Chapter Eight Flashcards
Law
What is a terms of business agreement (TOBA)?
A TOBA is a legally enforceable agreement that outlines the rights and responsibilities of brokers and their clients.
What is the primary role of a broker in the insurance process?
The primary role of a broker is to act as an independent intermediary who provides impartial advice to the insured and facilitates communication with insurers.
What is the significance of the unique market reference (UMR) code?
The UMR code is a unique identifier assigned to each risk facilitating the tracking and management of insurance contracts?
What is the difference between a retail broker and a wholesale broker?
A retail broker directly interacts with clients, while a wholesale broker works with insurers and may not have direct contact with the insured.
How does a broker assist clients during the claims process?
A broker assists clients by advising them on the claims process, maintaining evidence and negotiating with insurers.
How are brokers authorised and supervised in the UK?
brokers are authorised and regulated by the FCA which imposes strict rules regarding financial accounting, training and compliance.
What are the duties of an agent towards their principle?
An agent owes duties of obedience, personal performance, due care and skill, good faith and accountability to their principal.
What is meant by ‘binding the risk’ in the placing process?
Binding the risk refers to the broker obtaining confirmation from insurers to accept the risk and create a contract.
What legal changes were introduced by the Enterprise Act 2016 regarding claims payments?
The Enterprise Act 2016 introduced an implied term in insurance contracts that claims must be paid within a reasonable time allowing insureds to claim damages for late payments.
What are the three methods of creating a principle-agent relationship?
the three methods are agency by consent, agency by necessity and agency by ratification.
