IF1 Flashcards
A risk where there is possibility of a loss but not a gain
Pure Risk
A risk where there is chance of a gain
Speculative Risk
A risk that is localised or personal in its cause and effect
Particular Risk
A risk that occurs on such a vast scale that it is uninsurable
Fundamental Risk
An event that is accidental or unexpected and not inevitable
Fortuitous Event
That with gives rise to a loss
Peril
That which influences the operation or effect of the peril
Hazard
Each person’s side of the margin which supports the contract
Consideration
Acceptance of an offer which does not alter any of the terms of the original offer
Unconditional Acceptance
Acceptance of an offer where new terms are introduced, forming a counteroffer
Conditional Acceptance
The legal right to Insure arising out of a financial relationship recognised at law between the Insured and the subject-matter of Insurance
Insurable Interest
A legal term used for a bar or impediment that precludes a person from asserting a fact or a right arising when one party’s conduct has been relied upon by the other
Estoppel
The contract has been fully performed
Fulfilment
The dominant cause of a loss where there is a direct link between it and resulting loss
Proximate Cause
Financial compensation sufficient to place the Insured in the same financial position after a loss as they enjoyed immediately before the loss occurred
Indemnity
Non-indemnity policies that provide fixed benefits, mainly for sickness and accident
Benefit Policies
The policy term applied when there has been underinsurance
Average
A policy where the value of the subject-matter of Insurance is agreed at the start of the contract and the sum insured is fixed accordingly
Agreed Value Policy
A policy where the full value of the insured property is not at risk
First Loss Policy
An Insurer accepts an unknown future potential risk for an agreed premium
Risk Transfer Mechanism
The right of an Insurer to call upon others liable to the same insured to share the cost of an indemnity payment
Contribution
The right to stand in the place of another and avail all the rights and remedies of that other
Subrogation
The original insurer who is passing the risk to reinsurers
Cedant
The process whereby Insurers share a risk with other Insurers or with their own Insured
Co-Insurance
When two or more policies are in force which cover the same risk
Dual Insurance
A reinsurer obtaining reinsurance for itself
Retrocedant
Groups of private individuals or corporate investors who carry the risks
Syndicates
Companies where shareholders have limited liability
Proprietary Companies
An entity that is employed by a syndicate to appoint underwriters to write the risks and manage the day-to-day running of the syndicate
Managing Agents
The wider market that transacts insurance business in the London Market but outside of Lloyd’s
Company Market
An entity that ring-fences the assets of participating cells in a group to allow them to operate as distinct insurance entities
Protected Cell Company
Companies owned by their Policyholders
Mutual Companies
Insurance Companies who are solely insuring risks from parent/sister companies in the same group
Captives
Companies that accept a wide range of classes of business
Composite Company
The complete and final agreement of all terms between the Insured and the Insurer by the time that they enter into the contract
Contract Certainty
A non-traditional form of insurance that is compliant with the rulings of Sharia Law
Takaful Insurance
A specialist type of intermediary who has delegated authority to act for one or more Insurers
Managing General Agent
A requirement that companies have a solvency margin where assets must exceed liabilities
Capital Adequacy
A representative that is limited to distributing ‘non-real time financial promotions’ such as brochures
Introducer Appointed Representative (IAR)
An agreement outlining the contractual relationship between an Insurer and an intermediary
Terms of Business Agreement (TOBA)
Where a Third Party is not in a position to make a judgement about the extent of an agents authority
Apparent (Ostensible) Authority
An individual or a company that is appointed by an authorised person under the terms of the contract
Appointed Representatives
An intermediary that has been directly authorised by the FCA to provide independent advice
Authorised Persons
A broking firm can acquire access to centralised services and benefit from a formal alliance with other brokers
Broker Network
Companies that grow through formal acquisition of others within the marketplace
Consolidator
An arrangement between a bank and insurance company whereby insurance products are sold to the bank’s existing customers
Bancassurance
An act containing the law on disclosure and representations for non-consumer insureds
Insurance Act 2015
An act containing the law on disclosure and representations for consumers
Consumers (Disclosure and Representations) Act 2012
An act introducing a remedy for insureds who believe their claims have been paid late
Enterprise Act 2016
The extent of an agent’s authority - This can be expressed or implied
Actual Authority
