IC-92 Compulsory · Fellowship Actuarial

Actuarial Aspects of Product Development — Mock Tests & Exam Prep

Actuarial aspects of product development — pricing, profit-testing and the design of insurance products.

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473
Verified questions
100
Questions per exam
2 hrs
Exam duration
60%
Pass mark
40
Credit points

Try IC-92 free — 5 real questions

These are 5 of the 473 IC-92 questions in Certena, taken from across the paper. Every answer key has been checked against a source — a printed answer key, a textbook extract, or arithmetic — not guessed. Reveal the answer and the explanation below each question. No sign-up needed.

Question 1
The commission to be paid is based on _________, as determined by the insurers.
  1. AThe bank’s terms and conditions
  2. BComplexity of the policy design
  3. CComplexity of the product’s terms and conditions
  4. DThe agent’s financial status
  5. ENone of the above
Show answer & explanation

Answer: C. Complexity of the product’s terms and conditions

As per nature and the terms of payment of premium of various products, insurers determine the commission to be paid based on the complexity of the terms and conditions of the product. For instance, an insurance product with clear terms and conditions, which are easily understandable by a layman, would carry a lower rate of commission.

Question 2
The formula method was used because ___________________.
  1. Athere were too many computational powers
  2. Bthere was less computational power
  3. Cthere were many computational powers
  4. Dthere was no human power
  5. ENone of the above
Show answer & explanation

Answer: B. there was less computational power

Earlier, there were less computational power and hence formula method was used. With the ever-increasing speed of computational power cash flow method of pricing has gained remarkable popularity.

Question 3
In pricing of insurance products, taxes are considered as an example of which of the following category of expenses?
  1. AAdministrative expenses
  2. BLegal expenses
  3. CMiscellaneous expenses
  4. DProcurement expenses
  5. ENone of the above
Show answer & explanation

Answer: C. Miscellaneous expenses

Taxes are an example of miscellaneous expenses.

Question 4
The principal’s liability for contractors’ negligence may arise as a result of: I. Principal provides labour machinery II. Contractors work involves extra hazardous acts III. Principal maintains some control over the contractor
  1. AOnly I
  2. BOnly II
  3. COnly III
  4. DI and III
  5. EI, II and III
Show answer & explanation

Answer: E. I, II and III

The principal’s liability for contractors’ negligence may arise in the following circumstances: i. Where he retains some control over the contractor or provides labour and/or machinery. ii. Where the contractor’s work involves extra hazardous acts, etc.

Question 5
Which of the following is assumed in the cash flow method?
  1. APresent value of net cash flow
  2. BSet of commission rates
  3. CExpected income for each policy year
  4. DExpected outgo for each policy year
  5. ENone of the above
Show answer & explanation

Answer: B. Set of commission rates

In the cash flow method, the following assumptions are made: i. Premium is assumed, say, P1, (an arbitrary figure per 1000 SA) at a given age x, for a given policy term. ii. Life table is assumed (as explained above) in order to know expected premium income and expected claim amounts. iii. A set of commission rates (usually related to premium) iv. Initial expenses v. Renewal Expenses vi. Investment returns vii. Other assumtions

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Frequently asked questions

What is IC-92?
IC-92 (Actuarial Aspects of Product Development) is a compulsory Fellowship-level examination offered by the Insurance Institute of India (III). Actuarial aspects of product development — pricing, profit-testing and the design of insurance products.
How many questions are in the IC-92 exam?
The IC-92 exam has 100 MCQs to be answered in 120 minutes (2 hours). All questions must be attempted — there is no negative marking.
What is the pass mark for IC-92?
You need to score at least 60% to pass IC-92. Scoring 75% or above earns a Distinction grade.
How many credit points does IC-92 carry?
IC-92 carries 40 credit points. These count toward your III certification — 60 credits for Licentiate, 250 for Associateship, 490 for Fellowship.

Related subjects

IC-01
Principles of Insurance
IC-28
Foundation of Actuarial Science
IC-47
Foundation of Casualty Actuarial Science Part - I
IC-81
Mathematical Basis of Life Assurance
IC-84
Foundation of Casualty Actuarial Science Part - II
AS-03
Finance and Economics for Actuarial Science

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