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RO5 > The basics > Flashcards

The basics Flashcards

1
Q

Long term care- asset threshold

A

£23,250

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2
Q

Proportion of men off work through sickness or accident before retirement

A

1 in 5

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3
Q

What happens to debts of sole trader on death

A

passes to the estate

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4
Q

Key life changes which should trigger a protection review

A

divorce and change of employment

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5
Q

Divorce and wills

A

Divorce disinherits a named former spouse from a will

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6
Q

COBS applies to

A

all policies with an investment element

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7
Q

ICOBS applies to

A

all polices without an investment element

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8
Q

How did Mifid 2007 change rules

A

less prescriptive - more principles based- revised COBS and ICOBS

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9
Q

COBS RULES- RECORD KEEPING- PENSION TRANSFERS

A

INDEFINITELY

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10
Q

COBS RULES- RECORD KEEPING- OPT OUTS

A

INDEFINITELY

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11
Q

COBS RULES- RECORD KEEPING- FSAVCS

A

INDEFINITELY

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12
Q

COBS RULES- RECORD KEEPING- LIFE POLICIES

A

6 YEARS

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13
Q

COBS RULES- RECORD KEEPING- PENSION CONTRACTS

A

6 YEARS

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14
Q

ICOBS/COBS RULES- RECORD KEEPING- MIFID FIRMS

A

5 YEARS

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15
Q

ICOBS/COBS RULES- RECORD KEEPING- NON MIFID FIRMS

A

3 YEARS FOR MIFID EXEMPT FIRMS

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16
Q

COBS RULES– SUITABLITY- INVESTMENT-

A

REQUIRES A FINANCIAL ADVISER TO SELECT SUITABLE INVESTMENT PRODUCT IN LIGHT OF KNOWLEDGE OF CLIENTS CIRCUMSTANCES

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17
Q

ICOBS RULES- SUITABILITY- NON INVESTMENTS

A

REQUIRES A FINANCIAL ADVISER TO TAKE REASONABLE STEPS TO ENSURE THE RECOMMENDATION IS SUITABLEL TO THE CUSTOMERS DEMANDS AND NEDS A THE TIME ( EG LEVEL OF COVER, COST, EXCESS, LIMITATIONS AND CONDITIONS)

18
Q

COBS RULES- SUITABILITY REPORT

A

IF CUSTOMER BUYS, SELLS OR CHANGES A LIFE POLICY AS A RESULT OF ADVICE, THE ADIVSER MUST SEND A LETTER TO CUSTOMER CONFIRMATON TRANSACTION SUITABILITY- SUMMMARY OF CONSEQUENCES AND DISADVANTAGES

19
Q

ICOBS/COBS RULES- ON ANY PRODOUCT RE CHARGES AND COMMISSION

A

A FIRM MUST PROVIDE AN INITIAL DISCLOSURE DOCUMENT- INDEPENDANT OR RESTRICTED. DETAILS OF WAY CUSTOMER PAYS FOR ADVICE

20
Q

ICOBS/COBS RULES- PRODUCT DISCLOSURE- PACKAGED PRODUCTS

A

PRODUCT PROVIDER MUST PROVIDE A KEY FEATURES DOCUMENT-

21
Q

ICOBS/COBS RULES- WHEN MUST A KEY FEATURES DOCUMENT BE PROVIDED

A

BEFORE CLIENT COMPLETES AN APPLICATION FORM

22
Q

COBS RULES- PRODUCT DISCLOSURE FOR LIFE POLICIES

A

PRODUCT PROVIDER MUST SEND A POST SALE CONFIRMATION AND CANCELLATION NOTICE- MUST BE SENT WITH 14 DAYS OF CONTRACT BEING SIGNED AND CUSTOMER HAS 30 DAYS TO CANCEL

23
Q

ICOBS - PRODUCT DISCLOSURE

A

KEY FEATURS AND CANCELLATION NOTICES NOT AUTOMATICALLLY SENT FOR ALL POLICES WITHOUT AN INVESTMENT ELEMENT BUT THERE IS A STILL A RIGHT TO CANCEL WITHIN 30 DAYS

24
Q

COBS- CANCELLATION NOTICE WHEN SENT

A

MUST BE SENT WITHIN 30 DAYS STARTING ON THE DAY THE CONTRACT IS CONCLUDED- CUSTOMER THEN HAS 3O DAYS TO CANCEL THE CONTRACT

25
WHICH IS GREATER RISK- OFF WORK THROUGH SICKNESS OR DYING BEFORE RETIREMENT?
BEING OFF WORK THROUGH SICKNESS
26
RDR and sale of protection - affect of access to financial advice
Less access as bancassurance market shrinks and other companies move to high net worth fee model
27
Can commission be charged for protection
Yes
28
How many new term assurances bought directly from provider in 2016
140 000
29
2014 study by Pacific life re- which factors would prevent them buying insurance
Too expensive 40% Don't need it 18% Don't trust companies 13%
30
2014 Pacific ray research- how would most consumers buy insurance
Internet 45%
31
Demand for insurance driven by
Affordability Movements in housing market Income per head and various economic factors Whether they have dependants
32
Protection gap
Resources needed minus cover in place equals protection gap To maintain the living standards of dependants
33
Price elasticity of demand for mortality coverage
Minus 0.5 | Every 10% reduction in premium - there Had a 5% increase in level of sum assured people are prepares to buy
34
Morbidity
Relative incidence of a particular disease
35
Preferred life policies
Cherry picking risks | Establishes high fitness protocols
36
Effects of underwriting practices ( improved mortality)
Competitive premium rates Rate more lives and create different groups e.g. superselect Higher numbers declined as underwriting is stricter
37
How can you categorise risk
Severity of impact and likelihood of occurence
38
Most effective way of financing risk
Pooling the risk through insurance
39
Main drivers of sales of life insurance products at aggregate level
Affordability, housing, income per capita
40
Recent innovations in life product design are based on
Differential rates based on health
41
Preferred life policies and market distortion ?
Market will become complex, hard to get an indication of cost

RO5 (4 decks)

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