CHAPTER 10 - D Flashcards
What does ICOBS stand for?
Insurance: Conduct of Business sourcebook
What are the four requirements for insurers handling claims according to ICOBS 8.1.1?
- Handle claims promptly and fairly
- Provide reasonable guidance to help a policyholder make a claim and appropriate information on its progress
- Not unreasonably reject a claim
- Settle claims promptly once settlement terms are agreed
Under ICOBS 8.1.2, when is a rejection of a consumer policyholder’s claim considered unreasonable?
- Non-disclosure of a fact material to the risk which the policyholder could not reasonably be expected to have disclosed
- Non-negligent misrepresentation of a fact material to the risk
- Breach of warranty or condition unless connected to the breach
True or False: Insurers can invoke non-disclosure and misrepresentation against consumer insureds without showing fraud.
False
What is Conduct Risk in the context of claims handling?
Insurers must take into account the relative sophistication of their clients and ensure clear methods for making claims or complaints
What does ICOBS 8.8.3 require firms to do regarding conflicts of interest?
- Manage conflicts of interest fairly
- Identify conflicts of interest
- Maintain effective arrangements to prevent material risk to clients
What must a firm do if it does not have authority to deal with a claim according to ICOBS 8.3.4?
Forward any claim notification to the insurance undertaking promptly or inform the policyholder immediately
What is the primary requirement for regulated firms under UK anti-money laundering rules?
Ensure adequate processes are in place to minimize the risks of being used by criminals for financial crime
Name one key point London Market claims personnel must be aware of when handling Californian claims.
- Timelines for acknowledging receipt of claims
- Timelines for updating the insured on ongoing investigations
- Information for insureds if claims are denied
What is the definition of a sanction?
A ban imposed by governments on parties from doing business with certain individuals, businesses, or countries
What are financial sanctions?
- Prohibiting transfer of funds to a sanctioned country
- Freezing assets of a company or individual
- Freezing assets of a whole government
True or False: Sanctions can only be applied to governments.
False
What is a significant issue insurers face regarding payments under US sanctions?
All US dollar payments go through a US bank and can be frozen if there is a problem
How can insurers find out about sanctions?
- Websites of HM Treasury and the US Department of the Treasury, OFAC
- Crystal system on the Lloyd’s website
- Guidance from Market Associations
Fill in the blank: Insurers must ensure that all personnel handling Californian claims are _______.
certified annually
