Chapter 7 - Regulatory Processes, Systems, and Controls Flashcards
How do Lloyd’s members find out about information regarding regulations?
- centralised department in Lloyds that disseminate information
- LMA, IUA and LIIBA also send info
What kind of data would be recorded for regulatory purposes by coding?
- location of broker
- location of risk
- any premium tax or other tax payable
- whether direct or reinsured business
What do the Solvency II requirements ensure?
Ensures extent to which assets exceed liabilities in case of a large number of claims
What did Solvency II improve?
- better regulation
- deeper integration of EU insurance market
- enhanced policy holder protection
- improved competitiveness in EU markets
What systems and controls can be put in place to assist regulation?
- training and education
- easily accessible information for staff to check
- operating system controls, warnings, and blocks
- peer review
- system reports to spot problems after thefact
- authority limits
Why are sanctions imposed fundamentally?
- political pressure
- enforce concept of respect for democracy
- enforce concept of respect for human rights
- maintain or restore peace to a country
What form can financial sanctions come in?
- prohibiting the transfer of funds to sanctioned country
- freeze assets of company or individual
- freeze assets of whole government
What is the Office of Financial Sanctions Implementation (OFSI) responsible for?
implementing and admin of international financial sanctions for the UK
What is the Helms-Burton Act 1996?
Restricts conduct of business by US entities with or in Cuba
Which system on Lloyds can insurers find out about sanctions on?
Crystal
What does the Export Control Order contain?
Insurers must get license for insuring category A (guillotines, electric chairs)
Only require license for category B (rocket launchers) or C (tear gas / other military goods) if insurance being obtained for travel to embargoes country
What are the main elements of the Data Protection Act 2018 in general data processing?
- implement gdpr across all data processing
- provide clarity on definitions used in gdpr in UK context
- ensure private data processed confidentially
- provide appropriate restrictions and rights about access
What are the main elements of the Data Protection Act 2018 in regulation and enforcement?
- enact additional powers to IC
- allow IC to levy huge fines of data breaches, up to £17m or 4% of global turnover
Under DPA 2018 what is the controller and processor?
Controller says how and why personal data is processed and processor acts on controllers behalf
What does GDPR apply to?
Personal data
What does GDPR class as personal data?
- race
- ethnic origin
- politics
- trade union membership
- genetics
- biometrics
- health
- sex life
- sexual orientation
What are the main elements of the Data Protection Act 2018 in terms of rights?
- right to be informed
- right of access
- right to ratification
- right to erasure
- right to restrict processing
- right to data portability
- right to object
How long does a company have to respond to a data subject access request, and how much does it cost?
One month but additional two granted dependant on circumstances
Should be free unless company deems unfounded or excessive, can charge admin fee if so
What are the three layers of money laundering?
- placement
- layering
- integration
What does the Proceeds of Crime Act 2002 establish for money laundering?
- concealing, transferring, converting or removing criminal property
- making arrangements in respect of criminal property
- acquiring, using, or possessing criminal property
- failing to report suspected money laundering
- tipping criminals off about money laundering disclosure
Who does the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2007 effect?
- credit and financial institutions
- auditors
- lawyers
- trust or company service providers
- estate agents
What regulations does the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2007 put into place?
- conduct moeny laundering and terrorist financing risk assessments
- apply policies and procedures across business
- train staff
- comply with new customer due diligence
- ensure record keeping and data protection systems
Define financial crime
fraud, dishonesty, misconduct, or misuse of information relating to financial markets, handling the proceeds of crime, or terrorism
What does the Money Laundering Reporting Officer do?
Make a report at least annually on how the systems and controls operate and on their effectiveness
- responsibility for compliance with FCA rules regrading money laundering
- expected to be UK based
- required to have certain level of authority and independence within the firm
What does the nominated officer do?
Take overall responsibility for establishing and maintaining effective anti-money laundering systems and controls within the firm
What are the major offences under the Bribery Act 2010?
- bribing another
- being bribed
- bribing a foreign public official
- failure to prevent bribery
