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IF8 > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

What ways will insurers attempt to differentiate their products from competitors

A) premium and cover provided
B) premium
C) cover provided and T&C
D)premium, cover provided and T&C

A

D)premium, cover provided and T&C

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2
Q

Which of the following are small businesses:

A) sole traders and partnerships
B) partnerships and Ltd companies
C) sole traders and LTD companies

A

A) sole traders and partnerships

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3
Q

Is the below a sole trader or partnership?

Business owned and run by 2 or more people who may employ staff

A

Partnership

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4
Q

What percentage have sole traders risen since the start of 2000

A) 90%
B) 77%
C) 35%
D) 80%

A

B) 77%

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5
Q

What can some small businesses that are limited companies be formed under

A) companies act
B) Partnership
C) sole traders

A

A) companies act

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6
Q

What has become a major consideration in providing a competitive edge?

A) cost
B) cover
C) value

A

C) value- the combination of cover and price

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7
Q

How have IT based systems streamlined the admin process

A
  1. Computerised underwriting and quotation systems
  2. Development of standard policy documentation which is personalised to the insurers through computer generated schedules
  3. Automated systems for generating renewal notices
  4. Provision of instantaneous cover via payment of debit or credit card
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8
Q

What does the internet offer the facility to do

A) get a cheaper price
B) get cheap cover
C) research what is available and at what price

A

C) research what is available and at what price

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9
Q

Which of the following are within the Bank of England and responsible for macro- prudential regulation and watching for emerging risks to the UK’s financial system

A) the financial policy committee (FPC)
B) the prudential regulation authority (PRA)
C) The financial Conduct Authority (FCA)

A

A) the financial policy committee (FPC)

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10
Q

Which of these are part of the Bank of England, which is responsible for the micro- prudential regulation of systematically important firms (principally banks and insurers) will seek to prevent firm failures but will try to ensure that firms can fail without bringing down the whole system

A) the financial policy committee (FPC)
B) the prudential regulation authority (PRA)
C) The financial Conduct Authority (FCA)

A

B) the prudential regulation authority (PRA

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11
Q

Which of these are responsible for conduct of business regulation across the financial services industry and the prudential regulation of small firms

A) the financial policy committee (FPC)
B) the prudential regulation authority (PRA)
C) The financial Conduct Authority (FCA)

A

C) The financial Conduct Authority (FCA)

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12
Q

Which of these form part of the FCA handbook

A) ICOBS
B) PRA
C) FPC

A

A) ICOBS

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13
Q

What is central to the FCA’s work?

A) cover and price
B) fair treatment of customers
C) ICOBS

A

B) fair treatment of customers

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14
Q

What do the FCA expect firms to embed the fair treatment of customers in

A) every day life
B) corporate strategy
C) culture
D) corporate strategy, day to day and culture

A

D) corporate strategy, day to day and culture

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15
Q

What is the 4 lifecycle of a product?

A

1- product design

2- marketing and promotion

3- sales and advice

4- after sales care

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16
Q

What is a requirement for both product providers and intermediaries?

A) treat customers fairly
B) to provide cover within a certain timeframe

A

A) treat customers fairly

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17
Q

What are the three main approaches for the FCA to treat customers fairly

A

Pillar 1- proactive supervision of the biggest firms

Pillar 2- event driven, reactive supervision of actual and emerging risks

Pillar 3- thematic work that focuses on risks and issues affecting multiple firms or a sector as a whole

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18
Q

What are the two categories authorised firms are allocated to:

A) fixed and flexible
B) fixed only
C) flexible only

A

A) fixed and flexible

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19
Q

Is this a fixed portfolio firm or flexible portfolio firm:

are smaller in number of firms and based on factors such as size, market presence and customer footprint are considered the require the highest level of supervision

A

Fixed portfolio

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20
Q

Are the following benefit to the insured or insurer

A common renewal date for all covers

A

Insured

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21
Q

Is this a fixed portfolio firm or flexible portfolio firm:

Firms with a large number of retail customers are likely to receive the highest level of supervision

A

Fixed portfolio term

22
Q

Is this a fixed portfolio firm or flexible portfolio firm:

These comprise the balance and the majority of firms regulated by the FCA

A

Flexible portfolio firms

23
Q

Is the below a sole trader or partnership?

An individual who runs and owned their own business and may employ staff

A

Sole trader

23
Q

Is this a fixed portfolio firm or flexible portfolio firm:

These are on a reactionary basis where the FCA receives a report or has concerns about the firms activities

A

Flexible portfolio firms

25
Q

Which of the following are under the ICOBS right cover areas:

1. Application
General matters 
Distance communications
Information about the firm, it’s services and remuneration 
Identifying client needs and advising 
Product info
Cancellation 
Claims handling
A 
1. Application
General matters 
Distance communications
Information about the firm, it’s services and remuneration 
Identifying client needs and advising 
Product info
Cancellation 
Claims handling
26
Q

What is the below?

A policyholder or potential policyholder acting outside their trade, business or profession

A

Consumer

27
Q

What is this

A policyholder or potential policyholder who is not a consumer

A

Commercial customer

28
Q

What 6 things are normally required for almost all businesses

Starting with property damage

A 
A) property damage 
B) BI
C) Theft
D) Money
E) glass
F) Liability
29
Q

Are the following benefit to the insured or insurer

One proposal to complete

A

Insured

30
Q

Is the below a combined or package policy

Insured is able to select which sections of cover to buy and what suns insured will apply. But will be a minimum of 3 sections

A

Combined

31
Q

Are the following benefit to the insured or insurer

One policy document to retain and refer to particularly in the event of a claim

A

Insured

31
Q

Are the following benefit to the insured or insurer

One premium payable

A

Insured

33
Q

Are the following benefit to the insured or insurer

Lower premium levels

A

Are the following benefit to the insured or insurer

34
Q

Is this a fixed portfolio firm or flexible portfolio firm:

There is proactive supervision through market based thematic work and programs of activity aligned with the key risks identified for the sector in which the firm operates

A

Flexible portfolio firms

35
Q

Are the following benefit to the insured or insurer

Lower handling costs, particular as fewer staff are need to underwrite policies

A

Insurer

36
Q

Are the following benefit to the insured or insurer

Ease for review

A

Insurer

37
Q

Are the following benefit to the insured or insurer

Use of computer tech can be maximised

A

Insurer policy

38
Q

Are medium or large firms more likely to have a combined policy or a package policy

A

Combined

39
Q

Is the below a combined or package policy

Savings are passed on in the form of reduced premium levels

A

Package

40
Q

Is the below a combined or package policy

A multi section discount is usually offered which can reduce the premium by up to 10%

A

Combined

41
Q

Is the below a combined or package policy

Usually for small business where it’s a single contract offering a full package of cover under one policy

A

Package

42
Q

Is the below a combined or package policy

Will always include-

Damage to business contents (inc theft money and glass)
BI
EL, PL and product

A

Package

43
Q

Is the below a combined or package policy

Motor insurance is not usually included

A

Package

44
Q

Is the below a combined or package policy

It’s not individually underwritten and rated, it is constructed to meet the needs of small business of the type identified

A

Package policy

45
Q

Is the below a combined or package policy

They cater for small business risks which display suffice to homogeneity to enable streamlined underwriting practices and policy wording to be developed

A

Package

46
Q

Who are schemes normally available through

A) insurer
B) clubs
C) trade associations

A

C) trade associations

47
Q

Is the below a combined or package policy

A large number of risks with inherently similar characterising characterises and future claim costs and cover requirement become more predictable enabling a standardised approach

A

Package

49
Q

What has happened due to developing separate departments, with multi- disciplined, trained staff capable of underwriting and administering all the classes of insurance

A

Cost saving

50
Q

What is a scheme?

A

Where the insurer will offer preferential insurance cover and terms for specific trades

51
Q

Is this a fixed portfolio firm or flexible portfolio firm:

These firms are allocated to a named individual supervisor and are proactively supervised using a continuous assessment approach rather than on a reactionary basis

A

Fixed portfolio term

51
Q

Is the below a combined or package policy

A shell into which a variety of different classes of insurance may be grouped.

A

Combined

52
Q

What are the three non insurance services included:

  1. Risk control advise
A
  1. Helplines and advice

3. Authorised repairers and suppliers

IF8 (9 decks)

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