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Superannuation and Retirement Applications (SRA) — Actuaries Institute Fellowship Program

Practice Questions100 questions

2026 Statistics

Key Facts: General Insurance Applications (GIA) Exam

3 hours

Exam Duration

Actuaries Institute

$3,800 AUD

2026 Subject Fee

Actuaries Institute Fee Schedule

Syllabus Areas

AIA GIA Syllabus

GPS 340

Key APRA Standard

APRA Prudential Framework

100

Practice Questions

OpenExamPrep

General Insurance Applications (GIA) is one of four Applications subjects in the Actuaries Institute Fellowship Program, delivered 100% online over a 16-week semester. It is assessed by an open-book written examination of three hours plus 15 minutes reading time worth 80% and an assignment worth 20%, with a 2026 subject fee of $3,800 AUD; no item count and no pass mark are published, and results are set each semester by the Board of Examiners. The official syllabus states the relative study effort as 20% commercial operations and the Appointed Actuary, 35% commercial, legislative, regulatory and professional environment, and 45% the actuarial control cycle applied to valuations, reinsurance, capital and risk management. These 100 free questions are an English-language multiple-choice study adaptation of that syllabus — not an official item bank and not a simulation of the real written-answer paper.

Sample General Insurance Applications (GIA) Practice Questions

Try these sample questions to test your General Insurance Applications (GIA) exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under APRA Prudential Standard GPS 340 (Insurance Liability Valuation), what is the REQUIRED statistical standard for determining the risk margin applied to the central estimate of net outstanding claims liabilities for regulatory capital reporting?

A.The risk margin must be determined so that the total provision provides at least a 75% probability of sufficiency

B.The risk margin must equal a flat 10% loading across all classes of general insurance business

C.The risk margin must be calibrated to a 99.5% Value at Risk standard over a 1-year horizon

D.The risk margin is optional if the insurer maintains an A+ credit rating from Standard & Poor's

Explanation: APRA GPS 340 mandates that for calculating regulatory capital and net insurance liabilities, the valuation must include a central estimate plus an explicit risk margin calibrated to achieve at least a 75% probability of sufficiency (75% POD).

2Under Actuaries Institute Professional Standard PS 302 (Valuation of General Insurance Claims), what is the definition of a 'Central Estimate' of outstanding claims liabilities?

A.The expected value (statistically unbiased mean) of the distribution of potential future claim settlement outcomes

B.The 50th percentile (median) value of the empirical claims distribution

C.The most conservative upper bound estimate intended to guarantee solvency

D.The total undiscounted historical cumulative paid claims to date

Explanation: Professional Standard PS 302 defines the central estimate as the expected value (unbiased mean) of the distribution of potential claims liability outcomes, containing no deliberate bias towards conservatism or optimism.

3In Australian general insurance reserving, 'Superimposed Inflation' is defined as:

A.The tendency for claims costs to increase at a rate faster than standard wage or consumer price inflation, driven by legal, court, medical, and technological factors

B.The headline Consumer Price Index (CPI) published quarterly by the Australian Bureau of Statistics (ABS)

C.The interest rate penalty charged by APRA on deficient capital reserves

D.The annual increase in reinsurance brokerage commission rates

Explanation: Superimposed inflation refers to the growth in average claim costs over and above normal economic inflation (CPI/AWE), caused by expanding judicial interpretations, higher court awards, advances in medical treatment technology, and legislative changes.

4Which of the following Australian insurance lines of business is classified as a 'Long-Tail' class?

A.Compulsory Third Party (CTP) Motor Bodily Injury Insurance

B.Comprehensive Private Motor Vehicle Comprehensive Property Damage

C.Home and Contents Property Insurance

D.Marine Cargo Transit Insurance

Explanation: Long-tail classes involve claims that take several years or decades to be reported, develop, and settle. In Australia, CTP bodily injury, Workers' Compensation, and Public/Product Liability are classic long-tail lines with significant superimposed inflation and IBNR development.

5Under the Chain Ladder (development factor) claims reserving method, the age-to-age development factor f_(j) is calculated as:

A.sum_i (C_(i, j+1)) / sum_i (C_(i, j)), summing over all accident years i available for development periods j and j+1

B.The arithmetic average of premiums written divided by claims paid

C.The ratio of final year claims divided by initial year earned premiums

D.The difference between total incurred losses and paid losses

Explanation: The standard volume-weighted Chain Ladder development factor f_j calculates the ratio of cumulative claims in development period j+1 to period j across all historical accident years: f_j = sum(C_(i, j+1)) / sum(C_(i, j)).

6An actuary estimates ultimate claims for Accident Year 2025 using the Bornhuetter-Ferguson (B-F) method. Earned premium is AUD 20,000,000, the prior expected loss ratio is 65%, and cumulative paid claims to date are AUD 3,500,000. If the cumulative paid development factor to ultimate is 2.50, what are the estimated ultimate claims?

A.AUD 11,300,000

B.AUD 13,000,000

C.AUD 8,750,000

D.AUD 16,500,000

Explanation: The B-F method calculates Ultimate = Cumulative Paid + Prior Expected Losses × (1 - 1 / f). Initial expected losses = 65% × AUD 20,000,000 = AUD 13,000,000. Proportion of losses unpaid = 1 - 1 / 2.50 = 1 - 0.40 = 0.60. Expected unpaid claims = 0.60 × AUD 13,000,000 = AUD 7,800,000. Ultimate Claims = Paid (AUD 3,500,000) + Unpaid (AUD 7,800,000) = AUD 11,300,000.

7Why is the Bornhuetter-Ferguson method generally preferred over the pure Chain Ladder method for the most RECENT accident years in long-tail lines of business?

A.Chain Ladder projections are volatile and sensitive to small random fluctuations when percentage emerged is low, whereas B-F stabilizes estimates by anchoring to an a priori expected loss ratio

B.Chain Ladder cannot be computed when interest rates are positive

C.B-F guarantees zero underwriting loss under all circumstances

D.APRA strictly bans the Chain Ladder method for all Australian general insurers

Explanation: In recent accident years, only a small fraction of losses has emerged (e.g. 10%). Chain Ladder multiplies actual small numbers by large factors (e.g. 10.0), amplifying random noise. B-F blends actual emergence with an independent prior expectation, providing stability.

8Under APRA CPS 320 (Actuarial and Related Matters), what is the role of the 'Appointed Actuary' of a general insurer regarding the Financial Condition Report (FCR)?

A.The Appointed Actuary must prepare an FCR at least annually that assesses the insurer's current and projected financial condition, capital adequacy, and business risks over a 3-year planning horizon

B.The Appointed Actuary must personally audit all daily corporate credit card expenses

C.The Appointed Actuary is required to approve all individual retail insurance policy cancellations

D.The Appointed Actuary is responsible for setting customer advertising campaigns

Explanation: APRA CPS 320 (which replaced GPS 320 from 1 July 2019 and applies across general, life and private health insurers) requires every general insurer to have an Appointed Actuary who annually assesses the insurer's financial condition and prepares an FCR, which the insurer must submit to APRA. The FCR evaluates financial condition, underwriting, pricing, reinsurance adequacy, asset-liability matching and capital adequacy over the business planning horizon.

9Under accounting standard AASB 17 (Insurance Contracts), which measurement model is typically permitted as a simplified approach for short-duration general insurance contracts (e.g. 1-year home and motor policies)?

A.Premium Allocation Approach (PAA)

B.General Measurement Model (GMM / Building Block Approach)

C.Variable Fee Approach (VFA)

D.Historical Cost Model

Explanation: AASB 17 allows the Premium Allocation Approach (PAA) as a simplification for contracts with a coverage period of one year or less (or where the PAA reasonably approximates the General Measurement Model), which applies to most standard general insurance policies.

10Under AASB 17, how are claims incurred on general insurance policies (including long-tail claims) measured on the balance sheet?

A.As the Liability for Incurred Claims (LIC), comprising the present value of future cash flows (discounted best estimate) plus an explicit Risk Adjustment for non-financial risk

B.As an unearned premium reserve with zero discounting

C.As the undiscounted cumulative historical paid claims minus salvage

D.As a static contingency reserve equal to 50% of annual gross written premium

Explanation: Under AASB 17, outstanding claims liabilities are classified as the Liability for Incurred Claims (LIC). LIC equals discounted expected future cash flows plus an explicit Risk Adjustment reflecting compensation the insurer requires for bearing non-financial risk.

About the General Insurance Applications (GIA) Exam

General Insurance Applications (GIA) is an Applications subject in the Actuaries Institute Fellowship Program. It applies the principles taught in the General Insurance and Health Valuation (GIHV) and Pricing and Portfolio Analytics (GIHPPA) Principles subjects to the Australian general insurance context, covering how an Australian general insurer operates, the commercial, legislative, regulatory and professional environment, and the actuarial control cycle across valuation, reinsurance, capital and risk management, including compulsory injury compensation schemes.

Assessment

Open-book written examination (3 hours plus 15 minutes reading time) worth 80% plus a written assignment worth 20%, per the 2026 GIA subject syllabus. Assessment is delivered 100% online.

Time Limit

3 hours plus 15 minutes reading time

Passing Score

not-published

Exam Fee

$3,800 AUD (2026 Fellowship Program subject fee, GST exempt) (Actuaries Institute (Australia))

General Insurance Applications (GIA) Exam Content Outline

20%

Australian general insurance commercial operations and markets

Analyse the Australian insurance industry, product characteristics across short-tail and long-tail lines, underwriting cycles, claims management, and the statutory obligations of the Appointed Actuary.

35%

Legislative, regulatory, and APRA prudential frameworks

Apply the Insurance Act 1973, APRA Prudential Standards (GPS 110 Capital Adequacy, GPS 114 Asset Risk Charge, GPS 115 Insurance Risk Charge, GPS 116 Insurance Concentration Risk Charge, GPS 117 Asset Concentration Risk Charge, CPS 320 Actuarial and Related Matters, GPS 340 Insurance Liability Valuation), Actuaries Institute Professional Standards (PS 102 Financial Condition Report, PS 103 Actuarial Review, PS 302 Valuations of General Insurance Claims), AASB 17, and Australian injury compensation schemes (CTP and workers' compensation).

45%

Actuarial control cycle in valuation, reinsurance, capital, and risk management

Perform policy liability valuations, determine central estimates and risk margins at a 75% probability of sufficiency, prepare an Actuarial Valuation Report and a Financial Condition Report under CPS 320, apply the Actuarial Advice Framework, design reinsurance programs, and construct capital targets and ICAAP reporting.

How to Pass the General Insurance Applications (GIA) Exam

What You Need to Know

Passing score: not-published
Assessment: Open-book written examination (3 hours plus 15 minutes reading time) worth 80% plus a written assignment worth 20%, per the 2026 GIA subject syllabus. Assessment is delivered 100% online.
Time limit: 3 hours plus 15 minutes reading time
Exam fee: $3,800 AUD (2026 Fellowship Program subject fee, GST exempt)

Keys to Passing

Work through all 100 available questions
Review every answer and explanation
Track weak areas and revisit them
Use our AI tutor for tough concepts

General Insurance Applications (GIA) Study Tips from Top Performers

1Know the difference between the accounting balance sheet under AASB 17 and APRA regulatory capital under GPS 110/GPS 340.

2Understand the calculation of central estimate vs. risk margin for APRA's 75% probability of sufficiency requirement under GPS 340.

3Be familiar with the reports CPS 320 requires of the Appointed Actuary: the Actuarial Valuation Report (AVR) and the Financial Condition Report (FCR). The pre-2019 'Insurance Liability Valuation Report' terminology is retired.

4Study Australian statutory classes (CTP, Workers' Compensation) and their legislative benefit design, inflation indexing, and long-tail settlement patterns.

Frequently Asked Questions

What is the assessment structure for the GIA subject?

The 2026 subject syllabus states GIA is assessed by an open-book written examination of three hours plus 15 minutes reading time worth 80% of the mark, and an assignment worth 20%. Both are delivered online through Canvas.

What are the key APRA standards examined in GIA?

Key standards include GPS 110 (Capital Adequacy), CPS 320 (Actuarial and Related Matters, which sets the Appointed Actuary role, the Actuarial Advice Framework, the Actuarial Valuation Report and the Financial Condition Report), GPS 340 (Insurance Liability Valuation), and Actuaries Institute Professional Standards PS 102, PS 103 and PS 302.

How does AASB 17 affect the Australian general insurance actuarial valuation?

AASB 17 replaced AASB 1023, introducing the General Measurement Model (GMM) and Premium Allocation Approach (PAA), requiring distinct measurement of the Liability for Incurred Claims (LIC) with explicit Risk Adjustments.

What is the fee for the AIA General Insurance subject in 2026?

The subject enrolment and examination fee is $3,800 AUD in 2026 (GST-exempt).

Are these practice questions the same format as the official exam?

No. The official GIA paper requires extended written answers, calculations and case-study analysis. This bank is an English-language multiple-choice study adaptation of the official syllabus, built to drill the Australian regulation, valuation methods and judgement the paper assumes. It is not an official item bank and does not replace practising extended written answers.