Chapter 2

Question 1

Private individuals

Answer 1

Many people buy insurance in their private capacity. Household buildings and contents
insurance will be high on the list, though motor insurance will tend to be the major item of insurance
expenditure for most individuals

Question 2

Companies

Answer 2

The range covered by this category of ‘buyer’ extends from the very largest multinational
corporation with a multi-million pound worldwide premium spend to the self-employed sole trader working from home

Question 3

Partnership

Answer 3

Do not have a separate legal existence, each of the partners being jointly and severally liable.
They are most commonly found in the medical, veterinary and legal professions and their insurance needs,
especially in the area of professional negligence (the giving of poor professional advice that leads to loss), tend to be catered for by specialist schemes

Question 4

Public bodies

Answer 4

Are major buyers of insurance and include local authorities and schools. In some cases, they may
be large enough to have set up their own insurance fund through which they insure some risks, while turning to the insurance market to cover other risks. Some public bodies are exempt from compulsory insurance requirements.

Question 5

Charities, associations and clubs -

Answer 5

There are many charities, associations and clubs that will have some insurance needs.Whether it is the local football club or the local stamp collecting society, the management team or organisers will usually buy insurance cover for liability risks and damage to owned propert

Question 6

Mutual companies

Answer 6

Owned by thier policy holder

Question 7

A captive

Answer 7

is a tax efficient and cost- effective way of transferring the risk

Question 8

Proprietary companies are limited liability companies, owned by their shareholder and registered under the
companies act 198

Answer 8

Owned by thier shareholder and registered under the companies act 1998

Question 9

An introducer appointed representative (IAR)

Answer 9

Is one wose scope of appointment by the authorised person./ fimr is limited to effecting introductiong and disributing what are terms non real time financial promotions in other words supplying such thing as brouchures and proposal forms

Question 10

Appointed representatives AR

Answer 10

May be an individual or a company that is appointed by an authorised person(the principal) under the terms of a contract. An AR may be acting for an insurer or for an intermediary that is itself directly authorised by the PRA or FCA. The contract which sets out the terms of business between the parties (called an Appointed Representative Agreement) determines the AR’s role and responsibilities

Question 11

Authorised person

Answer 11

Is an individual or firm authorised by the FCA o engage in regulated activities

Question 12

Indirect

Answer 12

Intermediaries paid by the insurer to promote products on the insurers behalf (brokers

Question 13

Direct

Answer 13

employees of the insurer sell the insurance products or direct mailing techniques and websites are used
to promote sale (salesperson)

Question 14

Aggregate

Answer 14

A price comparison website uses web bases extraction tools to collect and analyse (aggregate) information from different data sources

Question 15

An underwriter

Answer 15

Assesses the risk that people bring to the pool and decides whether to accept it and on what
terms. They will then calculate a suitable premium

Question 16

A loss adjuster

Answer 16

is an expert in processing claims from start to finish and acts for the insurer. Straightforward small claims are usually negotiated and settled by an insurer’s inhouse claims staff

Question 17

An Assessors

Answer 17

All assessors are an expert in dealing with insurance claims and are appointed by the insured to assist them in negotiating a claim with the insurers. Loss assessors are experts in dealing with insurance claims and act for the insured/ policyholder, preparing and negotiating claims on their behalf.

Question 18

An actuary

Answer 18

May be defined as a professionally qualified persons who apply probability and statistical theory to problems of insurance, investment, financial and risk management, and demography

Question 19

Premium tax rate is

Answer 19

12%

Question 20

Travel

Answer 20

20%

Question 21

The rule of the risk manage

Answer 21

The systematic identification analysis and economic and elimination or control of
risks that threaten a business

Question 22

A compliance officer

Answer 22

Is responsible for ensuring that a firm complies with all legal and regulatory requirements

Question 23

ABI- Association of British insurers

Answer 23

The Abi is the largest of the insurance market associations formed in 1985 its 250 member companies include UK insurers and foreign insurance companies operating in the UK

Question 24

IUA- International underwriting association of London

Answer 24

The IUA is the world’s largest representative

organisation for international and wholesale insurance and reinsurance companie

Question 25

BIBA- British Insurance Brokers associatio

Answer 25

BIBA is the major non-statutory trade association for insurance intermediaries, with a membership of just under 2,000 regulated firms

Question 26

LMRC- London market regional committee

Answer 26

The position regarding representation of London market brokers is currently slightly complex up until the end of 2008 BIBA operated through a virtually autonomous trade body representing the interests of Lloyd’s brokers operating in the London and world-wide insurance and reinsurance markets

Question 27

LLIBA- London and international insurance broker association

Answer 27

Is a trade body representing the interests of

broker in the London and worldwide insurance and reinsurance markets

Question 28

LMA- Lloyd’s market association

Answer 28

Provides representation, information and technical services to underwriting businesses in the Lloyd’s market

Question 29

MGAA- Managing general agents associatio

Answer 29

Is a trade body for MGA’s it represents their interests and sets best practice guideline

Question 30

The CII- Chartered insurance institute

Answer 30

Is the professional body for those who work in insurance and is at the forefront of insurance education and professionalism

Question 31

CILA- Chartered institute of loss adjusters

Answer 31

Loss adjusters are impartial claims specialists

Question 32

The IFOA- Institute and Faculty of actuarie

Answer 32

Has more than 12,000 fellows’ affiliates and student members

Question 33

The IRM- Institute of risk management

Answer 33

offers qualifications and training for risk management professionals and
provides information and networking opportunities

Question 34

Airmic- Association of insurance and risk managers

Answer 34

Is in industry and commerce, promotes the interests of corporate insurance buyers and those involved in risk management and insurance for their organisation

Question 35

IUK- insurtech UK

Answer 35

Represents the interests of businesses that define themselves as insurtech has its primary
aim of positioning the UK as a leading technological innovation in the insurance sector

Question 36

MIB- Motor insurers Bureau

Answer 36

MIB has two agreements with the government designed to provide compensation
for the victims of uninsured or untraced motorists