Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

c i i m n k l o > Chp 2 > Flashcards

Chp 2 Flashcards

1
Q

What groups of people is the insurance market made from?

A 
Buyers
Intermediaries
Aggregators
Insurers
Re-insurers
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What divisions do buyers come under?

A 
Private
Partnership 
Companies
Public bodies
Associations 
Clubs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a partnership?

A

This is when several buyers come under one legal existence

This is when several individuals pool resources in a business each partner has joint and several liability for their actions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the divisions of insurers?

A 
Propriety
Societas Europeas
Mutual companies 
Mutual indemnity
Captives
Protected Cells 
Lloyd’s
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a proprietary company?

A

This company is owned by the shareholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is a Societas Europeas?

A

This company can register in any member state of the EU and transfer to other member states without needing to liquidate the company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the difference between a Mutual company and a mutual indemnity company?

A

A mutual company is owned by the policyholders and mutual indemnity while still owned by policyholders have their origins in being a self-managed pool

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Where is a mutual indemnity association usually found?

A

In marine insurance where protection and indemnity associations insure certain aspects of Marine hull liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a captive insurance company?

A

Insurance owned by a large non-insurance company that insurers the risks of its parent company only and not others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is a protected cell company?

A

This company is similar to the captive company but differs in that it operates in 2 parts

1) the core - manages the PCC as a separate entity
2) cells within the PCC - the cell owners can insure their risks in the same way as if they owned their own captive insurance company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a parent company?

A

?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the two different insurer designed functions?

A

Composite and specialist

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is a composite insurer?

A

These insurers accept several types of businesses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is a specialist insurer?

A

These insurers only accept one class of business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is Lloyd’s?

A

Lloyd’s is an institution not an insurer and provides & facilities a place for brokers to place risk within its own market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are the three different groups at Lloyd’s?

A

Syndicates
Managing agents
Member agents

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is a syndicate?

A

A group of private individuals (names) or corporate members who provide financial backing for risks in Lloyd’s

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is a managing agent?

A

A managing agent is employed by Lloyd’s syndicates to employ Underwriters who accept risks on behalf of the syndicate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is a member agent?

A

Someone who advise clients on the advantages and disadvantages of investing in the Lloyd’s market, syndicate selection and performance, reserve requirements and compliance issues

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Who are the managing agents in Lloyd’s regulated by?

A

They are dual regulated by Lloyd’s itself but also by the FCA & the PRA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Who are the firms approved by in Lloyd’s?

A

The FCA and the PRA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is the proposal form called at Lloyd’s?

A

A ‘slip’

Market Reform Contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is the process called of an underwriter signing a slip?

A

‘Scratching the skip’

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What is the process of preparing and signing the slip called?

A

‘Xchangung’ and it’s done centrally at Lloyd’s

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What is the percentage called that a broker receives for his services?

A

Commission also known as brokerage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What restriction was removed by the Legislative reform (Lloyd’s) order 2008?

A

The restriction allowing only Lloyd’s brokers to place business at Lloyd’s

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What is contract certainty?

A

The complete and final agreement of terms (including signed down lines) between the insurer and the insurer before inception

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What does it refer to when a broker places more than 100% of a slip and proportionally reducing Lloyd’s syndicates or the insurers share?

A

Signing down the line

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What is an intermediary?

A

Known as an agent authorised by one part t(e ‘principle’ to bring that principal into a contractual relationship with another, termed the third party

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Hat do the FCA require all ‘persons’ to be that carry out insurance mediation activities?

A

The must either be authorised by the FCA or Exempt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

What does it mean by Exempt?

A

To be exempt you must adopt a status of ‘Appointed representative’ or introducer appointed representative, be a member of a profession body that has equivalent rules to the FCA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

What is an authorised persons?

A

An individual or firm which is authorised by the FCA to engage in regulated activities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

What is an Appointed representative?

A

An individual or company that is appointed by an authorised persons (the principle) under the terms of a contract. They may be acting for an insurer or intermediary that is regulated by the FCA and PRA.

Eg garage selling extended warranty insurance for a customer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Who is responsible for making sure that an appointed representative follows all the FCA rules?

A

The authorised persons

36
Q

What is an introducer appointed representative?

A

This persons are only authorised to distribute ‘non-real time financial promotions’ such as brochures

37
Q

Who is responsible for the Introducer appointed representative?

A

The Authorised persons

38
Q

Who are Lloyd’s insurance brokers? And who are they regulated by?

A

These are brokers that have proved their knowledge and expertise to the council of Lloyd’s they are regulated by the FCA

39
Q

Identify 7 services provided by independent intermediaries to clients

A

1) find best market
2) negotiate terms
3) advise on policy wording
4) review clients needs
5) negotiate renewals
6) negotiate claims
7) risk management advice

40
Q

What is reinsurance and what is it’s purpose?

A

Reinsurance is a risk transfer mechanism for insurers to be able to insure risks that may be too large and the insurer is poised to lose financial in the event of a claim

41
Q

What is the insurer known as when reinserting?

A

Cedant or ceding office

42
Q

What further services can be provided under the Terms Business Agreement with the client?

A

Risk management advice, assisting with presentation of claims, and assisting with the recovery of uninsured losses

43
Q

What are the benefits m reinsurance

A

1) improved customer care
2) support for insurers moving into new business areas
3) protects portfolios against large losses / catastrophes
4) smoothed peaks and troughs in loss experience

47
Q

What are the different types of re-insurers?

A

Specialist, Syndicates, insurance companies that act as re-insurers

48
Q

What is it called when a re-insurer, re-insured a peril?

A

Retro-ceding & the risk transfer called retrocession

49
Q

What are the two main reinsurance centres?

A

Lloyd’s & International Underwriters Association

50
Q

What is the role of an Underwriter?

A

To manage to pool as effectively & profitably as possible by

1) assessing risk
2) deciding whether or not to accept risk
3) determine the terms and conditions
4) set the premium

51
Q

What is the role of claims personnel?

A

Deals with all claims quickly & fairly
Differentiate between real & fraudulent claims
Assess the realistic cost of the claim & put aside an amount in the accounts - reserving
Determine when experts need to be involved
Settle claims with minimum expense

52
Q

What is a Loss Adjuster?

A

A person hired by the insurer to assess the policy wording & investigate claims

53
Q

What is a loss assessor?

A

A person hired by the insured to prepare & negotiate claims on their behalf

54
Q

What is an Actuary?

A

A person who applies statistical & probability theories to problems of insurance & helps companies with pricing & claims reserving

55
Q

What is a risk manager?

A

A person who creates effective control methods of companies to control the various risks that effect businesses

56
Q

What is a compliance officer?

A

A person that makes sure companies abide by the rules set out by the FCA and PRA

57
Q

What is an internal auditor?

A

A person(s) that monitor and evaluate how well risks are being managed

58
Q

Who are the ABI?

A

Association of British Insurers

59
Q

Who are the IUA?

A

International Underwriters Association

60
Q

Who are BIBA?

A

British Insurance Brokers Association

61
Q

Who are LMRC?

A

London market regional committee

62
Q

Who are LIIBA?

A

London International Insurance Brokers Association

63
Q

Who are LMA?

A

London Market Association

64
Q

Who are MIB?

A

Motor Insurance Bureau

65
Q

Who are UKIC?

A

UK Information Centre

66
Q

What are consolidators?

A

Companies that grow through the formal acquisition of others within the insurance market

67
Q

What are the two types of distribution channels?

A

Direct and indirect

68
Q

What is a direct distribution channel?

A

Employees of the insurer sell the insurance products

69
Q

What is an indirect distribution channel?

A

Intermediaries sell products on insurers behalf being paid by the insurer to promote their product

70
Q

What is Takaful insurance?

A

Insurance that complies with Islamic principles

71
Q

Identify the 3 Islamic principles that insurance is not compatible with

A

Gharar (uncertainty)
Maisir (gambling)
Riba (interest)

72
Q

Identify 5 Islamic principles that Takaful insurance embraces

A

1) Mutuality & cooperation
2) shared responsibility
3) joint indemnity
4) common interest
5) solidarity

73
Q

Identify 3 areas where the state is the insurer

A

1) social services
2) pension provision
3) as guarantor of pool

74
Q

Identify 4 services that an intermediary may provide to insurers

A

1) collect premium
2) commit insurer if have authority
3) settle claims if have authority
4) issue motor or other cover notes

75
Q

Identify two ways the booking market has consolidated

A

1) consolidators

2) broker networks

76
Q

What is a broker network

A

Alliances of brokers who receive centralised services from a senior firm

77
Q

Identify 5 feature of direct distribution channels

A

1) no intermediary costs (+age for insurer)
2) advertising costs (-age for insurer)
3) quicker for buyer
4) only one insurer’s product sold (-age to buyer)
5) no advice

78
Q

Identify 3 features of indirect distribution channels

A

1) insurers pay commission to intermediary
2) intermediary offer advice
3) insurers may delegate their underwriting authority to intermediary

79
Q

What is banassurance?

A

Banks sell insurance companies’ products

80
Q

Who are the MGAA

A

Managing General Agents’ Association - represents interests of managing general agents founded in 2012

81
Q

Who are the cii

A

Chartered institute of insurance

82
Q

Yo are the CILA

A

Chartered institute of loss adjuster

83
Q

Who are IFoA

A

Institute and Faculty of actuaries

84
Q

What are some of the disadvantages of direct marketing?

A

No independent advice

85
Q

What are some feature of direct marketing channels?

A

Reduced costs for sales staff

Greater sense of ease for the buyer

86
Q

What is an aggregator

A

A website that allows buyers to compare quotes from corporate insurance brokers & companies

87
Q

When can property damage be claimed under the untraced drivers agreement?

A

When the vehicle is identified but the driver is untraced

c i i m n k l o (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions