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  Study Material IC-12-1

LICENTIATE EXAMINATION

INSURANCE BUSINESS ENVIRONMENT IC-12

QUESTION-ANSWERS

Q. 1 Expand the Following:

1. IRDA 2. MACT 3. ESIC 4. CDMA 5. NEER 6. NCLAT

Ans. IRDA : Insurance Regulatory & Development Authority

MACT : Motor Accidents Claims Tribunals

ESIC : Employee State Insurance Corporation CDMA : Code Division Multiple Access

NEER : Nominal Effective Exchange Rate

NCLALT : National Company Law Appellate Tribunal

Q. 2. Answer the following questions:

a. Members of Lice are appointed by…….

b. Owners of undertakings handing hazardous materials are liable to pay compensation under the ………………

c. The level of Government expenditure also have an effect on the economy, through its impact on……………………

d. When the price of one currency is quoted in terms of the numbers of units of the other currency, then it is called……………….

e. The first stock exchange in India was the ……………………….

f. Nowadays, terrorism has become a major…………………………

Ans. . a. Central Government

b. Public Liability Act, 1991

c. Money supply, inflation and interest rates.

d. National Currency Rate

e. Bombay Stock Exchange

f. Peril

Q. 3. Write an explanatory note on ‘Greenshoe option’.

Ans. A recent innovation with regard to IPO under the book building system is what is called the Greenshoe Option. This innovation is meant to introduce price stability in the market, as often the price tends to fall immediately after issue. Under this option, shares, in excess shares include in the public issue, are allocated to one or two lead book runners from among the issue management team. These book runners, called stabilizing agents are expected to use these allotments in order to transact in the market and influence the price. The share will be returned when the prices stabilize.

Q.4. Why the organizations should have proper Filing System? What are the essentials of good filing system?

Ans. The efficiency of records department depends on the speed with which the relevant data can be retrieved. This depends on the filing system adopted by the organization. The basic operations involved in filing are receipt of data and arranging them with indicators as to where they are stored. A proper system of filing will make the job of retrieval that much easier. The essentials of good filing system are:

i. Compactness: Space is costly. Space must be taken up unnecessarily.

ii. Accessibility: The records field must be readily accessible whenever required.

iii. Simplicity: The filing system must be simple to understand and to operate.

iv. Economy: The filing system must not be very expensive. The costs include the cost of equipment to store, space to keep the equipment, staff to maintain the system, etc.

v. Flexibility: The system adopted must be flexible in capacity so that it can expand with the need of time and changes in the business.

vi. Cross Reference: This must be considered while indexing, so that a document can be found under different headings.

vii. Maintenance: There must be a constant effort to destroy records, which are not relevant any more.

viii. Out Guides: These must be placed to show why a file is not available in its normal location. It may have been taken out for some work to be done on it.

ix. Classification: The most suitable method of classification should be adopted so that requisite file or record could be identified easily.

x. Error Detection: the system should not allow any mistake to creep in. even if mistakes are committed, the system should be able to detect it immediately.

Any system equipped with above features is the most suitable system for proper filing.