LO5: Understanding the regulatory and legal requirements applicable to the transaction of insurance business Flashcards
reasons for compulsory insurance
- response to public concerns
- to provide funds
road traffic act 1988
- what it says
its illegal to cause/permit use of a vehicle on a public road or any other public place without third party property damage and third party bodily injury/damage
employers liability (compulsory insurance) act 1969
- what for
- exemptions?
- min liability insured?
- insures against their liability to compensate employees for injuries and disease caused by their employment
- family memebers, employees that dont ususally stay in the UK, governemtn agencies
-£5m, sold at £10m as standard
employers liability tracing office
used to identify insurers who cover certain employees
riding establishments act 1970
public liability insurance must be in place to indemnify the rider and public
professional negligence/ professional indemnity
- what professions
- solicitors
- accountants
- doctors
- dentists
usa’s employer liability is…
- covers
workers compensation
covers
- illness
- injury
- death
- wages
- rehab
worker gives up rights to sue for damages
usa compulsory motor insurance for…
commercial vehicles, not private ones
usa disability insurance
- required in some states
- pays out for injury/illness not associated with the job
turkey compulsory insurance
- property owner EQ
- motor
australia compulsory insurance
- motor (similar to uk)
germany compulsory insurance
any event for which german courts may consider one negligent (for third pary liability)
consumer rights act 2015
- what?
ensures law, terms and notices in consumer contracts are fair
unfair = causes significant imbalance in the the parties right and obligations to the detriment of the consumer
consumer rights act 2015
- how to make sure its fair
- transparent and prominent
- plain intelligible language
- legible
consumer rights act 1025
- unfair example
makes the traders commitments subject to compliance with a particular formality
contract (rights of third parties) act 1999
- what
- how
reformed privity rules, allows circumstances where a third party can have the rights to enforce terms of contract
contract must make express provision for enforcement or third party must be identified by name, class or description
can be contracted out by insurers
privity of contract
only those part to the contract can enforce the terms in it therefore third parties cannot sue for breach
insurance premium tax
- on?
- rates?
- exemption?
- on general insurance premiums in the uk paid by the insured
- standard rate = 12%
- high rate = 20% for travel insurance and those sold along with vehicle/electrical appliances like extended warranties
exemptions
- long term insurance
- reinsurance
- insurance in ships, aviation and international goods in transit
- risks located outside of the uk
senior managers and certification regime (SM&CR)
- applies to
- what?
- applies to insurers and intermediaries
- provides a regulatory framework for individual accountability with focus on the senior individuals
sm&cr requirements
- senior managers have statements of responsibilities stating areas for which they are personally accountable
- produce firm responsibility map thats knits these together
- ensure all senior managers are preapproved by regulators
bank of England and financial services act 2016
duty of responsibility = senior managers should take steps that a reasonable person in their position would take to prevent breaches
sm&cr parts
senior managers regime
certification regime
rules of conduct
senior managers regime
- applies to?
applies to those performing senior management functions which includes
- heads of key business areas (area that could have own senior management function or can effect safety and soundness of the firm)
- group entity senior manager (employed in group/parent company and can significantly influence firms affairs)
-significant responsibility functions (senior execs. responsible for certain functions or business areas where key risks exist)
certification regime
- applies to?
not smf (senior management functions) but can harm firm or customers in their role
- dont require outside approval by regulators (firms should assess fitness and propriety)
sm&cr first tier rules
individual conduct
- integrity
- due skill, care and diligence
- open and cooperative with regulators
- due regard to the interests of customers and treat them fairly
- observe proper market standards
sm&cr second tier rules
senior manger conduct
- reasonable steps to controlled effectively
- reasonable steps to ensure compliance with regulatory standards
- reasonable steps to delegate to the appropriate personnel
- disclose information fca or pra would expect
rolls outside of tier one
ancillary roles (not specific to financial services)
- hr
- secretarial staff
- switchboard operators
- receptionists
assessing individual fit and proper
- honesty, integrity and reputation
- financial soundness
- competence and capability, FCA requirements?
compliance officer
compliance oversight function
- reports to the governing body of firm
- fca and pra regulated
compliance officer roles
- communication of company policies
- organising training
- completion of regulatory returns such as governance, finance and complaints
- review company procedures
- maintain company compliance manual and ensure its followed
mlro
regulated by fca and pra
