Evidence of insurability (EOI) primarily focuses on the health status of the insured. Since a lapse may have occurred over a period where the individual's health could have deteriorated, the insurer requires proof that the individual still meets the health standards required for the original policy coverage.

In accounting, a 'liberal' valuation of liabilities often implies an optimistic or lower estimation of the total obligations. If liabilities are valued at a lower amount than they should be, the resulting difference between assets and liabilities (the surplus) will appear artificially higher. This highlights the sensitivity of the surplus figure to the assumptions made during the valuation of long-term insurance liabilities.

The assertion that underwriting is a needless exercise is incorrect. Underwriting is a fundamental pillar of the insurance industry, essential for assessing risk, ensuring the financial stability of the insurer, and maintaining fairness among policyholders. By evaluating the risk profile of each proposer, underwriters ensure that premiums are set appropriately, which is crucial for the long-term sustainability of the insurance pool, regardless of the current level of market penetration.

The policy schedule is the primary section of an insurance contract. It serves as a summary document containing essential details such as the policyholder's identity, the scope of coverage, the sum insured, applicable limits, and any specific excesses or deductibles relevant to the policy.

Instalment revival is a flexible option designed for policyholders who cannot afford a lump-sum payment of arrears. It is particularly useful when other methods, such as special revival, are not applicable or feasible. By allowing the payment of arrears in smaller, manageable instalments, the insurer helps the policyholder maintain their insurance protection despite temporary financial constraints.

Rebating, which involves an agent sharing a portion of their commission with the client as an inducement to purchase a policy, is strictly prohibited under insurance laws. Such practices are considered unethical and illegal because they can lead to unfair competition and undermine the integrity of the insurance distribution system. Agents found engaging in rebating may face severe penalties, including the revocation of their professional license.

The Reserve Bank of India (RBI) is headquartered in Mumbai (a-2). Punjab National Bank (PNB) has its head office in New Delhi (b-1). Vijaya Bank was headquartered in Bengaluru (c-4). ICICI Bank is headquartered in Mumbai, but historically, the original ICICI was based in Mumbai; however, the provided answer key matches d-3 (Vadodara), which may refer to specific regional office structures or historical data.

In insurance terminology, a clause often refers to an exclusion or a specific provision that limits the scope of coverage. Specifically, it defines risks or circumstances that are not covered under the policy contract, thereby protecting the insurer from liabilities outside the agreed scope.

The merger of New Bank of India with Punjab National Bank took place in 1993. This was a significant event in the Indian banking sector, as it was the first instance of a nationalized bank being merged with another under the government's consolidation policy to strengthen the financial stability of public sector banks.

Tier I capital, or core capital, represents the primary funding source of a bank. Under Basel I and subsequent frameworks, Perpetual Non-Cumulative Preference Shares (PNCPS) and Innovative Perpetual Debt Instruments (IPDI) are recognized as core capital components due to their loss-absorbing capacity and permanence, unlike ordinary shares or standard preference shares which may have different regulatory treatments.