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2026 Statistics

Key Facts: III IC-01 Exam

100

Online MCQs per paper

III Examination Handbook — Licentiate MCQ pattern

2 hours

Exam duration

III Examination Handbook

60%

Passing mark (75% Distinction)

III Examination Handbook

Credit points for IC-01

III credit-point system / Examination Handbook

INR 600

India paper fee (20 credits) w.e.f. 1.4.2026

III Table of Fees / revision-of-fees

INR 800

Fresh registration (India) w.e.f. 1.4.2026

III Table of Fees / revision-of-fees

11 chapters

IC-01 Revised Edition 2024 syllabus

III Professional Examination Syllabus

III IC-01 is a 100-question, 2-hour online MCQ Licentiate paper on insurance principles. Passing requires 60% (Distinction from 75%). India paper enrollment for this 20-credit subject is INR 600 w.e.f. 1.4.2026, plus INR 800 registration for fresh candidates (taxes extra). The 11-chapter 2024 syllabus covers risk, principles, legal aspects, underwriting, claims, reinsurance, and accounts.

Sample III IC-01 Practice Questions

Try these sample questions to test your III IC-01 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1What is the primary economic purpose of insurance?

A.To transfer and pool the financial consequences of risk

B.To eliminate all uncertainty from human life

C.To guarantee profits for policyholders

D.To replace government social security entirely

Explanation: Insurance transfers the financial impact of uncertain losses from individuals to insurers, who pool premiums from many similar risks. It manages economic consequences of risk; it does not eliminate risk or guarantee profits.

2Which best describes risk pooling in insurance?

A.One wealthy person pays for everyone's losses

B.Many contributors pay small premiums into a common fund to pay the losses of the few

C.The government funds all private insurance claims

D.Insurers never share risks with reinsurers

Explanation: Pooling gathers many similar exposures so statistically expected losses of a minority are paid from premiums of the majority. Reinsurance is an additional risk-sharing mechanism.

3The law of large numbers in insurance implies that as the number of similar independent risks increases:

A.Actual average losses become less predictable

B.Premiums must always decrease to zero

C.Observed loss experience tends toward the expected value

D.Moral hazard disappears automatically

Explanation: With more similar independent exposures, actual loss ratios converge toward expected values, improving predictability for pricing.

4Pure risk is best defined as:

A.Risk where only gain is possible

B.Risk that can always be diversified away completely

C.Risk created deliberately for entertainment

D.Risk where only loss or no change is possible

Explanation: Pure risk offers outcomes of loss or no loss (no gain), such as fire or theft. Speculative risk includes the possibility of gain.

5Which is an example of speculative risk?

A.House fire

B.Accidental injury

C.Stock market investment

D.Theft of goods

Explanation: Speculative risk involves the possibility of gain, loss, or no change. Stock investment can appreciate or depreciate.

6Insurance differs from gambling because insurance:

A.Creates a new risk for entertainment

B.Always guarantees a profit to the insured

C.Does not use probability in pricing

D.Covers existing fortuitous losses and requires insurable interest

Explanation: Insurance covers fortuitous losses on existing interests where insurable interest exists. Gambling creates risk for stakes without insurable interest.

7In the Indian context, IRDAI primarily functions as:

A.The statutory regulator of insurance business in India

B.A reinsurance company owned by the government

C.A trade union for insurance agents only

D.An international rating agency for bonds

Explanation: IRDAI regulates and promotes the insurance industry under the IRDA Act. It is not an insurer, union, or rating agency.

8Which statement about the development of insurance in India is most accurate?

A.Insurance was unknown in India before 2000

B.Marine insurance practices existed in India before modern statutory regulation

C.Only life insurance existed historically in India

D.All insurance is now sold only by the government

Explanation: Insurance concepts, especially marine insurance linked to trade, have a long history in India. Modern regulation evolved through legislation culminating in IRDAI oversight.

9A fortuitous loss in insurance means the loss is:

A.Accidental and unforeseen

B.Expected and deliberate

C.Always excluded by policy

D.Caused only by war

Explanation: Fortuitous losses are accidental or unforeseen events, not deliberately caused by the insured.

10In insurance terminology, a peril is:

A.A condition that increases the likelihood of loss

B.The direct cause of loss such as fire or theft

C.The person who owns the insured property

D.The premium charged by the insurer

Explanation: A peril is the direct cause of loss (fire, lightning, theft). A hazard is a condition that increases the chance of loss.

About the III IC-01 Exam

IC-01 Principles of Insurance is the Insurance Institute of India's foundational Licentiate paper on insurance theory and practice common to life and general insurance tracks. The Revised Edition 2024 syllabus spans introduction to insurance, risk and hazard, rating, the core principles (utmost good faith, insurable interest, indemnity, subrogation, contribution, proximate cause), legal aspects, underwriting, claims, reinsurance, and insurance accounts. The online MCQ paper awards 20 credit points toward the Licentiate certificate.

Assessment

100 objective multiple-choice questions in a single online paper. IC-01 is a 20-credit compulsory Licentiate subject taken with IC-02 (life) or IC-11 (general) plus optional credits to reach 60 points.

Time Limit

2 hours

Passing Score

60% (Distinction at 75% or above)

Exam Fee

INR 600 per subject (20 credit points) for India candidates; fresh candidates also pay INR 800 registration (inclusive of life membership). Taxes extra. Fees w.e.f. 1.4.2026 per III Table of Fees. Study course material is purchased separately. (Insurance Institute of India (III))

III IC-01 Exam Content Outline

9 questions

Introduction to Insurance

Purpose, pooling, law of large numbers, pure/speculative risk, fortuity, and IRDAI context.

9 questions

Risk, Peril, and Hazard

Perils vs hazards, moral/physical hazard, risk classification, retention, and risk management.

9 questions

Rating and Pricing

Pure/gross premium, loadings, experience rating, average clause, detariffication, and minimum premium.

10 questions

Principles — One

Utmost good faith, material facts, warranties, representations, and insurable interest.

9 questions

Principles — Two

Indemnity, ACV, replacement cost, new-for-old, betterment, excess, salvage, and valued policies.

10 questions

Principles — Three

Subrogation, contribution, proximate cause, remote cause, and excluded perils.

9 questions

Legal Aspects

Contract elements, assignment, nomination, free-look, grace period, cover notes, and void/voidable contracts.

9 questions

Underwriting

Selection, anti-selection, medical UW, retention, declinature, coinsurance, inspection, File & Use.

9 questions

Claims

Intimation, surveyors, mitigation, CTL, ex gratia, repudiation, documents, on-account, and fraud.

9 questions

Reinsurance

Treaty/facultative, quota share, surplus, XL, ceding company, retrocession, and purpose.

8 questions

Insurance Accounts

UPR, OS reserves, IBNR, loss/combined ratio, solvency margin, technical reserves, investment income.

How to Pass the III IC-01 Exam

What You Need to Know

Passing score: 60% (Distinction at 75% or above)
Assessment: 100 objective multiple-choice questions in a single online paper. IC-01 is a 20-credit compulsory Licentiate subject taken with IC-02 (life) or IC-11 (general) plus optional credits to reach 60 points.
Time limit: 2 hours
Exam fee: INR 600 per subject (20 credit points) for India candidates; fresh candidates also pay INR 800 registration (inclusive of life membership). Taxes extra. Fees w.e.f. 1.4.2026 per III Table of Fees. Study course material is purchased separately.

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

III IC-01 Study Tips from Top Performers

1Study the official III IC-01 course (Revised Edition 2024) chapter by chapter before mixed mocks.

2Drill the six core principles with short scenarios — utmost good faith, insurable interest, indemnity, subrogation, contribution, and proximate cause.

3Practise average-clause and contribution numerical items (underinsurance and dual-policy splits).

4Review legal topics at principles level: nomination vs assignment, free-look, and grace period — detailed IRDAI regulation belongs in IC-14.

5Sit full 100-question, 2-hour mocks aiming above 60%, with Distinction practice at 75%+.

Frequently Asked Questions

How many questions are on the III IC-01 exam?

III Licentiate objective papers, including IC-01, are 100 multiple-choice questions completed in 2 hours online.

What is the IC-01 passing score?

Passing marks for III online MCQ papers are 60% or above. Candidates scoring at least 75% earn Distinction in that subject.

How many credit points does IC-01 carry?

Principles of Insurance (IC-01) carries 20 credit points. Licentiate certification requires 60 credit points including compulsory IC-01 and either IC-02 or IC-11 plus optional credits.

What is the IC-01 exam fee in India from April 2026?

III's Table of Fees effective 1.4.2026 lists INR 600 paper enrollment for a 20-credit-point subject and INR 800 registration for fresh candidates (India), plus applicable taxes. Study-course cost is separate.

What chapters are in the IC-01 syllabus?

III's Professional Examination Syllabus (Revised Edition 2024) lists 11 chapters: Introduction to Insurance; Risk, Peril, and Hazard; Rating and Pricing; Principles of Insurance (three parts); Legal Aspects; Underwriting; Claims; Reinsurance; and Insurance Accounts.