Chapter 5 Flashcards
What is the information gathering and quotation process starting with information about the risk to be insured
Insurer
Information about the quotation and the cover
Insured
When did the Insurance Act 2015 come into effect
A) August 2016
B) September 2016
C) October 2016
A) August 2016
Prior to the passing of the insurance act 2015 the rules for gathering material information were largely governed by who
A) CIDRA
B) Marine insurance Act 1906
B) Marine insurance Act 1906
What is the below:
Every circumstance is material which would affect the judgment of a prudent underwriter in fixing the premium or determine whether he will take the risk
A) point of interest
B) material fact
B) material fact
What two things would effect the judgment of an insurer when it comes to material fact starting with
1) whether or not they want to accept the risk
2) if willing to Accept the risk. What premium and terms will apply
Who has a duty to disclose all material facts about the risks to the insurer
A) insurer
B) proposer
B) proposer
What has the process of information gathering been significantly changed by
A) insurance act 2015
B) CIDRA
A) insurance act 2015
Prior to the passing of the insurance act the position was considered to be unfairly weighted in favour of who
A) insured
B) insurer
B) insurer
Is the below a material circumstance
Info that should reasonably have been revealed by a reasonable search of info held with the insureds own organisation
Yes
Why was the reform of the Marine insurance act needed
A) it caused disputes reducing trust and confidence
B) it caused extra premiums for the insureds
it caused disputes reducing trust and confidence
Why was the Insurance act needed
A) it caused higher premiums
B) it was inconsistent with global business practice
B) it was inconsistent with global business practice
What was the aim of the Insurance Act 2015
A) to become neutral
B) to become neutral between the insurer and the insured
B) to become neutral between the insurer and the insured
What is the pre contractual duty of disclosure for the insurance act 2015
A) it requires policyholder to make a fair presentation of the risk to the insurer
B) it requires the policyholder to remedy for a breach of the duty
A) it requires policyholder to make a fair presentation of the risk to the insurer
What are the two things that a policyholder that has a duty of disclosure of starting with
Every material circumstance which the insured knows or ought to know that would influence the judgement of an insurer
Sufficient info on material circumstances to put a prudent insurer on notice that need to make further enquiries
What must the manner of presentation be
A) clear
B) reasonably clear and accessible
B) reasonably clear and accessible
Is the below a material circumstance
Those that the insurer ought to know in the ordinary course of conducting their business. They include info known by the senior management
Yes
Does the insured need to disclose the following:
Matters known to individuals who participate on behalf of the insurer in deciding whether to take the risk and in what terms (eg underwriting teams)
No
What happens if the breach was neither deliberate and reckless but the insurer would have entered into the policy but on different terms
A) may avoid the policy
B) must be treated as if it has been entered into on those different terms but can’t seek to avoid the policy all together. If the insurer would have charged more for the policy they are entitled to reduce the amount paid on a claim
B) must be treated as if it has been entered into on those different terms but can’t seek to avoid the policy all together. If the insurer would have charged more for the policy they are entitled to reduce the amount paid on a claim
Does the insured need to disclose the following:
Matters known by an employee or agent of the insurer, which should reasonably have been passed on to the person deciding whether to take the risk (eg claims department)
No
What is contracting out subject to:
A) transparency requirements
B) clear and ambiguous terms
A) transparency requirements
What does the transparency requirements state
A) that all terms must be clear and unambiguous before the contract is entered into
B) that there is a pre contractual duty or disclosure
A) that all terms must be clear and unambiguous before the contract is entered into
Prior to the insurance act 2015 any breach of the duty of disclosure gave insurers the right to:
A) not pay the claim
B) avoid the contract in its entirety
B) avoid the contract in its entirety
What two things must be met for transparency requirements starting herb
The insureds likely life’s of understanding of insurance
2) the circumstances of the transaction
What means if the breach is deliberate or reckless
A) the insured didn’t know or care that they are in breach of their duty of fair presentation
B) beaches made innocently or merely carelessly
A) the insured didn’t know or care that they are in breach of their duty of fair presentation
What are the physical characteristics referring to:
Systems or check and control
) property damage
B) liability
C) personal accident
D) fidelity insurance
D) fidelity
Is the below a material circumstance
Confidential info acquired through a business relationship unconnected to the contract of insurance
No
Is the below a general question Or specific questions for prop form
Contents- sums insured
Specific
What does it mean if a beach was neither deliberate nor reckless
A) the insured didn’t know or care that they are in breach of their duty of fair presentation
B) beaches made innocently or merely carelessly
B) beaches made innocently or merely carelessly
What happens if the breach was not deliberate or reckless but the insurer would not have entered the policy on any terms
A) the policy must be treated as it had been entered
B) the insurer may avoid the policy and refuse to pay all claims but must return the premiums paid
B) the insurer may avoid the policy and refuse to pay all claims but must return the premiums paid
What does the IA2 contain 2 provisions concerning starting with
The effect of warranties contained in the policy
2) insurers remedies for fraudulent claims
What is one area of concern for the duty of fair presentation
A) or cover is placed online
B) if premiums are competitive
) or cover is placed online
What is a fair presentation or risk guarantee
A) that provide the insured answers the online questions and assumptions accurately they will accept as a fair presentation of the risk
B) that if all questions are answered correctly terms must be upheld
A) that provide the insured answers the online questions and assumptions accurately they will accept as a fair presentation of the risk
Is the below a peril or hazard
Is an event which can cause a loss
Peril
Is the below a peril or hazard
Is not itself the cause of a loss but it can increase or decrease the effect of a peril and may make the operation of a peril more likely
Hazard
What does physical hazard relate to:
A) physical characterises of the risk, in other words the measurable dimensions
B) the cause of loss
A) physical characterises of the risk, in other words the measurable dimensions
What are the physical characteristics referring to:
Construction of the building, type of stock, security features
A) property damage
B) liability
C) personal accident
D) fidelity insurance
A) property damage
What are the physical characteristics referring to:
Type of business
A) property damage
B) liability
C) personal accident
D) fidelity insurance
B) liability
Is the below a general question Or specific questions for prop form
Concerning the proposer and their business
General
What are the physical characteristics referring to:
Age, occupation
) property damage
B) liability
C) personal accident
D) fidelity insurance
C) personal accident
Is the below a general question Or specific questions for prop form
Computers
Specific
What is the prime consideration in relation to moral hazard
A) the insured person
B) the insurer
A) the insured person
Is the below a material circumstance
Information held by others such as the insureds brokers
Yes
Are the below example of physical or moral hazard
The submission of false or exaggerated claims
The insured withholding or misrepresent essential information
Failure of the insured to take reasonable care to prevent loss
Moral
What is a convenient, speedy and cost effective way for insurers to gather information
A) proposal forms
B) online forums
C) social media
A) proposal forms
Under the IA 2015 what must insureds take care to do on prop forms
A) make a fair presentation of the risk
B) known to be a material to risk
A) make a fair presentation of the risk
Does the insured need to disclose the following:
Knowledge which is held by the insurer and is readily available to the person deciding whether to take the risk
No
What happens if the breach was deliberate or reckless
A) insurer can treat the policy as if it never existed and decline all claims. They don’t need to return any premiums paid
B) the insured must return premiums paid
A) insurer can treat the policy as if it never existed and decline all claims. They don’t need to return any premiums paid
Instead of a specific question on a prop form what may happen
There may be a standard declaration detailing criteria which the proposer must confirm are true
Is the below a general question Or specific questions for prop form
Shops- type of goods and value of target stock
Specific
Is the below a general question Or specific questions for prop form
Details of previous claims
General
What do ICOBS require under the IA 2015 legal requirements
A) they require insurers and intermediaries to speak rally explain to the insured their duty to disclose all circumstances material to a policy and what happens if they breach this duty
B) it is a legal requirement to disclose all items that could be breached
A) they require insurers and intermediaries to speak rally explain to the insured their duty to disclose all circumstances material to a policy and what happens if they breach this duty
Is the below a general question Or specific questions for prop form
Name of the proposer- needed to indicate trade. Correspondence purposes etc
General
Is the below a general question Or specific questions for prop form
Concerning the specific type of insurance being proposed
Specific
Is the below a general question Or specific questions for prop form
The business of the proposer- allows the risk to be considered fully
General
What should a sole trader name be like on a prop form
Should shown all the full names including all forenames
What should a partnership name be like on a proposal form
Should show the full names as well as the partnership name eg
Jodie Collins T/A The dickhead
What should a limited company name look like on a proposal form
Show the name of the company and not that or the shareholders
Is the below a general question Or specific questions for prop form
The address of the proposer/ need for both correspondence and rating purposes
General
What contained a duty to disclose material facts implicit in all insurance negotiations and this was particularly important at the proposal stage
A) Marine insurance Act 1906
B) CIDRA
A) Marine insurance Act 1906
Is the below a general question Or specific questions for prop form
Period of insurance
General
Is the below a general question Or specific questions for prop form
Details of other insurances- contribution and potential dual insurance
General
Is the below a general question Or specific questions for prop form
Moral history/ convictions, bankruptcy
General
What seeks information on the risk, it’s nature and risk management
A) specific questions
B) general questions
A) specific questions
Is the below a general question Or specific questions for prop form
Premises- whether they are in a good state or repair; whether the premises are in the insureds sole occupation; construction details, rebuilding cost of buildings
Specific
Is the below a general question Or specific questions for prop form
Security- alarms etc
Specific
Is the below a general question Or specific questions for prop form
Business all risks- nature and value of contents
Specific
Is the below a general question Or specific questions for prop form
Money/ max amount or money in transit
Specific
Is the below a general question Or specific questions for prop form
Insurance history- been refused/ declined etc
General
Is the below a general question Or specific questions for prop form
BI- basis of cover, indemnity period. Sum insured for book debts
Specific
Is the below an eligibility criteria or a statement of fact
Details about the risk given by the proposer in response to questions on the checklist
The standard declaration, detailing criteria which the proposer which the proposer will have confirmed are true
Statement of fact
Is the below a general question Or specific questions for prop form
Personal Accident- number of employees
Specific
Is the below a general question Or specific questions for prop form
Hotels/ number of bedrooms, facilities and entertainment provided
Specific
Is the below a general question Or specific questions for prop form
Commercial liability- details of work in high risk premises, overseas or at heights
Specific
What is the insurance checklist cover
A) the same type of info as a prop form but instead of the proposer having to write everything down asks the prop a series of on screen promoted questions
B) statement of fact
A) the same type of info as a prop form but instead of the proposer having to write everything down asks the prop a series of on screen promoted questions
What will an insurance checklist contain:
A) a statement or fact
B) an eligibility statement
B) an eligibility statement
Is the below an eligibility criteria or a statement of fact
Proposers moral history,
Claims history
Security construction and maintenance
Business activities
Eligibility criteria
Is the below an initial disclosure documentation or demands and needs
Must be established before an intermediary provides a recommendation
D&N
Is the below an eligibility criteria or a statement of fact
Any incorrect or incomplete information must be notified to the insurer
Statement f fact
What is a scheme underwriter
A) where an underwriter from the insurer works in an intermediary’s office and they get provided info from a prop form, checklist or accessing the info on the intermediary’s files
B) chose an intermediary’s services specifically
A) where an underwriter from the insurer works in an intermediary’s office and they get provided info from a prop form, checklist or accessing the info on the intermediary’s files
What do some intermediaries find cost effective to obtain information from
A) scheme underwriters
B) meeting with the client
C) survey
B) meeting with the client
Is the below a general question Or specific questions for prop form
Liability- limits
Any work away from the premises
Specific
What are the other 6 ways to obtain information other than proposal forms
1- insurance checklists 2- statement of fact 3- scheme underwriters 4- meetings with the client 5- surveys 6- the internet
Under her FCA handbook what sections are the below:
The information which must be provided
The process for providing it
When it must be provided
A)ICOBS
B) PRA
C) FSA
A) ICOBS
Is the below a general question Or specific questions for prop form
Glass- dimensions, type or glass and fittings
Specific
Is there a requirement to issue initial disclosure documentation or a demands and needs statement when an insurer deals directly with a commercial customer
No
Is the below an initial disclosure documentation or demands and needs
The FCA rules give get some of certain info about the intermediary and it services which must be provided before the conclusion of an initial contest of insurance
initial disclosure documentation
Is the below an initial disclosure documentation or demands and needs
May be provided in:
Initial disclosure documentation prescribed by the FCA or
a standard term or business agreement developed by the intermediary that contains the relevant info
Initial disclosure
Is the below an initial disclosure documentation or demands and needs
Following must be used-
Name and address
Details of any links
Whether it gives advice on the basis of a fair analysis of the market
Initial disclosure
Is the below an initial disclosure documentation or demands and needs
Following must be used
Details of any fees
Procedures to be followed if the customer has a complaint
Whether the financial services compensation scheme applies
Initial disclosure
Is the below an initial disclosure documentation or demands and needs
Info must be given in a clear, accurate and comprehensible manner. Must be provided on paper or any other durable medium. But if cover is requested immediately orally is fine until they can sent it out
Initial disclosure
Is the below an initial disclosure documentation or demands and needs
An intermediary must disclose the commission that it receives in connection with a policy of the customer requests it
Initial disclosure documentation
Is the below an initial disclosure documentation or demands and needs
The following requirements must be fulfilled-
Suitability
Statement to D&N- implies that there is a comprehensive fact gathering exercise that must be undertaken placing the onus on the intermediary to establishing the facts
D&N
Is the below a general question Or specific questions for prop form
Loss of licence
Specific
Is the below an initial disclosure documentation or demands and needs
Must be issued prior the conclusion of the contract on paper or another durable medium
D&N
To help prevent money laundering what must be checked if it’s genuine
A) company name
B) address
B) address
Is the below a general question Or specific questions for prop form
Salons- details of treatments offered and if any equipment is hired out
Specific
What is not needed if business is translated by post or phone providing the payment is made from the proposers account at an authorised financial or credit institution
A) the address and information in the prop form
B) the prop form
C) the address
A) the address and information in the prop form
