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2026 Statistics

Key Facts: III IC-85 Exam

100

Online MCQs per paper

III Examination Handbook

2 hours

Exam duration

III Examination Handbook

60%

Passing mark (75% Distinction)

III Examination Handbook

Credit points for IC-85

III credit-point system

INR 600

India paper fee (40 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-85 is a 100-question, 2-hour online MCQ paper on Reinsurance Management. Passing requires 60% (Distinction from 75%). India paper enrollment for this 40-credit subject is INR 600 w.e.f. 1.4.2026, plus INR 800 registration for fresh candidates (taxes extra).

Sample III IC-85 Practice Questions

Try these sample questions to test your III IC-85 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 purpose of reinsurance for a primary insurance company?

A.To increase the primary insurer's capacity to write larger risks.

B.To avoid paying taxes on premium income.

C.To directly interact with the original insured parties.

D.To completely eliminate the risk of insolvency.

Explanation: Reinsurance allows the primary insurer to cede part of its risk, thereby freeing up capital and increasing its capacity to underwrite larger or more numerous policies.

2In a quota share reinsurance treaty, how are premiums and losses shared?

A.The reinsurer takes a fixed percentage of all premiums and losses.

B.The reinsurer only pays losses that exceed a specific amount.

C.The primary insurer retains all premiums and passes only losses.

D.The reinsurer takes all premiums and pays all losses.

Explanation: In a quota share treaty, the primary insurer and the reinsurer share premiums and losses on a fixed percentage basis across the portfolio.

3Which of the following best describes facultative reinsurance?

A.Reinsurance that covers an entire portfolio of risks automatically.

B.Reinsurance negotiated on an individual risk basis.

C.Reinsurance designed strictly for catastrophe losses.

D.Reinsurance mandated by government regulations.

Explanation: Facultative reinsurance is negotiated separately for each individual insurance policy or risk, as opposed to treaty reinsurance which covers a book of business.

4Under a surplus treaty, the retention of the cedant is referred to as:

A.The deductible.

B.A line.

C.The priority.

D.The limit.

Explanation: In a surplus treaty, the primary insurer's retention is typically referred to as a 'line'. Reinsurance capacity is then expressed as a multiple of lines.

5Which pricing method is most commonly used for excess of loss reinsurance treaties?

A.Original gross rate.

B.Burning cost or experience rating.

C.Fixed flat commission.

D.Statutory tariff rate.

Explanation: Burning cost (or experience rating) is heavily used to price excess of loss treaties by analyzing the historical losses that would have penetrated the proposed excess layer.

6What does 'retention' refer to in reinsurance?

A.The portion of the premium that the reinsurer returns to the cedant.

B.The portion of the risk that the primary insurer keeps for its own account.

C.The commission paid to the reinsurance broker.

D.The duration of the reinsurance contract.

Explanation: Retention is the amount of risk or liability that the ceding company chooses to keep for its own account and not pass on to the reinsurer.

7What is the function of the 'Follow the Fortunes' clause in a reinsurance contract?

A.It generally binds the reinsurer to follow the cedant's good-faith underwriting results and covered claims outcomes.

B.It requires the reinsurer to invest its funds in the same assets as the cedant.

C.It dictates that the primary insurer must adjust its rates to follow the reinsurer's pricing.

D.It allows the reinsurer to take over the primary insurer's operations during insolvency.

Explanation: Follow the Fortunes generally requires the reinsurer to share in the cedant's fortunes on the reinsured business—accepting good-faith underwriting and claims outcomes that fall within the treaty—rather than second-guessing every decision.

8Which type of non-proportional reinsurance protects the cedant against an accumulation of losses from a single event?

A.Stop Loss Reinsurance.

B.Quota Share Reinsurance.

C.Catastrophe Excess of Loss Reinsurance.

D.Surplus Treaty Reinsurance.

Explanation: Catastrophe Excess of Loss reinsurance protects the ceding company from the accumulation of multiple losses arising from a single catastrophic event, such as a hurricane or earthquake.

9If a cedant has a 9-line surplus treaty and a retention of $100,000, what is the maximum reinsurance capacity provided by the surplus treaty alone?

A.$100,000

B.$900,000

C.$1,000,000

D.$10,000,000

Explanation: Each 'line' equals the retention. A 9-line surplus treaty therefore provides 9 × $100,000 = $900,000 of reinsurance capacity. Total automatic writing capacity including the retention would be $1,000,000, but that is retention plus treaty—not treaty capacity alone.

10The 'Errors and Omissions' clause in a reinsurance agreement ensures that:

A.The contract is immediately void if a mistake is made.

B.Inadvertent mistakes or administrative delays do not void the reinsurance coverage.

C.The reinsurer must pay all claims, even those excluded by the original policy.

D.The primary insurer can alter the treaty terms at any time.

Explanation: The Errors and Omissions (E&O) clause protects the ceding company so that accidental delays or clerical errors in reporting do not invalidate the reinsurance cover, provided they are corrected when discovered.

About the III IC-85 Exam

The III IC-85 Reinsurance Management exam evaluates candidate understanding of key principles and practical concepts in Reinsurance Management. The syllabus encompasses various modules detailed below.

Assessment

100 objective multiple-choice questions in a single online paper. IC-85 is a 40-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 (40 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-85 Exam Content Outline

10 questions

Pricing Methods

Practice questions focusing on pricing methods concepts.

8 questions

Proportional Reinsurance

Practice questions focusing on proportional reinsurance concepts.

7 questions

Excess Of Loss

Practice questions focusing on excess of loss concepts.

4 questions

Surplus Treaty

Practice questions focusing on surplus treaty concepts.

3 questions

Retention Management

Practice questions focusing on retention management concepts.

3 questions

Non Proportional Reinsurance

Practice questions focusing on non proportional reinsurance concepts.

3 questions

Capacity Calculation

Practice questions focusing on capacity calculation concepts.

3 questions

Alternative Risk Transfer

Practice questions focusing on alternative risk transfer concepts.

2 questions

Quota Share

Practice questions focusing on quota share concepts.

2 questions

Catastrophe Cover

Practice questions focusing on catastrophe cover concepts.

2 questions

Working Excess Of Loss

Practice questions focusing on working excess of loss concepts.

2 questions

Ceding Commission

Practice questions focusing on ceding commission concepts.

2 questions

Reinsurance Program Design

Practice questions focusing on reinsurance program design concepts.

2 questions

Life Reinsurance

Practice questions focusing on life reinsurance concepts.

2 questions

Accounting Basis

Practice questions focusing on accounting basis concepts.

2 questions

Commutation

Practice questions focusing on commutation concepts.

2 questions

Administration

Practice questions focusing on administration concepts.

2 questions

Basis Of Cover

Practice questions focusing on basis of cover concepts.

2 questions

Program Design

Practice questions focusing on program design concepts.

2 questions

Profit Commission

Practice questions focusing on profit commission concepts.

2 questions

Specialty Lines

Practice questions focusing on specialty lines concepts.

2 questions

Claims Clauses

Practice questions focusing on claims clauses concepts.

1 questions

Purpose Of Reinsurance

Practice questions focusing on purpose of reinsurance concepts.

1 questions

Facultative Reinsurance

Practice questions focusing on facultative reinsurance concepts.

1 questions

Burning Cost

Practice questions focusing on burning cost concepts.

1 questions

Follow The Fortunes

Practice questions focusing on follow the fortunes concepts.

1 questions

Errors And Omissions

Practice questions focusing on errors and omissions concepts.

1 questions

Irdai Guidelines

Practice questions focusing on irdai guidelines concepts.

1 questions

Retrocession

Practice questions focusing on retrocession concepts.

1 questions

Reinstatement Clause

Practice questions focusing on reinstatement clause concepts.

1 questions

Fronting

Practice questions focusing on fronting concepts.

1 questions

Exposure Rating

Practice questions focusing on exposure rating concepts.

1 questions

Stop Loss

Practice questions focusing on stop loss concepts.

1 questions

Cut Through Clause

Practice questions focusing on cut through clause concepts.

1 questions

Reinsurance Brokers

Practice questions focusing on reinsurance brokers concepts.

1 questions

Principles Of Insurance

Practice questions focusing on principles of insurance concepts.

1 questions

Loss Participation

Practice questions focusing on loss participation concepts.

1 questions

Rate On Line

Practice questions focusing on rate on line concepts.

1 questions

Index Clause

Practice questions focusing on index clause concepts.

1 questions

Inflation

Practice questions focusing on inflation concepts.

1 questions

Captive Reinsurance

Practice questions focusing on captive reinsurance concepts.

1 questions

Treaty Vs Facultative

Practice questions focusing on treaty vs facultative concepts.

1 questions

Ultimate Net Loss

Practice questions focusing on ultimate net loss concepts.

1 questions

Right Of First Refusal

Practice questions focusing on right of first refusal concepts.

1 questions

Retention

Practice questions focusing on retention concepts.

1 questions

Hours Clause

Practice questions focusing on hours clause concepts.

1 questions

Deposit Premium

Practice questions focusing on deposit premium concepts.

1 questions

Loss Portfolio Transfer

Practice questions focusing on loss portfolio transfer concepts.

1 questions

Reinsurance Pools

Practice questions focusing on reinsurance pools concepts.

1 questions

Run Off

Practice questions focusing on run off concepts.

1 questions

Facultative Obligatory

Practice questions focusing on facultative obligatory concepts.

1 questions

Inuring Reinsurance

Practice questions focusing on inuring reinsurance concepts.

1 questions

Arbitration Clause

Practice questions focusing on arbitration clause concepts.

1 questions

Capacity

Practice questions focusing on capacity concepts.

1 questions

Obligatory Cession

Practice questions focusing on obligatory cession concepts.

1 questions

Clash Cover

Practice questions focusing on clash cover concepts.

1 questions

Finite Reinsurance

Practice questions focusing on finite reinsurance concepts.

1 questions

Offsets Clause

Practice questions focusing on offsets clause concepts.

1 questions

Auditing

Practice questions focusing on auditing concepts.

1 questions

Catastrophe Bonds

Practice questions focusing on catastrophe bonds concepts.

1 questions

Reserving

Practice questions focusing on reserving concepts.

1 questions

Intermediary Clause

Practice questions focusing on intermediary clause concepts.

1 questions

Lloyds Market

Practice questions focusing on lloyds market concepts.

1 questions

Deductibles

Practice questions focusing on deductibles concepts.

1 questions

Cancellation Clauses

Practice questions focusing on cancellation clauses concepts.

1 questions

Credit Risk

Practice questions focusing on credit risk concepts.

1 questions

Aviation

Practice questions focusing on aviation concepts.

1 questions

Syndication

Practice questions focusing on syndication concepts.

1 questions

Retroactive Reinsurance

Practice questions focusing on retroactive reinsurance concepts.

1 questions

Actuarial Models

Practice questions focusing on actuarial models concepts.

1 questions

Regulatory Status

Practice questions focusing on regulatory status concepts.

1 questions

Exclusions

Practice questions focusing on exclusions concepts.

1 questions

Marine

Practice questions focusing on marine concepts.

1 questions

Pay As Paid

Practice questions focusing on pay as paid concepts.

1 questions

Warranties And Conditions

Practice questions focusing on warranties and conditions concepts.

1 questions

Cash Call Clause

Practice questions focusing on cash call clause concepts.

1 questions

Reinsurer Security

Practice questions focusing on reinsurer security concepts.

1 questions

Credit Ratings

Practice questions focusing on credit ratings concepts.

1 questions

Aggregate Extension

Practice questions focusing on aggregate extension concepts.

1 questions

Premium Adjustment

Practice questions focusing on premium adjustment concepts.

1 questions

Sunset Clause

Practice questions focusing on sunset clause concepts.

1 questions

Alternative Capital

Practice questions focusing on alternative capital concepts.

1 questions

Ils

Practice questions focusing on ils concepts.

1 questions

Capacity Management

Practice questions focusing on capacity management concepts.

1 questions

Taxes Clause

Practice questions focusing on taxes clause concepts.

1 questions

Multi Line Treaty

Practice questions focusing on multi line treaty concepts.

1 questions

Subrogation And Salvage

Practice questions focusing on subrogation and salvage concepts.

1 questions

Gic Re

Practice questions focusing on gic re concepts.

1 questions

Indian Market

Practice questions focusing on indian market concepts.

1 questions

Accounting

Practice questions focusing on accounting concepts.

1 questions

Premium

Practice questions focusing on premium concepts.

1 questions

Deficit Carry Forward

Practice questions focusing on deficit carry forward concepts.

1 questions

Data Adjustment

Practice questions focusing on data adjustment concepts.

1 questions

Access To Records

Practice questions focusing on access to records concepts.

1 questions

Reinstatement Premium

Practice questions focusing on reinstatement premium concepts.

1 questions

Intermediaries

Practice questions focusing on intermediaries concepts.

1 questions

Mga

Practice questions focusing on mga concepts.

1 questions

Follow The Settlements

Practice questions focusing on follow the settlements concepts.

1 questions

Principles Of Reinsurance

Practice questions focusing on principles of reinsurance concepts.

1 questions

Experience Rating

Practice questions focusing on experience rating concepts.

How to Pass the III IC-85 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-85 is a 40-credit paper under the Insurance Institute of India (III) professional credit system.
Time limit: 2 hours
Exam fee: INR 600 per subject (40 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-85 Study Tips from Top Performers

1Study the official III IC-85 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-85 exam?

The III objective papers, including IC-85, consist of 100 multiple-choice questions completed in 2 hours online.

What is the IC-85 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-85 carry?

This paper (IC-85) carries 40 credit points under the Insurance Institute of India credit system.

100+ Free III IC-85 Practice Questions

Explore More Insurance Institute of India (III) Licentiate Papers

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III IC-104 Products of Life Insurance

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Key Facts: III IC-85 Exam

Sample III IC-85 Practice Questions

About the III IC-85 Exam

III IC-85 Exam Content Outline

How to Pass the III IC-85 Exam

What You Need to Know

Keys to Passing

III IC-85 Study Tips from Top Performers

Frequently Asked Questions