Iran Loss Adjuster Exam cheat sheet

Insurable interest: the insured must suffer measurable pecuniary loss from the event; in Iranian practice it must exist at the time of loss for indemnity lines and at inception for life.

Indemnity formula: payable = min(sum insured, actual loss) − deductible − underinsurance penalty; betterment and depreciation are deducted from repair/replacement costs.

Utmost good faith (a'la al-hosn) obliges both parties to disclose material facts; materiality is tested by whether a prudent underwriter would have altered terms or premium.

Proximate cause: the dominant, effective cause of loss determines cover; a remote or excluded intervening cause breaks the chain from the insured peril.

Subrogation: after paying, the insurer steps into the insured's rights against the liable third party, limited to the amount paid and never exceeding the insured's own recovery.

Contribution: where several policies cover the same interest and peril, each pays pro rata by independent liability or by sum-insured ratio, never producing total recovery above the loss.

Risk management hierarchy in underwriting: avoid, reduce (retention, deductibles, risk improvement), transfer (reinsurance, facultative or treaty), and retain (self-insurance reserve).

Moral hazard indicators: over-insurance, late reporting, recent policy inception, financial distress, and refusal to provide original invoices.

The 1937 Insurance Law (Qanun-e Bimeh) is the foundational statute; it and the Central Insurance of Iran (Bimeh Markazi) regulations govern insurer licensing, solvency, and tariff oversight.

Bimeh Markazi Iran (CII) is the regulator and supervisor; it approves policy wordings, general and special conditions, and minimum tariffs for compulsory lines.

Compulsory third-party motor liability (bimeh-e masouliyat-e shakhs-e sales) is mandatory for all vehicles; own-damage cover (bimeh-e badaneh) is voluntary.

Article 1 of the 1937 Law defines insurance as a contract in which the insurer undertakes to indemnify the insured against loss in exchange for premium; mutual and cooperative insurers are also recognised.

Insurers must maintain statutory technical reserves (unearned premium reserve, outstanding claims reserve, IBNR) and a solvency margin; CII may suspend or revoke licences for breach.

Life insurance in Iran operates under the supervision of CII and must respect Islamic principles; conventional life products with interest-bearing elements are restricted.

Article 20 of the 1937 Law requires the insurer to pay the claim within one month of receiving complete documentation, absent a valid dispute.

Claim disputes are heard by specialised insurance courts or arbitration; the regulator can intervene in cases of insurer delay or bad faith.

A policy is a contract of adhesion; ambiguities are construed contra proferentem (against the drafter), but clear exclusion wording is enforced as written.

Offer and acceptance: proposal form plus premium payment (or agreement to pay) forms the contract; cover may attach on payment of first premium or on a specified inception date.

Warranties and conditions precedent: breach of a warranty or failure to satisfy a condition precedent (e.g. notification within the stipulated period) may entitle the insurer to deny liability.

Utmost good faith: material misrepresentation or non-disclosure at proposal stage allows the insurer to avoid the contract or adjust the claim proportionally.

The principle of proximate cause applies to determine whether a loss falls within the insured perils; excluded perils do not become covered merely because they occur alongside a covered peril.

Average (underinsurance) clause: if the sum insured is less than the value at risk, the claim is reduced by the ratio sum insured / value at risk.

Contribution and subrogation clauses must be read together; a policy may exclude contribution where other insurance is intended to be primary.

Notice and proof of loss: the insured must notify the insurer promptly and submit a claim form with supporting documents; late notice may prejudice recovery if it prejudices the insurer.

Independence: the loss adjuster must act impartially between insurer and insured, disclose any conflict of interest, and decline instructions where independence is compromised.

Confidentiality: all claim information is confidential and may only be disclosed to the instructing insurer and authorised parties, subject to legal compulsion.

Competence: the adjuster must only accept instructions within their technical competence and must engage specialists (engineers, accountants, doctors) where required.

Documentation: every inspection, measurement, and statement must be recorded contemporaneously with date, time, location, and source; contemporaneous notes are the primary evidence.

Fee basis: adjusters are remunerated by the instructing insurer, not by the insured, and must not accept contingent fees linked to the size of the settlement.

Fraud reporting: suspected fraud must be reported to the insurer with evidence, without prejudging the insured's liability.

Fairness: the adjuster must explain the claim process and the basis of any reduction to the insured in plain language and in the language of the contract.

Professional standards: membership of a recognised adjusters' body and adherence to its code of conduct; breaches may lead to disciplinary action and loss of licence.

Fire cover under standard Iranian fire policy extends to lightning and explosion of domestic gas; smoke damage is covered only where it results from a covered fire.

Sum insured basis: reinstatement value (new-for-old) or actual cash value (replacement cost less depreciation); the policy wording determines which applies.

Underinsurance penalty: claim = loss × (sum insured / value at risk); the value at risk is the full reinstatement cost at the date of loss.

Average and coinsurance clauses reduce recovery where the insured has under-declared; a professional valuation is the standard defence against dispute.

Business interruption: gross profit or gross revenue basis, indemnity period, increased cost of working, and the trend/seasonal adjustment must be applied.

Salvage: the insurer is entitled to salvage proceeds after paying a total loss; the adjuster must record and value salvage and deduct it from the claim.

Exclusions commonly include war, nuclear risks, intentional acts, wear and tear, inherent vice, and loss caused by the insured's gross negligence.

Proof of loss documentation: fire brigade report, police report, inventory of damaged stock, purchase invoices, and photographic evidence of damage.

Compulsory third-party liability covers bodily injury and property damage caused to third parties; the insurer pays up to the statutory limit and the insured remains liable for the excess.

Own-damage (badaneh) cover is voluntary and pays for damage to the insured vehicle, subject to deductible, depreciation, and the sum insured.

Betterment deduction: new parts fitted to an older vehicle are depreciated by the vehicle's age and condition; the insured bears the difference.

Total loss: where repair cost exceeds the vehicle's market value (or a stated percentage), the claim is settled on market value less salvage and deductible.

Third-party bodily injury: compensation follows the diyeh (blood money) schedule set annually by the judiciary, plus medical expenses and loss of earnings where proven.

Fraud indicators in motor claims: accident inconsistent with damage pattern, late reporting, staged collisions, inflated repair estimates, and repeated claims by the same parties.

Subrogation: after paying a third-party claim, the insurer may recover from the at-fault party or their insurer; liability apportionment follows the police/forensic report.

No-claim discount and claims history must be verified against the insurer's central database before settlement.

Life claims require proof of death (death certificate), policy document, beneficiary identification, and, where relevant, a medical certificate of cause of death.

Suicide exclusion: most life policies exclude suicide within the first one or two years; after that period the sum insured is payable.

Non-disclosure at proposal: the insurer may avoid the policy or reduce the benefit where material medical facts were concealed; the two-year incontestability period is common.

Health claims: reimbursement or direct billing; eligible expenses are limited to reasonable and customary charges, with exclusions for pre-existing conditions, cosmetic treatment, and waiting periods.

Waiting periods: typically 30 days for illness and longer (e.g. 6–12 months) for maternity and specified conditions; accidents are usually covered from inception.

Medical necessity: the adjuster verifies that treatment was medically necessary, prescribed by a licensed practitioner, and consistent with the diagnosis.

Beneficiary nomination: the nominated beneficiary receives the sum insured; absent nomination, proceeds form part of the estate under the applicable succession rules.

Fraud controls in health claims: duplicate billing, upcoding, unbundling, and provider-insurer collusion require cross-checking against medical records.

Contractors' All Risks (CAR) and Erection All Risks (EAR) cover physical damage to works, plant, and third-party liability during construction and the maintenance period.

CAR/EAR exclusions: faulty design (unless endorsed), wear and tear, consequential loss, and damage caused by the insured's wilful misconduct.

Professional indemnity: covers negligent acts, errors, or omissions in professional services; the claim must arise from professional services and be notified within the policy period or extended reporting period.

Public liability: covers bodily injury or property damage to third parties arising from the insured's premises or operations; the limit is per occurrence or aggregate.

Product liability: covers damage caused by defective products; recall costs and pure financial loss are typically excluded unless specifically endorsed.

Machinery breakdown and boiler explosion policies cover sudden and unforeseen mechanical or electrical failure, excluding gradual deterioration and maintenance faults.

Fidelity guarantee: covers loss of money or property due to employee dishonesty; the adjuster must establish the employee's dishonest act and quantify the loss.

Miscellaneous lines (theft, money, glass, electronic equipment) each have specific sum-insured bases and depreciation rules that must be applied.

First notice of loss: record date, time, location, reporter, and immediate circumstances; late notification is a red flag requiring explanation.

Scene investigation: photograph and measure the scene, record the position of the insured property, and note any inconsistency with the reported cause.

Document verification: cross-check invoices, purchase records, stock ledgers, and bank statements against the claimed loss.

Fraud red flags: over-insurance, recent policy inception, financial distress, staged accidents, inflated estimates, and refusal to provide originals.

Interview technique: separate interviews with witnesses, open-ended questions first, then specific; record statements verbatim and obtain signatures.

Forensic evidence: fire patterns, electrical faults, and mechanical failures should be examined by a qualified expert; the report must state the probable cause.

Data analytics: compare claim patterns, repairer networks, and repeated claimants against historical data to detect organised fraud.

Referral: where fraud is suspected, the adjuster must not confront the insured alone; report to the insurer's special investigation unit with evidence.

Claim file contents: policy copy, claim form, proof of loss, investigation report, photographs, invoices, expert reports, and correspondence.

Preliminary report: issued within the period stipulated by the insurer (commonly 7–14 days), stating the facts established, the cause, and any reserve recommendation.

Reserve setting: case reserves reflect the estimated ultimate cost including defence costs, salvage, and subrogation recoveries; reserves are reviewed at each stage.

Final report: states the cause of loss, policy coverage analysis, quantum calculation, deductions (excess, depreciation, salvage), and the recommended settlement amount.

Settlement authority: the adjuster recommends; the insurer approves and pays; the adjuster must not commit the insurer to a settlement beyond delegated authority.

Payment timing: under Article 20 of the 1937 Law, the insurer should pay within one month of complete documentation; delays must be documented and justified.

Subrogation and salvage: obtain a signed subrogation receipt and transfer of salvage before releasing the settlement.

File closure: record the settlement date, amount, recovery, and lessons learned; retain the file for the statutory retention period.