Chapter 1 Flashcards by Jodie Collins

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

D)premium, cover provided and T&C

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Which of the following are small businesses:

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

A) sole traders and partnerships

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Is the below a sole trader or partnership?

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

Partnership

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What percentage have sole traders risen since the start of 2000

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

B) 77%

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

A) companies act
B) Partnership
C) sole traders

A) companies act

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

A) cost
B) cover
C) value

C) value- the combination of cover and price

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How have IT based systems streamlined the admin process

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

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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

C) research what is available and at what price

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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) the financial policy committee (FPC)

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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)

B) the prudential regulation authority (PRA

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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)

C) The financial Conduct Authority (FCA)

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Which of these form part of the FCA handbook

A) ICOBS
B) PRA
C) FPC

A) ICOBS

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What is central to the FCA’s work?

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

B) fair treatment of customers

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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

D) corporate strategy, day to day and culture

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What is the 4 lifecycle of a product?

1- product design

2- marketing and promotion

3- sales and advice

4- after sales care

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What is a requirement for both product providers and intermediaries?

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

A) treat customers fairly

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

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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What are the two categories authorised firms are allocated to:

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

A) fixed and flexible

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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

Fixed portfolio

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Are the following benefit to the insured or insurer

A common renewal date for all covers

Insured

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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

Fixed portfolio term

Is this a fixed portfolio firm or flexible portfolio firm:

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

Flexible portfolio firms

Is the below a sole trader or partnership?

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

Sole trader

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

Flexible portfolio firms

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 ```

``` 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 ```

What is the below? A policyholder or potential policyholder acting outside their trade, business or profession

Consumer

What is this A policyholder or potential policyholder who is not a consumer

Commercial customer

What 6 things are normally required for almost all businesses Starting with property damage

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

Are the following benefit to the insured or insurer One proposal to complete

Insured

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

Combined

Are the following benefit to the insured or insurer One policy document to retain and refer to particularly in the event of a claim

Insured

Are the following benefit to the insured or insurer One premium payable

Insured

Are the following benefit to the insured or insurer Lower premium levels

Are the following benefit to the insured or insurer

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

Flexible portfolio firms

Are the following benefit to the insured or insurer Lower handling costs, particular as fewer staff are need to underwrite policies

Insurer

Are the following benefit to the insured or insurer Ease for review

Insurer

Are the following benefit to the insured or insurer Use of computer tech can be maximised

Insurer policy

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

Combined

Is the below a combined or package policy Savings are passed on in the form of reduced premium levels

Package

Is the below a combined or package policy A multi section discount is usually offered which can reduce the premium by up to 10%

Combined

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

Package

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

Package

Is the below a combined or package policy Motor insurance is not usually included

Package

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

Package policy

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

Package

Who are schemes normally available through A) insurer B) clubs C) trade associations

C) trade associations

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

Package

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

Cost saving

What is a scheme?

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

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

Fixed portfolio term

Is the below a combined or package policy A shell into which a variety of different classes of insurance may be grouped.

Combined

What are the three non insurance services included: 1. Risk control advise

2. Helplines and advice | 3. Authorised repairers and suppliers