Chapter 2 Flashcards
When a reinsurer seeks to transfer some of its risk to other reinsurers, the risk placed in this way is called a:
retrocession.
Marine freight insurance covers?
The sum paid for transporting goods or for vessel hire.
The Motor Insurers’ Bureau is financed by:
a levy on authorised UK motor insurers.
A Lloyd’s broker obtains the signatures of a number of Lloyd’s underwriters as confirmation of the share of a risk each underwriter is prepared to take on. This is known as:
subscription underwriting.
Insurance premium tax is levied at the higher rate of 20% for:
travel insurance.
Under regulatory rules, how many principals is an appointed representative [AR] allowed to act on behalf of?
There is no restriction on numbers under the rules.
Jenny is employed by an independent intermediary to ensure that the firm abides by the rules and regulations set down by the FCA. What is Jenny’s job role?
A compliance officer.
What type of insurance provides cover for businesses against the risk of their debtors (buyers) being unable to meet their obligations?
Credit insurance.
Tobias owns 51% of the shares in a small insurance company. The rest of the shares are owned by members of his immediate family. The shares are not available to the general public. What type of a company does Tobias and his family own?
A private limited company.
A professional body that has equivalent rules to those of the FCA, membership of which allows an intermediary to be exempt from direct authorisation by the FCA, is called a:
Designated professional body.
Jim runs an online mail order company selling electrical goods. With each order he sends out, he inserts a brochure for extended warranty cover on behalf of the Swift Repair Insurance Company, giving details of how to contact it for a quotation. Under regulatory rules Jim is acting as an:
introducer appointed representative.
From a regulatory perspective, a protected cell company [PCC] is required to have an approved business plan for:
each cell.
What is the role of a members’ agent at Lloyd’s?
Advising potential corporate and individual members/Names on the pros and cons of investing in the Lloyd’s market.
Arranging reinsurance on a single known risk is known as:
facultative reinsurance.
A money policy provides cover for:
all risks of loss, destruction or damage.
