5

Question 1

NCDs abbreviation

Answer 1

No claims discounts

Question 2

PECE

Answer 2

Pre-existing conditions exclusion

Question 3

Two main distribution channels

Answer 3

Direct business and independent intermediaries

Question 4

% Intermediated PMI sales

Answer 4

69% (83% co-paid, 45% individual)

Question 5

Types of direct business

Answer 5

1. Advertising
2. Telesales
3. Internet
4. Worksite marketing
5. Social media
6. Direct sales force

Question 6

DSF abbreviation

Answer 6

Direct Sales Force

Question 7

Advertising

Answer 7

Full or abbreviated form in a newspaper or online ad

Question 8

Advantages of advertising

Answer 8

– Business volumes managed

Question 9

Disadvantages of advertising

Answer 9

– Consumers may have additional questions
– Consumers may be put off by complexity

Question 10

Telesales

Answer 10

The use of salespeople to sell PMI over the phone

Question 11

Worksite marketing types

Answer 11

1. Contacting employees directly
2. One-to-one meetings
3. Group meetings
4. Workshops and clinics

Question 12

Advantages of worksite marketing

Answer 12

– Minimum disruption for employer
– Insurer can see a large number of people quickly
– Minimal travel costs

Question 13

How do insurer DSFs differ from intermediated sales?

Answer 13

DSFs are proactive marketeers and cannot rely on referrals

Question 14

Why do more IFAs focus on PMI?

Answer 14

Commission can be paid and exam requirements more achievable

Question 15

Four main types of independent intermediary

Answer 15

1. Brokers
2. Other intermediaries
3. IFAs
4. EBCs

Question 16

Intermediary commission from insurers

Answer 16

Percentage of first year’s premium and each year’s annualised renewal premium

Question 17

Broker

Answer 17

Any intermediary firm registered with the FCA

Question 18

Other intermediaries

Answer 18

Firms that specialise in selling PMI

Question 19

Examples of EBC services

Answer 19

– Claims monitoring
– Product design
– Insurer negotiations
– Legal advice
– TPA

Question 20

Advantages for insurers of using intermediaries

Answer 20

1. Impartial
2. Less price and sales-driven
3. Analytical advice
4. Additional benefits
5. Lower admin costs -> lower premiums

Question 21

AMII abbreviation

Answer 21

Association of Medical Insurers and Intermediaries

Question 22

AMII purpose

Answer 22

Enables insurers to meet with and market to large intermediaries in a cost-effective way.

Question 23

2020 AMII announcement

Answer 23

Electronic transfer of underwriting between insurers

Question 24

Why is commission likely to be higher on group schemes?

Answer 24

Even if percentage is lower, premiums are typically greater

Question 25

Broker networks

Answer 25

Where a number of small brokers become loosely affialited under an umbrella organisation

Question 26

Purpose of a fact-find

Answer 26

1. Gather the necessary info 2. Determine demands and needs of the customer 3. Determine best underwriting method

Question 27

Information required to quote on individual customers

Answer 27

1. Personal details 2. Existing insurance 3. Personal healthcare requirements 4. Pre-existing conditions

Question 28

Information required to quote on group schemes

Answer 28

1. Company profile 2. Current scheme profile 3. Claims profile 4. Benefit requirements 5. Proposed membership

Question 29

What was made mandatory in August 2016 by AMII?

Answer 29

Customer Authorisation Form – to authorise insurers to deal with a new broker.

Question 30

Dual contractual nature of PMI

Answer 30

1. Insurer contracts with employer 2. Claimant contracts with provider

Question 31

Responsibility of PMI provider

Answer 31

1. Cover and terms are clear 2. Provision standards meet customer expectations 3. Premium costs are controlled

Question 32

Consumer Rights Act 2015

Answer 32

All written terms must be fully transparent

Question 33

8 Individual risk assessment factors

Answer 33

1. Age 2. PEC 3. Current health & wellbeing 4. Occupation 5. Location 6. Marital status 7. Congenital risks 8. Lifestyle

Question 34

SME risk assessment factors

Answer 34

1. Number of employees insured 2. Dep cover 3. Age profile 4. Occupational profile 5. Selection profile and funding 6. Underwriting 7. Cover requirements 8. Excess 9. Hospitals 10. Overseas

Question 35

Large scheme risk assessment factors

Answer 35

1. FI or risk sharing 2. Max liabi

Question 36

What must PMI providers ensure they provide once accepting the risk

Answer 36

Written terms and conditions – governed by English Law

Question 37

PMI provider administration responsibilities

Answer 37

1. Claims administration 2. Data/membership mgmt 3. Premium/invoicing admin 4. Policy documentation

Question 38

IDD abbreviation

Answer 38

Insurance Distribution Directive (2016/97)

Question 39

IDD definition

Answer 39

Sets out consumer protection provisions and scope of regulation for insurance

Question 40

Key provisions of the IDD

Answer 40

1. Professionalism – staff must complete at least 15 hours of professional training/year 2. Commission disclosure 3. New product governance requirements 4. IPIDs

Question 41

Ancillary insurance intermediaries

Answer 41

Providers that sell insurance, but it isn't their main business