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Key Facts: SLII Diploma in Insurance Exam

12 months

Program Duration

SLII Official Details

50-60%

Passing Score

SLII Examination Guidelines

7 Modules

Core Subjects

SLII Curriculum

The SLII Diploma in Insurance is a 12-month professional certification for insurance practitioners in Sri Lanka. The exam consists of multiple-choice and structured questions testing underwriting, claims, insurance law, and products. A pass mark of 50-60% is required for each module.

Sample SLII Diploma in Insurance Practice Questions

Try these sample questions to test your SLII Diploma in Insurance exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which regulatory body is responsible for supervising and regulating the insurance industry in Sri Lanka?

A.Insurance Regulatory Commission of Sri Lanka (IRCSL)

B.Central Bank of Sri Lanka (CBSL)

C.Securities and Exchange Commission of Sri Lanka (SEC)

D.Department of Motor Traffic (DMT)

Explanation: The Insurance Regulatory Commission of Sri Lanka (IRCSL) is the statutory body established to regulate, supervise, and develop the insurance industry in Sri Lanka under the Regulation of Insurance Industry Act. CBSL regulates banks, SEC regulates capital markets, and DMT handles vehicle registration.

2What does the principle of indemnity seek to achieve in insurance?

A.Provide a source of profit for the insured after a loss

B.Place the insured in the same financial position as they were immediately before the loss occurred

C.Guarantee that the insured will receive the sum assured regardless of the actual loss

D.Prevent the insurer from canceling the contract after a claim is filed

Explanation: The principle of indemnity ensures that an insured is restored to the same financial position they enjoyed prior to the loss. It prevents the insured from making a profit from a loss, which would create a moral hazard. Life insurance is generally an exception to this principle.

3In insurance terminology, what is a physical hazard?

A.An insured's lack of integrity or tendency to be dishonest

B.A physical characteristic of the risk that increases the likelihood or severity of a loss

C.The physical damage caused directly by an insured peril like fire

D.The geographical area where the insured property is located

Explanation: A physical hazard refers to the tangible or physical characteristics of the risk itself that can increase the chance of a loss. Examples include using wooden construction for a factory or storing flammable chemicals near a heat source. Dishonesty, on the other hand, is a moral hazard.

4Under Sri Lankan law, what type of motor insurance coverage is compulsory for all vehicle owners using public roads?

A.Comprehensive Motor Cover

B.Third-Party Property Damage Cover only

C.Third-Party Liability Cover (for bodily injury or death)

D.Personal Accident Cover for the driver

Explanation: According to the Motor Traffic Act in Sri Lanka, it is legally mandatory for all motor vehicle owners to carry insurance covering third-party bodily injury and death. This ensures that innocent road accident victims receive compensation. Comprehensive coverage is optional.

5Which of the following describes a moral hazard?

A.Leaving a building unlocked because it is fully insured

B.Using cheap electrical wiring in a newly built warehouse

C.Building a factory in an area prone to seasonal flooding

D.Storing gas cylinders close to a commercial kitchen stove

Explanation: Moral hazard arises from the behavior, attitude, or character of the insured. Leaving property unprotected or being careless simply because it is insured is a classic example of moral/morale hazard, as the existence of insurance changes the policyholder's behavior.

6What is the primary document used by an insurer to gather information about a risk before issuing a policy?

A.Claim Form

B.Proposal Form

C.Cover Note

D.Policy Schedule

Explanation: The proposal form is the primary questionnaire completed by the prospective client. It provides the insurer with essential details to assess the risk, determine acceptability, and calculate the appropriate premium. The policy schedule is issued after the risk is accepted.

7Which party in an insurance transaction represents the insurer and is typically paid a commission?

A.Insurance Broker

B.Insurance Agent

C.Loss Adjuster

D.Underwriter

Explanation: An insurance agent is a representative of the insurance company. Agents act on behalf of the insurer, selling policies and assisting clients, and are compensated via commissions paid by the insurance company. Brokers, by contrast, legally represent the client.

8The principle of utmost good faith (uberrimae fidei) requires that:

A.The insurer must pay all claims immediately without investigation

B.Both parties to the contract must disclose all material facts honestly

C.The insured must pay the premiums strictly before the due date

D.The agent must offer a discount to secure the client's business

Explanation: Utmost good faith requires both the prospective policyholder and the insurer to disclose all material facts truthfully. Failing to disclose a material fact can render the contract voidable. This is a higher standard of honesty than the common law principle of 'caveat emptor' (buyer beware).

9What is unearned premium?

A.Premium collected for cover that has not yet been provided by the insurer

B.Premium that the agent has failed to remit to the insurance company

C.Additional premium charged for higher-than-average risks

D.Premium that has been fully recognized as revenue by the insurer

Explanation: Unearned premium represents the portion of the written premium that corresponds to the unexpired period of the policy. Since the insurer has not yet provided coverage for that remaining period, it cannot recognize that portion as earned revenue and must hold it as a liability.

10What is the primary purpose of reinsurance?

A.To allow policyholders to purchase multiple policies for the same property

B.To transfer a portion of the insurer's underwriting risk to another insurer

C.To provide insurance coverage directly to low-income communities

D.To regulate the commission rates paid to insurance intermediaries

Explanation: Reinsurance is 'insurance for insurance companies.' It allows a primary insurer to transfer (cede) a portion of its risk exposure to a reinsurer. This protects the primary insurer from catastrophic losses, stabilizes its financial results, and increases its underwriting capacity.

About the SLII Diploma in Insurance Exam

The Sri Lanka Insurance Institute (SLII) Diploma in Insurance is a technical and supervisory qualification for insurance staff. The exam covers key topics including underwriting, claims management, personal lines, life and general insurance products, customer service, business finance, and Sri Lankan insurance laws and regulations.

Questions

100 scored questions

Time Limit

120 minutes per exam module

Passing Score

50% or 60%

Exam Fee

Varies based on registration status (Sri Lanka Insurance Institute (SLII))

SLII Diploma in Insurance Exam Content Outline

15%

Insurance Law and Regulation

Principles of insurance contracts, Sri Lanka insurance laws, and regulatory guidelines under the IRCSL.

15%

Underwriting Aspects

Risk assessment, physical and moral hazards, proposal form evaluation, and rating mechanisms.

15%

Personal Lines Insurance

Motor insurance, home cover, health and accident coverage, and typical exclusions.

15%

Insurance Products and Services

Life insurance plans, commercial property, liability insurance, marine cargo, and Takaful concepts.

10%

Customer Service and Marketing

Consumer psychology, marketing techniques, distribution channels, and sales ethics.

15%

Insurance Business and Finance

Financial accounting for insurers, solvency requirements, and reinsurance structures.

15%

Advanced Claims Management

Claims procedures, loss assessment, dispute resolution, and fraud prevention.

How to Pass the SLII Diploma in Insurance Exam

What You Need to Know

Passing score: 50% or 60%
Exam length: 100 questions
Time limit: 120 minutes per exam module
Exam fee: Varies based on registration status

Keys to Passing

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

SLII Diploma in Insurance Study Tips from Top Performers

1Familiarize yourself with the Insurance Regulatory Commission of Sri Lanka (IRCSL) guidelines and local insurance legislation.

2Understand the distinction between general insurance products (such as motor, fire, marine) and life insurance products.

3Study underwriting principles carefully, paying attention to how moral and physical hazards affect risk selection.

4Practice multiple-choice questions focusing on claims settlement procedures, subrogation, and indemnity calculations.

Frequently Asked Questions

Who is eligible for the SLII Diploma in Insurance?

Candidates with G.C.E. Advanced Level (A/L) qualifications or at least two years of experience in the insurance industry are eligible to enroll.

What is the passing score for the SLII Diploma exams?

The passing score is typically 50% or 60% per module, depending on the specific module and whether it is a local SLII qualification or aligned with international partners.

How long is the SLII Diploma in Insurance program?

The program is structured to be completed over 12 months, with exam sittings usually conducted twice a year in January and July.