Chapter 7 - Regulatory Processes, systems and controls Flashcards
What are the main aspects of regulation that affects the London Market?
Non-life, solvency, insurance mediation (mainly affects brokers), reinsurance and accounting
What are the steps for following regulation?
Obtaining information about applicable rules
Planning - plan to ensure compliance with regulation
Data evidence
Systems and controls - putting in place safety nets to try and avoid something happening
What does the coding applied to Lloyd’s premium and claims data allow analysis of?
Country from which the risk has come
Location of the broker
Location of the risk
Any premium tax or other tax payable
Whether the business is direct or reinsurance
What is Solvency II?
Name given to the EU’s Europe-wide solvency rules with the aim of:
Better regulation
Deeper integration of EU insurance market
Enhanced policyholder protection
Improved competitiveness of EU insurers.
What are the fundamental reasons for sanctions being imposed?
Political pressure
To enforce the concept of respect for democracy
To enforce the concept of respect for human rights
To maintain and restore peace in a country/region
What forms can Financial Sanctions come in?
Prohibiting the transfer of funds to a sanctioned country
Freezing the assets of a company or an individual
Freezing the assets of a whole government, as well as the companies and residents of the country concerned.
What is the Office of Financial Sanctions Implementation (OFSI) in HM Treasury responsible for?
The implementation and administration of international financial sanctions in effect in the UK with the following responsibilities:
Domestic legislation on financial sanctions
Implementation and administration of domestic financial sanctions
Domestic designation
Providing advice to Treasury Ministers on domestic designation decisions
Implementation and administration of international financial sanctions in the UK
Working on the design of individual financial sanctions regimes and listed decisions at the UN and EU
Working with international partners to develop frameworks
Licensing exemptions to financial sanctions where permitted
What are trade sanctions?
Managed and monitored by the Dep for Business, Energy and Industrial Strategy (BEIS) can include travel bans or bans on the import or export of certain cargos such as oil.
Why is it important for London Market companies to understand and comply with US sanctions?
London Market has very close links with the USA, with business coming from the states to the London Market and many of the insurers operating in London Market have a US parent company
What are some practical problems with sanctions?
Where the offending entity is not a party to the insurance at all, e.g. Piracy in countries which are sanctioned, no ransom money can be paid to them to free cargo and crew
What is the Crystal System?
Accessible by Lloyd’s insurers and brokers which has info about sanctions on a country by country basis
Who does the UK Data Protection Regulation (UK GDPR) apply to and what information does it apply to?
Applies to data controllers and processors in the UK, places legal obligations on them such as firms are required to maintain records of personal data and processing activities.
It applies to personal data of an identified living individual
What is sensitive personal data under UK GDPR?
Special categories of personal data:
Race
Ethnic Origin
Politics
Religion
Trade union membership
genetics
biometrics
health
sex life/ sexual orientation
What are the principles of GDPR?
Lawfulness, fairness and transparency
Purpose limitation - data should only be collected for legitimate purposes
Data minimisation
Accuracy
Storage limitation
Integrity and Confidentiality
What are the six lawful bases for processing data?
Consent
Contract
Legal obligation
Vital interests - absolutely necessary
Public task - necessary to perform in the public interest
Legitimate interests