7. Regulation of the Non-life Market Flashcards
Because shareholders and policyholders view solvency margins differently, it could create a place where there is …
conflict of interest
t is important that the claims negotiator’s estimates are correct.
If the estimates are too high:
- the company is reserving capital that could have been used for (1)…
- it affects the insurer’s (2)… margin.
- the (3)… ratio of the company looks worse than it is.
- lack of (4)… can reduce the price of shares and investments.
(1) business development
(2) solvency
(3) loss
(4) confidence
Recoveries from third parties are not regarded as consideration for supply of service and are therefore not subject to …
VAT
Statements & Accounts submitted to the Registrar:
- the audited (1)… needs to be submitted 4 months before expiry of financial year.
- a spreadsheet showing the (2)… underwriting results needs to be submitted 1 month before expiry of each quarter.
- a copy of any audited account or (3)… submitted to shareholders needs to be submitted 6 months before expiry of financial year.
(1) annual return
(2) gross & net
(3) balance sheet
The enactment of the (1)… no.34 of 2005 came into effect from 1 June 2007.
The thurst of this Act is to control the activities of (2)…
The National Credit Act impacts insurance in that it is:
- an extention to the concept of (3)… in the selection of cover.
- control the (4)… of cover.
- requirement that insurance premiums should be charged (5)…
(1) National Credit Act
(2) money lending
(3) free-choice
(4) amount
(5) annually or monthly
The insurer can not claim an input credit of the VAT portion when:
- payment is in respect of the (1)…
- the supply of the insurance is (2)…
- the person indemnified is neither a (3)…, nor a resident of the country.
- the payment is from a supply of goods (4)…
(1) supply of goods
(2) zero rated
(3) vendor
(4) outside the country
What are the two reasons why the non-life insurance market should be regulated?
- Contracts need to be renewed annually.
2. Primarily concerned with risk assessment.
The shareholder wants to see the company write the maximum amount of business and create the maximum utilization of resources which equates to a … margin.
lower solvency
The statement of assets submitted to the Registrar:
The statement of assets is quite detailed but the main points are:
- no amount may be included for (1)…
- no premium outstanding for a period of more than (2)… from due date may be included.
(1) goodwill
(2) 2 months
The statement of liabilities submitted to the Registrar:
The statement of liabilities should include:
- the rand value amount of (1)… outstanding.
- a reserve of the claims incurred but not (2)…
- the estimated liability for (3)…
(1) claims
(2) reported
(3) taxation
The (1)… was signed into law in April 2009 and came into effect 1 April 2011.
Below are some objectives of the Consumer Protection Act:
- unjust unreasonable or unfair (2)… are prohibited.
- the supplier will not be able to contract out of (3)…
- the consumer has the right to receive goods that are (4)… for the purposes of purchase and free of defect.
(1) Consumer Protection Act
(2) contract terms
(3) liability
(4) reasonably suited
The … of a company is basically the difference between its assets and its outstanding liabilities.
solvency margin
Name three examples of compulsory insurance:
- Road Accident Fund
- Nuclear Energy Act
- Unemployment Insurance Act
What are some of the duties of the Registrar of Insurance:
- submission of (1)…
- statement of (2)…
- statement of (3)…
- solvency margin (4)…
- (5)… for intermediaries
- statements & accounts
- liabilities
- assets
- regulations
- commission rates
What are some of the main reasons for compulsary insurance:
- the (1)… of funds.
- the easing of the (2)…
- public (3)…
- (4)… of the insured.
- provision
- State’s burden
- attitude
- protection
