IC-85 Reinsurance Management: Syllabus & Study Guide
IC-85 Reinsurance Management is a high-credit optional subject that comes up often in optional-subject planning for Associateship and Fellowship — and for good reason: reinsurance is how insurers themselves manage the risks they can't hold alone. This guide covers the syllabus, the concepts worth the most marks, and how to prepare.
What reinsurance actually is
Insurers insure individuals and businesses — but insurers themselves need protection against catastrophic or accumulated losses. Reinsurance is "insurance for insurers": one insurer (the cedant) transfers part of its risk to a reinsurer, in exchange for a share of the premium. IC-85 is where you learn how this works and why it matters.
What the IC-85 syllabus covers
- The purpose of reinsurance — capacity, catastrophe protection, stabilising results, and enabling insurers to accept larger risks than they could alone.
- Types of reinsurance — treaty vs facultative, and proportional vs non-proportional arrangements.
- Proportional reinsurance methods — quota share and surplus treaties.
- Non-proportional reinsurance methods — excess of loss and stop loss covers.
- The reinsurance market — direct placement vs broker-placed reinsurance.
- Reinsurance accounting and documentation at a foundational level.
High-value topics
- Treaty vs facultative. A treaty is a standing agreement covering a whole category of business automatically; facultative is negotiated risk-by-risk. This distinction anchors most of the paper.
- Proportional vs non-proportional. Proportional (quota share, surplus) shares premiums and losses in a fixed proportion; non-proportional (excess of loss, stop loss) only responds once losses cross a threshold. Exam questions frequently test which type responds to a given loss scenario.
- Quota share vs surplus treaty. Quota share cedes a fixed percentage of every risk; surplus treaty only cedes the portion above the insurer's own retention. Know the practical difference in when each is used.
- Why insurers buy reinsurance — capacity, catastrophe protection and result stabilisation are the three classic reasons; be ready to identify which reason a scenario illustrates.
Common exam traps
- Mixing up quota share and surplus. Quota share is a constant percentage of every risk; surplus only applies above a retention line — read scenario questions carefully for which is described.
- Assuming all non-proportional cover is the same. Excess of loss typically responds per-risk or per-event; stop loss responds to the insurer's aggregate loss ratio over a period — these serve different purposes.
- Underestimating the broker's role. Reinsurance placed through a broker vs direct with a reinsurer is a real distinction the exam tests, not just trivia.
A study plan for IC-85
- Week 1: Purpose of reinsurance and the treaty/facultative distinction — this is the paper's backbone.
- Week 2: Proportional methods (quota share, surplus) with worked, simplified examples.
- Week 3: Non-proportional methods (excess of loss, stop loss) and the reinsurance market, then mixed MCQs.
- Final days: Full-length mocks focused on "which reinsurance type responds here" scenario questions — these dominate the paper.
Reinsurance concepts click faster with simple, concrete examples than with abstract definitions — practise scenario MCQs rather than memorising terms in isolation. On Certena you can practise IC-85 questions with explanations and follow a study plan paced to your exam date.
Quick FAQ
Is IC-85 relevant beyond the exam? Very — reinsurance underpins how large insurers manage risk, and it connects directly to underwriting papers like IC-45.
Should I pair IC-85 with IC-86 (Risk Management)? They complement each other well — reinsurance is one tool within the broader discipline of risk management — but each stands alone for credit purposes.
The IC-85 syllabus and credit value are set by the Insurance Institute of India and may change by edition. Confirm the current syllabus on the official III website. Certena is an independent study app and is not affiliated with III or IRDAI.
A note on practice availability
Certena does not currently serve verified practice questions for this subject. We only serve questions whose answer keys have been checked against a source, and this paper is waiting on that check — so a small or absent bank means we have been cautious, not that the subject is unimportant. Use the guide above alongside the official course material, and see every III subject for papers where practice is available today.