Weak Areas Flashcards by Madison Gardner

What does it mean if you are risk averse?

buy insurance

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What does it mean if you are risk seeking?

self- insurance

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Is a speculative risk insurable?

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What is a speculative risk?

gain/break even. e.g gambling

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what is a pure risk?

opposite to speculative - no possibility of gain- either no loss or total loss

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what is a particular risk?

specific/small - opposite to fundamental

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what is a fortuitous risk?

accidental

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what is coinsurance?

one policy 2 insurers

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what is dual insurance?

2 or more policies - contribution

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what is a proprietary insurance company?

owned by Shareholders

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what is a mutual company?

owned by Policyholders

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what is a mutual indemnity company?

Marine

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what is a captive company?

1 insured- large cooperation self insurance

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What is a ‘Name’ in Lloyds Market?

unlimited liability

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what is a managing agent?

companies that manage the syndicates and appoints underwriters

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What is a corporate name in Lloyds?

companies that back syndicated financially - limited liability

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what is a member agent?

gives advice to potential investors

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what does an underwriter do in Lloyds?

accepts risks for syndicates

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What is a principal?

individual/policyholder/consumer

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what is an agent?

broker

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who are brokers authorised by in order to sell insurance?

FCA

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who is an appointed representative authorised by if they are exempt?

principal/client

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what is an actuary?

they build the premium/quote behind the aggregator website

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ceding is when…

an insurer gets insurance from reinsurer?

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retroceding is when...

a reinsurer gets insurance from another reinsurer

invitation to treat

NEVER AN OPTION

what is agency by ratification?

when broker acts above their authority and breaks the agreement by the client approves

when is insurable interest required for life insurance policies?

inception

Who does CIDRA apply to?

consumers/personal individuals

when is insurable interest required for marine policies?

time of loss

what do consumers have to do to comply with CIDRA?

duty to not make a misrepresentation and to answer all questions fully & accurately

who does Insurance Act apply to?

commercial/business

what is replacement / new for old likely to be used for?

machinery

what do commercial customers have to do?

make a fair presentation of the risk and signpost anything important

what is reinstatement used for?

buildings

average/underinsurance equation

SI/Correct Value * loss

contribution equation ( independent liability method)

SI / Value of risk * loss

contribution equation (max liability method)

SI Proportion / total SI * loss

PRA

- Capital adequacy & governance - Judgement based - forward looking -Judges proximity to failure & have a Proactive Intervention Framework

SMCR

- Certificate = key roles in firms - Senior Managers = statement of responsibilities, responsibility map, fit and proper testing

What is the ideal % of capital adequacy and what is the minimum %

99.5% minimum 85%

FCA

- function of market, day to day - consumer protection risk based approach

Under Solvency II, there are 2 reports annually. One is public

Solvency & Financial Condition Report - public Regulatory Supervisory Report- private

What Law investigates/prosecutes financial crime?

National Crime Agency

What Law defines Money Laundering?

Proceeds of Crime Act

How long must an insurance company keep complaints for?

3 years

What is the main purpose of IPT?

to raise revenue for the gov

How long does an insurance company have to respond with a final response?

8 weeks

For coninsurance situations, if one insurer becomes insolvent- how much of the claim does the other have to pay?

only their signed percentage

What type of company is owned by a non-insurance parent company?

Captive

when broker/agent is collecting money from client for insurer, they are obliged to...

keep the money seperate from their own

who has a duty of fair presentation within a contract?

both the insured and the insurer

why would an insurer offer the market value of their car and not a brand new car?

because this is the extent of their financial interest

what type of requirement is fair treatment of customers?

regulatory requirement

if an approved person does something wrong, who will be punished?

broker as well as the approved person

what is a fidelity guarantee policy?

covers the risk of fraud/dishonesty of an employee

does IPT apply to all insurance premiums?

only some GI policies

what type of body is the CII?

Professional

what is a tied agent?

represents only 1 insurer

can a client avoid a contract under a TOBA?

no he is bound by it

under a TOBA, an insurer and intermediary wouldn't be to fault if the failure i caused by force majeure...

major things outside of anyone's control which stops a cointract from completing

what measure of indemnity is used for total loss of building?

cost of reconstruction at the time of loss

what is a statutory requirement?

BY LAW

when must insurable interest first exist for motor insurance?

at the time the policy goes on risk

who initially collects IPT on behalf of the gov?

the insuRER

protection and indemnity clubs underwrite which LOB?

Marine

what regulation allows FCA to issue penalties and prosecution?

The Financial Services Act 2012

what are the 3 pillars for Solvency II

financial requirements governance / supervision reporting/disclosure

what are the main elements of CII's high standard of service?

accuracy transparency suitability

Who owns a captive company?

A parent company

What form of consideration is a principal likely to give an agent?

Commission on premium received

What is the GABRIEL system that is submitted to FCA

Framework with provides the FCA with supervision of an insurers activities

If there’s a term in the contract unknown my policyholder, what law does this breach?

CONSUMER RIGHTS ACT

What does a the contracts act allow a third party to do

Enforce the policy against the insurer

Under which act was the assets recovery agency established?

Proceeds of crimes act

Highest travel premium for travel

North America

When a broker is advising a client on insurance who are they acting as the agent of

The principal

Who does a money laundering reporting officer report to

National crime agency

What is the principle purpose of the proceeds of crime act

To empower authorities to confiscate funds where it is believed they have been obtained unlawfully

Weak Areas Flashcards

(79 cards)