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Key Facts: Iran Official Insurance Actuary Exam Exam

Regulation 78

High Council of Insurance regulation governing official actuaries, approved 1391 in 19 articles

High Council of Insurance Regulation 78

Descriptive

The official written paper uses descriptive questions in Persian, held in person in Tehran, not multiple choice

Insurance Research Institute applicant guide

4-6 Years

Relevant professional experience required alongside a Master's degree under Article 2

High Council of Insurance Regulation 78, Article 2

100%

Minimum Solvency Margin Ratio (SMR) required for Level 1 status under Regulation 69

High Council of Insurance Regulation 69

3% to 10%

Statutory IBNR band as a percentage of reported non-life claims under investigation

Regulation 58, Article 10 Note 2, as amended by Regulation 58/2

1%

Maximum shareholding an official actuary may hold in the insurer they report for

High Council of Insurance Regulation 78/1 (1395), amended Article 13

The Iran Official Insurance Actuary Examination is a statutory Persian-language assessment under Regulation 78, combining an in-person descriptive written paper in Tehran with an oral specialist interview; candidates must hold a relevant Master's degree and 4-6 years of experience to qualify for Central Insurance actuarial licensing.

Sample Iran Official Insurance Actuary Exam Practice Questions

Try these sample questions to review concepts for the Iran Official Insurance Actuary Exam exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1In the collective risk model, aggregate claims are represented as S = X_1 + X_2 + ... + X_N, where claim count N is independent of claim severities X_i and X_i are independent and identically distributed. Which expression correctly defines the variance of aggregate claims Var(S)?
A.Var(S) = E[N] * Var(X) + Var(N) * (E[X])^2
B.Var(S) = Var(N) * Var(X)
C.Var(S) = (E[N])^2 * Var(X) + (E[X])^2 * Var(N)
D.Var(S) = E[N] * (E[X])^2 + Var(N) * Var(X)
Explanation: By the law of total variance, Var(S) = E[Var(S|N)] + Var(E[S|N]). Since E[S|N] = N * E[X] and Var(S|N) = N * Var(X), this yields Var(S) = E[N * Var(X)] + Var(N * E[X]) = E[N] * Var(X) + Var(N) * (E[X])^2. This fundamental result in non-life risk theory forms the cornerstone of aggregate loss modelling under Chapter 4 of Payandeh's Risk Theory.
2An insurer models annual claims for a motor hull fleet using a compound Poisson process where annual claim frequency N follows Poisson(λ = 20). Individual claim severities X have a mean of 15 million rials and a variance of 25 (million rials)^2. What is the variance of the annual aggregate claims Var(S) in (million rials)^2?
A.4,500
B.5,000
C.500
D.9,000
Explanation: For a compound Poisson distribution, Var(N) = E[N] = λ = 20. Using Var(S) = E[N]*Var(X) + Var(N)*(E[X])^2, we have Var(S) = 20 * 25 + 20 * (15^2) = 500 + 20 * 225 = 500 + 4,500 = 5,000 (million rials)^2. The standard deviation is sqrt(5,000) ≈ 70.71 million rials.
3Which premium calculation principle defines the loaded pure premium as P = E[S] + α * Var(S), where α > 0 is the risk loading parameter?
A.Expected value principle
B.Standard deviation principle
C.Variance premium principle
D.Exponential premium principle
Explanation: The variance premium principle adds a loading proportional to the variance of the aggregate loss distribution: P = E[S] + α * Var(S). While it satisfies desirable properties such as additivity for independent risks, it does not satisfy positive homogeneity of degree 1 (multiplying the risk by a factor k multiplies the variance by k^2).
4A portfolio of commercial property policies has an expected annual aggregate claim cost E[S] of 400 million rials and a standard deviation SD(S) of 60 million rials. If the actuary applies the standard deviation principle with a loading coefficient of β = 0.50, what is the required loaded risk premium?
A.415 million rials
B.460 million rials
C.500 million rials
D.430 million rials
Explanation: Under the standard deviation premium principle, P = E[S] + β * SD(S). Substituting the parameters: P = 400 + 0.50 * 60 = 400 + 30 = 430 million rials.
5Why is the negative binomial distribution frequently preferred over the Poisson distribution when modelling claim frequencies in commercial liability and motor insurance?
A.Because the negative binomial distribution can be derived as a Poisson-Gamma mixture, capturing portfolio heterogeneity and overdispersion where variance exceeds the mean
B.Because the negative binomial distribution has a variance strictly less than its mean, capturing underdispersion
C.Because the negative binomial distribution is bounded above by the total number of policies
D.Because Central Insurance regulations prohibit the use of Poisson models in mandatory third-party liability
Explanation: Empirical insurance claim frequency data typically exhibits overdispersion, where the sample variance exceeds the sample mean. The Poisson distribution requires Var(N) = E[N]. When individual risk parameters λ vary across policyholders according to a Gamma distribution (heterogeneity), the resulting marginal distribution of claim counts is negative binomial, with Var(N) = E[N] + (E[N])^2 / r > E[N].
6In heavy-tailed non-life severity modelling, which probability distribution possesses a survival function of S(x) = (x_m / x)^α for x >= x_m > 0 and is widely used for modelling large industrial fire and catastrophe losses?
A.Exponential distribution
B.Single-parameter Pareto distribution
C.Weibull distribution with shape parameter greater than 1
D.Lognormal distribution
Explanation: The Pareto distribution with survival function S(x) = (x_m / x)^α for x >= x_m is a classic power-law, heavy-tailed distribution. As discussed in Chapter 5 of Payandeh's Risk Theory, it is particularly suitable for modelling extreme property, liability, and catastrophe losses where higher moments (such as variance or mean) may not exist if α is small.
7In Bühlmann credibility theory, an insured group is observed over n = 6 years. The expected value of process variance (EVPV) is estimated as v = 800 and the variance of hypothetical means (VHM) is estimated as a = 200. What is the Bühlmann credibility factor Z assigned to the group's own historical loss experience?
A.0.75
B.0.40
C.0.60
D.0.50
Explanation: The Bühlmann credibility parameter is k = v / a = 800 / 200 = 4. The credibility factor is Z = n / (n + k) = 6 / (6 + 4) = 6 / 10 = 0.60 (or 60%). The credibility premium is then 0.60 * (group mean) + 0.40 * (collective mean).
8An actuary has assigned a Bühlmann credibility factor of Z = 0.60 to a group's own experience. The group's observed average annual loss over the six-year experience period is 120 million rials, and the collective portfolio mean is 100 million rials. What is the Bühlmann credibility premium?
A.110 million rials
B.108 million rials
C.120 million rials
D.112 million rials
Explanation: The Bühlmann credibility premium is calculated as P = Z * X_bar + (1 - Z) * μ. Here, P = 0.60 * 120 + (1 - 0.60) * 100 = 72 + 40 = 112 million rials.
9In a life table, if l_50 = 90,000 and l_51 = 88,200, what is the annual probability of dying between ages 50 and 51 (q_50), and what is the probability that a life aged 50 survives to age 51 (p_50)?
A.q_50 = 0.020 and p_50 = 0.980
B.q_50 = 0.018 and p_50 = 0.982
C.q_50 = 0.025 and p_50 = 0.975
D.q_50 = 0.015 and p_50 = 0.985
Explanation: The number of deaths between age 50 and 51 is d_50 = l_50 - l_51 = 90,000 - 88,200 = 1,800. Therefore, q_50 = d_50 / l_50 = 1,800 / 90,000 = 0.020 (2.0%). Consequently, p_50 = 1 - q_50 = l_51 / l_50 = 88,200 / 90,000 = 0.980 (98.0%).
10An insurer issues a 1-year term life assurance to a person aged x with a sum assured of 1,000 million rials payable at the end of the year of death. The mortality rate is q_x = 0.02, and the annual effective discount rate corresponds to an interest rate of i = 5% (giving discount factor v = 1 / 1.05). What is the net single premium (actuarial present value)?
A.20.00 million rials
B.19.05 million rials
C.18.18 million rials
D.21.00 million rials
Explanation: The actuarial present value of a 1-year term assurance is A^1_{x:1|} = v * q_x * S. With S = 1,000 million rials, v = 1 / 1.05 ≈ 0.95238, and q_x = 0.02: Net Premium = 1,000 * (1 / 1.05) * 0.02 = 20 / 1.05 ≈ 19.0476 million rials, or approximately 19.05 million rials.

About the Iran Official Insurance Actuary Exam Exam

The Iran Official Insurance Actuary Examination (آزمون اکچوئر رسمی بیمه) is the statutory qualification for professional actuaries seeking certification as an اکچوئر رسمی under High Council of Insurance Regulation 78. Approved in Azar 1391 in nineteen articles and three notes under Article 17 of the Establishment of Central Insurance of Iran and Insurance Operations Act, Regulation 78 defines the official actuary's statutory role as an independent professional responsible for safeguarding institutional solvency and policyholder protection. The regulatory syllabus spans six core pillars: pricing mechanics and risk theory in life and non-life insurance (including aggregate loss models, credibility theory, and life contingent present values); reinsurance structures and retention optimization; valuation and technical reserves under Regulation 58 and motor third-party reserving guidelines (including unearned premium reserves, mathematical reserves, RBNS, and statutory IBNR); solvency ratio calculation and supervision under Regulation 69; financial statement analysis using Central Insurance model accounts; and insurance law and professional conduct under the Insurance Act of 1316 and Regulation 78 itself. Articles 7 to 12 impose the core fiduciary duties: an annual actuarial report evaluating pricing soundness, reserve adequacy, the solvency ratio, risk retention and reinsurance adequacy, institutional and investment risk management, and policyholder profit participation; immediate notification to the insurer and to Central Insurance where the actuary's work shows the insurer cannot meet its obligations; professional confidentiality except where the law requires disclosure; and personal legal responsibility for the accuracy of the reports. Regulation 78/1, approved in Esfand 1395, deleted the original Article 13 and renumbered Article 14 as Article 13, so the independence rule now in force bars the actuary and the members and partners of an actuarial firm from being employed by, holding a position in, or holding more than one percent of the shares of the insurer they report for. This question bank is independent practice for the Iranian Insurance Actuary Examination by OpenExamPrep. The official examination is administered in Persian using a descriptive written paper and an oral interview. These 100 questions provide an English-language multiple-choice study adaptation covering the statutory syllabus, quantitative techniques, and regulatory provisions for practitioners preparing for actuarial licensing in Iran. They are not an official translation, not official exam questions, and not endorsed by Central Insurance of Iran or the Insurance Research Institute.

Exam sponsor: Central Insurance of Iran (بیمه مرکزی جمهوری اسلامی ایران), with written paper delivery delegated to the Insurance Research Institute (پژوهشکده بیمه). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Licensing as an official insurance actuary in Iran is governed by High Council of Insurance Regulation 78 (آیین‌نامه اکچوئر رسمی بیمه), approved under Article 17 of the Establishment of Central Insurance Act. Under Article 2, an applicant must possess Iranian nationality, be at least 25 years old, have no effective criminal record or narcotic addiction, have completed military service or hold an exemption (for men), and hold either a Master's degree in Actuarial Science / Insurance Statistics with 4 years of relevant experience, a Master's degree in a related field (statistics, mathematics, insurance, economics, financial management) with 6 years of experience, or a recognised international actuarial qualification with 4 years of experience. Item 7 of Article 2 requires success in both the written and oral specialist examinations conducted by Central Insurance. The written paper is administered by the Insurance Research Institute in Tehran, in person, with descriptive problem-solving questions, and is followed by an oral interview at Central Insurance. The Institute's applicant guide describes the بیم‌سنجی paper as held in Tehran every four months; published Institute calendars have listed one scheduled sitting per year, so candidates should work from the current exam notice at azmoon.irc.ac.ir.

Time Limit

Not published as a fixed duration; the Insurance Research Institute announces the timing of each written sitting with its exam notice, and the oral interview is held separately by Central Insurance

Passing Score

Not published; Article 2(7) of Regulation 78 requires success in both the written paper and the oral interview

Exam / Certification Fees

Set by the Insurance Research Institute for each sitting and paid online in Iranian rials at azmoon.irc.ac.ir

Exam sponsor website

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

25%

Pricing and premium determination in life and non-life insurance (نرخ‌گذاری و مبانی تعیین حق‌بیمه)

Non-life risk theory and loss distributions, compound Poisson and aggregate loss models, premium calculation principles, credibility theory (Bühlmann and Bayesian models), experience rating, survival models, life contingent present values, life annuities, equivalence principle, and expense loadings.

15%

Reinsurance structures, pricing, and capacity (بیمه اتکایی و روش‌های انتقال ریسک)

Proportional treaties (quota share and surplus lines), non-proportional treaties (excess of loss per risk, per event, and stop loss), retention limits, capacity calculations, reinstatement premiums, ceding and profit commissions, and compulsory cessions to Central Insurance.

20%

Valuation, technical reserves, and reserving adequacy (ذخایر فنی و کفایت آن)

Non-life technical reserves under Regulation 58 as amended in 1400 and 1403: unearned premium reserve on the quarterly one-eighth basis after the 15 percent acquisition deduction, unexpired risk reserve above an 85 percent loss ratio, outstanding claims reserve split into RBNS and an IBNR set at 3 to 10 percent of reported claims under Note 2 to Article 10, Chain Ladder and Bornhuetter-Ferguson projection, life mathematical reserves (prospective and retrospective), and the supplementary and natural-perils reserve.

15%

Calculation of the solvency ratio and financial supervision under Regulation 69 (نحوه محاسبه و نظارت بر توانگری مالی)

The Regulation 69 Solvency Margin Ratio (SMR) framework: available capital as admissible assets plus the revaluation surplus on fixed assets less liabilities; required capital aggregated from the underwriting, market, credit and liquidity risk tables; the five solvency levels (Level 1 at >=100% down to Level 5 at <10%); the statutory restoration and capital-increase plans; and the transition to Regulation 110, notified in Shahrivar 1404.

10%

Financial statements and key insurance indicators (صورت‌های مالی و شاخص‌های مالی و فنی)

Central Insurance standard model financial statements, technical income statement construction, earned premium and incurred claims calculations, loss ratio, expense ratio, combined ratio, retention ratio, and investment return on technical funds.

15%

Insurance law, regulatory framework, and Regulation 78 actuarial governance (اصول، مقررات و وظایف اکچوئر رسمی)

The Insurance Act of 1316, the Establishment of Central Insurance Act of 1350, High Council of Insurance Regulation 78 and its 1395 amendment Regulation 78/1 (annual reporting duties, reserve and solvency certification, the Article 9 duty to report an insurer that cannot meet its obligations, confidentiality and liability under Articles 11 and 12, and the independence bar in the amended Article 13), and the regulations on the published reading list, including Regulations 55, 58, 61, 69, 88, 93, 94, 95 and 104 and life Regulation 107.

Preparing for the Iran Official Insurance Actuary Exam Exam

What You Need to Know

  • Passing score: Not published; Article 2(7) of Regulation 78 requires success in both the written paper and the oral interview
  • Assessment: Licensing as an official insurance actuary in Iran is governed by High Council of Insurance Regulation 78 (آیین‌نامه اکچوئر رسمی بیمه), approved under Article 17 of the Establishment of Central Insurance Act. Under Article 2, an applicant must possess Iranian nationality, be at least 25 years old, have no effective criminal record or narcotic addiction, have completed military service or hold an exemption (for men), and hold either a Master's degree in Actuarial Science / Insurance Statistics with 4 years of relevant experience, a Master's degree in a related field (statistics, mathematics, insurance, economics, financial management) with 6 years of experience, or a recognised international actuarial qualification with 4 years of experience. Item 7 of Article 2 requires success in both the written and oral specialist examinations conducted by Central Insurance. The written paper is administered by the Insurance Research Institute in Tehran, in person, with descriptive problem-solving questions, and is followed by an oral interview at Central Insurance. The Institute's applicant guide describes the بیم‌سنجی paper as held in Tehran every four months; published Institute calendars have listed one scheduled sitting per year, so candidates should work from the current exam notice at azmoon.irc.ac.ir.
  • Time limit: Not published as a fixed duration; the Insurance Research Institute announces the timing of each written sitting with its exam notice, and the oral interview is held separately by Central Insurance
  • Exam / certification fees: Set by the Insurance Research Institute for each sitting and paid online in Iranian rials at azmoon.irc.ac.ir Official sources

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Iran Official Insurance Actuary Exam: Suggested Study Strategy

1Master the statutory articles of Regulation 78: Article 2 (eligibility and the written plus oral examinations), Article 7 (the six annual report areas), Article 8 (professional standards), Article 9 (immediate notification where the insurer cannot meet its obligations), Articles 11 and 12 (confidentiality and liability), and the amended Article 13 introduced by Regulation 78/1 in 1395 (independence).
2Memorise the Regulation 69 solvency levels from Article 7: Level 1 (>=100%), Level 2 (>=70% to <100%), Level 3 (>=50% to <70%), Level 4 (>=10% to <50%), and Level 5 (<10%), with the three-year restoration plan at Level 2, the added two-year capital increase plan at Level 3, and the one-year plan plus Article 12 measures at Level 4.
3Practise worked numerical problems in risk theory and reserving: aggregate loss variance (E[N]Var(X) + Var(N)(E[X])^2), Chain Ladder loss development factors, Bornhuetter-Ferguson unpaid claims, and the Regulation 58 unearned premium base.
4Understand technical reserving under Regulation 58 and 58/2: the six non-life reserves listed in Article 1, the quarterly one-eighth unearned premium method in Article 8, the 85 percent loss-ratio trigger for the unexpired risk reserve in Article 9, the RBNS and IBNR split in Article 10, and the 3 to 10 percent IBNR band in Note 2 to that article.
5Clarify key Iranian insurance law sections: Article 4 (insurable interest), Article 10 (proportional rule of average), Article 19 (indemnity measure), Article 30 (subrogation), and Article 36 (two-year limitation period) of the Insurance Act of 1316.
6Review reinsurance treaty mechanics: calculating net retention, cessions, and commission in quota share and surplus lines, as well as layer recoveries and pro-rata reinstatement premiums in excess of loss covers.

Frequently Asked Questions

What are the statutory requirements to qualify as an official insurance actuary in Iran?

Under Article 2 of High Council of Insurance Regulation 78, an applicant must have Iranian nationality, be at least 25 years old, have completed military service or hold an exemption (for men), have no effective criminal record or narcotic addiction, hold an accredited Master's degree in Actuarial Science (with 4 years of relevant experience) or a related field such as statistics, mathematics, insurance, economics, or financial management (with 6 years of experience) or an international qualification recognised by Central Insurance, and pass both the written and oral specialist examinations conducted by Central Insurance.

What is the format and language of the official examination?

The examination is conducted in Persian. The Insurance Research Institute holds an in-person written paper in Tehran with descriptive problem-solving questions (سوالات تشریحی) rather than multiple-choice items, and Central Insurance of Iran then holds a specialist oral interview. Both components must be passed under Article 2, Item 7 of Regulation 78.

What are the primary reporting duties of an official actuary under Regulation 78?

Under Article 7 of Regulation 78, the actuary must submit an annual report assessing the insurer's pricing foundations, reserve adequacy, solvency ratio calculation and correctness, risk retention and reinsurance adequacy, investment and institutional risk management, and the calculation and distribution of policyholder profit participation.

What independence prohibitions apply to an official insurance actuary?

Regulation 78/1, approved by the High Council of Insurance on 22 Esfand 1395, deleted the original Article 13 of Regulation 78 and renumbered Article 14 as the new Article 13. Under that amended Article 13, an individual official actuary and the members and partners of a licensed actuarial firm may not be employed by, hold a position in, or hold more than one percent of the shares of the insurance institution for which they prepare reports. The earlier blanket bar on serving as a board member, managing director or employee of insurance institutions generally, and the earlier extension of the conflict rule to first-degree relatives, were superseded by that amendment.

What is the statutory whistleblowing obligation under Article 9 of Regulation 78?

If an official actuary's assessments reveal that an insurer is unable to fulfill its obligations or that its continued operation would be detrimental to policyholders, insureds, or beneficiaries, the actuary is legally obligated to immediately notify both the insurance company and Central Insurance of Iran.

How does this practice question bank relate to the official examination?

This question bank is an independent English-language multiple-choice study adaptation created by OpenExamPrep. It focuses on the assessable concepts, quantitative calculations, and regulatory standards of the published syllabus. It is not an official translation, does not reproduce official exam questions, cannot simulate the descriptive or oral components, and is not affiliated with Central Insurance of Iran or the Insurance Research Institute.