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C6 Flashcards

1
Q

What is the FCA

A

The financial conduct authority

Responsible for the conduct for all financial firms, including intermediaries

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3
Q

What is the FPC

A

The financial policy committee

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4
Q

What are the 3 operational objectives of the FCA

A

Consumer protection
Integrity
Competition

Secondary- stimulate competition and growth in the medium to long term

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5
Q

What do the FCA do

A

Overseas the financial ombudsman service (FOS) and the financial services compensation scheme (FSCS)

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6
Q

What is the FCAs focus

A

Product governance
End to end sales process
Prevention of financial crime

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7
Q

What is the FCAs approach to supervision

A

Fixed portfolio firms
Flexible portfolio firms

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8
Q

What does the PRA strive to do

A

Promote the safety and soundness of PRA regulated persons

Sits in the Bank of England

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9
Q

What are the PRA threshold conditions

A

Firms head office is in the uk

Conduct business in a prudent manner

Adequate resources

Fit and proper

Appropriately staffed

Capable of being effectively supervised

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10
Q

How does the PRA achieve its goals

A

Closely monitor a firms prospect of failure and has a supervisory framework to asses the gross risk firm is exposed to and what is in place to mitigate that risk.

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11
Q

What are the PRA secondary objectives

A

Acting in so far as reasonably possible in a way which faciilitates:

  • effective competition in in markets for services provided by PRA authorised firms
  • the uk economy’s international competitiveness
  • it’s growth over the medium to long term, subject to alignment with international standards
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12
Q

What does the FPC do

A

Looks for emerging and systemic risks

Provides strategic direction to the regulatory set up

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13
Q

What is PRIN

A

Principles for business
An FCA handbook

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14
Q

What is in PRIN

A

12 business principles e.g integrity, proper standards of market conduct

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15
Q

PRIN 6

A

Customers interests

Consistent and fair treatment of customers throughout product life cycle
Fair treatment pre contract post sale and during life of policy and sometimes after

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16
Q

Consumer

A

Natural person acting outside their trade or profession

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17
Q

Commercial customer

A

Acting for purposes that are business related

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18
Q

PRIN 3

A

Senior management

Every regulated person must take reasonable care to share out the significant responsibilities within the firm between its directors and senior managers and appoint an MLRO

19
Q

Whistle blowing

A

Encouraged by regulators if its in the public interest to do so and made in good faith protected by public interest disclosure act 1998

20
Q

Lloyds ESG agenda

A

Strategy and governance
Climate
Culture
communities

21
Q

Options to operate in the EU

A

Establishment basis - Establish a physical presence

Service Basis - work from home state

22
Q

US regulation

A

Up to individual states

Admitted basis - approved in particular states
Surplus lines basis - outside of local appetite more flexible

23
Q

What is the PRA

A

The prudential regulation authority

24
Q

Lloyds permission

A

Negotiates and obtains permission to operate in international markets so their syndicates can operate and write business in those regions

Is a second tier market in the US and only acts if the local market cannot accommodate the risk in all 50 states

25
Q

What is surplus lines status

A

When a local market cannot accommodate the risk so the second tier market takes on the risk

26
What is the council of Lloyds
Has the rule making power Looks at management and superintendency of all affairs Right to exercise any of the peers of the society of Lloyds Power to direct the insurance business at Lloyd’s
27
Primary and secondary rules of Lloyds
Bye laws and regulations Requirements
28
What do the Lloyds governance not tolerate
-Dishonesty -The forging of fake documents -Failure to look after money held on trust -Failure to organise/control the business -Any act or omission capable of damaging the Lloyds brand or bringing the name to dispute
29
What is solvency
Assets must exceed liabilities
30
Solvency margin
The amount assets exceed liabilities
31
What must insurers provide the regulator with each financial year
Revenue account Profit and loss account Balance sheet
32
What is runoff
Where a Lloyds syndicate cannot write or accept any new risk
33
What is the FOS
Financial ombudsman service Independent body which all authorised insurers must be a member of Complaints have 6 month to be escalated to the FOS
34
What is the FSCS
A one stop compensation shop to cover claims against insurers where they are unable to pay them because they can gone out of business or become insolvent Levy on authorised firms Covers 100% compulsory and 90% general insurance
35
What is the Lloyds central fund
Reserve that acts as the last port id call in the event that members are unable to pay claims for risks they have written
36
Who is the FCA consumer duty aimed at
Any small organisation involved in the manufacture or supply of products or services to any retail clients (consumers or small to medium enterprises SMEs)
37
What is consumer duty
Intends to improve how firms serve their customers and has implications for Product development Marketing Compliance Sales Customer support Aims to set higher and clearer standards across financial services market and protect customers form risk such as exploitation
38
Elements of consumer duty
PRIN 12 a firm must act to deliver good outcomes for retail customers
39
What are cross cutting rules
Set out more detail of the FCAs expectations in how firms should act to deliver good outcomes
40
What are some FCA expectations of grins
Putting consumers at the heart Providing products and services that meet customer needs Seeking not to exploit customers Monitor and review customer outcomes
41
Outcomes relating to firm conduct
Governance of products and services Price and value Consumer understanding Consumer support There has to be evidence this is being done
42
What impacts are regulators looking for
Ending inappropriate charges or fees Easily cancellation or change of products Helpful and accessible customer support and information Fit for purpose products Focusing on real needs for customers including those who are vulnerable
43
What are mashing agents expected to do by the FCA and PRA
Annual solvency test Plan the capital needed Maintain sufficient controls

Lm1 (9 decks)

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