Chapter 7: Conduct and Culture

Question 1

What is market conduct?

Answer 1

How brokers should operate in the insurance market and operate with insurers

Question 2

What is conduct?

Answer 2

Way brokers carry out their business, in every interaction with the clients and insurers.

Question 3

How do brokers demonstrate good conduct?

Answer 3

• Excellent Service
• high quality of advice and experience
• transparency of earnings
• good quality literature and documentation
• compliant handling
• avoidance of errors and omissions

Question 4

What is corporate culture?

Answer 4

shared values, attitudes, standards and beliefs that characterise members of an organisation and define its nature

Question 5

Who establishes an organisations culture?

Answer 5

It’s board

Question 6

What are strategic objectives?

Answer 6

Set by senior management at a board level and are long term goals. provide overarching purpose

Question 7

What is the complaints procedure?

Answer 7

1. Identification
2. Report and record
3. Investigate
4. Resolution
5. FOS?
6. M`ake Improvements

Question 8

Can you choose to be a member of the fos?

Answer 8

no

Question 9

Where are the full rules relating to handling of complaints found?

Answer 9

Dispute Resolution: Complaints (DISP) Sourcebook

Question 10

Who are eligible complainants?

Answer 10

Consumer
Micro-enterprise (<10 employees; turnover/balance sheet < euros2M)
Charities (Income

Question 11

Earliest complainant can refer their complaint to the FOS?

Answer 11

6 months of date on firms letter advising on final decision
6 years after event complained about
3 years after knew/should have known that they had cause of complaint

Question 12

How does the FOS award Redress?

Answer 12

Money award (max 355k for complaints after 1st April 2020 or omissions after aPRIL 2019) 
Directions award - telling the firm what actions need to be taken

Question 13

how is the FOS funded?

Answer 13

Levy

Case fee

Question 14

Why do brokers take care to avoid e&o?

Answer 14

• Time consuming
• Unrecoverable costs in defending claim
• increased e&O insurance premium

Question 15

How to prevent D&O?

Answer 15

• Right the first time
• Always ask
• Put it in writing

Question 16

How to deal with an e&O claim?

Answer 16

1. Follow procedures
2. Do not conceal problem
3. Be honest and open
4. Engage own PI insurers at earliest opportunity

Question 17

Is misselling a key issue for the FCA?

Answer 17

yes

Question 18

Which type of companies are most likely to monitor and gather management information to adapt and improve their processes?

Answer 18

Those that have a strong corporate culture.

Question 19

As part of a routine compliance check, a broker has spotted an error with an insurance contract they have drawn up. What should the next course of action include?

Answer 19

A conversation with their professional indemnity insurers to try to resolve the problem.

Question 20

Following a recent action, what is the client’s position if the Financial Ombudsman Service [FOS] awards them £50,000?

Answer 20

She could take legal action if she does not accept the decision of the FOS.