General Insurance Study Material

POSP Certification Training Guide

Table of Contents

1. Introduction to Insurance

2. Indian Insurance Market

3. Legal Principles of Insurance

4. Insurance Products

5. Grievance Redressal and Regulatory Framework

6. POSP Role and Responsibilities

7. Key Terminologies and Concepts

8. Practice Questions (if applicable)

1. Introduction to Insurance

1.1 Concept of Insurance

• Asset: Anything of value—physical (car, home), non-physical (reputation), or

• Risk: Possibility of damage or loss to an asset.

• Peril: Specific cause of loss (e.g., fire, theft, flood).

• Hazard: Condition that increases the chance or severity of a peril (e.g., smoking
increases risk of lung cancer).
1.2 Types of Risk

Type Description

Dynamic Arises from economic changes

Static Exists without economic change

Pure Only loss or no loss (e.g., fire)

Speculative Possibility of gain or loss (e.g., stock market)

Fundamental Affects large populations (e.g., war, flood)

Particular Affects individuals (e.g., theft)

Financial Involves monetary loss

1.3 Methods of Handling Risk

• Avoidance: Not engaging in risky activities.

• Control: Reducing likelihood or impact.

• Acceptance: Bearing the risk.

• Transfer: Shifting risk to another party (e.g., insurance).

1.4 Objectives of Risk Management

• Loss prevention

• Anxiety reduction

• Meeting external obligations

• Fulfilling social responsibility

1.5 What is Insurance?

• Risk transfer mechanism

• Based on pooling and law of large numbers

• Provides compensation, not prevention

• Reduces primary and secondary burdens of risk

• Enables peace of mind and better financial planning

1.7 Risk Management Techniques

• Avoidance, Retention, Reduction, Financing

1.8 Considerations Before Opting for Insurance

• Cost vs. benefit

• Affordability of loss

• Probability and impact of risk

1.9 Role of Insurance in Society

• Economic development

• Investment and employment generation

• Promotes industrial growth and financial stability

2. Indian Insurance Market

2.1 History of Insurance in India

• 1818: Oriental Life Insurance Company

• 1938: Insurance Act

• 1972: Nationalization

• 1999: IRDAI formation

2.2 IRDAI – Regulatory Authority

• Autonomous statutory body

• Functions include licensing, protecting policyholders, regulating intermediaries,

• Life Insurance: Covers human life risks

• Non-Life Insurance: Covers assets and liabilities

• Reinsurance: Insures insurers

2.4 Insurance Intermediaries

• Agents, Brokers, POSPs, Web Aggregators, TPAs, Surveyors, Ombudsman

3. Legal Principles of Insurance

3.1 Elements of a Valid Contract

• Offer and acceptance

• Consideration

• Legal capacity

• Free consent

• Lawful object

3.2 Principles of Insurance

• Utmost Good Faith: Full disclosure of material facts

• Insurable Interest: Financial stake in the insured item

• Indemnity: Compensation without profit

• Subrogation: Insurer’s right to recover from third party

• Proximate Cause: Closest cause of loss

• Contribution: Multiple insurers share the loss

3.3 Sales Literature

• Includes brochures, prospectus, and promotional material

3.4 Premium and Receipts

• Must be paid in advance

• Receipt is proof of payment

• Policy modifications and declarations

• Breach may void the contract

3.6 Rebate and Claim Process

• Rebates prohibited

• Claims must be promptly reported and documented

4. Insurance Products

4.1 Motor Insurance

• Types: Own Damage, Third Party, Comprehensive

• Add-ons: Zero Depreciation, Engine Cover, Invoice Cover

• Discounts: NCB, Voluntary Excess, Anti-theft devices

4.2 Health Insurance

• Coverage: Hospitalization, Pre/Post expenses, Daycare

• Types: Individual, Family Floater

• Add-ons: Maternity, Critical Illness, AYUSH, OPD

4.3 Personal Accident Insurance

• Covers death, disability, dismemberment

• Includes child education and ambulance benefits

4.4 Travel Insurance

• Covers medical emergencies, trip cancellation, lost baggage, public liability

4.5 Householder’s Insurance

• Covers structure and contents

• Includes burglary, fire, natural calamities

5.1 Grievance Redressal Mechanism

• Defined by IRDAI

• Includes escalation matrix and resolution timelines

5.2 KYC Norms

• Required for identity verification

• Mandatory for claims above ₹1 lakh

5.3 Anti-Money Laundering (AML)

• POSPs must report suspicious activity

• AML procedures include documentation and compliance checks

6. POSP Role and Responsibilities

6.1 Duties of a POSP

• Sell pre-underwritten products

• Ensure ethical conduct

• Assist in documentation and claims

6.2 Code of Conduct

• Maintain confidentiality

• Avoid misrepresentation

• Disclose all material facts

• Assist clients fairly and transparently

Term Meaning

Sum Insured Maximum coverage amount

Premium Payment for coverage

Deductible Amount borne by insured

NCB No Claim Bonus

IDV Insured Declared Value

Endorsement Policy modification

Exclusion Non-covered events

8. Practice Questions

[Link]
Question Answer Type
1 When was the Oriental Life Insurance Company
established in India? 1818 General
2 When was the General Insurance business
nationalised? 1972 General
3 When was the Insurance Regulatory
Development Authority formed? 1999 General
4 Oriental Life Insurance
Oldest Life Insurance Company is Company General
5
IRDAI Headquarter is situated at Hyderabad General
6
Which is a type of Insurance Organisation Non Life Insurance General
7
Which is a type of Insurance Intermediaries All of the above General
8
Person Seeking to become a POSP must All of the above General
9 Shop Keeper Insurance
POS cannot sell which of the following policy Policy General
10
POS cannot sell which of the following policy Marine Insurance Policy General
11
TPA Stands for Third Party Administrators General
12 assess the acceptability of
Underwriter is a Person who particular risk General
13 certify a loss when claims
Surveyor is a Person who are submitted General
14 Insurer for the Insurance
Reinsurance Company is Company General
15 Non Life Insurance Company cannot sell which
of the following Insurance Term Insurance Plan General
16 Life Insurance Company cannot sell which of
the following Insurance All of the above General
17 Regulate Insurance
What is the Function of IRDAI? Business of India General
18
TPA Licensed by the IRDAI General
19 Which was the first Act to Regulate life Life Insurance Companies
Insurance industry in India Act, 1912 General
20 Which of the following are risks are covered by
Non Life Insurance Company? All of above General
21 When did Headquarter of IRDA is shifted to
Hyderabad? 2001 General
22 Section 14 of IRDAI Act,
Functions of IRDA are defined in which section 1999 General
23 Ramesh recently bought a health insurance Non life insurance in both
policy and a personal accident policy cases General
24
These are not insurance intermediary Actuaries General
25 Which of the following statements is true under
IRDA Regulations in respect of existing POS? Both Statements are false General
26
Malhotra Committee formed in which Year 1993 General
27 The General Insurance Business Act was
passed in which year 1972 General
28 When was the Insurance Ombudsman Set up
under the Redressal of Public Grievance Rules? 1998 General
29
Stock Market Declines is which kind of peril? Economic Peril General
30
Which of the following is not a Natural Peril? Theft General
31
KYC stand for Know your Customer Life
32
AML stand for Anti-Money Laundering Life
Applying for insurance,
wherein the premium
33
When does the detailed KYC requirements amount is more than INR 1
arise, at the time of? Lakh. Life
34
FATF stand for Financial Action Task Force Life
35 Prevention of Money
PMLA Stands for Laundering Act Life
36 Protection of the interest of Policyholders, has
always been the priority of __________. IRDAI Life
As per the Grievance Redressal Policy of Roinet
37 Insurance Brokers Pvt Ltd select the correct
mail id for lodging complaint support@[Link] Life
As per the Grievance Redressal Policy of Roinet
38 Insurance Brokers Pvt Ltd all the grievance
should be acknowledged in___________ 24 Hours Life
As per the Grievance Redressal Policy of Roinet
39 Insurance Brokers Pvt Ltd all the grievance
should be resolved in__________ 14 Days Life
Not to explain all the
essential provisions of the
cover afforded by the policy
recommended by him so
40
that, as far as possible, the
Which is false under ?Conduct in relation to prospective client
explanation of insurance contract? ? Every understands what is being
insurance POSP shall: purchased. Life
Provide the list of
insurers(s) participating
under the insurance
41
Which is True under ?Conduct in relation to contract and advise any
explanation of insurance contract? ? Every subsequent changes
insurance POSP shall: thereafter. Life
Which is false under ?Conduct in matters It does not matter that the
42 relating to Sales practices?? Every insurance client understands the type
POSP shall: of service it can offer Life
As per the prevailing regulation of IRDAI, every
____________________ involved in the
43 insurance market, has to ensure that a proper
and effective mechanism to resolve complaints
and grievances of policyholders. Insurer and Intermediary Life
44
COC stands for Code of Conduct Life
The core objective of Code of Conduct ? Roinet To harmonize the
45 Insurance Brokers Pvt Ltd POSP?s Private Ltd. professional conduct of
is POSP Life
Not to disclose on behalf of
its client all material facts
46 Which is false under ?Conduct in relation to within its knowledge and
furnishing of information?? Every insurance give a fair presentation of
POSP shall: the risk. Life
Provide the list of Banks
participating under the
47 Which is False under ?Conduct in relation to insurance contract and
explanation of insurance contract? ? Every advise any subsequent
insurance POSP shall: changes thereafter. Life
 Which is False under ?Conduct in relation to
48 renewal of policies? ? Every insurance POSP
shall: None of the above Life
Which is True under ?Conduct in relation to
49 renewal of policies? ? Every insurance POSP
shall: Both A & B Life
In Roinet Insurance Brokers Pvt Ltd if a
policyholder is still dissatisfied with the decision/
50
resolution, to the complaint, provided by
Grievance officer, the he may approach to: Principal Officer Life
All grievances will be given
Which of the following is false in the Process of acknowledgment receipt
51
addressing queriesComplaints received to within 24 working Days of
Roinet Insurance Brokers Pvt Ltd? :- the receipt of complaint. Life
Which of the following is True in the Process of
52 addressing queriesComplaints received to
Roinet Insurance Brokers Pvt Ltd? :- All of the above. Life
53 A prospectus of any insurance product shall
clearly state that All of the Above Life
_____________________ is an act of
54 disguising illegal sources of money so that it
looks as if it has originated from a legal source. Money Laundering Life
_________________________ is an inter-
governmental body that sets broad standards
55
policies to combat money laundering and Financial Action Task Force
terrorist financing. (FATF) Life