NIACL AO key terms

The amount a policyholder pays an insurer, in a lump sum or instalments, in exchange for the risk cover promised under an insurance policy.

The maximum amount the insurer contractually agrees to pay on the happening of the insured event, fixed at the time the policy is issued.

The process by which an insurer assesses the risk profile of a proposal and decides whether to accept it, and on what terms and premium.

The risk that an insured person behaves less carefully, or makes a dishonest claim, because insurance has removed the financial consequence of loss.

A situation where individuals with higher-than-average risk are more likely to buy or retain insurance, worsening the insurer's claims experience unless premiums are priced correctly.

The proportion of premium income an insurer pays out as claims, usually expressed as claims incurred divided by premium earned for a period.

Insurance bought by an insurance company itself, transferring part of its risk to another insurer in return for a share of the premium.

The excess of an insurer's admissible assets over its liabilities, maintained above a regulatory minimum to demonstrate ability to meet policyholder obligations.

A legal and pecuniary relationship with the subject matter of insurance such that the insured benefits from its survival and suffers loss from its destruction.

The principle obliging both insurer and insured to disclose all material facts fully and honestly, without being asked, before the contract is formed.

The principle that a general insurance claim restores the insured to the financial position held before the loss, neither enriching nor penalising them.

The distribution of insurance products through bank branches and bank channels, often under a corporate agency or referral arrangement with the insurer.

The Insurance Regulatory and Development Authority of India, the statutory regulator that licenses insurers and intermediaries and frames conduct and solvency rules.

A licensed person or firm, such as an agent, broker or corporate agent, that arranges insurance contracts between buyers and insurers for commission or fee.

A pure protection life policy that pays the sum assured on death within the policy term, with no survival benefit if the insured outlives it.

The rate at which banks borrow short-term funds from the central bank against government securities, used as the main signal for monetary policy.

The rate at which the central bank absorbs surplus liquidity from banks by accepting deposits, historically the floor of the policy corridor.

Cash Reserve Ratio, the share of net demand and time liabilities that banks must hold as cash with the central bank, earning no interest.

Statutory Liquidity Ratio, the minimum share of net demand and time liabilities banks must hold in cash, gold or approved government securities.

The rate at which the central bank lends long-term funds to banks without collateral, often aligned with the marginal standing facility rate.

The central bank's use of interest rates, reserve requirements and liquidity tools to influence money supply, credit and inflation in the economy.

The Monetary Policy Committee, a statutory body that sets the policy repo rate by majority vote, with a mandated inflation target.

The minimum lending rate below which a bank may not lend, calculated from cost of funds, operating expenses and a profit margin.

Marginal Cost of Funds based Lending Rate, the internal benchmark for floating-rate loans, set separately for each maturity bucket.

Non-Performing Asset, a loan on which principal or interest has remained overdue for more than ninety days and which stops earning income.

The total outstanding book value of all non-performing assets held by a lender, before deducting provisions and write-offs.

The amount a lender sets aside from profit to absorb expected losses on bad loans or other impaired assets, guided by regulatory norms.

A law enabling secured creditors to enforce security interests and take possession of mortgaged assets without first approaching a court, after due notice.

The Insolvency and Bankruptcy Code, which provides a time-bound corporate resolution process supervised by the adjudicating authority and professionals.

The ratio of a bank's eligible capital to its risk-weighted assets, showing how far losses can be absorbed before depositors are exposed.

An international framework of capital, leverage and liquidity standards for banks, introduced after the global financial crisis to strengthen resilience.

A Basel standard requiring a bank to hold enough high-quality liquid assets to survive a thirty-day stress outflow of funds.

A deductive reasoning question type in which two or more given statements must be tested to decide which conclusions logically follow.

A puzzle type where family relationships are described through statements or coded symbols, and the candidate must identify how two people are related.

A puzzle requiring candidates to place people in rows, circles or squares from clues about positions, facing directions and adjacency.

A reasoning task where words or numbers are converted into a code by a rule, and the candidate must apply or reverse that rule.

A question format giving a problem with two or more statements, where the candidate decides which statements are needed to answer it.

A set of questions based on tables, bar graphs, pie charts or caselets, requiring calculation of ratios, averages and percentage changes.

A speed technique in quantitative aptitude where numbers are rounded to convenient values so an answer can be chosen from close options quickly.

An English question type in which sentences of a paragraph are given out of order and must be rearranged into a coherent sequence.

A passage with blanks, each to be filled by the option that fits the grammar and meaning of the surrounding text.

A long passage followed by questions on main idea, inference, tone and vocabulary, testing the ability to read closely under time pressure.

A structured letter to an official or organisation, following conventions of salutation, subject line, body paragraphs and complimentary close.

A descriptive English task requiring a structured argument on a given topic, with introduction, developed body paragraphs and a conclusion.

A concise summary of a passage that retains its essential points in the writer's own words, usually within a prescribed word limit.