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100+ Free III IC-45 Practice Questions

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2026 Statistics

Key Facts: III IC-45 Exam

100

Online MCQs per paper

III Examination Handbook

2 hours

Exam duration

III Examination Handbook

60%

Passing mark (75% Distinction)

III Examination Handbook

30

Credit points for IC-45

III credit-point system

INR 600

India paper fee (30 credits) w.e.f. 1.4.2026

III Table of Fees

INR 800

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

III Table of Fees

III IC-45 is a 100-question, 2-hour online MCQ paper on General Insurance Underwriting. Passing requires 60% (Distinction from 75%). India paper enrollment for this 30-credit subject is INR 600 w.e.f. 1.4.2026, plus INR 800 registration for fresh candidates (taxes extra).

Sample III IC-45 Practice Questions

Try these sample questions to test your III IC-45 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 is a primary objective of the underwriting process in general insurance?
A.To reject as many proposals as possible to minimize claims
B.To automatically accept all risks submitted by an agent
C.To ensure that the insurance company makes the maximum possible profit
D.To classify risks and ensure that the premium charged is commensurate with the risk
Explanation: The core objective of underwriting is to classify risks accurately and assign a premium that correctly reflects the level of risk being assumed by the insurer.
2In the context of hazard evaluation, which of the following represents a 'moral hazard'?
A.A factory lacking adequate fire extinguishing equipment
B.A location situated in a known earthquake zone
C.An insured with a history of submitting fraudulent claims
D.A building constructed with highly flammable materials
Explanation: Moral hazard refers to subjective characteristics of the insured, such as dishonesty or a history of fraud, which increase the likelihood of a loss.
3What is the primary function of a 'File and Use' guideline set by the insurance regulator?
A.To require insurers to file product details with the regulator before marketing, then use them under prescribed timelines or deemed-approval rules
B.To enforce standard pricing for all general insurance products
C.To allow insurers to launch products immediately after filing without waiting for approval
D.To require agents to file a report before selling a policy
Explanation: Under IRDAI 'File and Use' procedures, insurers file product particulars with the regulator and may market the product only under the prescribed filing/waiting or deemed-approval framework. Immediate launch without filing timelines is closer to 'Use and File'.
4Which rating method uses the past claims experience of the specific insured to determine the premium for the upcoming policy period?
A.Judgment Rating
B.Class Rating
C.Experience Rating
D.Retrospective Rating
Explanation: Experience rating modifies the manual or class premium based on the actual past loss experience of the specific insured over a defined period.
5What is a major consequence of 'adverse selection' in general insurance?
A.There is no impact on the insurer's profitability
B.The insurer's loss ratio will likely increase as high-risk individuals are more prone to buy insurance
C.Insurers end up with a portfolio of better-than-average risks
D.The regulator will mandate a decrease in premiums
Explanation: Adverse selection occurs when individuals with a higher-than-average probability of loss are more likely to seek insurance, leading to higher claims and increased loss ratios.
6Which of the following is typically a function of treaty reinsurance rather than facultative reinsurance?
A.Allowing the reinsurer to reject individual risks within the portfolio
B.Being used exclusively for highly unusual or hazardous individual risks
C.Providing automatic capacity for a specific portfolio or class of business
D.Negotiating the reinsurance placement on a risk-by-risk basis
Explanation: Treaty reinsurance provides automatic coverage for a defined class of business, meaning the primary insurer does not need to negotiate each risk individually.
7In the context of property insurance underwriting, 'PML' stands for:
A.Premium Margin Limit
B.Primary Market Liability
C.Property Minimum Limit
D.Probable Maximum Loss
Explanation: Probable Maximum Loss (PML) is an underwriter's estimate of the largest expected loss that is likely to occur from a single event, such as a fire.
8Which of the following documents is the primary source of underwriting information provided by the prospective insured?
A.The Reinsurance Treaty
B.The Policy Wordings
C.The Claims Register
D.The Proposal Form
Explanation: The proposal form contains the specific details about the risk being proposed for insurance and is the fundamental document upon which the underwriter bases their decision.
9In a 'Quota Share' reinsurance arrangement, how are premiums and losses distributed?
A.The reinsurer covers only specific named perils
B.The primary insurer retains all premiums but the reinsurer pays all losses
C.The primary insurer and reinsurer share premiums and losses on a fixed percentage basis
D.The reinsurer only pays for losses exceeding a certain fixed amount
Explanation: Quota share is a form of proportional reinsurance where the primary insurer and reinsurer share a fixed percentage of every risk, premium, and loss.
10A 'franchise' in an insurance policy means that:
A.The insurer deducts a fixed amount from every claim settlement
B.The insured shares the risk equally with the insurer
C.The insured pays a fixed percentage of every claim
D.The insurer pays nothing if the loss is below the franchise limit, but pays in full if it exceeds the limit
Explanation: A franchise is a threshold amount. If the loss is less than the franchise, no payment is made. If the loss equals or exceeds the franchise, the entire loss is paid.

About the III IC-45 Exam

The III IC-45 General Insurance Underwriting exam (Revised Edition 2023) covers introduction and methodology of underwriting, rate making and pricing, IRDAI File & Use / Use & File procedures, underwriting tools, policy types, profitability strategies, and policyholder protection. Online MCQ paper: 100 questions, 2 hours, 60% pass (Distinction 75%), 30 credit points.

Assessment

100 objective multiple-choice questions in a single online paper. IC-45 is a 30-credit paper under the Insurance Institute of India (III) professional credit system.

Time Limit

2 hours

Passing Score

60% (Distinction at 75% or above)

Exam Fee

INR 600 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. (Insurance Institute of India (III))

III IC-45 Exam Content Outline

10 questions

Introduction to Underwriting

Practice questions focusing on Introduction to Underwriting concepts from the IC-45 syllabus.

14 questions

Methodology & Procedures of Underwriting

Practice questions focusing on Methodology & Procedures of Underwriting concepts from the IC-45 syllabus.

8 questions

Principles of Rate Making

Practice questions focusing on Principles of Rate Making concepts from the IC-45 syllabus.

8 questions

Rating Approaches and Pricing Methods

Practice questions focusing on Rating Approaches and Pricing Methods concepts from the IC-45 syllabus.

5 questions

IRDAI File & Use Guidelines

Practice questions focusing on IRDAI File & Use Guidelines concepts from the IC-45 syllabus.

5 questions

Applications of File & Use and Use & File

Practice questions focusing on Applications of File & Use and Use & File concepts from the IC-45 syllabus.

24 questions

Tools of Underwriting

Practice questions focusing on Tools of Underwriting concepts from the IC-45 syllabus.

20 questions

Types of Policies

Practice questions focusing on Types of Policies concepts from the IC-45 syllabus.

4 questions

Underwriting Profitability & Reunderwriting

Practice questions focusing on Underwriting Profitability & Reunderwriting concepts from the IC-45 syllabus.

2 questions

Protection of Policyholder's Interests

Practice questions focusing on Protection of Policyholder's Interests concepts from the IC-45 syllabus.

How to Pass the III IC-45 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-45 is a 30-credit paper under the Insurance Institute of India (III) professional credit system.
  • Time limit: 2 hours
  • Exam fee: INR 600 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.

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-45 Study Tips from Top Performers

1Study the official III IC-45 coursebook chapter by chapter before mixed mocks.
2Review the core regulations and guidelines relating to this paper.
3Sit 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-45 exam?

The III objective papers, including IC-45, consist of 100 multiple-choice questions completed in 2 hours online.

What is the IC-45 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-45 carry?

This paper (IC-45) carries 30 credit points under the Insurance Institute of India credit system.