C2 Flashcards
What are four different ways of obtaining information?
- proposal forms
-brokers
-risk surveys
-call centres
What is the most common way of obtaining information as an insurer?
Proposal Form
What types of questions do proposal forms include?
General and Specific
What type of general questions are included in a proposal form?
- Name
- Correspondence address
- occupation
-period of insurance
What type of specific questions are included in a proposal form?
- The risk address
-age
description of risk
-sum insured or limit of liability
A premium is usually decided by applying a premium rate to a premium base. What does the rate and base represent?
- The premium rate reflects the hazard associated
-The premium base reflects the measure of exposure
What is the equation for premium?
Sum Insured X Rate = Premium
Does rate per cent or rate per mile represent the price in pounds for £1000 of exposure?
rate per mile
What is the difference between an adjustable premium and a flat premium?
An adjustable premium can be adjusted up or down at the end of the year so that is no longer based on an estimate whereas a flat premium is pre set or from a rating table.
What is the Standard rate of Insurance Premium Tax and then what is the higher rate?
12% and then 20%
Who is IPT paid by?
The policyholder
What are three different ways of paying for premium?
- upfront single payment
- by credit
-in monthly direct debit instalments
Why is a fee usually added each month when paying for premium monthly?
to reflect the loss of interest from the premium not being paid fully at the start.
How does the Association of British Insurers define Contract Certainty?
it is achieved by “the complete and final agreement of all terms,, with contract documentation provided promptly”
What is used as evidence of the contract?
the policy itself
