III IC-24 common mistakes
III IC-24 · Understand the traps and how to avoid them.
Answering 'what would a good insurer do' instead of applying the exact wording of the Insurance Act, 1938 and IRDAI regulations - e.g. writing that a claim must be paid 'within a reasonable time' rather than citing the specific statutory/regulatory requirement the question asks about.
Candidates transfer general commercial intuition or on-the-job practice into a legal/regulatory paper, and exam questions in IC-24 are marked against statutory provisions, definitions and regulatory clauses, not against industry best practice.
What to do instead
Before writing, identify the provision the question is testing (Act section, IRDAI Regulation, or policy condition) and build the answer around that text; where practice and law diverge, state the legal position first and then note practice as a secondary comment.
Confusing the roles and powers of IRDAI with those of the Central Government (and with the Insurance Association/self-regulatory bodies), for example attributing a power of appointment, rule-making or winding-up to the wrong authority.
Several chapters describe overlapping functions, and candidates memorise a list of 'regulators and bodies' without mapping each specific power to the correct entity.
What to do instead
Maintain a two-column table for every statutory power you meet: 'power' versus 'who exercises it, under which section/regulation'. Revise by covering the right column and reciting the authority, then check against the bare Act.
Describing the insurance contract as a simple offer-and-acceptance transaction and omitting the features the examiner is testing - insurable interest, utmost good faith, indemnity, subrogation, contribution, proximate cause and the requirement of a premium as consideration.
Candidates treat insurance like an ordinary sale of goods contract and rely on general Contract Act knowledge, so the distinctive legal characteristics of insurance are never surfaced in the answer.
What to do instead
For any question on formation or nature of the contract, run a fixed checklist of the six or seven special features and write one sentence on each, explicitly linking it to the facts in the question.
Treating insurable interest as a single test applied identically to life and general insurance - for example requiring pecuniary interest at the time of the loss in a life policy, or accepting a mere expectation in a marine or fire policy.
The timing and measure of insurable interest differ between life, fire and marine, and candidates learn one definition and apply it everywhere.
What to do instead
Learn a three-row comparison: life (interest at inception, need not be pecuniary to the same degree, no strict monetary limit), fire (interest at inception and at loss, limited to pecuniary value), marine (interest at the time of loss, defined by statute). Answer with the correct row for the class in question.
Answering a proximate cause question by naming the last event in the chain rather than the dominant, effective and efficient cause, and failing to apply the exceptions (e.g. losses caused by wilful misconduct or by an excluded peril that is the real cause).
Everyday language equates 'cause' with 'the final thing that happened', so candidates pick the chronologically last peril instead of the operative one.
What to do instead
Practise with short fact patterns: write the chain of events, strike out concurrent or remote events, and justify which single peril set the loss in motion. State the rule ('proximate cause is the dominant, not the nearest, cause') and then apply it to the facts.
Mixing up the principles of subrogation and contribution - using them interchangeably, or claiming an insurer can recover from its own insured, or allowing double recovery by the insured.
Both principles limit recovery and both involve third parties, but subrogation transfers the insured's rights against a wrongdoer while contribution apportions a loss between insurers covering the same interest; candidates blur the two.
What to do instead
Write a one-line definition of each plus a worked numeric example of contribution (proportionate sharing of a loss between two policies) and a separate example of subrogation (insurer stepping into the insured's shoes against a negligent third party). Note expressly that neither permits the insured to profit.
Confusing reinsurance with co-insurance, or describing facultative and treaty reinsurance without stating the distinguishing feature (individual risk-by-risk acceptance versus automatic portfolio cover) and the main treaty types (quota share, surplus, excess of loss).
The terminology is technical and the chapters are often skimmed, so candidates produce a generic 'risk sharing' answer that scores few marks.
What to do instead
Build a classification chart: reinsurance (facultative, treaty - quota share, surplus, excess of loss, stop loss) versus co-insurance (two or more insurers on the same risk under one policy). For each type write one sentence on how the loss is shared and one on who deals with the original insured.
Describing the claims process in vague stages ('intimation, survey, settlement') without the statutory or regulatory time limits, the role of the surveyor and the consequences of delay - and without distinguishing cashless from reimbursement settlement.
Candidates rely on general familiarity with claims and never memorise the specific procedural requirements and timelines that carry marks.
What to do instead
Reduce the claims process to a numbered timeline with the actor and the requirement at each step (intimation, registration, surveyor appointment, survey report, settlement or repudiation, grievance escalation). Learn the surveyor's statutory role and the limits on appointment, and write the cashless and reimbursement routes as separate short sequences.
Answering a 'distinguish between' question with two separate descriptions rather than a point-by-point comparison, so the examiner cannot see that the distinction has been understood.
Under time pressure candidates write everything they know about each term instead of contrasting them on the same criteria.
What to do instead
Use a two-column table with a fixed set of criteria (definition, legal basis, who is protected, timing, measure of recovery, effect on the insured). Answer the contrast first, then add a short note on each term only if space allows.
Misallocating time and marks - writing long essays on the first two questions, leaving later compulsory or higher-weight questions unanswered or answered in note form, and ignoring the instruction to attempt all parts.
Candidates answer in the order they feel confident rather than the order that maximises marks, and they underestimate how much writing each mark requires.
What to do instead
Before starting, read the whole paper, note the marks per question and per part, and allocate minutes roughly in proportion to marks with a reserve for review. Answer every part, even briefly, because an attempted part usually earns more than an omitted one; practise full papers under timed conditions to calibrate speed.