6 Insurance Intermiedation

Question 1

Three ways of agency agreement

Answer 1

Agreement in writing or inferred by behaviour

Ratification - done then later accept

Necessity - emergency situation

Question 2

If broker breaches duty of care

Answer 2

Breaches obligation under law of tort (or civil wrongs) to person harmed

Question 3

Single tied agent

Answer 3

Representing 1 insurer. Cannot advise on products. High street, no Lloyds market

Question 4

Multi tied agent

Answer 4

Insurer but selling multiple insurers’ products

Question 5

Independent intermediary

Answer 5

Lloyds London market broker - working for ultimate client

Question 6

Surplus lines broker

Answer 6

Working on biz from USA. Only used when local market has been shown business and can’t support.

Question 7

Open market correspondent

Answer 7

Broker but not lloyds

Question 8

Lloyds broker

Answer 8

Has Lloyds accreditation procesd

Question 9

Non Lloyds broker

Answer 9

Regulated by uk or home state not not Lloyds accreditation

Question 10

Insurers market repository

Answer 10

Xchanging - Electronic central market document repository

Question 11

Insurer market repository IMR

Answer 11

Electronic doc repository

Question 12

Signing number and date

Answer 12

Unique reference

Question 13

Risk transfer tobA

Answer 13

Allows broker to hold premium on behalf of insurer. any money collected by broker is deemed payable to the insurer

Question 14

Insurance distribution directive

Answer 14

Applies to insurance distributors (wider ranging incl admin rolls excl where premium less than EUR 600)

reason - ease procedures for cross border entry into markets within eu

Principles
- must act honestly fairly
- All info must be fair not misleading
- must disclosure nature and basis for remuneration

Question 15

FCA three pillars

Answer 15

Assessment of conduct

Event driven work

Reviewing products

Question 16

Types of segregated accounts: Statutory vs non statutory trust

Answer 16

Statutory - not fund premiums for clients out of accounts where they hold client money

Non stat- fund premiums prior to receiving money

Question 17

DPA 2018 elements

Answer 17

• confidentiality in health
• rights to access and delete data
• setting parental consent age
• giving power to ico to regulate laws

Question 18

DPA apply to?

Answer 18

Data controlled a and processors

Question 19

Agents duties to principals

Answer 19

follow instructions, act in good faith, do not sub-delegate without permission, account for funds, act with due care

Question 20

if agent acts outside authority, what can principal do

Answer 20

ratify and do nothing
ratify and sue for damages
refuse to ratify and exposure agent

Question 21

LPAN

Answer 21

London premium advice notification. From exchanging. sets out premium information / tax etc

Question 22

FCA’s CASS

Answer 22

client assets rules
fca handbook - broker must be clear on how they handle clients money. concept is broker must protect clients money they are reasonable for (premium or claim payment) by having segregated accounts. keep in statutory or non statutory trusts

Question 23

max ICO fine for breaching data laws

Answer 23

up to GBP 17.5m or 4% of annual turnover