Chapter 7: Conduct and Culture Flashcards
What is market conduct?
How brokers should operate in the insurance market and operate with insurers
What is conduct?
Way brokers carry out their business, in every interaction with the clients and insurers.
How do brokers demonstrate good conduct?
- Excellent Service
- high quality of advice and experience
- transparency of earnings
- good quality literature and documentation
- compliant handling
- avoidance of errors and omissions
What is corporate culture?
shared values, attitudes, standards and beliefs that characterise members of an organisation and define its nature
Who establishes an organisations culture?
It’s board
What are strategic objectives?
Set by senior management at a board level and are long term goals. provide overarching purpose
What is the complaints procedure?
- Identification
- Report and record
- Investigate
- Resolution
- FOS?
- M`ake Improvements
Can you choose to be a member of the fos?
no
Where are the full rules relating to handling of complaints found?
Dispute Resolution: Complaints (DISP) Sourcebook
Who are eligible complainants?
Consumer
Micro-enterprise (<10 employees; turnover/balance sheet < euros2M)
Charities (Income
Earliest complainant can refer their complaint to the FOS?
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
How does the FOS award Redress?
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
how is the FOS funded?
Levy
Case fee
Why do brokers take care to avoid e&o?
- Time consuming
- Unrecoverable costs in defending claim
- increased e&O insurance premium
How to prevent D&O?
- Right the first time
- Always ask
- Put it in writing
How to deal with an e&O claim?
- Follow procedures
- Do not conceal problem
- Be honest and open
- Engage own PI insurers at earliest opportunity
Is misselling a key issue for the FCA?
yes
Which type of companies are most likely to monitor and gather management information to adapt and improve their processes?
Those that have a strong corporate culture.
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?
A conversation with their professional indemnity insurers to try to resolve the problem.
Following a recent action, what is the client’s position if the Financial Ombudsman Service [FOS] awards them £50,000?
She could take legal action if she does not accept the decision of the FOS.
