5. Legal and regulatory requirements Flashcards
What are the compulsory insurances within the UK?
- Motor 3rd Party
- Employers Liability
- Public Liability
- Liability for dangerous wild animals and dangerous dogs
If Mavis Mare, the owner of a riding school runs over one of her employees when she drives her car into the stable yard, which of her insurances might she have to advise?
a. Employers’ liability and riding school liability only.
b. Employers’ liability and motor insurance only.
c. Riding school liability and motor insurance only.
d. Employers’ liability, riding school liability and motor insurance.
b. Employers’ liability and motor insurance only.
Why is compulsory insurance required?
a. To provide guaranteed income for insurers.
b. To ensure the public behave sensibly.
c. To protect innocent injured parties.
d. To protect people’s income.
c. To protect innocent injured parties.
Which of these is NOT a type of compulsory insurance?
a. Professional indemnity for lawyers.
b. Liability insurance for riding schools.
c. Nuclear liability.
d. Compulsory motor insurance.
c. Nuclear liability.
How is the operation of the concept of good faith and the duty of fair presentation affected in relation to compulsory insurances?
a. There is no difference between compulsory and non compulsory insurances.
b. The insured is under a heavier burden of disclosure for compulsory insurances.
c. The insurer cannot decline a claim because of a breach of the duty in compulsory insurances.
d. There is no specific duty of fair presentation for compulsory insurances.
c. The insurer cannot decline a claim because of a breach of the duty in compulsory insurances.
Under the Employers’ Liability (Compulsory Insurance) Regulations 1998, what will the impact be if the insured breaches a policy warranty?
a. No impact on the policy at all.
b. All claims can be declined.
c. Underwriters will come off risk.
d. Underwriters will still have to settle claims but can take action against the insured.
d. Underwriters will still have to settle claims but can take action against the insured.
Marcus Monart, the Chief Executive Officer (CEO) of a London Market insurer decides to display his private art collection in the offices as he spends more time there than at home. If he is buying the insurance himself to protect this artwork, how
will the regulator define him and why?
a. A retail consumer because he is buying insurance for his own use or benefit.
b. A wholesale consumer because he is an insurance professional.
c. A wholesale consumer because the artwork is being held in an office building.
d. A retail consumer because he is paying the premium personally.
a. A retail consumer because he is buying insurance for his own use or benefit.
What was the main change made to the law of contract under the Contracts (Rights of Third Parties) Act 1999?
a. It permitted more than two parties to make a contract.
b. It allowed certain parties, not privy to the contract, to claim on the contract.
c. It allowed different parties to pay insurance premium.
d. It allowed certain external parties rights under the contract as long as they
contributed to the premium.
b. It allowed certain parties, not privy to the contract, to claim on the contract.
What is the standard rate of IPT?
12%
What is the higher rate of IPT?
20%
Who does the SM&CR apply to?
Insurers and brokers
How is a consumer defined under the FCA rules?
a. Anyone buying motor insurance.
b. Anyone not using a broker.
c. Anyone buying personal lines insurance.
d. Anyone buying insurance outside their business, trade or profession.
d. Anyone buying insurance outside their business, trade or profession.
How does the law define an unfair term in a consumer insurance contract?
a. Something that benefits the insured.
b. Something that causes an imbalance between the parties, to the disadvantage of the insurer.
c. Something that causes an imbalance between the parties, to the disadvantage of the insured.
d. Something that is written in small print.
c. Something that causes an imbalance between the parties, to the disadvantage of the insured.
Who is the third party in relation to any contract of insurance?
a. The insured.
b. The insurer.
c. The broker.
d. Anyone not a party to the insurance.
d. Anyone not a party to the insurance.
Who is responsible to HMRC for the payment of the insurance premium tax?
a. The insured.
b. The broker if one is being used.
c. The insurer.
d. They all have a shared responsibility.
c. The insurer.
