Chapter 5: Legal and Regulatory Requirements

Question 1

Define ‘breach of warranty’

Answer 1

When a compulsory insurance has a breach of duty of fair representation

Question 2

Define ‘compensation’

Question 3

Define ‘controlled function’

Question 4

Define ‘damages’

Question 5

Define ‘liability insurance nuclear reactirs’

Question 6

Define ‘marine pollution liability insurance’

Question 7

Define ‘non consumer contract’

Answer 7

Contract done for business reasons

Question 8

Define ‘compulsory insurances’

Answer 8

Insurance which is compulsory in England and wales. Either for private individuals or professions and businesses.

Question 9

Why are certain forms of insurance compulsory?

Answer 9

To provide funds for compensation and in response to national concerns

Question 10

What act made third party motor compulsory insurance?

Answer 10

Road traffic act 1998

Question 11

What act made employers liability compulsory insurance?

Answer 11

Employers liability (compulsory insurance) act 1969

Question 12

What act made public liability insurance compulsory for riding schools?

Answer 12

Riding establishments act 1970

Question 13

What do all compulsory insurances in the UK have in common?

Answer 13

They are liability, not property.

Question 14

What can an insurer do if there has been a breach or bad faith on a compulsory line of insurance?

Answer 14

Not much. They have to pay out, but then can chase the insured for the money.

Question 15

What are compulsory insurances in the USA?

Answer 15

Workers compensation, motor insurance for compulsory vehicles. And some states have short term disability insurance for employees

Question 16

What is compulsory insurance in Turkey?

Answer 16

Property owners must be insured against earthquakes, and motor.

Question 17

What is compulsory insurance in Australia?

Answer 17

Third party motor

Question 18

What is compulsory insurance in Germany?

Answer 18

Third party liability for any event in which a German court may consider you negligent.

Question 19

What does the Consumer Rights Act 2015 say about unfair terms?

Answer 19

An unfair term is not binding on the consumer but if they want to rely on that term they can choose to do so.

Question 20

Define ‘unfair contract terms’

Answer 20

A term which causes a significant imbalance in the parties rights and obligations under the contract to the detriment of the consumer.

Question 21

How can a term avoid being measured as unfair?

Answer 21

Be transparent, expressed plainly, and be legible.

Question 22

Define ‘consumer contract’

Answer 22

Anyone buying insurance outside of their business, trade, or profession.

Question 23

What does the Contracts (Rights of Third Parties) Act 1999 say?

Answer 23

Set out when a third party can enforce the terms of a contract. - if they are identified in the contract by name.

Question 24

Define ‘injuction’

Answer 24

A remedy that the court can award to prevent a party doing something.

Question 25

Define ‘specific perfomance’

Answer 25

Opposite of an injunction- a court says a party must do something.

Question 26

Why can the rights of third parties act be excluded in cargo?

Answer 26

Because cargo insurance often has claims from people who are not the original buyers of insurance.

Question 27

Define ‘insurance premium tax’

Answer 27

A tax on general insurance premiums in the UK. the standards rate is 12%, higher rate is 20%.

Question 28

What is the senior managers and certification regime?

Answer 28

A regime that applies to both brokers and intermediaries, introducing a regular you framework.

Question 29

What are the three parts of SM&CR?

Answer 29

Senior managers regime, certification regime, rules of conduct.

Question 30

What roles are included in SM&CR Senior mangers regime?

Answer 30

Head of key business area, group entity senior manager, significant responsibility function? And executive and non executive directors.

Question 31

What are the first tier of conduct rules in SM&CR?

Answer 31

Act with integrity, act with skill, care, diligence, be cooperative with regulators, treat customers fairly, observe standards of market conduct.

Question 32

Define ‘approved person’

Answer 32

A person who has been approved to carry out their function.

Question 33

Define ‘compliance officer’

Answer 33

The person responsible for carrying out compliance oversight.

Question 34

Define ‘money laundering reporting officer’

Answer 34

Someone who checks there is no money laundering. Regulated by PRA and FCA.