Renewals & Cancellations Flashcards
What is the purpose of the renewal date in insurance?
It allows both the insurer and policyholder to reconsider the terms, conditions, and premium, with no obligation for renewal on either party.
Why are insurers keen to encourage policy renewal?
Improve statistical accuracy with stable portfolio
Cheaper to renew than acquire business
What does ICOBS Rule 6.1.5R state regarding renewals?
A firm must ensure customers are provided with appropriate information in good time and in a comprehensible form to make an informed decision about the renewal arrangements.
What are the FCA’s 2017 rules regarding renewal notices?
Insurers must disclose last year’s premium, encourage consumers to shop around, and provide additional messages for customers renewing for four consecutive years.
What does the Consumer Insurance (Disclosure and Representations) Act 2012 require during renewals?
Insurers must ensure consumers are aware of material information and remind them of the questions and answers from the proposal form when renewing.
What is the impact of the Consumer Rights Act 2015 on renewals?
The act requires transparent notices to customers, including renewal notices, and fair treatment regarding contract terms.
What is the goal of the Consumer Duty introduced in 2023?
To set higher standards of consumer protection, ensuring firms deliver good outcomes for consumers in terms of products, price, value, understanding, and support.
What does cancellation in insurance mean?
Cancellation defines how an insurer can cancel a policy, usually with at least 7 days’ notice, and may involve returning a proportionate amount of the premium.
What is the ICOBS 7.1.1R regarding policy cancellation?
Consumers have a 14-day cooling-off period after inception or renewal to cancel their policy and receive a refund.
What happens if a policy is canceled mid-term?
A short-period premium may be charged, and the insured might not receive a full refund, depending on the circumstances.
How does the Consumer Rights Act 2015 affect policy cancellation?
It ensures that administration fees for cancellation are not disproportionately high and requires the cancellation of ancillary policies if the primary policy is canceled.
What happens when an insured cancels a policy after making a claim?
If a claim occurred during the current policy period, no refund may be issued, as the insurer has fulfilled their side of the contract.
