Insurance Foundation Certificate Examination - Syllabus

Learning Objective:

‘To introduce candidates to the need for insurance, the principles of

insurance and the legal framework that underpin its practice.’

Principles and Practices of Insurance

Foreword

Improving knowledge, developing skills, building careers

The insurance industry in the Kingdom has arrived.

The success of the new industry will rely on the knowledge and skills of the

people who work in the industry.

Professionalism in insurance is not an option but is a must.

As a first step in the development of Saudi Arabian insurance professionals,

the Institute of Banking has developed this foundation course in insurance

which must be taken before all other courses.

The Foundation Course has been formed with individual modules covering

different subject areas within insurance, protection and savings. During your

studies, your principal learning resource will be yourself and this courseware.

However, the Institute of Banking has also developed a classroom based

presentation to accompany and support this book.

The instructor of this program will guide your studies, develop your group

discussions and be able to fully explain those issues which are particularly

complex. He will also answer your questions on specific issues that you may

find difficult.

There are three knowledge ratings used throughout the course which indicate

the depth of knowledge required for each topic. These are i. To be aware of,

ii. To have knowledge of and iii. To understand.

The courseware contains definitions and explanations throughout together

with regular short questions to check your understanding of the text. These

questions are given in a box and will either test your understanding of the

topic or stimulate your thought process and facilitate further discussion.

At the end of each module, there is a series of questions to test your knowledge

of the module. It is strongly recommended that these be completed before

moving on to the next module.

The IOB’s goal of developing excellence amongst insurance professionals

in the Kingdom will only be achieved if each of us strives for insurance

knowledge. This program is here for your development. Use it!

Good luck, enjoy the Program and, may it be the stepping-stone to an

interesting and rewarding career.

Icons

When you read the print materials, you will find the following icons displayed in the

left hand margin.

Indicates key content to which you should pay special attention.

Notes a website that may contain additional information on a topic.

Directs you to other modules that contains more information on a topic.

Questions to test your understanding of the topic and/or for further discussion.

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Principles and Practices of Insurance

Course Content & Syllabus:

Module 1: Risk and Insurance

1.1 Meaning of risk 007

1.2 Categories of risk 008

1.3 Insurable risks 012

1.4 Uninsurable risks 013

1.5 Insurance as a risk transfer mechanism 015

1.6 Pooling of risk 016

1.7 Perils and hazards 019

1.8 Benefits of insurance 021

1.9 Reinsurance 025

1.10 Co-insurance and self-insurance 030

1.11 How an insurance company operates 032

Progress Check 035

Module 2: Legal Principles of Insurance

2.1 Utmost Good Faith 041

2.2 Insurable Interest 044

2.3 Indemnity 046

2.4 Subrogation 053

2.5 Contribution 055

2.6 Proximate Cause 058

Progress Check 061

Module 3: Risk Underwriting

3.1 Material facts 067

3.2 Physical and moral hazards and the use of warranties 069

3.3 Proposal forms and broker’s slips 074

3.4 Surveys 078

3.5 Quotations 080

Progress Check 084

Module 4: The Insurance Market

4.1 Components of the insurance market 089

4.2 Intermediaries 092

4.3 Distribution channels 095

4.4 The role of ancillary players in the insurance 097

Progress Check 100

Module 5: The need for documentation

5.1 Proposal Forms and policy structure 105

5.2 Warranties and endorsements 109

5.3 Cover notes and certificates of insurance 110

5.4 Claim forms 112

5.5 Renewal invitations 114

Progress Check 116

Module 6: Regulation of the Insurance Industry in the Kingdom

6.1 Why the insurance and protection/savings industry needs to be regulated. 121

6.2 The Historical Background of the Insurance Industry in the Kingdom 123

6.3 Regulation of insurance in the Kingdom of Saudi Arabia 127

Progress Check 148

Module 7: Market Code of Conduct Regulation MCCR

7.1 Introduction 153

7.2 General Requirements 154

7.3 Standards of Practice 156

7.4 Appendix 163

Progress Check Answers

182

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