summarise Flashcards
What is ISO 9001?
A: It is an international standard for Quality Management Systems (QMS), ensuring consistent quality in products and services.
Is ISO 9001 certification mandatory?
A: No, but many companies adopt it to enhance credibility and efficiency.
How does ISO 9001 benefit insurers and repairers?
A: It improves claims handling, repair quality, and customer service, reducing errors and complaints.
What is MID1?
A: The Motor Insurance Database for individual policies, updated by insurers within 48 hours.
What is MID2?
A: The Motor Insurance Database for fleet & motor trade policies, updated by policyholders within 14 days.
How long does CIFAS retain fraud data?
A: Between 1 to 6 years, depending on the severity of the fraud.
What is Proportional Reinsurance
A type of reinsurance where the reinsurer shares both premiums and losses in a fixed proportion with the insurer. Examples: Quota Share & Surplus Reinsurance.
What is Non-Proportional Reinsurance?
A type of reinsurance where the reinsurer only pays when losses exceed a specified amount. Examples: Excess of Loss & Stop Loss Reinsurance.
What is Facultative Reinsurance?
Reinsurance that covers individual risks on a case-by-case basis. Used for high-value or unusual risks where treaty reinsurance may not apply.
What is Treaty Reinsurance?
Reinsurance that covers multiple risks under a contract without individual underwriting. Example: Obligatory Treaty Reinsurance, where the reinsurer must accept all risks.
What are the two main types of rating methods in motor insurance?
Class rating (Tariff rating) and Individual rating.
What is Class (Tariff) Rating?
A method where risks are grouped into classes based on factors like age, vehicle type, and location. Premiums are set based on historical claims data for that group.
What is Individual Rating in motor insurance?
A method where the premium is calculated based on the specific risk factors of the insured, such as claims history, driving experience, and location.
What is Experience Rating in motor insurance?
A rating method where premiums are adjusted based on the past claims history of the policyholder or fleet.
What is Burning Cost Rating?
A method mainly used in fleet insurance where premiums are based on previous claims experience over a set period, usually the last three to five years.
What is Schedule Rating?
A method where underwriters assess multiple risk factors (e.g., driver history, vehicle security, business use) to determine the premium.
What is Loss Ratio Rating?
A method where the premium is based on the insurer’s past claims payouts compared to premiums collected, helping to ensure profitability.
What does backdating certificates mean in motor insurance?
Backdating certificates refers to the illegal practice of issuing a motor insurance certificate with a start date earlier than the actual date of issuance.
What is a tort in motor insurance?
A tort is a civil wrong (other than a breach of contract) that causes harm or loss, leading to legal liability.
What are the main types of torts in motor insurance?
Negligence – Failure to take reasonable care, leading to damage or injury.
Nuisance – Interference with public or private property (e.g., reckless driving).
Trespass – Unlawful interference with another person’s land or property.
The rehabilitation periods are as follows:
- Fine – one year.
- Endorsement* – five years.
- Penalty points – three years.
- Disqualification – the end of the disqualification period.
- Imprisonment is spent after periods varying between two and eleven years, depending on the length of custodial sentence, but sentences of more than four years are never spent.
What happens if a misrepresentation is deliberate or reckless?
Insurer can void the policy and keep the premium.
What happens if a misrepresentation is careless?
Remedy depends on what the insurer would have done if the correct information was given.
What if an insurer would have charged a higher premium?
Claim payout may be reduced proportionally.
What if an insurer would have applied an exclusion?
The claim may not be paid if it falls within that exclusion.
What if an insurer would not have offered cover?
The policy may be voided, and premiums refunded.
What are fixed costs in motor insurance?
Costs that do not change with the number of policies or claims (e.g., staff salaries, office rent, IT systems).
What are variable costs in motor insurance?
Costs that fluctuate based on the number of policies or claims (e.g., claims payouts, commissions, repair costs)
What organisation funds the Insurance Fraud Enforcement Department (IFED)?
The Association of British Insurers (ABI).
What is the difference between earned vehicle years and written vehicle years?
Earned vehicle years: Total exposure period for insured vehicles within a set timeframe.
Written vehicle years: Total number of policies starting or renewing within a set timeframe.
Can “Driving Other Cars” (DOC) extensions be used abroad?
No, DOC extensions only apply within British Isles.
What does the dual indemnity undertaking state?
If a driver has third-party cover under both a vehicle’s policy and a driving other cars (DOC) extension, the DOC insurer does not contribute to a claim.
What does the Untraced Drivers’ Agreement cover?
Compensation for death, injury, and property damage caused by an untraced driver, based on the balance of probabilities.
When does the MIB compensate a victim under the Uninsured Drivers’ Agreement?
When the at-fault driver is uninsured, and the MIB confirms their negligence.
What is the role of insurance engineers in vehicle repairs?
They assess repair costs, ensure quality repairs, and approve trusted repairers.
When will the UK ban new petrol and diesel car sales?
By 2030 (hybrids by 2035).
What is CIFAS?
A not-for-profit fraud prevention organisation in the UK that helps financial institutions, insurers, and other businesses detect and prevent fraud.
What is HPI in motor insurance?
Hire Purchase Investigation, a system that checks if a vehicle has outstanding finance, is stolen, or has been written off.
What is IFED?
A dedicated police unit funded by the ABI and UK insurers to investigate insurance fraud. It operates within the City of London Police.
What is the IFR?
A national database of proven insurance fraudsters, managed by the ABI to help insurers detect and prevent fraud.
What is IFIG?
A network of fraud investigators from insurers, police, and government agencies working together to combat insurance fraud.
How Many Years of Claims History Do Fleets Need for a Policy?
3-5 years depending on how big the fleet is
