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CII IF1 > Chapter 11: Consumer Protection and Dispute Resolution > Flashcards

Chapter 11: Consumer Protection and Dispute Resolution Flashcards

1
Q

What is GDPR and what does it do?

A

General Data Protection Regulation (2018)

Sets out a firm’s obligations and principles to follow when dealing with and handling customer’s personal data

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2
Q

What is the right to erasure?

A

The right of an individual to request a firm delete the information held on them, provided it is no longer necessary or valid to hold it

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3
Q

Does a policyholder have a right to erasure?

A

No - the insurer obviously needs to hold data about it’s customer so it is deemed necessary information. This may continue to be the case for years after the policy expires as some claims can take many years to become apparent

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4
Q

If a valid right to erasure request is received, how long does the firm have to delete the customer’s data?

A

1 month

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5
Q

What is the key requirement of GDPR?

A

Consent to hold data

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6
Q

What does the Consumer Rights Act 2015 do?

specifically in respect of the terms in a contract

A

Ensures contract terms will only be binding upon the consumer if they are “fair” and do not place the consumer at a disadvanage

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7
Q

What should CII members adhere to at all times?

A

CII Code of Ethics

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8
Q

What 5 overlapping requirements constitute ethical behaviour under the CII’s Code of Ethics?

A
  1. Integrity
  2. Fairness
  3. Compliance
  4. Service
  5. Client’s Interest
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9
Q

What may happen if a CII member does not comply with the code of ethics?

A

The CII may take disciplinary action

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10
Q

What is DISP and where does it come from?

A

Dispute Resolution: Complaints Sourcebook

The FCA

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11
Q 
Define complaint
(as defined in DISP)
A

Any oral or written expression of dissatisfaction, whether justified or not, from or on behalf of a person about the provision of or failure to provide a financial service, which alleges that the complainant has suffered or may suffer financial loss, material distress or material incovenience

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12
Q

Who is an “eligible complainant”?

A
  1. A consumer
  2. Micro-enterprise with fewer than 10 employees and a turnover of less than £2 million
  3. Charity with an annual income of less than £6.5 million
  4. Trustee of a trust of less than £5 million
  5. Small business with fewer than 50 employees and a turnover less than £6.5 million OR just a turnover less than £5 million
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13
Q

What are the rights of an eligible complainant?

A

Complaints subject to FCA rules and have a right of access to the Financial Ombudsman Service

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14
Q

How long should records of complaints be kept?

A

3 years from the date the complaint is received

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15
Q

Under FCA rules how long does an insurer have to respond to a complaint?

(either a final response or an explanation of why they cannot yet give a final response)

A

8 weeks from receving the complaint

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16
Q

When can insurers deal with a complaint less formally and not issue a final response?

A

When the complaint has been dealt with within 3 working days

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17
Q

What is the FOS?

A

Financial Ombudsman Service

18
Q

What insurers are members of the Financial Ombudsman Service?

A

All - membership is compulsory for FCA authorisation

19
Q

What is the purpose of the FOS?

A

An independent body to provide dispute resolution for “eligible complainants” - they are not concerned with large businesses

20
Q

How long does a complainant have to refer a complaint to the Financial Ombudsman Service?

A

Six months from receiving the final response

usually, sometimes longer

21
Q

What is the maximum financial award the Financial Ombudsman Service can require a firm to make?

A

£355,000

they can recommend more but it is not binding

22
Q

What happens following a decision by the FOS?

A

The complainant will be given time to either accept or decline. If they accept the decision is binding on the receiver (insurer in our case). If they decline they can pursue the complaint further in court

23
Q

What does FSCS stand for?

A

Financial Services Compensation Scheme

24
Q

What is the purpose of the FSCS?

A

To cover claims where the insurer is unable, or likely to be unable, to pay. Usually where the insurer has become insolvent

25
Q

Who can claim under the Financial Services Compensation Scheme?

A

Consumers and small businesses with a turnover less than £1 million

26
Q

When is a policyholder entitled to 100% protection under the Financial Services Compensation Scheme?

A

When the claim is for:

  1. Compulsory insurance
  2. Professional Indemnity
  3. Long term insurance (life)
  4. Certain claims for injury and sickness or infirmity
27
Q

If the claim does not meet the criteria for 100% protection under the FSCS, how much protection will they receive?

A

90%

28
Q

How is the FSCS funded?

A

By a levy on all FCA authorised firms who receive an income from clients who could be eligible to claim from the FSCS

29
Q

Who handles complaints relating to policies placed at Lloyd’s?

A

Lloyd’s independently handles complaints, but if the complainant isn’t satisfied they do have the right to refer the complaint to the Financial Ombudsman Service

30
Q

FCA’s high level rules for senior management on training and competence can be found in what handbook?

A

SYSC - Senior Management Arrangement, Systems and Controls Sourcebook

31
Q

What is the FCA’s guidance on when a complaint should be acknowledged?

A

Promptly

32
Q

What is the grey list?

A

A list of contract terms considered unfair under the Consumer Rights Act 2015

33
Q

What is the key term on the grey list relating to insurance?

A

A term which excludes or hinders the consumer’s right to legal remedy or action

34
Q

How long must training records be kept once an employee has left the insurer?

A

3 years

35
Q

What is the maximum fine that could be imposed for a breach of GDPR?

A

20 million euros OR 4% of global turnover for the preceding year, whichever is greater

36
Q

What is personal data?

A

Information related to a living individual who could be identified from that data

37
Q

If personal data is being transferred outside the EU what must be ensured?

A

The country the data is being transferred to must have similar protections to GDPR

38
Q

Who is responsible for regulating and enforcing data protection laws?

A

Information Commisssioner

39
Q

Under GDPR some data requires more protection. What categories of info does this apply to and what is it called?

A 
Sensitive personal data:
Race
Ethnic origin
Politics
Religion 
Trade union membership 
Genetics
Biometrics used for ID
Health
Sex life or sex orientation
40
Q

What statute made GDPR part of UK law?

A

Data Protection Act 2018

CII IF1 (11 decks)

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