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100+ Free Insurance Commission Licensure Exam — Non-Life Practice Questions
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2026 Statistics
Key Facts: Insurance Commission Licensure Exam — Non-Life Exam
70%
Passing Score
Insurance Commission
PHP 1,010.00
Exam Fee
Circular Letter 2014-15
3 Years
License Validity
RA 10607
40 Hours
Pre-license Training
Recommended
30,000 PHP
No-Fault Motor Limit
IMC 2024-01 / Sec 391
200,000 PHP
CTPL Bodily Injury Limit
IMC 2024-01
The Insurance Commission Licensure Exam for Non-Life / General Insurance Agents is the mandatory gateway to selling property, fire, motor car, marine, and casualty insurance in the Philippines. Administered by the Insurance Commission under the Department of Finance, the exam requires a passing score of 70%. Candidates must be sponsored by an accredited insurance company or agency and complete a 40-hour pre-licensing training course. The exam fee is PHP 1,010.00, which is typically covered by the sponsoring firm.
Sample Insurance Commission Licensure Exam — Non-Life Practice Questions
Try these sample questions to test your Insurance Commission Licensure Exam — Non-Life 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 fundamental requirement for a property insurance contract to be legally valid under the Philippine Insurance Code?
A.The contract must be verbal to allow flexibility in premium payments
B.The insured must possess an insurable interest in the subject matter
C.The policy must cover speculative risk for both parties
D.The insurer must guarantee that no losses will occur during the policy period
Explanation: Under the Philippine Insurance Code, an insurable interest is a basic prerequisite for any insurance policy. Without an insurable interest, the contract is considered a wager and is void under Section 25. The insurable interest in property must exist both when the insurance takes effect and when the loss occurs.
2The Principle of Indemnity states that after a loss has occurred, the insured should be:
A.Compensated to make a reasonable profit from the disaster
B.Restored to approximately the same financial position as before the loss
C.Given the full replacement value of all items regardless of depreciation
D.Paid a flat rate determined solely by the local LTO office
Explanation: The Principle of Indemnity aims to restore the insured to the same financial position they enjoyed immediately before the loss occurred. Under Section 82 of the Philippine Insurance Code, the insured cannot recover more than the actual loss sustained. This prevents the insured from profiting from insurance, which would create a moral hazard.
3Under the principle of subrogation, what right does the insurer acquire after paying a claim to the insured?
A.The right to increase the insured's premiums immediately
B.The right to cancel all other insurance policies held by the insured
C.The right to step into the insured's shoes and pursue recovery from the negligent third party
D.The right to seize the insured's remaining property without compensation
Explanation: Subrogation is a corollary of the principle of indemnity. Once the insurer pays the claim, it acquires the legal right of the insured to recover damages from the third party responsible for the loss. This prevents the insured from collecting twice for the same loss and ensures the responsible party pays for the damage.
4If a policyholder has multiple insurance policies covering the same property and a loss occurs, how is the claim payout typically handled under the principle of contribution?
A.The policyholder can collect the full loss amount from each insurer
B.Only the policy that was purchased first is obligated to pay the claim
C.Each insurer pays a proportional share of the loss based on their limit of liability
D.The government's Security Fund pays the entire claim directly
Explanation: The principle of contribution applies when multiple policies cover the same interest, risk, and property (double insurance). Under Section 96 of the Insurance Code, each insurer is liable to contribute proportionally to the loss based on their respective policy limits. This prevents double recovery by the insured, adhering to the principle of indemnity.
5What does the principle of Utmost Good Faith (Uberrimae Fidei) require from both parties of an insurance contract?
A.To negotiate the premiums in a public bidding process
B.To disclose all material facts honestly and completely to each other
C.To hire independent legal counsel to review every clause of the policy
D.To settle all disputes within 15 days without involving the court
Explanation: Insurance contracts are contracts of utmost good faith, requiring both the applicant and the insurer to reveal all material facts. A material fact is one that would influence the insurer's decision to accept the risk or determine the premium rate. Failure to observe this principle allows the injured party to rescind the contract.
6How is concealment defined under the Philippine Insurance Code?
A.The intentional destruction of damaged property to claim salvage value
B.A neglect to communicate that which a party knows, and ought to communicate
C.An oral statement that exaggerates the value of property during negotiation
D.The act of transferring property ownership without the insurer's consent
Explanation: Section 26 of the Philippine Insurance Code defines concealment as 'a neglect to communicate that which a party knows, and ought to communicate.' Whether intentional or unintentional, a concealment of a material fact entitles the injured party to rescind the contract of insurance under Section 27.
7If an applicant makes an oral representation about a fact that is false, under what condition can the insurer rescind the policy?
A.Only if the representation was written into the policy document as a warranty
B.Only if the representation relates to a fact that is material to the risk
C.For any false statement, regardless of whether it is material or trivial
D.Only if the misrepresentation was made under oath in front of a notary
Explanation: Section 45 of the Insurance Code states that if a representation is false in a material point, the injured party is entitled to rescind the contract from the time when the representation becomes false. Materiality is determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is made.
8What is the primary difference between a warranty and a representation in a property insurance contract?
A.A warranty must be literally complied with, while a representation only needs to be substantially true
B.A representation must be written on the policy itself, while a warranty can be verbal
C.A warranty is made by the agent, while a representation is made by the underwriter
D.Warranties are optional endorsements, while representations are required by LTO
Explanation: A warranty is a statement or promise that is part of the insurance contract itself and must be strictly and literally true or complied with. In contrast, a representation is an active statement made prior to or at the time of issuing the policy, which is collateral to the contract and only needs to be substantially true.
9In insurance claims, what does the principle of proximate cause refer to?
A.The closest event in time to the occurrence of the physical damage
B.The geographical distance between the hazard and the insured property
C.The active, efficient cause that sets in motion a train of events without the intervention of any new force
D.The liability limits outlined on the first page of the policy document
Explanation: Proximate cause is the active, efficient cause that sets in motion a chain of events bringing about a loss, without the intervention of any new and independent force. Under Section 86 of the Insurance Code, an insurer is liable for a loss of which the peril insured against was the proximate cause, even if an excluded peril was the immediate cause.
10Which mathematical principle states that the larger the number of similar exposure units, the more predictable the future loss experience will be?
A.The Law of Diminishing Returns
B.The Law of Large Numbers
C.The Principle of Indemnity Multiplication
D.The Co-insurance Contribution Ratio
Explanation: The Law of Large Numbers is a fundamental mathematical concept used in insurance rate-making. It asserts that as the sample size (number of exposure units) increases, the actual loss experience will deviate less from the expected probability of loss. This enables insurers to predict claims and price premiums accurately.
About the Insurance Commission Licensure Exam — Non-Life Practice Questions
Verified exam format metadata for Insurance Commission Licensure Exam — Non-Life / General Insurance Agent (Philippines) is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.