GIC Re Assistant Manager flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Utmost good faith

A duty on both proposer and insurer to disclose all material facts honestly. Breach lets the insurer avoid the contract from inception, subject to statutory limits.

Insurable interest

A financial relationship where the insured benefits from the subject's survival and suffers loss from its destruction. Required at proposal for life, at loss for indemnity.

Principle of indemnity

The insured is restored to their pre-loss financial position, never better off. Subject to sum insured, average clause, deductibles and policy terms.

Subrogation

After paying a claim, the insurer acquires the insured's legal right to recover the loss from the responsible third party. Limited to the amount paid.

Contribution

When two or more indemnity policies cover the same loss, insurers share it rateably so the insured receives no more than the actual loss.

Quota share treaty

A proportional reinsurance arrangement where the reinsurer accepts a fixed percentage of every risk's premium and pays the same percentage of losses.

Surplus treaty

A proportional treaty where the ceding insurer retains a fixed line and cedes amounts above it, up to a stated number of lines per risk.

Excess of loss treaty

Non-proportional reinsurance where the reinsurer pays losses above a deductible or priority, up to a limit, usually per risk or per event.

Compound interest formula

A = P(1 + R/100)^T, where P is principal, R the annual rate and T the years. For half-yearly compounding use R/2 and 2T.

Rule of 72

An investment doubles in approximately 72/R years at R percent annual compound growth. A quick approximation used in interest and growth problems.

Alligation rule

The ratio in which two ingredients at different prices must be mixed to get a mean price is (mean − cheaper) : (dearer − mean).

Relative speed

For two bodies moving in opposite directions, relative speed is the sum; in the same direction, it is the difference. Used in trains and boats problems.

Circular permutation

The number of ways to arrange n distinct objects in a circle is (n−1)!, because rotations of the same arrangement are treated as identical.

Independent events

Two events are independent when P(A∩B) = P(A) × P(B). Occurrence of one gives no information about the other.

Syllogism conversion rules

'All A are B' converts to 'Some B are A'; 'Some A are B' converts to 'Some B are A'; 'No A are B' converts to 'No B are A'.

Weighted average

The mean of values each multiplied by its weight, divided by total weight: Σwx/Σw. Used for average marks, age and mixture problems.

Subject-verb agreement

Singular subjects take singular verbs. 'Each', 'every', 'either', 'neither', 'everyone' and 'nobody' are singular; with 'neither...nor' the nearer subject governs.

Present perfect tense

Formed with has/have plus past participle. Used for past actions with present relevance, recent events, and periods continuing to now.

Affect versus effect

'Affect' is usually a verb meaning to influence; 'effect' is usually a noun meaning a result. Confusion between them is a common error-spotting item.

Active to passive voice

Passive is formed with the object moved to subject position, a form of 'be', and the past participle: 'The policy was renewed by the client.'

Reported speech shift

In indirect speech, present becomes past, past becomes past perfect, and time/place words shift: now becomes then, today becomes that day.

Reading comprehension strategy

Read the question first, locate the keyword in the passage, paraphrase the relevant sentence, and reject options that overstate or add unstated claims.

Collocation

The conventional pairing of words in a language, such as 'comply with', 'consist of', 'depend on' and 'prefer to'. Tested in cloze and error questions.

Prepositions of time

Use 'in' with months and years, 'on' with days and dates, and 'at' with clock times. Fixed usage, not governed by a general rule.

Loss ratio

Incurred claims divided by earned premium, expressed as a percentage. A key indicator of underwriting performance and pricing adequacy.

IBNR reserves

Incurred but not reported reserves cover claims that occurred but were not yet notified. Estimated using chain-ladder or Bornhuetter-Ferguson actuarial methods.

Solvency margin

The ratio of available solvency margin to required solvency margin. IRDAI prescribes a minimum control level that insurers must maintain at all times.

Pre-authorisation

Approval obtained from a health insurer or TPA before planned hospitalisation, confirming cashless treatment and the admissible amount under the policy.

Pre-existing disease

A condition diagnosed or treated within a defined look-back period before policy inception. Covered only after the waiting period stated in the policy.

Proximate cause

The dominant, effective cause of a loss in an unbroken chain of events. It determines whether the loss falls within the policy's coverage.

Insurance Act, 1938

The principal Indian statute governing insurance business, including registration, deposits, policyholder protection and the mandate for a national reinsurer.

Motor third-party liability

Compulsory cover under the Motor Vehicles Act, 1988, for death, bodily injury and property damage caused to third parties by an insured vehicle.