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Flashcards in IF1 CH.2 Deck (67)
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1

The Insurance Market is made up of five components

1;Buyers(Policy holder)
2.Insurers(Sellers)
3. Intermediaries
4.Comparison 5.Websites(aggregators)
6.Reinsurers

2

There Five types of Insurance Buyers

1.Private Individuals
2.Partnerships
3.Companies
4.Public Bodies
5.Associations and Clubs

3

Which type of Insurance are high on the list for Private Individuals

Motor Insurance is the most likely as it is compalsory, and then household buildings and contents Insurance

4

What are the needs of most partnerships

Their Insurance needs are mostly on professional negligence(giving poor professional advise), they are catered for by specialist schemes

5

which type of Insurance buyers set up their own insurance fund through which they insure some risks

Public Bodies

6

What type of Insurance do Associations and clubs usually buy

Liability Risks and Damage to own property

7

What is the PRA

Prudential Regulation Authority, they authorize any company in the UK wishing to transact Insurance

8

What are the six types of Insurers as defined by Ownership

1.Proprietary Companies
2.Societas Europaeas
3.Mutual Companies
4.Captive Comapnies
5.Protected cell Companies
6.Lloyds

9

What are Proprietary Companies

These companies are owned by shareholders, who by buying shares have contributed to the share capital of the firm

They have limited liability

10

What is Societas Europaeas

Are Public EU company, that can register in any Member State of the EU,

11

What are Mutual Comapnies

These are companies owned by policyholders. The policyholders share in the profit of the company by way of lower premiums

12

Where are Mutual Indemnity Associations active

They are primarily active in marine Insurance

13

What are Captive Insurer

This is an Insurance Company established by its parent company or group(usually a large corporation) that provides insurance coverage primarily, if not soley to the parent company

14

How are Captive Insurance Tax efficient

1. Premium payable to the captive may be taxdeductible at source

15

what are the two parts that PCC operate as

Pcc operates as Core and unlimited number of cells

16

What are the two types of Insurers defined as type of function

they are Composite Companies and Specialist Insurers

17

What are takaful Insurance Companies

Takaful is the type of insurance that has its roots in the ISalmic financal service

18

What is the Lloyds Market

Lloyd is an organisation that provides facilities on the place risks in its own market

19

What are Syndicates

These are private individuals or corporate members who carry risks( the financial burden)

20

Who syndicates employ, to accept risks on their behalf

Syndicates employ managing agents who also appoint underwriters to accept risks on their behalf

21

What does it mean when you say the Managing Agents are Dual- regulated

This meand they are regulated by the PRA and FCA. This Meaning they are approved by the PRA and their business conduct activites are regulated by the FCA

22

what are Memebers' Agent

They advise their clients on the advantages and disadvantages of investing in the Lloyd's Market,syndicate selection,performance,reserve requirement and compliance issues

23

What are the responsibilities of Member Agents

They act as a communicating Channel between members and various managing agents running their syndicates

24

Who approves the Member Agents

Currently there are three active member Agents, approved by the FCA and Lloyd's Specifically

25

What is MRC?

Market Reform Contract also known as slips, this is how most risks are placed in the Lloyd's market

26

What are NAmes

These are people who have demonstrated a certain level of financial wealth,provide capacity for insuring risks

27

What did the Legislative REform(Lloyd's )Order 2008 allow

This Legislative allowed non Lloyd brokers to place business in the Lloyd market. Ensuring the same minimum standards apply to these non-Lloyd brokers as the Lloyd Brokers.

More Commoditised Risks like motor and household can be written outside the Lloyd's Office and presented to underwriters without using the Slip.
Other Risks are written directly with insured by managing agents owned service companies
Removed the divestment rule, that stated underwriting and broking activities should be different

28

What is Contract Certanity

Contract Certanity is achived by the complete and final agreement of all terms between Insured and Insurer before Inception

29

What is an Agent

Is one who is authorized by the principal, to bring the principal into a contractual relationship with the third party. E.g of an Agent is an Insurance Intermediary

30

Inorder to be a person who carry on Insurance mediation activities you must either be directly authorised b ythe FCA or be exempt by adopting which status

The Intermediary can adopt status of Appointed Representative (AR) or Introducer Appointed Representative(IAR) or be a memeber of a professional body that has equivalent rules to the FCA (designated professional body