C8 Flashcards
What duties does the agent have
DOGPA
due care and skill
Obey instructions and have obedience
good faith
Personal performance so no delegation to others
Accountability
What are the duties of the principle
Provide remuneration mostly in the form of commissional brokerage and should be disclosed to consumers and commercial clients when requested
Indemnity to cover expenses of costs when working for a principle
How can agency be terminated
Mutual agreement of both parties
Termination by one party
Death insanity or bankruptcy of one party
Who is the contact of insurance between
Insured (principal) and insurer (third party)
What does a broker do
Provide impartial expert advice
What is the law of agency
3 parties being the principal, agent and third party
Principal changes depending on who the broker is acting for it can be the insurer or client
What is the principle responsibility for
Any action the agent takes on their behalf
How is an agency relationship created
Consent/agreement - agreement usually written up in the form of an express appointment e.g a TOBA in the london market
Necessity - looking after someone’s goods in an emergency
Ratification- agents acts outside of authority or usual authority, principle must ratify all terms of he agreement
What is a TOBA in the london market
A terms of business agreement
Must be (CRED)
Clear abs succinct
Reflect the business relationship
Ensure regulatory compliance
Define and allocate responsibilities and rights
When are brokers the agent of the insured
When they are binding cover and also have the responsibility to collect premiums
What is an undisclosed principle
An agent is allowed to act under this principle
This is when the third party or client is unaware that there is an insurer in the background and they think they are dealing with the insurer directly
This happens alot when the broker is allowed to write risks themselves
What is actual authority
Usual written and consistent with British authority
What is apparent/ostensible authority
The principal is bound by the agent even if they are acting outside their authority
The insurer may be liable to the third party but may seek recourse agains the broker for breaching their authority as the agent
Who are brokers regulated by
The FCA
Can be authorised or act under contract under an authorised person
Do you have to be a Lloyds broker to broke in Lloyds
No provided you have eveidence of a TOBA
Lloyds brokers still have higher status and has to be given status by council
Wholesale vs retail brokers
Retail - local broker and has direct contact and be closer to client
Wholesale - relationship with insures and usually be london based
What is the intermediaries expected to do
Conduct a fair analysis of the market and be able to make a list of all potential insurers
What are the brokers roles
Reviewing the clients needs
Giving advise on the risk
Scoping out the market
Negotiating on the clients behalf
Claims assistance
How do brokers present risks to insurers
Proposal form
Brokers presentation
Survey report
What acts must be followed for consumer and commercial clients
Consumer insurance disclosure and representations act 2012
Insurance act 2015
What is imputed knowledge
What is known by the client is known by the broker and must be passed on to insures if material
What do brokers do for insurers as a service
Binding the risk itself
Issuing documentation
Collecting premiums
Potentially settlement of claims
What is binding authority/binder between insures and brokers
When insurers wish to delegate authority to brokers so they are able to place cover within predetermined parameters
Makes like easier for both and can share profits
Where does the broker submit the agreed upon slip, premium and relevant taxes
To the Xchanging insure services XIS/velonetic to be enters onto a central database for Lloyds and IUA companies
What is LPAN
London premium advice note
Stranded format to present premium
What is UMR
Unique market reference
Unique code assigned to the premium
What is a BID
Broker insurance document
Copy of market reform contract to provide evidence of cover
How long does the document have to be issued after inception of the policy
30 days
What does brokers do for the insured in terms of claims
Reminder of t&cs
Gathering of documents and info underwriter may want
What do claims advocated do
Actively argue the case in favour of the insured
What is the XCS
Xchabging claims services
Centrally recorded claims data only for Lloyds market
Enterprise act 2016
Provides insureds with a remedy if insurers have paid claims later than necessary
What are APs
Authorised persons
Regulated by FCA and type of intermediary
What are ARs and IARs
Appointed representatives
Introducer appointed representative
-can only market insurance products
Type of intermediaries and not regulated by FCA and are exempt
