Chapter 7 - Regulatory processes, systems and controls

Question 1

If a risk comes from a certain country, do you comply with their rules?

Answer 1

Yes

Question 2

Does Lloyd’s have a centralised department to notify syndicates of changes to regulatory processes?

Answer 2

Yes

Question 3

What is Solvency 2?

Answer 3

Balance between assets and liabilities

EU solvency rules

Question 4

Does the PRA need additional ‘padding’ for insurers?

Answer 4

Yes and varies depending on the COB

Question 5

Why is Solvency 2 in the EU good?

Answer 5

Better regulation
Integration of EU market
Policyholder protection
Competitiveness of EU insurers

Question 6

Why are sanctions put in place?

Answer 6

Political pressure
Concept for democracy
Human rights
Peace in a region

Question 7

Who is responsible for UK sanctions?

Answer 7

Office of Financial Sanctions Implementation (OFSI) - guidance on website

in HM Treasury

Government

Question 8

Can Sanctions be lifted?

Answer 8

Yes e.g., Haiti

Question 9

Does a UK firm with US parent company have to deal with US sanctions?

Answer 9

Yes

Question 10

What act restricts the conduct of business by US entities with Cuba?

Answer 10

Helms-Burton Act 1996

Question 11

What are individuals who are sanctioned called?

Answer 11

SDNs - specially designated nationals

Question 12

Where to find out about sanctions?

Answer 12

1. US Department of Treasury
2. HM Treasury
3. OFSI
4. OFAC - office of foreign asset control
5. Crystal - Lloyd’s

Question 13

Act for export controls

Answer 13

Export Control Order 2008

Military goods

Category A and B - different levels

Question 14

When did the Data Protection Act 2018 (DPA 2018) come into effect?

Answer 14

May 2018 with the EU GDPR

Question 15

What is the fine if a company breaches data protection act?

Answer 15

£17.5m or 4% annual turnover

Question 16

What is the 3 stage process of money laundering?

Answer 16

Placement - cash in
Layering - complex transaction
Integration - clean money

Question 17

What are money laundering offences?

Answer 17

Guilty of concealing, transferring, reconverting, removing money
Making arrangements
Acquiring/using criminal property

Question 18

What is the maximum money laundering prison sentence?

Answer 18

14 yrs - fine or both

Question 19

Is it a money laundering offence of the FCA if you fail to report or tip off?

Answer 19

Yes

Question 20

What is the act to recover proceeds of criminal activity?

Answer 20

Serious Crime Act 2007

National Crime Agency

Question 21

How was financial crime defined?

Answer 21

Financial Services and Markets Act 2000 (FSMA)

Question 22

Should you report directly to the NCA or MLRO?

Answer 22

MLRO - discharges legal responsibility

Question 23

How long should client verification records be kept for?

Answer 23

5 years