CII IF1 Chapter 2

Question 1

Within the Lloyd’s market, what is the role of a managing agent?

Answer 1

It manages the underwriting of one or more syndicates.

Question 2

Under the Insurance Distribution Directive, an ancillary insurance intermediary does what?

Answer 2

distributes insurance even though its principal activity is not insurance distribution.

Question 3

What 5 components is the insurance market made up of?

Answer 3

CIRIB!
Comparison Websites
Intermediaries
Re-Insurers
Insurers
Buyers

Question 4

What are the 5 types of buyers of insurance? (A C ollective 3 P’s)

Answer 4

Associations and clubs
Companies
Private Individuals
Partnerships
Public Bodies

Question 5

What is the PRA

Answer 5

Prudential Regulation Authority

Question 6

A reinsurer will typically accept business from a[n] what?

Answer 6

insurance company.

Question 7

What is an insurer that buys reinsurance known as?

Answer 7

ceding office.

Question 8

Saki has a complex claim on her insurance policy that will require expert negotiation. Who is she most likely to use to assist her?

Answer 8

A loss assessor.

Question 9

Within the insurance industry, price comparison websites are known as what?

Answer 9

aggregators

Question 10

Legal expenses and business interruption are both examples of what type of insurance?

Answer 10

Pecuniary

Question 11

In legal terms, what is the name of someone who is authorised by one party to arrange a contractual relationship with another.

Answer 11

An Agent (Think travel agent)

Question 12

What is an aggregator?

Answer 12

A group of independent agencies that band together to combine premiums, giving its members the scale and advantages that are usually only available to the largest agencies.

Question 13

What is an example of a packaged insurance policy?

Answer 13

Shopkeepers’ insurance.

Question 14

Between which two parties must ‘contract certainty’ exist in the London Market?

Answer 14

The insured and insurer

Question 15

What best describes the main type of insurance risks dealt with in the London Market?

Answer 15

Complex or large worldwide risks.

Question 16

What does a loss adjustor do?

Answer 16

process more complex claims from start to finish on behalf of the insurer.

Question 17

Which regulator ensures that UK insurance companies have adequate solvency levels?

Answer 17

PRA

Question 18

Which organisation represents worldwide insurance and reinsurance companies that operate through London?

Answer 18

International Underwriting Association of London.

Question 19

Retroceding is the process of:

Answer 19

reinsurers transferring some of their risks to other reinsurers.

Question 20

Which role has responsibility for ensuring that an insurance company abides by the rules and regulations set down by the regulator?

Answer 20

Compliance oversight function.

Question 21

An intermediary that provides advice but does NOT need to be directly authorised by the UK regulator is a[n]:

Answer 21

appointed representative

Question 22

Who historically provided the financial backing for the Lloyd’s market?

Answer 22

Lloyd’s Names.

Question 23

Within a claim which person negotiates and works for the policyholder and solely for their benefit?

Answer 23

Loss Assessor

Question 24

How does an insured who buys insurance via direct marketing from an insurance company potentially benefit?

Answer 24

They may get lower premiums

Question 25

What is Bancassurance

Answer 25

an arrangement between a bank and an insurance company whereby insurance products are sold to the banks customers

Question 26

What are the 3 main types of reinsurer?

Answer 26

Specialist Insurance Companies that do not transact direct insurance business
Lloyds Syndicates
Insurance companies that also act as reinsurers

Question 27

Who are actuaries?

Answer 27

Professionally qualified persons who apply probability and statistical theory to problems of insurance, investment, financial and risk management.

Question 28

What do internal auditors do?

Answer 28

They monitor and evaluate how well risks are being managed, how well the business is being governed and internal process working.

Question 29

What is the LMA and what do they do?

Answer 29

Lloyds Market Association. They provide representation, information and technical services to underwriting businesses. Their main purpose is to identify and resolve issues.

Question 30

What is the LMRC

Answer 30

London Market Regional Committee

Question 31

What is the IUA (Of London) and what do they do

Answer 31

International Underwriting authority of London. They look to drive modernisation with digitisation and automation, deliver knowledge and expertise for innovating underwriting and claims handling.

Question 32

Which authorised body is dedicated to actuaries and provides manuals for actuarial practice along with issuing guidance?

Answer 32

Institute and Faculty of Actuaries

Question 33

Give examples of Commercial property insurance…

Answer 33

Perils and “all risks” policies
Engineering / breakdown
Glass
Livestock
Money

Question 34

What does Pecuniary mean?

Answer 34

Relating to money. (legal expenses, credit, business interruption, Fidelity Guarantee)

Question 35

What are the 3 main things marine insurance covers?

Answer 35

Hull, Cargo and Freight.

Question 36

Within the Lloyd’s market, risks are placed by means of a what?

Answer 36

A Market Reform Contract

Question 37

A surgery requires insurance to protect against professional negligence claims. Who are they most likely to arrange this with?

Answer 37

A specialist insurer

Question 38

An independent Intermediary is placing business for their clients, her services are unlikely to include what?

Answer 38

Actions on behalf of the insurer