IRDAI Assistant Manager Insurance and Management (Specialist Stream) Syllabus

Insurance and Management (Specialist Stream) syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Insurance and Management (Specialist Stream) in IRDAI Assistant Manager, not a summary of it.

1. 1

   Principles of Insurance

   4 topics

   • Concept, Nature and Functions of Insurance
   • Fundamental Principles
     • Utmost good faith and insurable interest
     • Indemnity, subrogation and contribution
     • Proximate cause
   • Risk and Risk Management
   • Reinsurance and Co-insurance
2. 2

   Life and General Insurance

   5 topics

   • Life Insurance Products and Annuities
   • Health Insurance and Third Party Administrators
   • Motor, Fire, Marine and Miscellaneous Insurance
   • Underwriting and Claims Management
   • Actuarial Concepts and Premium Determination
3. 3

   Insurance Regulation and Law

   4 topics

   • Insurance Act 1938 and IRDAI Act 1999
   • IRDAI Regulations, Guidelines and Circulars
   • Policyholder Protection and Grievance Redressal
     • Insurance Ombudsman and Bima Lokpal
   • Distribution Channels and Intermediaries
4. 4

   Management Principles

   4 topics

   • Functions of Management and Organisational Behaviour
   • Motivation, Leadership and Communication Theories
   • Human Resource and Marketing Management
   • Corporate Governance and Business Ethics

Insurance and Management (Specialist Stream) flashcards for IRDAI Assistant Manager

22 of 74 cards from the Insurance and Management (Specialist Stream) deck — real questions with worked answers.

1. Define insurance.

   A contract (policy) in which an insurer agrees, for a consideration called the premium, to indemnify or pay the insured a defined sum on the happening of a specified uncertain event. It is a mechanism for transferring and pooling risk among many exposed to similar perils.

2. What is the basic principle behind how insurance works (the pooling concept)?

   The losses of the few are met out of the contributions (premiums) of the many. Risk is pooled across a large number of similar exposures so that the law of large numbers makes aggregate losses predictable.

3. List the primary functions of insurance.

   Primary: risk transfer, creation of a common pool, and equitable premiums (fair contribution). Secondary: loss prevention, capital/credit support, and mobilisation of savings/investment. Indirect: economic growth, social security, and foreign-exchange earnings.

4. Distinguish a 'peril' from a 'hazard' in insurance.

   A peril is the cause of a loss (e.g., fire, theft, accident). A hazard is a condition that increases the likelihood or severity of loss from a peril (e.g., storing petrol increases fire hazard).

5. Name the three types of hazard.

   Physical hazard (tangible conditions, e.g., faulty wiring), moral hazard (insured's dishonesty/intent, e.g., arson for claim), and morale hazard (carelessness or indifference because one is insured).

6. What are the seven fundamental principles of insurance?

   Utmost good faith (uberrimae fidei), insurable interest, indemnity, subrogation, contribution, proximate cause, and loss minimisation (mitigation).

7. What does the principle of utmost good faith (uberrimae fidei) require?

   Both parties must voluntarily disclose all material facts accurately, even if not asked. A material fact is one that would influence a prudent underwriter's decision to accept the risk or set the premium.

8. Define insurable interest and state when it must exist for life and for general insurance.

   Insurable interest is the legal right to insure arising from a financial relationship recognised by law where the insured benefits from the subject's safety and suffers from its loss. In life insurance it must exist at inception of the policy; in general (property) insurance it must exist both at inception and at the time of loss; in marine insurance, only at the time of loss.

9. State the principle of indemnity.

   The insured is restored to the same financial position as before the loss, no better and no worse. It prevents profiting from insurance and applies to general insurance, not to life or personal accident (which are 'benefit/contingency' policies).

10. Define subrogation.

    After indemnifying the insured, the insurer steps into the insured's legal rights to recover the loss from a responsible third party. It supports indemnity by preventing the insured from recovering twice.

11. Define the principle of contribution.

    Where the same risk is insured under more than one policy, each insurer shares the loss rateably in proportion to the sum insured. It prevents the insured from collecting the full loss from each policy.

12. What is the principle of proximate cause (causa proxima)?

    The loss is attributed to the nearest/dominant effective cause in the chain of events, not the remote one. The insurer is liable only if the proximate cause is an insured peril.

13. Differentiate risk, peril, and hazard succinctly.

    Risk = uncertainty of loss/the chance an adverse event occurs; Peril = the actual cause of loss; Hazard = condition increasing the chance or size of loss.

14. Distinguish pure risk from speculative risk and state which is insurable.

    Pure risk involves only the possibility of loss or no loss (e.g., fire, death) and is insurable. Speculative risk carries the chance of loss, no change, OR gain (e.g., gambling, investment) and is generally NOT insurable.

15. Differentiate a fundamental risk from a particular risk.

    Fundamental risks affect large groups or society at large and are impersonal in origin (e.g., earthquakes, wars, inflation). Particular risks affect individuals and are personal in origin (e.g., a single car theft). Particular risks are typically more insurable.

16. What are the main techniques of risk management?

    Risk avoidance, risk control/reduction (loss prevention and minimisation), risk retention (self-insurance/deductibles), and risk transfer (insurance and contractual transfer).

17. List the steps in the risk management process.

    1) Risk identification, 2) Risk evaluation/analysis (frequency and severity), 3) Selecting the risk-handling technique, 4) Implementing the chosen technique, and 5) Monitoring and review.

18. In the frequency/severity risk matrix, which technique fits high-severity, low-frequency risks?

    Risk transfer (insurance) is ideal for low-frequency, high-severity risks. High-frequency/high-severity is usually avoided; low/low is retained; high-frequency/low-severity is controlled or retained.

19. Define reinsurance.

    Insurance purchased by an insurer (the cedant) from another insurer (the reinsurer) to transfer part of its assumed risk, increasing underwriting capacity and stabilising results. It is 'insurance for insurers'.

20. Distinguish facultative from treaty reinsurance.

    Facultative reinsurance covers a single, specific risk negotiated individually (optional for both parties). Treaty reinsurance is an automatic agreement covering a whole class/portfolio of risks under pre-agreed terms.

21. Distinguish proportional from non-proportional reinsurance, giving examples.

    Proportional: reinsurer shares premiums and losses in a fixed proportion (e.g., quota share, surplus treaty). Non-proportional: reinsurer pays only when losses exceed a retention/threshold (e.g., excess of loss, stop loss).

22. Define co-insurance and how it differs from reinsurance.

    Co-insurance is the sharing of a single large risk among two or more insurers at inception, each directly liable to the insured for its agreed share. Reinsurance is a separate contract between insurers; the original insured has no direct relationship with the reinsurer.

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