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100+ Free III IC-26 Practice Questions

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2026 Statistics

Key Facts: III IC-26 Exam

100

Online MCQs per paper

III Examination Handbook — MCQ pattern

2 hours

Exam duration

III Examination Handbook

60%

Passing mark (75% Distinction)

III Examination Handbook

30

Credit points for IC-26

III credit-point system / Examination Handbook

INR 900

India paper fee (30 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

2023

Syllabus Revised Edition year

III Professional Examination Syllabus — IC-26

III IC-26 is a 100-question, 2-hour online MCQ Associateship paper on Life Insurance Finance (compulsory life option with IC-22). Passing requires 60% (Distinction from 75%). India paper enrollment for this 30-credit subject is INR 900 w.e.f. 1.4.2026, plus INR 800 registration for fresh candidates (taxes extra). Syllabus Revised Edition 2023.

Sample III IC-26 Practice Questions

Try these sample questions to test your III IC-26 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which of the following schedules to the Revenue Account under IRDA (Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations prescribes the format for Premium Earned?
A.Schedule 1
B.Schedule 2
C.Schedule 3
D.Schedule 4
Explanation: Under IRDAI regulations for the preparation of financial statements, Schedule 1 prescribes the format and details for Premium Earned (Net).
2In the valuation of life insurance liabilities, the difference between the present value of future benefits and the present value of future net premiums is known as:
A.Mathematical Reserve
B.Gross Premium Reserve
C.Solvency Margin
D.Expense Reserve
Explanation: The mathematical reserve (or net premium reserve) represents the actuarial present value of future benefits minus the actuarial present value of future net premiums.
3Under IRDAI Investment Regulations, life insurers are required to invest a minimum percentage of their Life Fund in Central Government Securities. What is this minimum percentage?
A.15%
B.25%
C.35%
D.50%
Explanation: According to IRDAI (Investment) Regulations, life insurers must invest a minimum of 25% of their Life Fund in Central Government Securities.
4Which accounting standard issued by the ICAI primarily deals with 'Revenue Recognition', which is relevant for recognizing premium income, although insurers have specific IRDAI guidelines overriding general rules?
A.AS 9
B.AS 13
C.AS 15
D.AS 22
Explanation: AS 9 deals with Revenue Recognition. While insurance companies follow IRDAI formats for premium recognition, AS 9 forms the general accounting basis for recognizing revenue in India.
5What is the primary objective of calculating the Solvency Margin for a life insurance company?
A.To determine the amount of dividend payable to shareholders
B.To ensure the insurer has sufficient capital to meet unexpected future liabilities
C.To calculate the surrender value of lapsed policies
D.To evaluate the performance of the sales and marketing team
Explanation: The Solvency Margin is the extra capital an insurer must hold above its liabilities to act as a buffer against unforeseen events and ensure it can meet its obligations to policyholders.
6In the context of life insurance taxation in India, under which section of the Income Tax Act, 1961, is the income of a life insurance business computed?
A.Section 44
B.Section 80C
C.Section 10(10D)
D.Section 115JB
Explanation: Section 44 of the Income Tax Act, 1961, states that the profits and gains of a life insurance business are computed in accordance with the rules contained in the First Schedule, superseding standard business income computation rules.
7The 'Bonus' declared by a life insurance company on participating policies is typically distributed from which of the following?
A.Paid-up Share Capital
B.Actuarial Valuation Surplus
C.Revaluation Reserve
D.Securities Premium Account
Explanation: Bonus for participating policyholders is distributed from the actuarial valuation surplus, which is the excess of the life fund over the actuarial liability.
8When preparing the Balance Sheet of a life insurance company, where are 'Agents' Balances' typically classified?
A.Investments
B.Current Assets
C.Loans
D.Current Liabilities
Explanation: Agents' balances represent amounts owed by agents to the insurer (e.g., premium collected but not remitted) and are classified under Current Assets (Schedule 11) in the Balance Sheet.
9In a gross premium valuation, which of the following is NOT explicitly projected as a future cash flow?
A.Future expected premiums
B.Future expected mortality and morbidity claims
C.Future expected expenses and commissions
D.Statutory minimum reserves
Explanation: Gross premium valuation explicitly projects future expected premiums, claims, expenses, and commissions. Statutory minimum reserves are an external requirement, not a cash flow projected in the valuation itself.
10Under the Insurance Act, 1938, what is the minimum paid-up equity capital required to carry on life insurance business in India?
A.Rs. 10 Crores
B.Rs. 50 Crores
C.Rs. 100 Crores
D.Rs. 500 Crores
Explanation: Section 6 of the Insurance Act, 1938 requires a life insurer to have a minimum paid-up equity capital of Rs. 100 crores (exclusive of preliminary expenses) before commencing business.

About the III IC-26 Exam

IC-26 Life Insurance Finance is a compulsory Associateship paper for the life stream. The Revised Edition 2023 syllabus covers elementary accounts, premium and disbursement accounting, expenses of management, investments, Revenue Account and Balance Sheet, budgeting, financial reporting concepts, accounting standards applicable to life insurers, financial analysis, and application of financial management in insurance.

Assessment

100 objective multiple-choice questions in a single online paper. IC-26 is a compulsory 30-credit Associateship life-stream subject (alongside IC-22) covering life insurance accounting, investments, valuation, solvency, and taxation. Syllabus: Revised Edition 2023.

Time Limit

2 hours

Passing Score

60% (Distinction at 75% or above)

Exam Fee

INR 900 per subject (30 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-26 Exam Content Outline

23 questions

Life Office Accounts & Final Accounts

Revenue Account and Balance Sheet schedules, premium accounting, benefits paid, commissions, operating expenses, and fund segregation under IRDAI formats.

21 questions

Actuarial Valuation & Reserving

Mathematical reserves, Gross Premium Valuation, Zillmerisation, margins for adverse deviation, lapse/mortality assumptions, and negative-reserve treatment.

16 questions

Solvency Margin & Capital Adequacy

Required and Available Solvency Margin, control level 150%, inadmissible assets, reinsurance capital relief, and ALM concepts.

11 questions

Accounting Standards for Insurers

ICAI standards relevant to insurers and where IRDAI guidelines override general AS application.

10 questions

IRDAI Investment Regulations

Life Fund pattern of investment, Central G-Secs, approved securities, infrastructure allocation, other-than-approved caps, and exposure norms.

10 questions

Profit, Surplus & Bonuses

Actuarial surplus, participating surplus distribution, reversionary/terminal bonuses, and new business strain.

9 questions

Taxation of Life Insurance Business

Section 44 / First Schedule surplus computation, Section 115B 12.5% rate, and MAT under 115JB.

How to Pass the III IC-26 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-26 is a compulsory 30-credit Associateship life-stream subject (alongside IC-22) covering life insurance accounting, investments, valuation, solvency, and taxation. Syllabus: Revised Edition 2023.
  • Time limit: 2 hours
  • Exam fee: INR 900 per subject (30 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-26 Study Tips from Top Performers

1Memorize IRDAI Revenue Account / Balance Sheet schedule numbers (premium, commission, operating expenses, benefits, capital, investments).
2Drill Life Fund investment percentages: 25% Central G-Secs, ≥50% G-Secs/approved securities, infrastructure floor, and ≤15% other-than-approved.
3Practice Gross Premium Valuation logic, MAD, zeroisation of negative reserves, and the 150% control solvency level.
4Review Section 44 / First Schedule surplus taxation and the 12.5% Section 115B rate separately from normal corporate tax.
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-26 exam?

III objective papers, including IC-26, are 100 multiple-choice questions completed in 2 hours online.

What is the IC-26 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-26 carry?

Life Insurance Finance (IC-26) carries 30 credit points. It is a compulsory Associateship subject for the life stream (paired with IC-22 underwriting). Candidates need 250 credit points in total for the Associateship Diploma.

What is the IC-26 exam fee in India from April 2026?

III's Table of Fees effective 1.4.2026 lists INR 900 paper enrollment for a 30-credit-point subject and INR 800 registration for fresh candidates (India), plus applicable taxes. Study-course cost is separate.

What does the IC-26 syllabus cover?

The Revised Edition 2023 syllabus covers elementary principles of accounts; life assurance policy types; premium, disbursement, and management-expense accounting; investments; Revenue Account and Balance Sheet; budgeting; financial reporting concepts; accounting standards for life insurers; financial analysis; and financial management applications in insurance.