IRDAI Surveyor Engineering (S-05) cheat sheet

IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015 govern licensing, conduct and discipline of surveyors; licences are granted in categories A (life), B (general), C (both) and by class of business (fire, marine, motor, engineering, misc).

Eligibility: minimum 18 years, bachelor's degree or equivalent professional qualification (engineering, accountancy, law, actuarial, management), plus practical training and passing the IRDAI S-05 examination; a composite (allied) licence requires higher qualification and experience thresholds.

Licence validity is 5 years and must be renewed before expiry; renewal applications are filed at least 30 days before expiry with the prescribed fee, failing which the licence lapses and fresh licensing requirements apply.

A surveyor may hold a maximum of one licence covering specified classes; the licence is personal, non-transferable, and practice beyond the licensed classes is a violation attracting penalty or cancellation.

Fee structure for loss assessment is prescribed by IRDAI (typically 1% of assessed loss up to a cap, plus slab-based rates for higher amounts); insurers must pay within 15 days of submission of the final survey report.

Surveyors must maintain confidentiality of insured data, disclose conflicts of interest (no survey where the surveyor has a relationship with the insured or intermediary), and cannot accept employment or remuneration from the insured for the same claim.

Code of conduct requires independence, objectivity, timely reporting (usually within 30 days of appointment, extendable by insurer with reasons), and preservation of records for at least 5 years.

IRDAI disciplinary powers include warning, fine up to the prescribed limit, suspension or cancellation of licence; appeals lie to the Securities Appellate Tribunal (SAT) under the Insurance Act, 1938 framework.

Professional indemnity insurance is mandatory for licensed surveyors; records of claims, working papers and reports must be retained and made available to IRDAI on demand.

Indemnity principle: the insured is restored to the pre-loss financial position, no better; applies to property and liability, not to life or personal accident benefits.

Insurable interest must exist at the time of loss for property insurance and at inception for life insurance; absence defeats the claim.

Utmost good faith (uberrimae fidei) obliges both parties to disclose all material facts; non-disclosure or misrepresentation renders the contract voidable.

Proximate cause: the nearest effective cause of loss determines liability; where multiple causes operate, the dominant and effective cause governs.

Subrogation transfers the insured's right of recovery against third parties to the insurer after payment; insured cannot double-recover.

Contribution applies when multiple policies cover the same risk at the same time; each insurer pays rateably, and the insured cannot profit.

Average clause for underinsurance: claim = (sum insured / value at risk) × loss, applied where the sum insured is less than the actual value at the date of loss.

Reinstatement value vs indemnity value: reinstatement pays the cost of replacing/repairing with new, subject to sum insured; indemnity deducts depreciation.

Claims documentation: policy, claim form, proof of loss, invoices, FIR/police report, photographs, and survey report; investigation precedes settlement offer.

Standard fire policy covers fire, lightning, explosion of gas, and aircraft/impact damage; perils like riot, flood, storm, earthquake and terrorism are add-on covers.

Loss assessment steps: verify policy and endorsements, confirm sum insured and basis (reinstatement or indemnity), establish cause, quantify loss, apply deductibles and average clause, and finalise net payable.

Depreciation is applied to damaged assets under indemnity basis; under reinstatement basis, depreciation is not deducted but betterment and salvage are considered.

Salvage value of damaged property is deducted from the assessed loss; the insurer may take over salvage or allow the insured to retain it at agreed value.

Fire deductible/excess (policy excess) is deducted from each and every loss; aggregate excess and catastrophe limits may apply under large risks.

Stock valuation: use purchase records, stock statements, and average stock method; ascertain stock at date of loss to test adequacy of sum insured and apply average clause.

Business interruption (consequential loss) cover requires proof of gross profit, turnover trend, and indemnity period; increased cost of working is limited to the amount saved from loss of turnover.

For earthquake, flood and storm claims, verify occurrence date and location against policy, and confirm the peril is not excluded; engineering surveys may be needed for structural damage.

Report must state cause, extent of damage, quantum with computation, and recommendation on claim; attach photographs, invoices, and valuation workings.

Motor Own Damage (OD) assessment: verify policy, registration, driving licence, fitness certificate and permit (for commercial vehicles); check that the driver was authorised and not excluded.

Depreciation for plastic/rubber parts, glass and metal is applied as per policy schedule; standard percentages apply to labour and parts under the India Motor Tariff practices.

Total loss/constructive total loss: where repair cost exceeds 75% of the IDV (industry practice), treat as total loss; IDV is the maximum liability, less salvage and excess.

Third-party liability claims are governed by the Motor Vehicles Act, 1988; the surveyor assesses the damage and the insurer settles through the MACT or Lok Adalat process.

Theft claims require FIR, non-traceable certificate, and confirmation that all keys and documents are surrendered; delay in FIR can raise suspicion.

Miscellaneous covers: burglary, money, fidelity guarantee, engineering (CAR/EAR, machinery breakdown), and liability; each has specific exclusions and conditions.

For machinery breakdown, ascertain cause (mechanical/electrical failure), check that the machine was maintained and operated within rated capacity, and assess repair vs replacement.

For CAR/EAR claims, verify the stage of construction, design responsibility, and whether the loss arose from defective design or workmanship (usually excluded).

Documentation for motor claims: claim form, FIR (for theft/third-party injury), repair estimates, photographs, driving licence and RC copies, and the surveyor's own inspection notes.