Chapter 8 Law and regulation

Question 1

Which body that is part of Bank of England is responsible for micro prudential regulation of systemically important firms i.e make sure insurance companies are solvent

Answer 1

Prudential Regulation Authority

Question 2

Which body that is part of Bank of England is responsible for conduct of business across the financial services industry and prudential regulation of small firms

Answer 2

Financial Conduct Authority

Question 3

Which body within the Bank of England is responsible for macro prudential regulation and watching for emerging risks to UK’s financial systems

Answer 3

Financial Policy Committee

Question 4

What are the three stages of authorisation for an intermediary?

Answer 4

Make application to FCA
Assessed by FCA
Authorised

Question 5

What are the FCAs three operational objectives?

Answer 5

Consumer protection
Protecting integrity of financial system
Competition - promoting efficiency and choice in market

Question 6

What are the FCA’s 11 principles

Answer 6

Integrity 
Skill, care and diligence
Management and control
Financial prudence
Market conduct
Customers' interests and treat fairly
Communications with clients
Conflicts of interest
Customers relationships of trust 
Client's assets
Relations with regulators

Question 7

When was the Approved Persons regime replaced by the Senior Managers and Certification Regime?

Answer 7

9 December 2019 for solo regulated firms

Question 8

What are the three key elements of the SMCR

Answer 8

1. Individual and Senior Manager Conduct Rules
   Minimum standards of behaviour
   2, Senior Managers Regime
   Approved to undertake Senior Manager Function
   Statement of responsibilities
2. Certification Regime
   Not senior managers but job has big impact on customers, market, firm
   Roles are called Certification functions
   Must be fit and proper

Question 9

Which body challenged the regulators view that PMU should not be regulated as a protection product

Answer 9

Financial Services Consumer Panel

Question 10

What are the key requirements of the Insurance Distribution Directive regarding training and competenec

Answer 10

15 hours training and CPD
Knowledge on
Insurance market
Claims and complaints
Business ethics and conflict interest management

Question 11

How many hours of cpd is required by the Insurance Distribution Directive

Answer 11

15

Question 12

Which body has code of practice stating that its members

should provide a Consumer Guide to personal customers considering purchasing PMI

Answer 12

Association of British Insurers (ABI)

Question 13

What document includes Private Medical Insurance Common definitions and information and examples of how cancer claims are dealt with under PMI

Answer 13

ABI Statement of Best Practice (SoBP)

Question 14

Which body resolves the “relatively few” complaints on PMI insurance from individuals who are not satisfied with their insurers response to their claim

Answer 14

Financial Ombudsman Service

Question 15

Which scheme funded by a levy protects customers if their insurer goes out of business?

Answer 15

Financial Service Compensation Scheme

Question 16

Which Act gives individuals the right to access reports provided by medical practitioners for employment or insurance purposes

Answer 16

Access to Medical Reports Act 1988

Question 17

Access to Medical Reports Act 1988 if an individual asks a medical practitioner to amend a medical report what are the medical practitioners two option?

Answer 17

They can amend as requested

If they do not agree attach a statement to the report giving the individual’s views

Question 18

Under the Access to Medical Reports Act 1988 how long does a medical practitioner have to keep a record of a report submitted for employment or insurance purposes

Answer 18

6 months

Question 19

What Act established the right for individual to access their health records its main provisions being incorporated now in the Data Protection Act 2018

Answer 19

Access to Health Records Act 1990

Question 20

What Act deals with discrimination

Answer 20

Equality Act 2010

Question 21

Can an insurer treat disabled people less favourably

Answer 21

Only if can be justified on basis of statistical information

Question 22

Which case established that insurers can not in any circumstances discriminate on gender

Answer 22

Test Achats

Question 23

What information does the GDPR apply to

Answer 23

Personal data including IP addresses

Question 24

What is sensitive personal data under the GDPR?

Answer 24

Race
Ethnic origin.
Political opinions.
Religious beliefs or other beliefs of a similar nature.
Trade union membership.
Genetics
Biometrics
Physical and mental health.
Sexual life.
Sexual orientation

Question 25

What are the 6 GDPR Data Protection Principles?

Answer 25

Fairly and lawfully processed
Processed for limited purposes
Adequate, relevant and not excessive
Accurate and up to date
Not kept longer than necessary
Processed in secure manner

Question 26

Under GDPR how does a firm demonstrate “lawful processing”?

Answer 26

Identify the lawful purpose for processing

Document it

Question 27

Under GDP what must be freely given specific informed and unambiguous?

Answer 27

Consent

Question 28

Identity 8 rights of Individuals under GDPR

Answer 28

The right to be informed.
The right of access.
The right to rectification.
The right to erasure.
The right to restrict processing.
The right to data portability.
The right to object.
Rights in relation to automated decision making and profiling

Question 29

If an individual asks an organisation why it is using or storing their data it is known as a what?

Answer 29

Subject access request

Question 30

What information does an individual have a right to under GDPR
Structured or unstructured?

Answer 30

Structured

Question 31

Following a subject access request if a person asks for a correction to be made what must the holder do?

Answer 31

make the correction if they agree
make a note if they are not satisfied the information is inaccurate
supply applicant with copy of correction or note

Question 32

What act outlines a statutory framework to protect people who lack capacity to make decisions

Answer 32

Mental Capacity Act 2005

Question 33

What Act deals with non disclosure by consumers

Answer 33

Consumer Insurance Disclosure & Representations Act 2012

Question 34

Under the Consumer Insurance Disclosure & Representations Act 2012 what is insurer’s remedy for misrepresentation which is honest and reasonable

Answer 34

None insurers must pay claim

Question 35

Under the Consumer Insurance Disclosure & Representations Act 2012 what is insurer’s remedy for misrepresentation which is careless

Answer 35

Insurer can offer compensatory or proportionate response based on what they would have done if consumer had taken care to answer accurately eg if they would have excluded the condition they can refuse to pay claims for that condition but have to pay other claims.

If they would have charged a higher premium they can proportion down the claim

Question 36

Under the Consumer Insurance Disclosure & Representations Act 2012 what is insurer’s remedy for misrepresentation which is deliberate or reckless

Answer 36

Can treat policy as if never existed and deny all claims

Question 37

Which Act relates to disclosure for commercial customers purchasing Group PMI?

Answer 37

Insurance Act 2015