III IC-83 cheat sheet

The exam code "III IC-83" could not be matched to any published syllabus, so no official domain list, weighting, or task inventory can be confirmed; treat all content here as provisional.

No verified source confirms the issuing body, question count, time limit, passing score, or delivery format for IC-83; do not assume parity with any other "IC" exam series.

Because domain coverage is unknown, this sheet covers transferable insurance concepts: risk, policy structure, underwriting, claims, regulation, and ethics.

Risk is uncertainty about loss; pure risk offers only loss or no loss, speculative risk offers gain or loss, and insurable risk is typically pure, measurable, and accidental.

Indemnity principle: insurance restores the insured to pre-loss financial position, no better; valued policies and replacement-cost endorsements are exceptions to strict indemnity.

Utmost good faith (uberrimae fidei) obliges both parties to disclose material facts; materiality means a fact that would change an underwriter's decision or rating.

Insurable interest must exist at inception for property cover and at loss for life cover in most common-law jurisdictions; absence voids the contract.

Proximate cause is the dominant, effective cause of loss; remote causes do not trigger cover unless the policy wording says otherwise.

Policy structure order: declarations, insuring agreement, exclusions, conditions, definitions; exclusions narrow the insuring agreement and conditions set duties after loss.

Underwriting evaluates hazard (conditions increasing loss frequency or severity) separately from peril (the cause of loss) and risk (the chance of loss).

Moral hazard is dishonest intent; morale hazard is carelessness or indifference; both raise expected loss without changing the physical object.

Rating factors must be statistically credible, actuarially justified, and non-discriminatory where law requires; proxy discrimination via neutral factors is a regulatory focus.

Coinsurance clause: insured bears (required insurance − carried insurance) ÷ required insurance × loss, subject to the policy limit.

Deductibles reduce premium and moral hazard; a straight deductible subtracts a fixed amount, a franchise deductible pays the full loss once the threshold is exceeded.

Reinstatement after a loss may be pro rata, full, or on payment of additional premium; the clause determines whether limits restore automatically.

Aggregate limit caps total payout across the policy period; per-occurrence limit caps each event; the aggregate is normally the lower effective ceiling.

Subrogation transfers the insured's recovery rights to the insurer after payment, preventing double recovery and shifting cost to the at-fault party.

Claims handling sequence: notification, coverage verification, loss investigation, damage valuation, payment or denial, and subrogation or salvage recovery.

Reservation-of-rights letters preserve the insurer's coverage defenses while investigation continues; they are not denials and do not waive coverage.

Actual cash value = replacement cost − depreciation in most jurisdictions; some use market value or a broad-evidence formula, so wording controls.

Replacement cost pays new-for-old without depreciation, usually conditioned on repair or replacement within a stated period after loss.

Betterment and depreciation deductions prevent the insured from profiting from loss; salvage value reduces the payable amount.

Bad-faith exposure arises from unreasonable delay, failure to investigate, or denial without a reasonable basis; remedies can include extra-contractual damages.

Proof-of-loss is a sworn statement of the loss; late or defective filing can bar a claim only if the insurer is prejudiced, depending on jurisdiction.

Business interruption values loss of net profit plus continuing expenses during the period of indemnity, less savings and any revenue earned elsewhere.

Contract formation requires offer, acceptance, consideration, legal purpose, and competent parties; the policy is the written evidence of that agreement.

A binder is temporary evidence of cover pending policy issue; it can be oral in many jurisdictions and is subject to the same terms as the policy.

Warranties are promises whose breach can void cover; representations are statements believed true, and misrepresentation must be material to allow rescission.

Waiver is voluntary surrender of a known right; estoppel prevents a party from asserting a right after conduct led the other to rely on it.

Utmost good faith duties run both ways: the insured discloses material facts, and the insurer discloses unusual or onerous terms.

Aleatory contract: the parties exchange unequal values depending on chance; adhesion contract: the insurer drafts and the insured accepts, so ambiguities are construed against the drafter.

Cancellation terms differ: pro rata refund is used when the insurer cancels without cause, short-rate when the insured cancels mid-term.

Conditions precedent (notice, proof of loss, cooperation) must be satisfied before the insurer's duty to pay arises.

Regulatory objectives: solvency protection, fair market conduct, product disclosure, and market stability; solvency regimes are risk-based, not premium-volume-based.

Solvency capital is typically set against a defined confidence level (for example a one-year 99.5% VaR under Solvency II-style regimes); the exact standard for IC-83 is unverified.

Market-conduct rules cover advertising, disclosure, complaints handling, and claims timeliness; mis-selling findings can trigger remediation and fines.

Data protection principles: lawful basis, purpose limitation, data minimisation, accuracy, storage limitation, integrity, and accountability.

Anti-money-laundering duties include customer due diligence, beneficial-ownership identification, ongoing monitoring, and suspicious-activity reporting.

Sanctions screening must occur at onboarding and on an ongoing basis; strict liability regimes can penalise dealing with a designated party even unknowingly.

Ethical decision test: is it legal, does it treat the customer fairly, would it survive disclosure, and does it align with the code of conduct?

Premium components: expected loss cost, expenses (fixed and variable), profit and contingency margin, and a risk or cat load; the sum is the gross premium.

Loss ratio = incurred losses ÷ earned premium; expense ratio = expenses ÷ written premium; combined ratio = loss ratio + expense ratio (under 100% is an underwriting profit).

Earned premium accrues over the policy term; unearned premium is the portion not yet earned and is a liability on the balance sheet.

Incurred but not reported (IBNR) reserves estimate claims that occurred but are not yet notified; case reserves cover reported claims.

Technical reserves plus capital must cover best-estimate liabilities plus a risk margin; reserve adequacy is tested via run-off triangles and chain-ladder methods.

Investment return on float supports pricing; a low combined ratio plus investment income can still produce a positive total return.

Reinsurance cedes risk: quota share is proportional, surplus shares risk above a retention, and excess of loss covers losses above an attachment point.

Insurance distribution duties: know the customer, assess demands and needs, disclose remuneration, and provide a demands-and-needs statement before sale.

Conflicts of interest must be identified, disclosed, and managed; commission structures can create bias and must be transparent to the customer.

Product oversight and governance (POG) requires a target market definition, testing, and monitoring for products sold to retail customers.

Complaint handling must be timely, logged, and escalated; root-cause analysis feeds product and process fixes.

Vulnerable-customer handling includes extra care for those with health, cognitive, or financial difficulties; outcomes must be as good as for other customers.

Suitability versus appropriateness: advice requires a suitability assessment; execution-only sales require an appropriateness check in some regimes.

Record-keeping: retain advice and disclosure records for the regulatory minimum period; the exact period for IC-83 is unverified.

Common policy coverages: property (fire, theft, water), liability (public, product, employer), and financial lines (D&O, professional indemnity, cyber).

Liability policies are written on an occurrence or claims-made basis; claims-made cover requires the act and the claim to fall within the policy period or an extended reporting period.

Property exclusions typically include wear and tear, gradual deterioration, faulty design, war, and nuclear risks; cover may be bought back by endorsement.

Business interruption needs a defined period of indemnity, a gross-profit or gross-revenue basis, and a clear definition of insured perils.

Cyber policies address data breach, network interruption, ransomware, and third-party privacy liability; sub-limits and waiting periods are common.

Professional indemnity covers negligent acts, errors, or omissions in the course of professional services; dishonesty and deliberate acts are excluded.

Directors and officers cover protects personal assets of managers for wrongful acts; conduct exclusions and severability clauses are key terms.