PSGICs OFFICERS PRE PROMOTIONAL ONLINE EXAM -2017
TIPS TO ACHIEVE EXCELLENCE .
Dr. Mu. Dhanasekaran, Principal, Corporate Learning Centre, United India Insurance Co.Ltd. Chennai.
1. Focus on examination point of view & Read what is important and necessary. Prepare thoroughly
four subjects and one more standby. Read only common to all PSGICs, avoid wasting time on matters
company specific.
2. Plan three rounds. At EXAM, in the first round have a glance of questions on the topics which you
prepared, start attempting where you are comfortable. Complete one topic and proceed to next.
Avoid confusing questions and where you are not sure. In the first round, ensure that you will pass
through comfortably. It will make you happy, give confidence to proceed and spend little more time
later to analyze the unattempted questions. In case if you have not completed the required number
in each topic, you can make it in the second round to score more marks by taking little more time. In
the third round, ensure the answers are okay, in case you change, don’t forget to save.
3. If you don’t know, never attempt to complete the required numbers of questions just for luck as it
may deplete your good score by negative marking system.
4. During EXAM, if you are cool emotionally, you tend to do less mistake. Therefore, imagine /
rehearse the real-time situations while you at home often and take control of yourself.
5. Read, Understand, Concentrate, Analyze, Discuss & Rehearse.
While preparing for exam, whenever you read a question and an answer, never limit your knowledge
with one straight answer. Revolve over the question and answer @ 360 degree, imagine and analyze
all possible ways the question could be put in different ways, yes that only make you thorough.
Example:
You know the compensation towards SOLATIUM FUND is Rs. 25,000. But, don’t limit your knowledge
with this. Try to remember all possible, associated questions over Solatium Fund.
1. Amount of compensation (In respect of the death a fixed sum of Rs.25,000 / grievous hurt a fixed
sum of Rs.12,500)
2. Similar amount of compensation in other heads (Public liability Act =Rs.25,000 / No fault Liability
for death =Rs.50,000 / for PD Rs.25000)
3. Another name for SL = Hit and run
4. Only covers death or also Grievous injury?
1
5. No need to go through MACT
6. Section under MV act = Section 163 (1) of the Motor Vehicles Act 1988 whereas NFL is Section 140
in The Motor Vehicles Act, 1988
7. Who is authorized to settle = The victim of the “hit-and-run” vehicle or his legal representative
shall make an application to the Claim Enquiry Officer in each Taluka. After due enquiries, the Claims
Enquiry Officer will submit a report together with certificate of post mortem or injury certificate to
the claims settlement commissioner who will either the District Collector or the Deputy
Commissioner at the District level. He will process the claims and sanction the payment within 15
days from the receipt of report from Claim Enquiry Officer and communicate sanction order to the
nominated office of the Insurance Company. The compensation under Hit and Run Accident cases
are made from a Solatium Fund which is contributed by General Insurance industry under an agreed
formula. The administration of claims is done by New India Assurance Co Ltd which has nominated
one Divisional Manager in each district at District Level Committee which is headed by District
Collector.
8. Will it be deducted in case of other liability of insurers, life or non-life policies
Need to take an undertaking which specifies that the amount of compensation received under the
Scheme will be refunded to the insurer if the injured victim or the legal representative of the
deceased receives any other compensation in lieu of this amount, or under any other existing
provision by law
9. Time for application = Application is made within six months. If made after six months, but before
12 months from the date, may be accepted by the Claims Enquiry Officer if he is satisfied that there
are reasonable grounds for the delay. If, however, the Officer is not convinced and the application is
rejected.
Remember, a question may be a simple or a complex one:
SIMPLE ONE:
Q: The amount of compensation under Solatium fund in case of death is:
A: a. Rs. 50000/- b. Rs. 100000/- c. Rs.25000/- d. 12500/-
(Right Answer- c. Rs. 25000/-)
(Or)
Q: The minimum amount of compensation under Hit and Run case/ claim:
A: a. Rs. 10000/- b. Rs. 25000/- c. Rs.12500/- d. 50000/-
(Right Answer- c. Rs.12500/-)
COMPLEX ONE:
LIKE THIS
Q: Raj met with a road accident, got injured with bruises while driving a vehicle and later
recovered. His wife applied for compensation under Solatium fund. The authorities will settle an
amount of :
A. a. Rs. 12500 b. Rs. 25000 c. Nil d. Only actual medical expenses.
(Right Answer- c. NIL as this is self-injury)
2
(Or) LIKE THIS
Q: Raj met with a road accident, got grievously injured, declared disabled @ 50%. The vehicle that
caused the accident could not be traced. His wife applied for compensation under Solatium fund
and received the compensation. Later it is found an independent PA policy for a SI of 1.00 Lac with
a bonus of 10% with a non-life insurer. The claimant is eligible to get the overall compensation
from the insurer:
A. a. Rs. 12500 b. Rs. 42500 c. Rs.37500 d. 100000.
The Answer is b. Rs.42500. (50% of SI including Bonus= Rs.55000, Minus 12500= Rs.42500)
Note, One should know here, the amount of Solatium fund - compensation under grievous injury,
eligibility as to refund as per declaration in case of other compensation, compensation under PA
policy, with accrued bonus.
NB: ALSO KEEP UPBREAST OF NEW DEVELOPMENTS VIZ.,MV ACT AMENDMENT BILL 2016
SOME MORE EXAMPLES
The strategy I adopted while preparing for the exam, was, that I used to high light important points
in the Tariffs, Circulars and ASSOCIATE BOOKS which helped me to remember these points well. I
used to recall them while preparing which helped me to avoid making mistakes during the exam.
You could adopt a similar strategy or own strategy for remembering key points. Read IRDA circulars
which are common to all the companies. The questions would be from areas which are common to
all the 4 companies and they expect you to possess in depth knowledge of Technical subjects and
your understanding of the same.
First read the questions, well understand what is asked and then answer. Since it is objective type
prepare very well for at least 4 topics and keep one extra subject as standby, as it would help if the
questions in one subject are unexpectedly difficult. Choose subjects which are comfortable to you as
you would have prepared yourself for associate exams earlier or you might have some practical
experience in your operating office which would make reading interesting.
On account of our age (I mean average age), forgotten reading habit, memory status, family
atmosphere and official work load we may feel that reading is stressful. But remember- this is an
opportunity to grow, stand out from others. Also an opportunity to learn, unlearn, refresh and gain
confidence over the subjects and on our role and responsibilities. While preparing for exam, you
would be surprised to note that what you have been thinking all these years as correct may not be
correct.
If you feel sleepy or tired, practice inhale/exhale exercises for 5 to10 minutes (remember the correct
way that your stomach to bulge while inhaling and tuck in while exhaling) before you start reading.
You can walk and read in between. Read theory, close the book and check yourself with some
objective set of questions and answers.
3
I am giving here some more examples for you to understand that how the questions are being
framed and how you should pick up the right answer by eliminating all other wrong answers.
FIRE
The topics to be covered under Fire are: Read the Tariff & become familiar with the tariff. Many of
the questions would be from General Regulations. A few of the examples are given here below:
Under General Regulations - Mid-term cover can be given in respect of Fire & STFI.
The question could be framed like this:
It is not possible to issue Mid-cover for Fire & STFI:
A) If premium is adjusted out of Bank Guarantee Account/ Cash Deposit Account
B) If the premium is paid by cash/DD only.
C) Both the above options A & B are correct.
D) None of the above.
- In the above question the option A is correct, because in respect of Mid-term cover for the
above perils, cover should be given for the entire property and the premium has to be paid
by cash/DD only and the cover starts only after 15 days from receipt of the premium.
- Specific attention should be paid to the following and questions could be asked from the
following: What I have given is only illustrative.
- Extension of short period policy is not permitted.
- Kutcha Loading need not be charged, for temporary sheds erected during monsoon only for
protection during loading and unloading and not for storage cover.
- No floater extra should be charged if stocks covered are situated within godowns in the
same compound.
- Learn about what is not covered under Declaration policies
- Floater policy cannot be issued in respect of unspecified locations.
- Minimum SI under Declaration (1crore) / Floater declaration policies (2crores). Mode of
declaration under declaration policies. Minimum % of Retention of premium in respect on
adjustment under the above policies.
- Damage caused to Boilers due to centrifugal force is not covered under the Fire policy.
- Focus on deductibles on boilers. Earlier there was no policy excess for boilers. There was
problem given in the exam, where one of the options given was with excess and without
excess in respect of claim for Boiler covered under Boiler policy. The correct answer is the
one with the appropriate excess as per the latest circular. Thus, they check whether you are
up to date with regard to the current developments.
- There was one question on land slide wherein the normal cracking, settlement or bedding
down of new structure was also included amongst the options, which is a specific exclusion
under the policy.
- Under RIV clause, the insured should mention his desire to reinstate within six months of
loss and must be completed with 12months or within such further time as insurers might
allow. In the absence of the above, the claim would be settled on normal indemnity basis.
RIV policies cannot be issued in respect of stock and merchandise.
- Focus on Add-on covers. They had asked a few questions from this section. One of the
4
questions was on deterioration of stock in cold storage and had given options for which you
needed to know the correct answer. The key point to be noted is breakdown of power
supply be arising out of peril covered under both at the premises of Power station (which is
further subject to Time Excess of 24 Hours.) and also out of damage to cold storage
machinery. Another point of relevance is for mid-term inclusion of Add-on covers, annual
premium should be charged and not short period rates.
- Under omission to insure clause, it should be noted that the liability is restricted to 5% of
sum insured for each item and if the insured fails to declare within 30days of expiry of policy,
there will be no refund of the advance premium collected.
- In respect of earth quake add-on cover, overflowing of sea, river and lake would be covered
only if STFI perils are also covered.
- The leakage and contamination cover extension would apply to oils and chemicals only and
not to other commodities.
- In addition to this, read the clauses also.
- Under IAR policy MLOP is an optional cover. The sum insured under IAR policies is on the
basis of RIV only for buildings, FFF & and Current Replacement Value in r/o machineries.
Under-insurance to an extent of 15% is waived.
- Mega risks are those risks which have a sum insured of 2500crores per location and the
threshold limit of PML per location is 1054crores.
You can expect a few questions from LOP section also.
- LOP Turnover=money payable to the insured for goods sold.
- Variable Charges = expenses incurred in producing the goods.
- Standing charges = Fixed charges irrespective of turnover.
- Net Profit = Gross Profit-Standing charges.
- Gross profit = Net Profit + Standing charges.
Net Profit = Turn over – Variable charges – Standing charges.
Standard Turn over =
The Turnover during that period in the 12 months immediately before the date of incident,
which correspond, with the indemnity period. Example -Indemnity period for the restoration
of the business disturbed is 01.06.2001 to 30.10.2001 and this period is the period of
interruption. The standard turnover for this purpose means the turnover for a period from
1.6.2000 to 30.10.2000.
Indemnity period can vary from 3months to 3years.
The sum insured should correspond to Gross profit which is Net Profit + Standing charges.
The claim is payable under LOP policy only if a claim is admissible under material damage
policy which is known as “Material Damage” proviso.
While reckoning the standard Turn over, the corresponding period of the previous year is
considered to give a fair comparison. (For e.g., January to March.)
Increased cost of working covers the additional expenditure necessarily and reasonably
incurred for the sole purpose of reducing the turn over.
The additional Auditor’s fees to produce books of accounts to provide documentary
evidence of the probable loss can also be insured additionally. Extension can be given
damage to insured’s property in other locations, damage at supplier’s premises resulting in
interruption of production. Extension can also be given for additional wages,
layoff/retrenchment compensation.
5
IAR policies cover – Fire & Special perils, Burglary, MBD/Boiler explosion/EEI, Business
interruption – FLOP. MLOP cover is optional.
As per the latest circular, while reckoning the premium, discount should not be allowed on
Add-on cover of EQ and STFI. The rates for the above must be added separately after
allowing all the discounts under basic cover.
ENGINEERING
Engineering: Divided into two types- Construction & Operational Phase.
Construction Phase: CAR, EAR, MCE, CWI, ALOP. – One time policies. The policies are issued
in joint names i.e., Principals/contractors for the period of the project.
Operational Policies: MBD, B&PP, MLOP, CPM, CECR- Civil Engineering completed risks, EEI,
Deterioration of Stocks.
The question could be framed like this:
Which one of the following is considered to be an operation phase peril?
1) Accidental Damage
2) Accidental Breakdown
3) Short Circuit
4) Theft and Burglary
A) Only 4
B) Only 3
C) Both 2 & 3
D) All of the above.
The answer is C as specifically relates to operation risk.
The basis of loss settlement in engineering policies -In case of repairable damages, the policy
pays for the cost of repairs necessary to restore it to pre-loss condition without
application of depreciation. In case of total loss (the actual value of the item immediately
before loss – salvage) is payable. The cost of any improvements is not payable
CAR & EAR Policies: Both the policies are – All Risk policies. CAR policies cover civil
constructions/projects; EAR policies cover machinery, plant during erection. Both are
vulnerable to physical loss, additional financial loss in terms of anticipated income, third
party liability. Insurance Act provides for payment of premium in installments for long term
contracts (>12months). The first installment should be higher than other installments by 5%.
Intervening period should not exceed 3months. The last installment should be collected
6months before the expiry of the policy.
CAR policies primarily deal with civil engineering projects. Major exclusions – losses
discovered at the time of inventory, penalties for delay, faulty design, vehicles licensed for
road use, water borne vessels or equipment mounted on such vessels (e.g., drilling rigs).
Sum insured should correspond to the completely erected value of the contract work
inclusive of materials, wages, construction costs, freight, customs duties and items supplied
by the principal. Sum insured is adjustable on completion of construction based on the
actual values in respect of construction cost, freight, custom duties and additional premium
charged or excess premium is refunded. However, there can be no adjustment in respect of
prime cost of materials.
6
CPM - Contractor's Plant & Machinery- policies can be insured under CAR/EAR policies provided the
sum insured is not more than 5% of the SI of the project or less than 25lakhs.
SI should correspond to current replacement value (henceforth referred to as CRV).
The cover commences from the commencement of the work or after unloading of the
property insured at the site, whichever is earlier.
Erection All Risks & MCE Policies: Basically concerned with erection of electric plant and
machinery, equipment and structures involving no or very little civil work. However civil
engineering works necessary for the project could be included in EAR policy, provided the
nature of the work is predominantly that of erection work. SI should correspond to
completed erected value of the property inclusive of freight etc.,
The insurance would commence from the time of unloading of the property mentioned in the
schedule at the site specified and shall continue until immediately after the first test operation or
test loading is concluded. In case of Second Hand /used property, the cover ceases immediately on
the commencement of the test.
In respect of transit risk arranged separately, the machinery are inspected by the insured as
soon as they are unloaded at the site in order to ascertain loss or damage recoverable under
Marine policy. Under MCE policies, cover commences from the moment the goods leave the
manufacturer’s ware house.
However war cover is available only for ocean voyage and not during land transit.
Transit risk from one project site to another project site is not covered and has to be
covered separately by a marine policy.
Under Boiler and Pressure plant insurance: only explosion (including centrifugal force- force
which operates away from the center of the boiler which results in explosion.) & implosion
(collapse) resulting from its internal working is covered. Hence for perils which need to be
covered under Fire policy, the boilers should be included under fire policies.
It is warranted that boilers and pressure plants are inspected by the inspectors annually and
shall only be operated by those who have a valid certificate of competency for operating
boilers.
Earlier there was no excess under BPP policy. However, w.e.f., 1/4/11 are subject to an
excess of 5% of the claim amount subject to a minimum of 10000/-.
TP Liability under BPP can be on first loss basis
MLOP covers loss of net profit, insured standing charges and increased cost of working. A
claim under MLOP is admissible only if a claim is payable under MBD/BPP policy. (Material
damage proviso, analogous to FLOP.) However, losses under MLOP are subject to time
excess as per the recent circular- 14 Days/21 days, up to 2500 Cr/ more than 2500 Crores
respectively.
Deterioration of stocks other than potatoes is a form of consequential loss cover for stocks
contained in large cold stores following breakdown of the refrigeration plant and machinery
and a claim is admissible under MBD policy.
7
Under EEI policies – the cover is on all risk basis – Loading for absence of maintenance
warranty for equipment whose value is less than 1lakh 50% and more than 1lakh 100%. AMC
in respect of Personal computers up to 1lakh can be waived.
A discount of 10% of the applicable EEI rate is applicable if the item is covered also under
SFSP Policy.
MISCELLANEOUS
In general, there would be four choices for one question. But in hurry we tend to choose the first
answer as if it appears to be correct. But further reading of other choices will reveal that there is one
more appropriate and relevant answer. So don’t miss to select such right and the best answer.
The question could be framed like this:
Example I: A claim pertaining to Bloodstock is payable provided if carried out by -
a) Euthanasia by the insured
b) Euthanasia by the insured on prior approval by the insurer
c) Euthanasia by the insured on prior approval by the insurer within the geographical area
d) Euthanasia by the insured on prior approval by the insurer inside & outside the
geographical area
Both b & c are correct independently; but ‘c’ is more appropriate answer, so ‘c’ is the best and right
answer.
Example II: Under burglary policy, in respect of damage to uninsured building of the
landlord during burglary wherein the contents are covered by the insured -
a. Claim can’t be paid.
b. Claim settled on the basis repairer’s estimate
c. Claim settled on the basis repairers estimate, strictly confined to the damage actually caused
by forcible entry subject to SI.
d. Only 50% of the actual claim can be paid.
‘C’ is correct as the claim is payable as Tenant Liability which is an inbuilt cover in burglary risk.
We have also designed a MOCK TEST to help you to get real time experience of PSGICs
OFFICERS PRE PROMOTIONAL ONLINE EXAM and the web link is:
FOR OFFLINE PRACTICE- DOWNLOAD FROM:
https://www.dropbox.com/s/i0abaz07u5qjl50/Mock%20Test%20PE%202015-
16.zip?oref=e&n=42891640
ALL THE VERY BEST TO YOU!
DISCLAIMER: THIS IS AN UNOFFICIAL NOTE, WITH A GOOD INTENTION TO SHARE EXPERIENCE TO HELP OUR COLLEAGUES
AND HAS NO LEGAL BINDING WITH THE ORGANSATION.
