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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
Q

WHICH IS GREATER RISK- OFF WORK THROUGH SICKNESS OR DYING BEFORE RETIREMENT?

A

BEING OFF WORK THROUGH SICKNESS

26
Q

RDR and sale of protection - affect of access to financial advice

A

Less access as bancassurance market shrinks and other companies move to high net worth fee model

27
Q

Can commission be charged for protection

A

Yes

28
Q

How many new term assurances bought directly from provider in 2016

A

140 000

29
Q

2014 study by Pacific life re- which factors would prevent them buying insurance

A

Too expensive 40%
Don’t need it 18%
Don’t trust companies 13%

30
Q

2014 Pacific ray research- how would most consumers buy insurance

A

Internet 45%

31
Q

Demand for insurance driven by

A

Affordability
Movements in housing market
Income per head and various economic factors
Whether they have dependants

32
Q

Protection gap

A

Resources needed minus cover in place equals protection gap

To maintain the living standards of dependants

33
Q

Price elasticity of demand for mortality coverage

A

Minus 0.5

Every 10% reduction in premium - there Had a 5% increase in level of sum assured people are prepares to buy

34
Q

Morbidity

A

Relative incidence of a particular disease

35
Q

Preferred life policies

A

Cherry picking risks

Establishes high fitness protocols

36
Q

Effects of underwriting practices ( improved mortality)

A

Competitive premium rates
Rate more lives and create different groups e.g. superselect
Higher numbers declined as underwriting is stricter

37
Q

How can you categorise risk

A

Severity of impact and likelihood of occurence

38
Q

Most effective way of financing risk

A

Pooling the risk through insurance

39
Q

Main drivers of sales of life insurance products at aggregate level

A

Affordability, housing, income per capita

40
Q

Recent innovations in life product design are based on

A

Differential rates based on health

41
Q

Preferred life policies and market distortion ?

A

Market will become complex, hard to get an indication of cost

RO5 (4 decks)

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