What is the PCEIA life exam?
The Pre-Contract Examination for Insurance Agents (PCEIA) is the entry exam set by the Asian Institute of Insurance (Aii) for new insurance agents in Malaysia. Life agents usually sit the AC route: Part A covers basic insurance principles and Part C covers life insurance. After passing, you register with the Life Insurance Association of Malaysia (LIAM) before you can sell.
The exam format
| Route | AC (Basic + Life): 100 questions, 50 + 50, 2 hours, RM 100 |
|---|---|
| Life only (CO) | 50 questions, 1½ hours, RM 95 |
| Pass mark | 50% |
| Languages | English, Bahasa Malaysia and Mandarin |
| Delivery | Virtual Computer-Based Exam (VCBE); permit and results through Aii's iLMS |
| Entry | SPM/MCE with 5 passes including Bahasa Malaysia, or equivalent |
| Exemptions | No longer recognised from 8 August 2024 |
Aii also offers PCIL, a 100-question combined exam (40 basic, 30 life, 30 investment-linked) for agents who want to sell life and investment-linked products from the start.
What the exam covers
- Risk and insurance principles: pure and speculative risk, hazards, risk management, the law of large numbers
- Insurance contract law: utmost good faith, insurable interest, Schedule 9 disclosure and misrepresentation remedies, non-contestability after two years
- Regulatory framework: the FSA, BNM, licensing, LIAM registration, the financial ombudsman scheme
- Ethics and consumer protection: Schedule 7 prohibited conduct and BNM's Fair Treatment of Financial Consumers outcomes
- Life products: term, whole life, endowment, participating policies, annuities, surrender and paid-up values
- Riders, medical and health insurance: waiver of premium, critical illness, deductibles and co-insurance
- Underwriting, policy provisions and claims: misstatement of age, the 15-day free-look, nomination and trust under Schedule 10
- Takaful and needs analysis: tabarru', wakalah, Shariah compliance under the IFSA, working out a cover shortfall
Free official resources, and what we add
Aii does not publish a free question bank. The exam fee includes an e-learning module and e-book, which are your core study material. The Acts themselves are free to read: the Financial Services Act 2013 and BNM policy documents are on bnm.gov.my. Our questions are written from those primary sources, and every explanation names the section or paragraph it comes from, so you can check it.
How to prepare
- Read the Aii e-book once from start to finish to see the whole syllabus.
- Learn the key Schedules of the FSA: 8 (policies, free-look, insurable interest), 9 (disclosure and misrepresentation) and 10 (nomination).
- Practise one topic at a time and read every explanation, including for answers you got right.
- Work through the calculation questions (misstatement of age, deductibles, needs analysis) until the steps are automatic.
- Sit a full timed mock of 100 questions in 2 hours, then revisit your weakest topics.
Practice questions with answers
Tap a question to see the correct answer and explanation.
In insurance terms, what is a "hazard"?
- The event, such as fire or death, that actually causes the loss
- A condition that increases the chance or size of a loss
- The amount the insured must bear before a claim is paid
- The insurer's estimate of its claims for the coming year
Answer: B, A condition that increases the chance or size of a loss. A peril is the cause of loss (for example fire or death), while a hazard is a condition that makes a loss more likely or more severe, such as poor wiring or smoking. Source: Aii PCEIA syllabus, concepts of risk and insurance.
Under the Contracts Act 1950, which element is NOT required for a valid contract?
- Free consent of the parties
- Lawful consideration and a lawful object
- A written document signed in front of a lawyer
- Parties who are competent to contract with each other
Answer: C, A written document signed in front of a lawyer. Section 10 of the Contracts Act 1950 says agreements are contracts if made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object. A contract need not be witnessed by a lawyer. Source: Contracts Act 1950 (Act 136), section 10.
Under the FSA, who grants a licence to carry on insurance business?
- The Minister, on the recommendation of Bank Negara Malaysia
- Bank Negara Malaysia alone, with no role for any Minister
- The Life Insurance Association of Malaysia
- The Asian Institute of Insurance (Aii), after the PCEIA results
Answer: A, The Minister, on the recommendation of Bank Negara Malaysia. Section 8(1)(a) says no person shall carry on insurance business unless licensed by the Minister, on the recommendation of the Bank, under section 10. Carrying on authorised business without a licence is an offence under section 8(3). Source: Financial Services Act 2013 (Act 758), sections 8 and 10.