permit agents to interpret statutes authoritatively for insurers
  3. To ensure agents understand the legal framework, duties, and penalties so that they conduct business lawfully Correct answer.
  4. To allow agents to represent customers in consumer courts

Explanation

Knowledge of insurance law and regulation equips the agent to understand the statutory duties, prohibited conduct, and penalties, thereby promoting lawful and ethical business practices. Agents do not draft legislation, represent customers in court, or issue authoritative legal interpretations.

Question 22Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent's employee collects premiums in cash, issues a receipt bearing the insurer's name, and then diverts part of the amount to personal use. Which offence is most directly implicated?

  1. Breach of the policy's waiting period
  2. Non-compliance with the nomination requirement
  3. Criminal breach of trust and misappropriation of customer funds Correct answer.
  4. Violation of the sum assured limit

Explanation

Diverting premium collected on behalf of the insurer amounts to criminal breach of trust and misappropriation, attracting both regulatory penalties and criminal liability. The other options concern policy terms, not the handling of funds.

Question 23Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

An insurer terminates its agreement with a corporate agent. What is the correct treatment of policies already sold by that corporate agent?

  1. The policyholders must repay the commission to the insurer
  2. Existing policies continue in force with the insurer and servicing obligations are addressed as per norms Correct answer.
  3. All existing policies are automatically cancelled and premiums refunded
  4. The corporate agent must continue to service the policies without any agreement

Explanation

Termination of the corporate agency agreement does not cancel policies already issued; they remain in force with the insurer, and servicing arrangements are handled as per prescribed norms. Policyholders are not penalised for the agent's exit.

Question 24Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A customer wants to surrender a traditional endowment policy after two years. Which statement correctly reflects the agent's duty?

  1. The agent should explain the surrender value, the loss compared to continuing the policy, and alternatives, and let the customer decide Correct answer.
  2. The agent should refuse to discuss surrender and end the conversation
  3. The agent should promise a higher surrender value than the policy provides
  4. The agent should advise surrender without explaining the financial loss involved

Explanation

The agent must give the customer complete and accurate information about the surrender value, the financial implications of early exit, and possible alternatives such as a paid-up or reduced paid-up policy. The decision must remain with the customer, without misrepresentation.

Question 25Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which combination best reflects the fiduciary nature of a corporate agent's relationship with the customer?

  1. Delegating all advice to the insurer's call centre
  2. Maximising the agent's commission regardless of suitability
  3. Selling only the highest-priced product available
  4. Acting in the customer's best interest, disclosing material facts, and avoiding conflicts of interest Correct answer.

Explanation

A fiduciary relationship obliges the corporate agent to act in the customer's best interest, disclose all material facts, and manage or avoid conflicts of interest such as commission-driven recommendations. Commission maximisation, product pushing, and abdication of advice all breach this duty.

Question 26Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Under the corporate agency regulations, which individual is required to pass the IC-38 examination before a corporate agent can be licensed?

  1. The company secretary of the corporate entity
  2. The statutory auditor of the corporate entity
  3. The specified person who solicits and services insurance business Correct answer.
  4. Every shareholder holding more than ten percent of the entity

Explanation

The corporate agency framework requires the individuals actually engaged in solicitation and servicing of insurance business, known as specified persons, to hold the prescribed qualification including the IC-38 examination. Shareholders, auditors and the company secretary are not solicitation personnel and therefore fall outside this requirement.

Question 27Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which of the following best describes the role of the principal officer of a corporate agent?

  1. To settle claims on behalf of the insurer independently
  2. To personally underwrite and approve each life insurance proposal
  3. To oversee the entity's insurance distribution activity and act as the single point of responsibility Correct answer.
  4. To fix premium rates for the products sold by the corporate agent

Explanation

The principal officer is the designated individual responsible for the corporate agent's insurance distribution activities and for ensuring compliance with the regulator's directions. Underwriting, claim settlement and pricing are functions reserved to the insurer, not to the corporate agent.

Question 28Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A prospective corporate agent is a firm of chartered accountants. Which statement about the eligibility of such an entity to be licensed as a corporate agent is correct?

  1. A firm may be licensed only if it is listed on a recognised stock exchange
  2. Only individuals can be licensed, so no firm can ever become a corporate agent
  3. A firm may be licensed as a corporate agent if it satisfies the eligibility conditions prescribed for corporate agents Correct answer.
  4. A firm may be licensed only if all its partners are licensed individual agents

Explanation

Corporate agency is available to entities such as companies, firms, banks and cooperative societies provided they meet the prescribed eligibility conditions. There is no requirement that every partner hold an individual agent licence, and stock exchange listing is irrelevant to the licence.

Question 29Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

During the IC-38 training, a module explains the concept of 'insurable interest'. Which situation best illustrates insurable interest at the time of taking a life policy?

  1. A person insuring the life of a famous cricketer to gain publicity
  2. A neighbour insuring the life of a person living next door
  3. A creditor insuring the life of a debtor to the extent of the outstanding loan Correct answer.
  4. A journalist insuring the life of a politician to obtain a story

Explanation

Insurable interest in life insurance requires a pecuniary relationship such that the proposer benefits from the continued life of the insured or suffers loss on death. A creditor has such an interest to the extent of the debt, whereas mere fame, proximity or professional curiosity creates no insurable interest.

Question 30Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A specified person of a corporate agent explains a policy to a prospect and states that the premium paid will be invested only in government securities even though the product is a unit-linked plan with an equity component. This conduct amounts to which violation?

  1. An acceptable method of reducing the prospect's risk perception
  2. Misrepresentation of the product's investment nature Correct answer.
  3. A permissible sales illustration of expected returns
  4. A valid explanation of the free look period

Explanation

Describing a unit-linked product with an equity component as wholly invested in government securities is a misrepresentation of material product features. Sales communications must accurately reflect the product's actual investment pattern and risk profile.

Question 31Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which document typically forms the basis of the insurance contract and must be completed truthfully by the proposer?

  1. The insurer's annual report
  2. The agent's visiting card
  3. The proposal form Correct answer.
  4. The corporate agent's licence certificate

Explanation

The proposal form records the information supplied by the proposer and, along with the declaration, forms the basis of the insurance contract. Accuracy in the proposal is essential because the insurer relies on these disclosures when assessing risk.

Question 32Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A policyholder under a unit-linked insurance plan wishes to know how the value of the units is determined. Which statement is correct?

  1. Units are valued at the discretion of the corporate agent selling the policy
  2. Units are valued at a price fixed once at the time of purchase and never revised
  3. Units are valued at the face value of the policy divided by the policy term
  4. Units are valued at the net asset value declared by the insurer on each valuation date Correct answer.

Explanation

In a unit-linked plan the policyholder's fund is expressed in units whose price reflects the net asset value of the underlying fund, declared by the insurer at prescribed intervals. The corporate agent only distributes the product and does not determine unit values.

Question 33Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

In the context of the IC-38 training on ethics, which behaviour best demonstrates the principle of suitability while recommending a product?

  1. Recommending the same product to every prospect for consistency
  2. Recommending the product that offers the highest commission to the intermediary
  3. Recommending a product only because a competitor does not offer it
  4. Recommending a product after assessing the prospect's needs, income and risk appetite Correct answer.

Explanation

Suitability requires matching a recommendation to the customer's identified needs, affordability and risk appetite. Commission-driven or one-size-fits-all recommendations breach the conduct expectations for corporate agents.

Question 34Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which of the following correctly describes the concept of 'proximate cause' as taught in the IC-38 insurance law module?

  1. The dominant and effective cause that sets in motion the chain of events leading to the loss Correct answer.
  2. The cause chosen by the insured in the claim form
  3. The last event in time before the loss occurred
  4. The cause that is most convenient for the insurer to investigate

Explanation

Proximate cause is the dominant, effective cause that initiates the sequence of events producing the loss, and it determines whether the loss is covered. It is not simply the last event in time or a matter of convenience in investigation.

Question 35Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent's specified person receives a cheque towards premium from a prospect. What is the correct handling of this payment?

  1. Remit it to the insurer in accordance with the insurer's prescribed procedure without delay Correct answer.
  2. Deposit it in the corporate agent's own account and use it for business expenses first
  3. Hold it until the policy document is issued to the customer
  4. Deposit it in the specified person's personal account and remit later

Explanation

Premiums collected by a corporate agent are held in a fiduciary capacity and must be remitted to the insurer promptly as per the insurer's prescribed process. Using such funds for personal or business purposes is a serious breach of trust.

Question 36Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which statement about the records a corporate agent must maintain is correct?

  1. Records may be kept only in the memory of the specified person
  2. Records of insurance business transacted must be maintained and made available for inspection as required Correct answer.
  3. Records may be discarded once the commission is received
  4. Records need to be kept only if the customer requests a copy

Explanation

Corporate agents are expected to maintain proper records of the insurance business transacted and to produce them for inspection by the insurer or the regulator on demand. Record-keeping supports accountability and complaint resolution.

Question 37Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A prospect asks a specified person to explain the difference between a participating and a non-participating traditional policy. Which explanation is correct?

  1. A participating policy is always unit-linked, while a non-participating policy is always endowment
  2. A participating policy has no death benefit, while a non-participating policy has one
  3. A participating policy shares in the insurer's surplus through bonuses, while a non-participating policy does not Correct answer.
  4. A participating policy can be issued only to corporate entities

Explanation

Participation refers to the policyholder's right to share in the surplus of the insurer's participating fund, usually through bonuses. Non-participating policies carry benefits fixed at outset and do not receive such surplus distributions.

Question 38Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which of the following is the most appropriate action for a specified person when a prospect's requirements appear to be beyond the products the corporate agent can offer?

  1. Ask the prospect to sign a blank proposal form for later completion
  2. Sell the closest available product without mentioning the limitation
  3. Promise a product feature that the insurer may develop in future
  4. Advise the prospect honestly and, where appropriate, suggest seeking suitable professional guidance Correct answer.

Explanation

Honesty about the scope of available products is part of ethical conduct, and where the need is outside the intermediary's offering the prospect should be guided appropriately. Selling an unsuitable product or making false promises harms the customer and breaches conduct norms.

Question 39Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

What is the principal objective of the training and examination requirement for specified persons under the corporate agency framework?

  1. To replace the insurer's underwriting department
  2. To ensure that persons soliciting insurance understand products, regulations and ethical conduct Correct answer.
  3. To reduce the number of corporate agents in the market
  4. To increase the commission earnings of the corporate agent

Explanation

Training and examination are intended to build competence in product knowledge, regulatory requirements and ethical selling among those who solicit insurance. They are not designed to influence commission, restrict market participants or replace insurer functions.

Question 40Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A specified person is explaining the claim process to a nominee. Which statement correctly reflects the nominee's role in a life insurance policy?

  1. The nominee can alter the sum assured at will
  2. The nominee receives the policy money on the death of the life assured, subject to the policy terms Correct answer.
  3. The nominee becomes the owner of the policy during the policyholder's lifetime
  4. The nominee is responsible for paying future premiums after the policyholder's death

Explanation

A nomination directs the insurer to pay the policy proceeds to the nominated person on the death of the life assured, subject to the terms of the policy and applicable law. The nominee does not become the owner during the lifetime of the policyholder nor acquire rights to vary the sum assured.

Question 41Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent's specified person wants to display promotional material about an insurer's product. Which practice is correct?

  1. Create custom material with higher projected returns to attract customers
  2. Circulate handwritten notes promising guaranteed high returns
  3. Use only sales literature approved by the insurer and avoid unauthorised modifications Correct answer.
  4. Compare returns with bank deposits without any disclaimer

Explanation

Sales material used by a corporate agent must be that approved by the insurer, and intermediaries should not alter it or create unauthorised projections. Customised material with inflated returns or unqualified comparisons misleads customers.

Question 42Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which of the following best explains the term 'renewal' in the context of an insurance policy?

  1. The continuation of cover for a further period on payment of premium as per policy terms Correct answer.
  2. The insurer's right to cancel the policy at any time
  3. The transfer of the policy to another insurer
  4. The reduction of the sum assured after each claim

Explanation

Renewal refers to continuation of the insurance cover for a further term, typically on payment of the renewal premium within the allowed period and subject to the policy conditions. It is distinct from cancellation, assignment or claim-related reduction.

Question 43Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A customer has a grievance about the conduct of a specified person of a corporate agent. Which sequence of escalation is most appropriate?

  1. Raise it with the corporate agent and the insurer's grievance redressal machinery before approaching the Ombudsman Correct answer.
  2. Approach the Insurance Ombudsman first and then the insurer
  3. File a police complaint immediately without informing the insurer
  4. Ignore the grievance because intermediaries are outside the complaint system

Explanation

Grievances should first be raised with the corporate agent and the insurer's grievance redressal mechanism; if unresolved within the prescribed period, the policyholder may approach the Insurance Ombudsman. Skipping the insurer or ignoring the grievance is not the correct route.

Question 44Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which statement correctly distinguishes an agent from a corporate agent under the insurance distribution framework?

  1. An agent is licensed as an individual while a corporate agent is a licensed entity acting through specified persons Correct answer.
  2. An agent represents the policyholder while a corporate agent represents the insurer
  3. A corporate agent can sell only motor insurance while an agent sells life insurance
  4. A corporate agent does not need any licence while an agent does

Explanation

An individual agent is licensed in a personal capacity, whereas a corporate agent is an entity licensed to distribute insurance and acts through qualified specified persons. Both act on behalf of the insurer and both require licensing.

Question 45Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

In a unit-linked policy, a customer asks what happens to the fund value if the policy is discontinued after the lock-in period. Which statement is correct?

  1. The fund value is payable to the policyholder as per the policy terms applicable on discontinuance Correct answer.
  2. The entire fund value is forfeited to the insurer
  3. The fund value is held indefinitely without any option to the policyholder
  4. The fund value is transferred to the corporate agent as commission

Explanation

On discontinuance after the lock-in period, the policyholder is entitled to the fund value in accordance with the policy terms, which may include payment or continuation in a prescribed manner. Forfeiture of the entire fund or payment to the intermediary is not permitted.

Question 46Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A specified person notices that a prospect has a serious pre-existing illness but the prospect wants to omit it from the proposal form. What is the correct course of action?

  1. Advise the prospect to take the policy from a different insurer
  2. Sign the proposal as a witness without recording the illness
  3. Help the prospect omit the illness to ensure issuance of the policy
  4. Explain that full and accurate disclosure is required and that non-disclosure can lead to claim rejection Correct answer.

Explanation

Material facts, including pre-existing illness, must be disclosed truthfully because the insurer assesses risk on the basis of the proposal. Assisting in non-disclosure is a breach of duty and can result in repudiation of the claim.

Question 47Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which of the following best reflects the concept of 'utmost good faith' in insurance?

  1. The intermediary may withhold facts that reduce the chance of a sale
  2. Good faith applies only after a claim is filed
  3. Both parties must disclose all material facts relevant to the risk honestly and completely Correct answer.
  4. The insurer alone must disclose all facts while the proposer need not

Explanation

Insurance is a contract of utmost good faith, requiring both the proposer and the insurer to disclose material facts fully and honestly. The duty exists from the outset and is not confined to the intermediary or to the claim stage.

Question 48Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent is asked by a customer to explain why the premium for a term plan is lower than that for an endowment plan of the same sum assured. Which explanation is most accurate?

  1. A term plan is cheaper because it provides no death benefit
  2. A term plan is cheaper because it is always sold without commission
  3. A term plan is cheaper because the insurer does not assess risk
  4. A term plan pays only on death during the term, while an endowment plan combines protection with a maturity benefit Correct answer.

Explanation

A term plan provides pure risk cover and pays only if death occurs during the term, so the premium is relatively low. An endowment plan includes both protection and a savings element payable on maturity, which raises the premium.

Question 49Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

Which statement about the handling of customer information by a corporate agent's specified person is correct?

  1. Customer data may be sold to third parties without consent
  2. Confidentiality applies only to high-value policies
  3. Personal and financial information must be kept confidential and used only for the purpose for which it was collected Correct answer.
  4. Personal data may be shared freely with other customers as marketing material

Explanation

Customer information collected during the insurance process is confidential and must be protected and used only for the intended purpose. Sharing, selling or misusing personal data without consent violates privacy and conduct expectations.

Question 50Corporate Agent IC-38 Study Material / Online Training and Examination (as published by Insurance Institute of India)

A corporate agent's specified person is unsure whether a particular claim is payable and tells the claimant that the insurer will definitely reject it. Which principle of conduct is being violated?

  1. The principle of maintaining accurate and fair communication with customers Correct answer.
  2. The principle of avoiding written communication
  3. The principle of maximising the intermediary's commission
  4. The principle of discouraging claims to protect insurer profits

Explanation

Intermediaries must communicate accurately and fairly and should not predict or influence claim outcomes without basis, since claim assessment is the insurer's function. Discouraging a valid claim or making unfounded assurances breaches fair conduct.