Regulatory processes, systems, & controls Flashcards
What do regulators require to show compliance with regulation?
Data evidence.
This evidence may be accompanied by any monies for taxes in certain countries.
What is the meaning of solvency?
The balance between assets and liabilities.
What is solvency relative to?
Solvency is relative to the class of business being written.
More volatile classes of insurance would require a heavier weighting on the assets side of the equation.
What is Solvency II?
The name given to the EU’s Europe-wide solvency rules.
What is the most important system & control for ensuring Solvency?
Training & education.
(of underwriters & brokers)
What is a Sanction?
It is a ‘ban’ from doing business with certain individuals, businesses, governments, or whole countries/regimes.
Who can sanctions apply to?
- individuals
- companies
- governments
- regimes
What is the main reason sanctions are imposed?
Sanctions are imposed to control the access to funds for regimes, companies or persons who are felt to be less than desirable because they have links to terrorism or other unlawful behavior.
Name some fundamental reasons sanctions are imposed?
- political pressure
- enforce respect for democracy
- enforce respect for human rights
- maintain/restore peace in a country/region
What are the 2 main types of sanctions that affect insurers?
- financial
- trade
What does OFSI stand for?
The Office of Financial Sanctions Implementation.
What does OFSI do?
OFSI is responsible for implementing international financial sanctions imposed by the UK.
Is it possible to have sanctions lifted?
Yes - there is a list of ‘lifted regimes’ on the OFSI website.
What insurers must comply with US sanctions too?
Any London Market insurer with a US parent company must comply with US sanctions too.
What act restricts US entities conducting business with Cuba?
The Helms-Burton Act 1996.
What is ‘piracy’?
Involves capturing a ship and her cargo and demanding a ransom for its return.
How do Lloyd’s insurers and brokers find out about sanctions?
Crystal system.
How does the London Market include sanctions in its policies?
Sanctions clauses.
What is an Embargo?
A trade ban.
What does the Export Control Order (2008) do?
Requires a license to be obtained for the movement of arms or military goods between 2 overseas countries.
When did the Data Protection Act (2018) & General Data Protection Regulation (GDPR) come into force in the UK?
Came into effect in the UK in May 2018 and replaced pre-existing data legislation.
What does a data ‘controller’ do?
Says how & why personal data is processed.
What does a data ‘processor’ do?
Processes personal data on the behalf of the controller.
What information does the GDPR apply to?
GDPR applies to personal data.
