Chapter 9 Flashcards
What are some compulsory insurances?
The employer’s liability insurance – Made it compulsory for employers in the UK to effect employers liability insurance.
The Road Traffic Act – Made it illegal to drive a motor without having coverage for third party damages or liability.
For certain professions it may be required to have professional indemnity insurance.
Other compulsory insurances include, public liability insurance for riding establishments and for private individuals owning dangerous or wild animals.
What makes up the main regulatory framework in the UK?
The main regulatory framework is composed by the PRA, FCA and FPC.
What does the PRA do?
The PRA supervises around 1,500 financial institutions including banks and insurance companies.
What does the FCA do?
The Financial Conduct Authority (FCA) isresponsible for the functioning of the U.K. financial markets. The FCA aims to ensure honest and fair markets by protecting consumers, protecting the financial markets, and promoting competition. The FCA is a public body under the purview of the U.K.’s Treasury and Parliament.
What does the FPC do?
The Bank of England’s Financial Policy Committee (FPC) identifies, monitors and takes action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system.
What are the 11 principles in the FCA and PRA rulebook?
(1)Integrity, (2)Skill, care and diligence, (3)Management and control, (4)Financial Prudence, (5)Market conduct, (6)Customers interest, (7)Communications with clients, (8)Conflicts of interest, (9)Customers; relationships of trust, (10)Client’s assets, (11) Relations with regulators.
How can the PRA and FCA punish firms who do not follow regulations and guidelines?
Public censure – when the FCA considers that a firm has failed to meet a requirement imposed under their regulations, the FCA may issue a public statement of misconduct on an approved person.
Financial penalties – The FCA may impose financial penalties on a firm itself where the firm has contravened a requirement of the financial services act 2012 or and approved person guilty of misconduct.
Prosecution for criminal offence – The FCA has the power to bring criminal prosecution against individuals if deemed necessary.
For a UK based insurance company looking to conduct business in the UK who must they be authorised by?
A UK-based company wishing to transact insurance in the UK must be authorised by the PRA.
What is meant by fit and proper capital requirements?
Fit and proper capital requirements must be put in place ot ensure that claims can be paid etc.
To carry out mediation activity in the UK who must a firm be authorised by?
The FCA.
What are the main risks the government seek to make insurance compulsory for?
Those risks concerning liability or negligence.
