IC-38 General Insurance Agents Licensing Examination - Principles, Products, Claims and Compliance
IC-38 tests the general-insurance agent's grasp of contract principles, the main general lines (fire, marine, motor, health, liability), underwriting and claims practice, and the IRDAI rules governing how a policy may be sold. Questions are applied rather than merely definitional.
Contract foundations
Every general policy rests on insurable interest, utmost good faith, indemnity, subrogation, contribution and proximate cause. Formation needs offer, acceptance, consideration and lawful object; the premium is the consideration, and Section 64VB of the Insurance Act, 1938 bars the insurer from assuming risk before premium is received. Section 41 prohibits rebating - an agent who returns part of the commission to the buyer commits an offence and breaches the Code of Conduct. Agents must also hold a current licence, disclose their commission and pass material information to the insurer.
The product map
- Fire/property: standardised Bharat Griha Raksha for homes and Bharat Sookshma/Laghu Udyam Suraksha for small enterprises, with optional add-ons.
- Marine: cargo transit and hull covers under the Marine Insurance Act, 1963; open covers operate through declarations.
- Motor: own-damage plus compulsory third-party liability (Motor Vehicles Act, 1988, s.146); no-claim bonus applies to OD only, while TP premium is tariffed by IRDAI.
- Health: pre-existing disease waiting periods, portability, and a moratorium after 60 continuous months of cover.
- Liability: public, product and professional indemnity covers.
Claims
Intimation, documentation, survey by a licensed surveyor (Insurance Act s.64UM, above the prescribed claim threshold), assessment, then settlement or a reasoned repudiation. The insurer, not the agent or surveyor, decides the claim.
Worked example
Stock sum insured ₹20 lakh, value at risk ₹25 lakh, fire loss ₹6 lakh, deductible ₹10,000. Average clause: 6,00,000 × 20/25 = ₹4,80,000, less ₹10,000 = ₹4,70,000. The shortfall is the underinsurance penalty.
Traps
Confusing contribution (two policies, same interest, same peril) with subrogation; assuming no-claim bonus reduces the third-party premium; believing oral assurance binds cover without premium; expecting the surveyor to settle the claim.