The Parties Flashcards
When a policyholder dies, who does the benefit of the policy pass to?
The Estate. Where there is a will - the Executors, without a will - the Administrators
What are the two ways a mortgagee can be noted on a policy?
Noted as a policyholder eg Mr A Smith & XYZ mortgage company as a mortgagee, or noted elsewhere in the policy (but not as a policyholder)
Where a policyholder commits fraud, how does this affect the rights of the mortgagee?
The insurer may still be bound to make a payment to the mortgagee as they still have a legitimate interest in the property
Which types of parties can refer complaints to the FOS?
Individuals, micro-enterprises, charities and trusts
What is the purpose of regulatory bodies eg the FOS
To promote confidence in insurance providers. Standards set by the body must be followed by suppliers in the supply chain eg Adjusters
What do underwriters consider?
All material on the potential risk including circs surrounding the risk. They will then decide whether to offer or refuse cover, or impose specific terms or conditions.
What is Lloyd’s of London? Describe how it works.
A marketplace where insurance is bought and sold. Regulated & supervised by the FCA. Members/Names combine into Syndicates. Line % signed on slip. Lead underwriter has delegate powers to bind ‘following market’
How does co-insurance differ from reinsurance?
Risk is shared equally by a group of insurers, rather than in layers. Lead co-insurer usually takes the largest proportion of the risk and agrees policy liability
Describe how reinsurance works
Insurers insure a risk again, passing on part of the risk. No direct relationship between original policyholder and reinsurer. Allows insurers to accept large risks while limiting their exposure.
Ceding - underwrites risk & issues policy docs, cedant- transfers a portion of the risk to a reinsurer
Which case law recognised that an intermediary can act for both insured and insurer at different stages of the claim
Stockton v Mason and the Vehicle and General Insurance Co Ltd and Arthur Edward (Insurance) Ltd
Who is a broker acting for if they have DA to handle and settle claims?
The insurer
Explain the role of Underwriting Agencies
An Agency underwrites business and places the risk with insurers or Lloyd’s underwriters. They do not hold the risk but act as an agent of the insurer.
What type of organisation is the FCA?
An independent, non-governmental body that derives its powers from the Financial Services and Markets Act 2000. The FCA board is appointed by the UK Treasury.
What is the role of the FCA?
Four objectives
plus
Legislative functions to make rules and issue codes, statements and guidance. FCA handbook sets out its rules incl PRIN, ICOBS, DISP (dispute resolution: complaints)
Describe the FOS
Independent public body set up under FSMA to adjudicate on individual complaints between consumers & businesses providing financial services. It aims to resolve matters:
Fairly
Reasonably
Quickly
Informally
Which parties are eligible to refer a claim to the FOS?
Individuals
Micro-enterprises and small businesses that employ fewer than 10 people and have a turnover not exceeding £6.5M
What will the FOS reference when making a decision?
What is fair & reasonable in all the circumstances of the case.
Not constrained by case law.
Can also make compensation payments.
Insurers are bound by the decision but policyholders aren’t and can still choose to take legal action.
Are Loss Assessors regulated?
Yes, by the FCA
When might a solicitor be appointed?
To provide legal advice dealing with:
The cause of a loss,
Policy interpretation,
Settlement.
Handle any legal action or ADR.
