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Cert CII IF3 > Chapter 8 > Flashcards

Chapter 8 Flashcards

1
Q

What is the role of an UW?

A

Manage common pool effectively and profitably:
- Assess risk person brings and decide if to accept
- Determine terms and cover
- Calculate suitable premium

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2
Q

What does the UW process assess?

A
  • Major UW factors affecting claims experience
  • Average claim per member
  • Proposer’s characteristics in comparison with average member
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3
Q

What are the UW considerations for Motor insurance?

A
  • Driver’s age - younger lack risk awareness
  • Type and vehicle make
  • Use
  • Geographical area
  • Storage
  • Driving record
  • Cover / extensions
  • Vehicle modifications
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4
Q

What are the UW considerations for Health insurance?

A
  • Occupation - 4/5 classes grouped low to hazardous
  • Age
  • Family circumstances
  • Lifestyle and physical condition eg smoking or obesity
  • Medical history
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5
Q

What are the UW considerations for Household - Buildings insurance?

A
  • Construction
  • Location - storm, flood, crime
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6
Q

What are the UW considerations for Household - Contents insurance?

A
  • Area
  • Occupation during the day
  • Security
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7
Q

What are the UW considerations for Travel insurance?

A
  • Destination - USA higher medical expenses
  • Purpose and duration
  • Group policies
  • Pre-existing conditions
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8
Q

What are the UW considerations for Property - Fire and Special Perils insurance?

A
  • Building use
  • Goods stored on premises eg paper is combustible, bulk storage
  • Construction and material
  • Safety features eg sprinklers
  • Risk management features
  • Number of floors
  • Method of heating and lighting
  • Location to perils eg flood
    All risks same but more consideration premium and terms as cover is wider
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9
Q

What are the UW considerations for Property - theft insurance?

A
  • Trade
  • Geographical area
  • Moral hazard of owner
  • Nature / construction of property
  • Theft precautions
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10
Q

What are the UW considerations for Property - Glass insurance?

A
  • Use of building
  • Geographical area - vandalism main concern in town centres
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11
Q

What are the UW considerations for Property - Money insurance?

A
  • How much money is handled
  • Storage and transport precautions eg sfe
  • How employees are paid - large amount of cash on site?
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12
Q

What are the UW considerations for Legal Expenses insurance?

A

Look at susceptibility of actions through the courts
- Employment criteria - sex and race
- View / actions to health and safety legislation
- Occupation

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13
Q

What are the UW considerations for Business Interruption insurance?

A
  • Can they operate from another premises
  • Replacement machinery availability
  • Critical machines or interdependency
  • Seasonal features
  • External dependancies eg suppliers
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14
Q

What are the UW considerations for Extended Warranties insurance?

A

Not generally underwritten, sold at point of sale
Insurers look at statistics for likelihood of product breaking down

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15
Q

What are the UW considerations for Employer’s Liability insurance?

A
  • Trade / occupation
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16
Q

What are the UW considerations for Public Liability insurance?

A
  • Trade / business and how much contact with the public
17
Q

What are the UW considerations for Pollution Liability insurance?

A
  • Trade
  • Materials used, chemical storage
  • Risk control measures
18
Q

What are the UW considerations for Products Liability insurance?

A
  • Trade
  • Final use of the product
  • Quality control systems
  • Goods exported to USA - litigious society
19
Q

What are the UW considerations for Professional Indemnity insurance?

A
  • Occupation and professional qualifications
  • Experience and degree of moral hazard
20
Q

How is credit rating used in UW considerations?

A

Across all lines
Link between propensity and frequency of claim, LR and credit rating

21
Q

What can fraud look like?

A

Exaggerating claim costs or deliberately creating an insured event

22
Q

What does the Insurance Fraud Bureau do?

A
  • Co-ordinate industry wide actions (including policy and insurance companies)
  • Public education campaigns
  • Operate centres of expertise on fraudsters and methods
23
Q

What fraud databases are there?

A
  • MIAFTR - details of total loss and theft claims, check to see if vehicle being claimed more than once
  • MID
  • Claims and Underwriting Exchange - check history of policyholders and eliminate multiple claims
  • Art Loss Register - increase recovery rates and deter theft by making resale harder
24
Q

How do claims handlers pay a role in fraud?

A

Common indicators:
- Claim soon after renewal or inception
- No documents for lost items
- Several similar claims for similar loss / damage in short period of time
Methods to combat:
- Claims forms over the phone
- Replacement rather than cash

25
Q

What are the consequences of fraud?

A

Insurers - impact bottom line (profit), less competitive, reputation as soft touch
Insureds - premium increase across the board
- Fraudulent claimants - temptation to continue

26
Q

What is the impact of the Equality Act 2010?

A

Extends protections to characteristics not previously covered ands strengthens aspects of equality law
Types of discrimination: direct, associative, perceptive and indirect
Test-Achats - premium for female motorists now same as men

27
Q

What is the impact of UK GDPR?

A

Places legal obligations on controllers and processors
Applies to personal info of identified living individual, automated personal data and manual filing systems

28
Q

What is sensitive personal data?

A

Race, ethnic origin, politics, religion, trade union, health and sexual orientation

29
Q

What are the data principles?

A

Main responsibilities for organisations:
- Lawful, fair and transparent
- Collected for specified, explicit, legitimate purpose
- Data adequate, relevant and limited
- Data accurate and up to date
- Storage limitation
- Appropriate security

30
Q

What is lawful processing of data?

A
  1. Consent
  2. Contract
  3. Legal obligation
  4. Vital interests
  5. Public task
  6. Legitimate interests
31
Q

What rights are there for data?

A

Right to be informed, access, rectification, erasure, restrict processing, data portability, object, automated decision making and profiling

Cert CII IF3 (11 decks)

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