ICOBS

Question 1

ICOBS 1 refers to:

A) Consumer protection.
B) Payment regulations.
C) Application.
D) Complaints process.

Answer 1

C) Application.

Question 2

ICOBS 2 refers to:

A) General Matters.
B) Product Information.
C) Cancellations.
D) Claims Handling.

Answer 2

A) General Matters

Question 3

ICOBS 3 refers to:

A) Product Information.
B) Distance Communications.
C) Intermediaries and Insurers.
D) Product Specific Rules

Answer 3

B) Distance Communications.

Question 4

ICOBS 4 refers to:

A) Information about the firm, its services and remuneration.
B) Fee disclosure.
C) Risk factors.
D) E-Commerce.

Answer 4

A) Information about the firm, its services and remuneration.

Question 5

ICOBS 5 refers to:

A) Liability.
B) Duty of Disclosure.
C) Identifying client needs & advising.
D) Sales process.

Answer 5

C) Identifying client needs & advising.

Question 6

ICOBS 6 refers to:

A) Policy details.
B) Consumer details.
C) Cancellations.
D) Product information.

Answer 6

D) Product information.

Question 7

ICOBS 6 (A) refers to:

A) Product specific rules.
B) Claims handling.
C) Underwriting process.
D) Intermediaries and insurers.

Answer 7

A) Product specific rules.

Question 8

ICOBS 7 refers to:

A) Cancellation.
B) Client details.
C) Hazards and perils.
D) Rating factors.

Answer 8

A) Cancellation.

Question 9

ICOBS 8 refers to:

A) Debts.
B) Transitional provisions and schedules.
C) Claims handling.
D) Record Keeping.

Answer 9

C) Claims handling.

Question 10

ICOBS 1: What is the general application rule?

A) The rule which Underwriters use to ensure the
information they have gathered is correct, thus
ensuring their assessment of the risk is optimal.
B) The general application rule refers to a firm carrying on
non-investment insurance contracts from an
establishment maintained by it (or its appointed
representative) which follows the following activities-
an insurance mediation activity, effecting and carrying
out contracts if insurance, managing the underwriting
capacity of a Lloyd’s syndicate as a managing agent at
Lloyd’s or communicating/approving a financial
promotion.
C) The general application rule refers to a firm carrying on
contracts of insurance from a business originally
underwritten by an insurer, where the aim is to ensure
solvency for all parties involved.
D) The general application rule refers to a firm making its
customer aware of the rights both parties hold in a
contract (through the intermediary) to ensure they are
aware of any rights they can apply as well as what the
insurer can apply, such as a subrogation clause.

Answer 10

B) The general application rule refers to a firm carrying on
non-investment insurance contracts from an
establishment maintained by it (or its appointed
representative) which follows the following activities-
an insurance mediation activity, effecting and carrying
out contracts if insurance, managing the underwriting
capacity of a Lloyd’s syndicate as a managing agent at
Lloyd’s or communicating/approving a financial
promotion.

Question 11

ICOBS 2: Policy holders can be separated into consumers and commercial customers because:

A) Consumers are policyholders acting for purposes outside of their profession, while commercial customers are not.
B) Consumers are restricted to private lines insurance, while commercial customers exist in all other areas.
C) Consumers hold policies which effect multiple parties, while commercial customers hold policies that only effect themselves.
D) They cannot be seperated.

Answer 11

A) Consumers are policyholders acting for purposes outside of their profession, while commercial customers are not.

Easy ways to identify and differentiate them are:
Consumers are:
1- Personal representatives, including executors, unless they are acting in a professional capacity, for example, a solicitor acting as executor.
2 - Private individuals acting in personal or other family circumstances, for example, as trustee of a family trust.

Customers are:
1- Trustee of a trust such as a housing or NHS trust.
2- Member of the governing body of a club or other unincorporated association such as a trade body and a student union.
3- Pension trustee.
4- A person taking out a policy covering property bought under a buy-to-let mortgage.
5 - Partner in a partnership hen taking out insurance for purposes related to his profession.

Question 12

ICOBS 3: Policy holders can be separated into consumers and commercial customers because:

A) Consumers are policyholders acting for purposes outside of their profession, while commercial customers are not.
B) Consumers are restricted to private lines insurance, while commercial customers exist in all other areas.
C) Consumers hold policies which effect multiple parties, while commercial customers hold policies that only effect themselves.
D) They cannot be separated.

Answer 12

A) Consumers are policyholders acting for purposes outside of their profession, while commercial customers are not.

Easy ways to identify and differentiate them are:
Consumers are:
1- Personal representatives, including executors, unless they are acting in a professional capacity, for example, a solicitor acting as executor.
2 - Private individuals acting in personal or other family circumstances, for example, as trustee of a family trust.

Customers are:
1- Trustee of a trust such as a housing or NHS trust.
2- Member of the governing body of a club or other unincorporated association such as a trade body and a student union.
3- Pension trustee.
4- A person taking out a policy covering property bought under a buy-to-let mortgage.
5 - Partner in a partnership hen taking out insurance for purposes related to his profession.

Question 13

ICOBS 4: What are the three elements of fee disclosure?

A)
1) A firm must provide its customer with details of any
fees other than premium monies for an Insurance
Mediation Activity.
2) The details must be given before the customer incurs
liability to pay the fee or before conclusion of the
contract (whichever is earlier).
3) To the extent that an actual fee cannot be given, a
firm must give the basis for calculation.
B)
1) A firm must send the customer ALL details of any
fees.
2) These details must be given before the conclusion of
the policy.
3) A firm does not have to provide the basis for their
calculation.
C)
1) A firm does not HAVE to send a customer any fee
details.
2) The firm can send the details after the customer
incurs liability; it is the customers duty to contact the
firm and ensure there are no outstanding fees.
3) A firm has to provide its basis for calculation IF the
customer requests it.
D)
1) A firm has to send the customer the details of any
fees they have incurred.
2) These details must be sent to the customer as soon
as they become liable, even if this is after the
conclusion of their contract.
3) The basis of calculation is to be given at the insurer’s
own discretion and delegated guidelines.

Answer 13

A)
1) A firm must provide its customer with details of any
fees other than premium monies for an Insurance
Mediation Activity.
2) The details must be given before the customer incurs
liability to pay the fee or before conclusion of the
contract (whichever is earlier).
3) To the extent that an actual fee cannot be given, a
firm must give the basis for calculation.

Question 14

ICOBS 5: What is the statement of demands and needs?

A) After the conclusion of the negotiation stage, a firm must specify, based on the information a customer provided, the demands and needs of that customer.
B) Prior the conclusion of a contract, a firm must issue a document to a customer which should specify what the firm requires the customer to do.
C) A document issued by an insurer which gives the customer details of any fees, contractual duties and clauses which are within their policy; to ensure the customer is aware of any demands and needs the company requires of them.
D) Prior to the conclusion of a contract, a firm must specify, on the basis of information provided by the customer, the demands and needs of that customer as well as the reasons for any advice given to the customer on that policy. The details must be modulated according to the complexity of the policy proposed.

Answer 14

D) Prior to the conclusion of a contract, a firm must specify, on the basis of information provided by the customer, the demands and needs of that customer as well as the reasons for any advice given to the customer on that policy. The details must be modulated according to the complexity of the policy proposed.

Also:

(1) A statement of demands and needs must be communicated:
(a) on paper or on any other durable medium available and accessible to the customer;
(b) in a clear and accurate manner, comprehensible to the customer; and
(c) in an official language of the State of the commitment or in any other language agreed by the parties.
(2) The information may be provided orally where the customer requests it, or where immediate cover is necessary.
(3) In the case of telephone selling, the information may be given in accordance with the distance marketing disclosure rules (see ICOBS 3.1.14 R).
(4) If the information is provided orally, it must be provided to the customer in accordance with (1) immediately after the conclusion of the contract of insurance.

Question 15

ICOBS 6: What are the six elements of product information:

A)
1) General Product Information Notes
2) Pre-Contract Information: General Insurance
3) Pre-and-Post Contract Information: Pure Protection
4) Pre-and-Post Contract Information: Protection Policies
5) Responsibilities of Insurers and Intermediaries
6) Policy Summary for Consumers
B)
1) General Product Information Notes
2) Pre-and-Post Contract Information: Financial
3) Pre-and-Post Contract Information: Personal Lines
4) Pre-and-Post Contract Information: Housing
5) Responsibilities of Insurers and Intermediaries
6) Policy Summary for Consumers
C)
1) General Product Information Notes
2) Pre-and-Post Contract Information: General Insurance
3) Pre-and-Post Contract Information: Pure Protection
4) Post-Contract Information: Protection Policies
5) Responsibilities of Insurers and Intermediaries
6) Policy Summary for Insurers
D)
1) General Product Information Notes
2) Pre-Contract Information: Financial
3) Pre-Contract Information: Personal Lines
4) Pre-Contract Information: Housing
5) Responsibilities of Consumers
6) Policy Summary for Insurers

Answer 15

A)

1) General Product Information Notes
2) Pre-Contract Information: General Insurance
3) Pre-and-Post Contract Information: Pure Protection
4) Pre-and-Post Contract Information: Protection Policies
5) Responsibilities of Insurers and Intermediaries
6) Policy Summary for Consumers.

Question 16

ICOBS 6A: Where a Guaranteed Asset Protection (GAP) policy is taken out, what information MUST the firm provide to the customer so they can make an informed decision?

A)
1) The total premium of the contract separate from
other prices.
2) Relevant policy documents including features and
benefits.
3) Whether or not the GAP policy is sold with vehicle
finance and note that GAP contracts are sold by
other distributors.
4) The duration of the policy.
5) Whether the GAP is optional or compulsory.
6) When the GAP can be concluded by the firm,
according to the ICOBS regulation.
7) The date the above information is issued to the
customer.
B)
1) The total premium of the contract.
2) Relevant policy documents including features and
benefits.
3) Whether or not the policy is sold with vehicle finance.
4) The duration of the policy.
5) Note that the GAP is ALWAYS optional.
6) When the GAP can be concluded by the firm.
7) When the GAP can be concluded by the customer.

C)
1) The total price of the contract.
2) All policy documents.
3) Note the GAP policy is sold with vehicle finance.
4) The length of the policy.
5) Note that the GAP is ALWAYS compulsory.
6) When the GAP can be concluded by the customer.
7) The date the above information is issued to the
customer.

D)
1) The premium of the contract.
2) Relevant policy documents including features and
benefits.
3) Note that GAP can be sold by other distributors.
4) The Duration of the policy.
5) Note that GAP is ALWAYS compulsory.
6) When the GAP can be concluded by the firm.
7) The date the above information is issued to the
customer.

Answer 16

A)
1) The total premium of the contract separate from
other prices.
2) Relevant policy documents including features and
benefits.
3) Whether or not the GAP policy is sold with vehicle
finance and note that GAP contracts are sold by
other distributors.
4) The duration of the policy.
5) Whether the GAP is optional or compulsory.
6) When the GAP can be concluded by the firm,
according to the ICOBS regulation.
7) The date the above information is issued to the
customer.

Question 17

ICOBS 7: What are the TWO rights to cancel for a consumer, where there is no reason given and no charge applicable?

A) The right to cancel applies to:
1) Where an insurer has has failed to issue
documentation correctly.
2) Within 14 days of the contract beginning.

B) The right to cancel applies to:
1) 30 days for a contract of insurance which is or has
elements of a pure protection or payment protection
contract.
2) 14 days for any other contract of insurance of
distance contract.

C) The right to cancel applies to:
1) Where an insurer has not issued documentation.
2) Where an insurer has issued incorrect
documentation.

D) The right to cancel applies to:

1) Where an insurer has breached GDPR.
2) 30 days for all insurance contracts.

Answer 17

B) The right to cancel applies to:
1) 30 days for a contract of insurance which is or has
elements of a pure protection or payment protection
contract.
2) 14 days for any other contract of insurance of
distance contract.

There are SIX exceptions to the right to cancel:

1) A travel and baggage policy or similar short-term policy of less than one month’s duration;
2) A policy the performance of which has been fully completed by both parties at the consumer’s express request before the consumer exercises his right to cancel;
3) A pure protection contract of six months’ duration or less which is not a distance contract;
4) A pure protection contract effected by the trustees of an occupational pension scheme, an employer or a partnership to secure benefits for the employees or the partners in the partnership;
5) A general insurance contract which is neither a distance contract nor a payment protection contract, sold by an intermediary who is an unauthorised person (other than an appointed representative); and
6) A connected contract which is not a distance contract.

Question 18

ICOBS 8: What are the TWO rules of motor vehicle claims handling?

A)
1) The firm of the person who caused the accident must
prepare a reasoned offer of compensation, even in
cases where the claim is still pending.
2) The firm to whom the claim for compensation has
been addressed must provide a reply to the points
made in the claim, whether or not liability has been
decided.

B)
1) The firm of the person who caused the accident must
make a reasoned offer of compensation in cases
where liability is not contested and the damages
have been contested.
2) The firm to whom the claim for compensation has
been addressed must provide a reasoned reply to
the points made in the claim in cases where liability
has been decided.

C)
1) The firm of the person who caused the accident (or
its claims representative) must make a reasoned
offer of compensation in cases where liability is not
contested and the damages have been quantified
2) The firm to whom the claim for compensation has
been addressed (or its claims representative) must
provide a reasoned reply to the points made in the
claim in cases where liability is denied or has not
been clearly determined or the damages have not
been fully quantified.
D)
1) The firm of the person who caused the accident (or
its claims representative) must make a reasoned
offer of compensation, even in cases where the
claim is still pending.
2) The firm to whom the claim for compensation has
been addressed (or its claims representative) must
provide a reasoned reply to the points made in the
claim in cases where liability has been decided.

Answer 18

C)
1) The firm of the person who caused the accident (or
its claims representative) must make a reasoned
offer of compensation in cases where liability is not
contested and the damages have been quantified
2) The firm to whom the claim for compensation has
been addressed (or its claims representative) must
provide a reasoned reply to the points made in the
claim in cases where liability is denied or has not
been clearly determined or the damages have not
been fully quantified.

Also note:

1) If liability is initially denied, or not admitted, within three months of any subsequent admission of liability, the firm must (directly, or through a claims representative) make a reasoned offer of settlement, if, by that time, the relevant claim for damages has been fully quantified.
2) If an injured party’s claim for damages is not fully quantified when it is first made, within three months of the subsequent receipt of a fully quantified claim for damages, the firm must (directly, or through a claims representative) make a reasoned offer of damages, if liability is admitted at that time.