CHAPTER 7: Regulatory Processes, systems and controls Flashcards
How can insurers get regulatory information?
Lloyd’s have a centralised department in it’s corporation to manage regulator relationships.
What do regulators require to show compliance with regulations?
They require data evidence, which comes from the reporting done to regulators.
What does Lloyd’s use for interpreting data?
Lloyd’s use codes for more generic information (risk location, applicable taxes, direct or reinsurance etc..)
What is solvency?
The balance between assets and liabilities.
What is Solvency II?
EU Regulation, introducing new solvency requirements for insurance firms, with the following aims:
- Better regulation
- Deeper integration of EU insurance market
- Enhanced policyholder protection
- Improve competitiveness of EU insurers
What can be considered one of the most important systems and controls in place?
Training and education of staff.
What is a simple definition of a sanction?
A ban, can take many forms.
Why are sanctions imposed?
- Political Pressure
- Enforce respect for democracy
- Enforce respect for human rights
- Maintain and restore peace in a country/region
Name some financial sanctions.
- Freezing assets of a company or individual
- Prohibiting the transfer of funds to a sanctioned country
- Freezing the assets of a whole government
Who are the OFSI?
The Office of Financial Sanctions Implementation in HM Treasury. Responsible for the implementation and administration of international financial sanctions in effect in the UK.
What responsibilities to OFSI have?
- Domestic legislation on financial sanctions
- Implementation and administration of domestic and international financial sanctions
- Providing advice to treasury ministers
- Working with the the UN and EU on financial sanction regimes
Who has to follow EU regulations imposing and/or implementing sanctions?
These sanctions are part of EU law, so directly effect any entities in the member states. They also affect all persons and entities doing business in the EU.
What are trade sanctions and who manages them?
Trade sanctions can include travel bans and/or a ban of import or export of certain cargoes.
Trade sanctions are managed and monitored by the Department for Business, Energy and Industrial Strategy (BEIS)
What are the US sanctions on Cuba?
May not provide accounting, marketing, sales or insurance services to a Cuban company or foreign company for their Cuban business.
What is an example of problems had with sanctions?
Dealing with piracy ransoms. The UIK and US have Somalia on their sanctions list and numerous groups/individuals. This can make it hard to know if a ransom payment can be made.
How do insurers find out about sanctions?
On the websites for HM Treasury and US department of the Treasury, OFSI and Office of Foreign Assets Control.
Lloyd’s insurers can also check the Lloyd’s website.
What is an export control?
A restriction on certain exports.
What is the export control order?
Requirement for a licence if:
- There is movement of arms or military goods between two overseas countries (not in the UK)
- Involvement of any UK person including UK entities which might be involved only by insuring such goods
The licences have 3 categories: A, B and C.
What are the categories for the export control order licences?
A: Gallows, guillotines and electric chairs
B: Rocket launchers etc capable of being operated by three or less people
C: Military goods not falling into A or B
What is an embargo?
An embargo is a trade ban
What is the Data Protection Act 2018 (DPA 2018)?
Came into effect in 2018 to coincide with the general data protection regulation (GDPR) and the law enforcement directive (LED)
It aims to modernise data protection laws for the future.
What are the main elements of the DPA 2018?
General Data processing
- implement GDPR standards
- Ensure certain data can be processed whilst maintaining confidentiality
…
Regulation and enforcement
- Enact additional powers for the information commissioner
Who does GDPR apply to? Give definitions of them.
It applies to controllers and processors.
A controller says how and why the data is processed. The processor acts on the controller’s behalf.
What information does GDPR apply to?
Personal information and any information that can be identifying.
