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IAI SA3 General Insurance Specialist Advanced practice questions are available now; exam metadata is being verified.
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2026 Statistics
Key Facts: IAI SA3 Exam
4
Syllabus Domains
SA3 syllabus
35%
Largest Domain Weight
SA3 syllabus
3h 15m
Exam Duration
SA3 format
150%
IRDAI Solvency Control Level
IRDAI regulations
74%
Insurer FDI Cap
Insurance Act 2021
100
Practice Questions
OpenExamPrep
IAI Subject SA3 is the General Insurance Specialist Advanced Fellowship subject of the Institute of Actuaries of India, examined as a written application-style paper of 3 hours 15 minutes focused on the Indian general insurance market. The current syllabus weights general insurance markets, catastrophe modelling and emerging risks most heavily at 35%, reserving, pricing, capital modelling and reinsurance at 30%, financial management, monitoring and strategies at 25%, and the regulatory, legislative and taxation environment at 10%. IAI does not publish a fixed question count or cut score; the pass mark is set each diet. This free prep builds knowledge over 100 MCQs across all four domains.
Sample IAI SA3 Practice Questions
Try these sample questions to test your IAI SA3 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.
1Under IRDAI regulations, every general insurer in India must at all times maintain a control level of solvency expressed as a minimum solvency ratio of:
A.100%
B.120%
C.150%
D.200%
Explanation: The IRDAI (Assets, Liabilities, and Solvency Margin of General Insurance Business) Regulations require insurers to maintain a control level solvency ratio of 150%, i.e. Available Solvency Margin of at least 1.5 times the Required Solvency Margin. Falling below triggers regulatory action.
2In the Indian general insurance solvency framework, the Required Solvency Margin (RSM) for a class of business is determined as:
A.The premium-based RSM1 only
B.The claim-based RSM2 only
C.The higher of the premium-based RSM1 and the claim-based RSM2
D.The lower of RSM1 and RSM2
Explanation: IRDAI computes RSM as the higher of RSM1 (a percentage of gross/net premiums) and RSM2 (a percentage of gross/net incurred claims), subject to the prescribed minimum. Taking the higher figure ensures the margin reflects whichever of volume or experience is more onerous.
3An Indian general insurer reports Available Solvency Margin of Rs 750 crore against a Required Solvency Margin of Rs 500 crore. Its solvency ratio is:
A.67%
B.133%
C.150%
D.250%
Explanation: Solvency ratio = ASM / RSM = 750 / 500 = 1.50, i.e. 150%. This exactly meets the IRDAI control level, leaving no buffer above the minimum, so the appointed actuary would likely flag a need to strengthen capital.
4The Indian Motor Third Party Declined Risk Pool (DR Pool) for commercial vehicle 'Act only' insurance was dismantled with effect from:
A.1 April 2007
B.1 April 2012
C.1 April 2016
D.1 April 2020
Explanation: IRDAI dismantled the Declined Risk Pool from 1 April 2016, after it had replaced the earlier Indian Motor Third Party Pool in 2012. Despite dismantling, insurers must not deny motor third-party cover to any vehicle owner.
5In India, the premium rates for motor third-party (Act only) liability insurance are:
A.Set freely by each insurer through filed rates
B.Determined entirely by the GIC Re reinsurance treaty
C.Notified/regulated by IRDAI rather than freely priced
D.Fixed by the Motor Vehicles Act schedule with no actuarial input
Explanation: Unlike Own Damage (which is risk-rated under File and Use), motor third-party premiums in India are notified/regulated by IRDAI based on actuarial analysis of pooled experience. This reflects the compulsory, unlimited-liability nature of the cover under the Motor Vehicles Act.
6Which body acts as the Indian reinsurer with statutory obligatory cession rights from domestic general insurers?
A.SEBI
B.LIC of India
C.GIC Re (General Insurance Corporation of India)
D.NABARD
Explanation: GIC Re is the national reinsurer and historically received a statutory obligatory cession from every Indian general insurer. The Order of Preference rules also give Indian reinsurers and FRBs priority before cessions to overseas reinsurers.
7An actuary projects ultimate claims for a long-tailed liability class. The chain ladder method assumes that:
A.Each accident year has identical ultimate losses
B.Claims inflation is zero across all years
C.Future development factors are independent of accident year and proportional to claims to date
D.Case reserves are always adequate
Explanation: The basic chain ladder assumes development is multiplicative and stable across accident years, so cumulative claims to date scale up by age-to-age factors independent of the accident year. Distortions such as changing mix, inflation or claims handling violate this assumption.
8The Bornhuetter-Ferguson reserving method is generally preferred over the chain ladder for recent immature accident years because it:
A.Ignores the loss ratio entirely
B.Always produces lower reserves than chain ladder
C.Blends an a priori expected loss ratio with observed development, reducing leverage on sparse data
D.Requires no development pattern
Explanation: BF weights an a priori expected ultimate (premium times expected loss ratio) with the chain-ladder projection using the proportion unreported. For green years where few claims have emerged, this dampens the volatility that pure chain ladder would magnify from a small reported amount.
9For a recent accident year, premium is Rs 100 crore, the a priori expected loss ratio is 70%, and the chain-ladder development factor to ultimate is 4.0 (so 25% of claims are reported). Reported claims are Rs 20 crore. The Bornhuetter-Ferguson ultimate is:
A.Rs 70.0 crore
B.Rs 80.0 crore
C.Rs 72.5 crore
D.Rs 90.0 crore
Explanation: BF ultimate = reported + a priori * (proportion unreported) = 20 + (100*0.70)*(1 - 0.25) = 20 + 70*0.75 = 20 + 52.5 = Rs 72.5 crore. The unreported proportion of 75% applies to the a priori expected loss of Rs 70 crore.
10IBNR in general insurance reserving most precisely refers to reserves for claims that are:
A.Internally Budgeted Net Reserves
B.Invoiced But Not Recovered from reinsurers
C.Incurred But Not Reported, including pure IBNR and IBNER
D.Indexed Bond Notional Reserves
Explanation: IBNR stands for Incurred But Not Reported and, in broad usage, captures both pure IBNR (events that have occurred but no claim is yet notified) and IBNER (incurred but not enough reported, i.e. development on known claims). Both are required reserves alongside outstanding case estimates.
About the IAI SA3 Practice Questions
Verified exam format metadata for IAI SA3 General Insurance Specialist Advanced is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.