Chap 4

Question 1

A broker must have excellent knowledge of…

Answer 1

The range of products and services available, including the benefits and features of the policy

Question 2

A benefit is…

Answer 2

A favourable result for the customer arising from a particular advantage

Question 3

Sales and marketing must sell on..

Answer 3

Benefits not features

Question 4

Features are…

Answer 4

A characteristic of the service or product such as a standard policy wording.

Question 5

Brokers must ask questions until….

Answer 5

They establish the underlying needs of their clients requests.

Question 6

Brokers must explain the insurance…

Answer 6

Product and translate any jargon

Question 7

Brokers will need to explain….

Answer 7

1) Why they are recommending something

2) How it will deliver or how it will not deliver the benefits the clients want

Question 8

There is an overarching need for

Answer 8

Transparency and the broker must advise the client on the precise terms of cover

Question 9

Once the broker has established the clients wants they will need to provide a…

Answer 9

Copy of their clients demands and needs via a suitability statement

Question 10

A suitability statement will record

Answer 10

1) The clients needs
2) How the recommendation addresses these demands and needs
3) The reasons behind the recommendation

Question 11

A small company will focus on…

Answer 11

Policy

Question 12

A large company will focus on…

Answer 12

Utilising risk management/risk financing services

Question 13

Written agreements with clients include…

Answer 13

1) Regulatory info
2) Broking firms terms of business
3) Details of the service the broker is providing
4) Brokers remuneration

Question 14

The regulatory information must include…

Answer 14

1) Regulated activities the firm is authorised to take
2) The cooling off period
3) Details of firms complaints

Question 15

A TOBA is

Answer 15

Market agreements which detail how a broker is to do business with various parties including…

Insurers/clients/producing brokers

Question 16

A brokers privacy notice must include to comply with the data protection act….

Answer 16

1) What personal information you have
2) What you do with the PI and what you’re planning to do
3) What you need
4) Whether you are collecting the info you need
5) Whether you are creating new personal info
6) Whether there are multiple data controllers

Question 17

A Brokers SLA describes….

Answer 17

General services as well as specific policy programmes/services the broker is providing.

Question 18

SLA’s should include…

Answer 18

1) Info on how services will be provided
2) Reporting/communication protocols
3) Description with how claims are dealt with.

Question 19

Service agreements may define the…

Answer 19

Standard to which the brokers services will be applied. Including;

1) Delivery of renewal terms in a specified time
2) Standards measured by KPI’s

Question 20

A detailed service plan should…

Answer 20

1) Set out key dates for the year which means both parties are aware of key dates

such as a Client pre renewal strategy meetings

Question 21

The service agreement may provide a basis for…

Answer 21

The broker to calculate a fee.

Question 22

A broker can be paid via..

Answer 22

1) Brokerage/commission

2) Client fee

Question 23

Before the conclusion of the contract a broker must…

Answer 23

1) Agree the basis of remuneration
2) Advise how any fee will be calculated
3) Disclose any interest the broker may have

Question 24

Where a payment is by fee, the written agreement should detail…

Answer 24

1) The period
2) Whether the fee is in full/adjustable
3) Payment terms
4) The services the fee relates too
5) When the fee is to be earned.
6) Review of timing and process.
7) Whether any services will be provided after the contract is terminated.

Question 25

Eligable complainants are subject to the FCA complaints handeling rules requiring brokers to…

Answer 25

1) Have a formal procedure for dealing with complaints
2) Inform their clients of this proceudre and their rights to complain to the FOS
3) Manage complaints in accordance with states procedures which the broker should document in the authorised firms compliance manual

Question 26

Simple/short complaints…

Answer 26

Resolved in three days

Question 27

Complex complaints…

Answer 27

Require further investigation

Question 28

Errors and omissions are…

Answer 28

Mistakes by the broker causing financial loss to the client

Question 29

Errors and omissions can affect the broker by

Answer 29

1) Being expensive

2) Damage reputation.

Question 30

E+O losses can come to light when

Answer 30

There is an uninsured loss that the insured thought was covered

Question 31

what might bring about the insured thinking they are covered for a loss?

Answer 31

1) Policy wording does not say what the client thought

2) The policy does not do what the broker said it would

Question 32

Potential broker mistakes include…

Answer 32

1) Inaccurate explanation of the terms
2) Documentation failure
3) The brokers failure to appreciate the extent of cover

Question 33

E+O Claims can be reduced by…

Answer 33

1) Ensuring tasks are done right the first time
2) Never being afraid to ask if a problem is beyond your knowledge or competence.
3) Putting convos and instructions in writing

Question 34

What are the actions when dealing with an E+O claim?

Answer 34

1) Follow set procedures
2) Don’t conceal a problem or try to resolve it
3) Be open and honest
4) Notify professional indemnity insurers promptly.