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528 Cards in this Set

  • Front
  • Back
Under TPO private motor what is the maximum limit for third party property damage?
£20,000,000
What limit of indemnity is normally provided under and employers liability insurance policy?
£10,000,000
What is the minimum limit of indemnity legally required for EL?
£5,000,000
What is a flat premium?
No AP or changes during the year change the premium regardless of losses.
What is an adjustable premium likely used for?
Products Liability.
What is a flat premium likely used for?
Public Liability of Manufacturers.
Where would a Contractual Liability Exclusion apply?
Most likely in Motor.
What is the Operative Clause?
Sets out cover.
When Do docs have to be sent?
7days after renewal.
What is an Ex Gratia payment?
A favour payment.
in what insunrace is repair mostly used?
Motor.
What settlement option is used most infrequently?
Reinstatement.
How many days are needed of in patient treatment are needed for a significant personal injury.
4.
What does LAN Stand for?
Local Area Network.
How long are complaints retained for?
Three years from the complaint.
Give an example of someone who is not an eligible complainant.
A micro–enterprise of more than 10 people
What is a capital sum?
A lump sum paid as an initial fee or investment.
What is required for a valid theft claim?
Forcible AND violent entry or exit.
Where would the insured get free advice about their policy?
Insurer Helpline.
What are the limits of cover for a typical legal expenses policy?
Unlimited cover.
Limit per claim.
What isn't covered under baggage on a travel policy.
Contact lenses.
What is subsidence caused by?
Tree roots.
Glass insurance excludes breakage by what?
Fire lightning and explosion.
Insurance policies legal significance is as the what?
Evidence if the contract.
What is needed on a proposal form?
Insurers occupation.
What settlement is used for BI?
Money.
What is a router used for?
To manage the flow of electronic traffic.
What type of data is regulated used the DPA 1998?
Personal Data.
What is the limit for TP property damage throughout Commercial Motor insurance?
5million.
What is the limit for TP property damage thorough RTA (Car/Bike)?
1 million.
What is the limit for TP property damage throughout TP/TPFT/COMP (car/bike)?
20 million.
What are rating tables?
pre set homogeneous (general) rates calc by the actuary.
What is the main rating factor for money insurance?
amounts held / carried.
What are two optional extensions for a standard money policy?
Assault risks
Credit cards
Give two exclusions for theft cover.
looting
Livestock
What is the minimum upper limit insurers CaN impose on employers liability policies?
5 million.
Which liability policy is limited both per claim and I'm the aggregate per annum?
PI
What is the difference between claims occurring/arising and claims made?
occurring – must settle on the date of loss.
made – must settle on the time the claim is submitted
will public liability insurance cover loss or damage to property and will it cover consequential loss?
Yes and yes.
What is the typical limit of indemnity for public liability policids?
2m
Which two liability insurances operate on a claims made basis?
PI & DNO
Give 3 benefits to the insurer when selecting a reputable authorised repaired.
Quality
Price
Relationship
Give an example of physical risk control and financial risk control.
Physical – sprinkler system
Financial – self insurance funds
What is the professional body for risk managers?
AIRMIC
What material facts do not need to be disclosed?
Law
Public domain
waived: estoppel
lessen the risk
survey should have revealed
spent convictions
covered in policy terms
insured doesn't know
Under TPO private motor what is the maximum limit for third party property damage?
£20,000,000
What limit of indemnity is normally provided under and employers liability insurance policy?
£10,000,000
What is the minimum limit of indemnity legally required for EL?
£5,000,000
What is a flat premium?
No AP or changes during the year change the premium regardless of losses.
What is an adjustable premium likely used for?
Products Liability.
What is a flat premium likely used for?
Public Liability of Manufacturers.
Where would a Contractual Liability Exclusion apply?
Most likely in Motor.
What is the Operative Clause?
Sets out cover.
When Do docs have to be sent?
7days after renewal.
What is an Ex Gratia payment?
A favour payment.
in what insunrace is repair mostly used?
Motor.
What settlement option is used most infrequently?
Reinstatement.
How many days are needed of in patient treatment are needed for a significant personal injury.
4.
What does LAN Stand for?
Local Area Network.
How long are complaints retained for?
Three years from the complaint.
Give an example of someone who is not an eligible complainant.
A micro–enterprise of more than 10 people
What is a capital sum?
A lump sum paid as an initial fee or investment.
What is required for a valid theft claim?
Forcible AND violent entry or exit.
Where would the insured get free advice about their policy?
Insurer Helpline.
What are the limits of cover for a typical legal expenses policy?
Unlimited cover.
Limit per claim.
What isn't covered under baggage on a travel policy.
Contact lenses.
What is subsidence caused by?
Tree roots.
Glass insurance excludes breakage by what?
Fire lightning and explosion.
Insurance policies legal significance is as the what?
Evidence if the contract.
What is needed on a proposal form?
Insurers occupation.
What settlement is used for BI?
Money.
What is a router used for?
To manage the flow of electronic traffic.
What type of data is regulated used the DPA 1998?
Personal Data.
What is the limit for TP property damage throughout Commercial Motor insurance?
5million.
What is the limit for TP property damage thorough RTA (Car/Bike)?
1 million.
What is the limit for TP property damage throughout TP/TPFT/COMP (car/bike)?
20 million.
What are rating tables?
pre set homogeneous (general) rates calc by the actuary.
What is the main rating factor for money insurance?
amounts held / carried.
What are two optional extensions for a standard money policy?
Assault risks
Credit cards
Give two exclusions for theft cover.
looting
Livestock
What is the minimum upper limit insurers CaN impose on employers liability policies?
5 million.
Which liability policy is limited both per claim and I'm the aggregate per annum?
PI
What is the difference between claims occurring/arising and claims made?
occurring – must settle on the date of loss.
made – must settle on the time the claim is submitted
will public liability insurance cover loss or damage to property and will it cover consequential loss?
Yes and yes.
What is the typical limit of indemnity for public liability policids?
2m
Which two liability insurances operate on a claims made basis?
PI & DNO
Give 3 benefits to the insurer when selecting a reputable authorised repaired.
Quality
Price
Relationship
Give an example of physical risk control and financial risk control.
Physical – sprinkler system
Financial – self insurance funds
What is the professional body for risk managers?
AIRMIC
What material facts do not need to be disclosed?
Law
Public domain
waived: estoppel
lessen the risk
survey should have revealed
spent convictions
covered in policy terms
insured doesn't know
Under TPO private motor what is the maximum limit for third party property damage?
£20,000,000
What limit of indemnity is normally provided under and employers liability insurance policy?
£10,000,000
What is the minimum limit of indemnity legally required for EL?
£5,000,000
What is a flat premium?
No AP or changes during the year change the premium regardless of losses.
What is an adjustable premium likely used for?
Products Liability.
What is a flat premium likely used for?
Public Liability of Manufacturers.
Where would a Contractual Liability Exclusion apply?
Most likely in Motor.
What is the Operative Clause?
Sets out cover.
When Do docs have to be sent?
7days after renewal.
What is an Ex Gratia payment?
A favour payment.
in what insunrace is repair mostly used?
Motor.
What settlement option is used most infrequently?
Reinstatement.
How many days are needed of in patient treatment are needed for a significant personal injury.
4.
What does LAN Stand for?
Local Area Network.
How long are complaints retained for?
Three years from the complaint.
Give an example of someone who is not an eligible complainant.
A micro–enterprise of more than 10 people
What is a capital sum?
A lump sum paid as an initial fee or investment.
What is required for a valid theft claim?
Forcible AND violent entry or exit.
Where would the insured get free advice about their policy?
Insurer Helpline.
What are the limits of cover for a typical legal expenses policy?
Unlimited cover.
Limit per claim.
What isn't covered under baggage on a travel policy.
Contact lenses.
What is subsidence caused by?
Tree roots.
Glass insurance excludes breakage by what?
Fire lightning and explosion.
Insurance policies legal significance is as the what?
Evidence if the contract.
What is needed on a proposal form?
Insurers occupation.
What settlement is used for BI?
Money.
What is a router used for?
To manage the flow of electronic traffic.
What type of data is regulated used the DPA 1998?
Personal Data.
What is the limit for TP property damage throughout Commercial Motor insurance?
5million.
What is the limit for TP property damage thorough RTA (Car/Bike)?
1 million.
What is the limit for TP property damage throughout TP/TPFT/COMP (car/bike)?
20 million.
What are rating tables?
pre set homogeneous (general) rates calc by the actuary.
What is the main rating factor for money insurance?
amounts held / carried.
What are two optional extensions for a standard money policy?
Assault risks
Credit cards
Give two exclusions for theft cover.
looting
Livestock
What is the minimum upper limit insurers CaN impose on employers liability policies?
5 million.
Which liability policy is limited both per claim and I'm the aggregate per annum?
PI
What is the difference between claims occurring/arising and claims made?
occurring – must settle on the date of loss.
made – must settle on the time the claim is submitted
will public liability insurance cover loss or damage to property and will it cover consequential loss?
Yes and yes.
What is the typical limit of indemnity for public liability policids?
2m
Which two liability insurances operate on a claims made basis?
PI & DNO
Give 3 benefits to the insurer when selecting a reputable authorised repaired.
Quality
Price
Relationship
Give an example of physical risk control and financial risk control.
Physical – sprinkler system
Financial – self insurance funds
What is the professional body for risk managers?
AIRMIC
What material facts do not need to be disclosed?
Law
Public domain
waived: estoppel
lessen the risk
survey should have revealed
spent convictions
covered in policy terms
insured doesn't know
What are the three types of data?
1) Public data.
2) Corporate data.
3) Personal data.
What is public data?
Data available to anyone.
What is corporate data?
Relevant details of customers, suppliers, products, payments made to employees and financial information on the company itself.
What is personal data?
This relates to individuals.
How many data protection principles are there?
8
What is sensitive data?
Someone's ethnicity, religious beliefs or sexual orientation.
What basic principles must be followed for information held?
1) Restricted access.
2) Files saving and back ups.
3) Source documentation retention.
4) Protection against theft.
5) Copyright.
6) Use of passwords.
7) File disposal.
What must corporate data be protected from?
Malicious alteration, deliberate destructive acts and industrial espionage.
What must personal data be protected from?
Being used for blackmail or unauthorised disclosure.
Can you transfer personal data to a country outside the European economic area?
You can if they have an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data.
What three criminal offenses were introduced in the Computer Misuse Act 1990?
1) Unauthorised access to a computer.
2) Unauthorised access to a computer with intent to commit serious crime.
3) Unauthorised modification of computer material.
What are telematics?
Black box. Shows how the car is driven etc.
Average Formula
sum insured
–––––––––––––––––––
Contribution Condition (Rateable Proportion)
policy sum insured
–––––––––––––––––––––––––––––
Rehab Period
Length of Sentance
+
Buffer Period
=
Rehab Period
What is the ABI?
Principle body representing insurers carrying on business in the United kingdom.
What is the attachment date?
The date at which the insurers responsibility for the risk commences.
What is a benefit policy?
A contract to pay a sum of money in the event of defined contingencies occurring.
What is buy back?
An element of cover specifically excluded from the cover provided by a property policy, but which can be covered by pay in an additional premium.
What is a capital sum?
A lump sum benefit.
What is a combined policy?
A single policy which has a combination of optional covers with a premium that represents a discount for packaging.
What is a condition?
A provision in the policy that must be complied with.
Who is a consumer?
Anyone who Is a current of potential buyer of insurance.
What is contribution?
The right of an insurer to call upon other insurers that may be liable to share the cost of indemnity payment.
What is customer service?
The broad range of activities that a company and it's employees undertake in order to keep customers satisfied.
Define: Damages.
Compensation for a loss or damage to property and or death or injury.
What is data?
Information recorded in a durable medium.
What is a database?
A software package used to maintain and manilipulate data.
What is data material?
Any document or other material used in connection with or produced by data equipment.
What is a data subject?
An individual who is the subject of personal data.
What is a data user?
A person who holds data.
What is a declaration?
A statement signed by the proposer at the end of a proposal form certifying the accuracy of the information given.
What is an employee?
Any person who is under a contract of service or apprenticeship.
What is an excess?
The first amount payable for each claim.
What is an exclusion?
A provision that excludes the insurers liability to pay a claim in certain circumstances.
What is goods in transit insurance?
All risks cover for property being loaded into, carried on or unloaded from motor vehicles and trailers.
What is indemnity?
The legal principle that the insured should be restored to the same financial position after the loss.
What is liability insurance?
Insurance to cover the legal liability of the insured to the extent of such liability, but subject to any limitation expressed in the policy.
Who is a loss adjuster?
Someone who investigates claims on behalf of insurers.
What is a material fact?
A fact that would affect the risk.
What is negligence?
Omission to do something a reasonable person would do.
What is onus of proof?
The duty imposed on an individuall to produce evidence to prove the truth.
What is own damage?
Insurance cover for damage to the insurers own vehicle.
What is a package policy?
A single contract incorporating a combination of insurance covers with limited scope for change.
What is pecuniary insurance?
The insurance of intangibles such as income, revenue or value.
What is personal data?
Data consisting of information which can be used to identify a person.
What is a representation?
A statement of fact made by the insured when negotiating an insurance contract.
What is sensitive data?
Personal data that concerns such Things as someone's ethnicity, religious beliefs, health or sexual life.
What is subrogation?
The right of an insurer to take over the insureds rights following payment of a claim to recover the payment from a third party responsible for the loss.
Who does the onus of proof rest on?
The insured.
What two things does the insured have to provide as proof?
1) That an insured peril arose.

2) The amount of the loss.
What responsibilities does the insurer have for a valid claim?
1) That cover was in force.

2) The insured is named in the policy.

4) The peril is covered.

5) Insured has taken reasonable steps to minimise loss.

6) Conditions and warranties are complied with.

7) Utmost good faith is complied with.

8) No exceptions are appropriate.

9) The value of the loss is reasonable.
Can a claim be valid but only partially met?
Yes.
What terms and conditions would make a claim only partially met?
1) Sums insured or limit of liability limiting the maximum amount recoverable.

2) Operation of the average clause.

3) Voluntary or compulsory excess.
What are implied duties?
Imposed at common law whether or not they are found In the policy wording.
What are four examples of implied duties?
1) To act uninsured.

2) To advise appropriate authorities where appropriate.

3) Must take all steps to prevent a loss.

4) Must not hinder claims investigations.
What are expressed duties?
Found in the claims conditions section of the policy.
What happens if you breach express duties?
Insurer can repudiate the relevant claim.
What are claims procedures & action by the insured conditions?
Sets out the duties of the insured on the happening of the event insured against.
What actions are required by the insured under the claims procedures & action by the insured conditions?
1) Prompt notification to the insurer.
2) Involvement of the police if appropriate.

3) Reasonable prevention of further damage.
What is the purpose of a claim form?
1) Establish whether the insured is entitled to indemnity.

2) Provide sufficient information for the insurer.

3) For the insurer to estimate damage.

4) Insurers to see if it is likely a third party will claim.

5) Insurers can see if they have recovery rights.
What does motor insurance use instead of a claim form?
An accident form.
What supporting evidence is needed for theft claims?
Possible to compare details of the property stolen.
What supporting evidence is needed for accident claims?
In factory it may be desirable to obtain an engineer's report.
What supporting evidence is needed for personal injury and sickness clains?
1) Medical evidence.
2) Doctors certificate.
What supporting evidence is needed for motor claims?
Vehicle registration document is needed in the event of a total loss claim.
Who pays a loss adjuster?
The insurers.
Who pays a loss assesor?
The insured.
What are loss adjusters experts in?
Processing claims from start to finish.
What is subrogation?
The right of an insurer to chase third parties for recovery.
What does the arbitration condition deal with?
Disputes as to whether or not liability exists.
What is a narrative type of policy?
Prepared by hand and specific to the insured.
What is scheduled policy?
Pre–printed booklet with a schedule incorporated at the end of the policy.
What is a recital clause?
The rectial clause is the basis of the contract.
What are operative clauses?
They describe thr scope of the cover in detail.
what are the two types of conditions?
Express & implied.
What are four implied conditions?
1) The insured must act uninsured.

2) The insured may be required to advise the appropriate authorities depending on the circumstances.

3) The insured must take reasonable action but not if this endangers the insured.

4) The insured must not hinder the insurer in investigations of claims.
What are specific exclusions?
These apply to particular parts of the policy.
What are general exclusions?
These apply to the entire contract.
What are market exclusions?
Exclusions which are common to all general insurance policies.
What are 6 Market exclusions?
1) War and related perils.

2) Riot and civil commotion.

3) Radioactive contamination and explosive nuclear assemblies.

4) Terrorism.

5) Pollution and or contamination.

6) Marine policies.

7) Contractual liability.

8) Sonic bangs.
What is the war and related perils ME?
Damage caused by the perils of war, civil war etc.
What is the riot and civil commotion ME?
Damage caused by the perils of war, civil war etc.
What was 'Pool re'?
A mutual re insurance company providing limited cover for property damage and business interruption resulting from fire or explosion caused by terrorism.
What is the terrorism ME?
Loss destruction or damage from terrorist attacks.
What is the sonic bangs ME?
Damage from sonic bangs.
What is the duties of the policyholder condition?
This condition states that the insured must observe and fulfill all the terms of the policy.
What is the alteration condition?
It extends the duty of disclosure to be a continuing one.
What is the action by the insured in the event of a claim condition?
Sets out the procedures to be followed In the event of a claim.
What is the fraud condition?
All benefit under the policy is forfeited if fraud is found.
What is the reasonable precautions condition?
This formulises the implied condition by stating that the insured must take all reasonable care and precautions to minimise the risk of loss or damage.
What is the contribution condition?
Insurers can contact other insurers to pay their rateable proportion.

Only found in indemnity policies.
What is the average condition?
Reduces the claim payments in proportion to the under insurance.
What is the subrogation condition?
The insurer can go after third parties after a claim to recover the payment.
What is the arbitration condition?
This deals with any disputes w/r to whether or not liability exists.
What is the cancellation condition?
States that the insurer has to send a cancellation notice by recorded delivery to the insured last know address.
What is the customer service standards statement?
It details what the insured may expect In respect of service provided.
What are complaints procedures?
Includes reference to internal procedures by encouraging policyholders to write to a nominated person within the insurers organisation in the first instance.
What are the two types of excess?
1) Compulsory.

2) Voluntary.
What Is a deductible?
A large excess.
What are franchises?
Acts like a gate/threshold to determine if claims are payable.
What is a warranty?
An undertake by the insured that:
1) Something will or will not be done.

2) A certain fact exists or does not exist.
What happens when a warranty is breached?
The insurer is discharged from their liability from the date of the breach.
What are expressed warranties.
It is specified in the policy.
What are two examples of express warranties?
1) Fire inusrance warranties.
2) Theft insurance warranties.
What is an implied warranty?
A warranty that does not appear in the policy but which is understood by both parties.
Where are implied warranties found?
Only in marine insurance.
What are the two types of conditions?
Expressed or implied.
What are the categories of conditions?
1) Precedent to the contract.

2) Precedent to liability.
What are conditions precedent to the contract.
These must be fulfilled prior to the formation of the contract.
What are continuing conditions precedent?
An ongoing requirement to comply.
What are conditions precedent to liability?
Must be complied with if there is to be a valid claim.
What are exclusions used for?
Used to define the extent of policy cover.
What are representations?
Statements made by the proposer to persuade an insurer to enter into a contract on particular terms.
When are representations made?
During the negotiation period.
What is it called when a proposer provides wrong information?
A misrepresentation.
Do representations appear in the policy itself?
No.
Do exclusions appear in the policy?
Always.
Why do insurers want to renew polices rather than get new business?
Costs less.
What three regulatory bodies were introduced in the financial services act 2012?
1) The financial conduct authority.
2) The prudential regulation authority.
3) The financial policy committee.
What is contact certainty?
The complete and final agreement of all terms between the insured and the insurer by the time they enter into the contract, with contract documentation provided promptly thereafter.
What are other categories of intermediary are there?
1) Appointed representatives.
2) Introducer appointed representatives.
3) Wholesale broker / intermediary.
What are the two principal types of tobas?
1) Those individually entered into with insurers.

2) If the intermediary is a Lloyds broker, with Lloyds syndicates.
What do tobas determine?
The nature of the relationship, authority levels and financial aspects.
In negotiations between insurer and client who must they assume the client is?
A consumer.
If the person is in he capacity of both consumer and commercial client what are the entitled to?
The limited rules for a commercial client.
What must be given to the client prior to completion?
An initial disclosure document.
What are the standard means of communication?
Unless stated otherwise information must be provided in a durable medium like paper.

If completed verbally a paper version must be sent immediately after
What are distance communication with consumers governed by?
The distance marketing directive.
What must be provided by the intermediary before a recommendation?
The demands and needs.
Does the FCA require mandatory disclosure of commission?
No.
What are pure protection policies?
These are insurance contracts where benefits are only payable on death or in respect of incapacity.
What are two examples of pure protection policies?
1) Life policies.
2) Critical illness polices.
What are payment protection policies?
These are insurance contracts whrte the benefits are designed to protect a policyholders ability to continue to make payments they owe to third parties.
What are quotations based on?
Material facts.
What does EDI stand for?
Electronic data interchange.
What is the main function of EDI system's?
To obtain quotations for prospective policyholders.
In what type of insurance is EDI common?
Motor.
Give two examples where cancellation rights do not apply.
1) A travel and baggage policy of less than one month duration.

2) A general insurance contract which has been fully completed.
What four things must be given to a commercial client before the conclusion of the contract?
1) Appropriate information in good time.

2) The law applicable to the policy.

3) Arrangements for handling complainants.

4) Address of the head office.
What does contract certainty define promptly as?
Within 30 days of commencement.
What do you use instead of prop forms for large risks?
Presentations and surveys.
What is a premium?
The amount paid to an insurer in consideration of the insurer agreeing to cover the risk.
What are insurers no longer allowed to do from 2012?
Take account of gender.
What does the law of large numbers state?
Where there is a large number of a similar situation the actual number of events occurring tends towards the expected number.
How are premiums calculated?
By applying a premium rate to a premium base.
What is household insurance rated on?
Sums insured.
What is EL rated on?
Wage roll.
What is PRL rated on?
Turnover.
What is PI rated on?
Fees earned.
What is an adjustable premium?
The insured is able to estimate the total wage bill for the coming year.

The rate is applied to he estimated figure and, at the end of the year the insured submits a deceleration showing the actual wages paid.
What helpline would a household policy have?
Assistance with:
1) Legal advice.
2) Emergency services.
3) Glazing servives.
What helpline would travel insurnace have?
24hour multi lingual medical emergency service.
What kind of helpline would pet insurnace have?
Free helpline offering;

1) Vet surgeon.
2) Legal advice.
3) Bereavement counselling to owners.
4) Replacement pets.
What benefits are helplines to insurers?
Insurer can:
1) Manage the speed of help.
2) Manage the standard of work.
3) Manage the costs involved.
What are authorised repairers?
Many motor insurers have arrangements with nominated repairers who, because a certain amount of work is guaranteed allow a a price reduction on both parts and Labour.
What are the benefits of authorised repearers?
1) Collection and delivery of he vehicle.
2) No requirement to obtain repair estimates.
3) Provision of a loan car whilst repairs are carried out.
What are the benefits of authorised suppliers?
1) Insured obtains the benefit of the guarantees provided by the retailer.

2) Insurers benefit from the preferential rates that are available to then for such outlets.

3) There is no need for negotiation on price.
What is the surveyor concerned with on fire and special perils risks?
The physical aspects of storage and the manufacturing processes.
What will the surveyor consider for business interruption?
Aspects that may be unique to BI cover such as bottlenecks in the production processes.
Is it unusual for surveys to be carried out for money insurance?
Yes.
Can surveys be carried out for EL?
Yes to provide advice upon employers liability risk.
What two categories do public liability risks fall into?
Risks related to the premises and risks away from the premises.
What recommendations do insurers make for PRL?
1) Storage arrangements.
2) Labeling for clarity.
3) Packaging.
4) Warning notices.
5) Quality control methods.
What recommendations are made for engineering policies?
Specialist engineers will advise on requirements and recommendations relating to the physical condition of the particular plant or machinery.
FPA provides... What?
Advice and guidance In specialist areas whereas the Abi provides consumer information for free.
Where is the legal definition for 'materiall fact' found?
The marine insurance act 1906.
What is a material fact?
Any fact of circumstance which would affect the judgement of a prudent insurer in considering:

1) Whether to accept the risks.

2) If willing what rates are applicable.
What does the proposer have a duty to do?
State facts relating to the risk.
What facts do not need to be disclosed?
1) Facts of law.

2) Facts that lessen the risk.

3) Facts that a survey should have revealed.

4) Facts of public knowledge.

5) Facts where the insurer has waived its rights.

6) Facts that the insured does not know.
What over facts do not need to be disclosed?
Spent convictions.
What are spent convictions?
Facts that are treated as never having happened and therefore do not need to be disclosed.
What does the consumer insurance act 2912 do?
This act effectively brings unto law the regulators and financial ombudsmans approach to non–disclosure and misrepresentation by consumers.
What is the primary task of underwriting?
To assess the risk which each individual brings to common pool.
What is a physical hazard?
This relates to the physical characteristics of the risk.
What are good and poor physical hazards?
Good physical hazards are likely to reduce the likelihood of loss of severity.

Poor physical hazards are likely to increase the incidence of losses or the potential severity.
What is a moral hazard?
A moral hazard relates to the human aspects that may influence the outcome of the risk
What is a proposal form?
It is the most common mechanism by which the underwriter receives information regarding the risk.
What does the consumer insurance act 2012 do?
Places an onus on the insurer to ask all the relevant questions when dealing with a consumer.
What should proposal forms be?
Simple to understand and easy to complete.
What are other ways of getting information?
Surveys and supplementary questionnaires.
What is a slip presentation?
This carries the full risk in a recognised format and is often used in London market placing.
What does the employer's liability act 1969 stipulate?
That employers must be insured against liability for bodily injury or disease sustained by their employees arising out and in the course of their employment.
What did the employer's liability regulations 2008 change?
It removed the requirement to display a certificate of insurance at each place of business.
What does ELTO stand for?
Employers liability trading office.
What does ERN stand for?
Employer reference number.
What do ELTO members have to do?
Have to supply policy data on all new and renewed policies effective for the first time on or after the 1st April 2011.
What do EL policies cover?
1) Damages in respect of bodily injury to, or death, disease or illness sustained by any person under a contract of service or apprenticeship with the insured.

2) Caused during the period of insurance.
3) Arising out of and in the course of their employment by the insured.
4) In connection with the trade or business.
5) Occuriung within certain territorial limits.
What does EL legal liability cover?
The policy only indemnifies the insured in respect of their legal liability to pay damages.
When will someone be entitled to compensation?
If they suffer injury as a result of their employers negligence or breach of statutory duty.
Why are claims settled outside of court often?
To avoid unnecessary legal costs.
Are claimants costs covered for EL?
Yes.
What is the definition of an employee?
Any person who is under a contract of service or appeniceship.
When does the injury have to arise for EL to be covered?
It must arise during the employment.
What does the injury have to be in connection with for EL?
Must be in connection with the trade or business.
When does cover apply for EL?
Cover only applies during the period of insurance. Even If the illness doesn't become apparant until year's after.
Why are there few standard exclusions for EL?
They are not permitted by the EL compulsory insurance legislation.
Why might EL cover be limited?
As part of the under writing process in terms of applying trade clauses.

1) By restricting the definition of business.
2) By excluding certain kinds of work.
3) By excluding certain machines and or processes.
What are EL policies rated on?
Wages for different categories of Job types.
Why is PL an open policy?
It is an open policy and is defined by the exclusion of specific perils.
What is PL designed to do?
Designed to compensate an insured in respect of claims for legal liability from members of the public who suffer damage due to the insured negligence.
What is the standard cover for PL?
Provides indemnity to the insured for legal liability to third parties for damages.
What does the legal liability in PL standard cover cover?
It covers all forms.
What does injury to persons relate to?
1) Any form of physical of medical.

2) Impairment.

3) Death, illness, disease etc.
What does PL cover for loss of or damage to property?
Only the risk of physical damage to material properly.
Excludes cover for intangibles or indirect economic loss.
what does consequential loss cover in PL?
Covers losses directly flowing from accidents resulting in injruy or damage to property.
What is the limit of indemnity for PL?
The maximum amount insurers are prepared to pay following a claim is specified in the policy.
What are the optional extensions for PL?
1) Tenants liability.

2) Defective premises.
What is the tenants liability extension for PL?
It covers legal liability for loss of or damage to leased or rented premises.
What is the defective premises extension for PL?
Covers legal liability for defects in premises that have been owned or occuef as long as the insurance remains in force.
What are the basic features of PRL?
Covers liabilty to customers for injury illness and loss or damage arising from the supply of goods.
How does damage occur in the products for PRL?
1) Inadequate design.
2) Faulty manufacturing.
3) Inadequate instructions.
4) Contamination.
What is the standard cover for PRL?
Covers liability for bodily injury occurring from your products.
Does PRL cover consequential loss?
Yes only if these from directly from loss of damage.
Is financial loss covered for PRL?
Not usually unless it results from bodily injury.
When does the damage have to occur for PRL?
During the insurance.
Are they subject to a limit of indemnity for PRL?
Yes it is chosen by the insured.
What are the limitations for PRL?
1) Doesn't cover calling back goods.
2) Doesn't cover faulty design.
3) Doesn't cover if product isn't fit for purpose.
What is a director's primary duty for D&O?
To the company not the shareholders.
What does the companies act 2006 do with regards to D&O insurance?
It means they are required to act honestly and in good faith and to carry out their dutie with reasonable care and skill.
What are the director's duties for D&O?
1) To act within powers.

2) To promote the success of the company.

3) To exercise independent judgment.

4) To exercise reasonable care skill and dillengence.
5) To avoid conflicts of interest.

6) No to accept benefits from third parties.

7) To declare and interest in any transaction with the company.
What does the companies act 2004 do?
Allows companies to help financially while litigation or other proceedings are going on.
What did the companies act 1985 do?
Restricts the indemnity that a company could make to its diectors?
What is the standard cover for D&O?
1) Cover for D&O in their personal capacity when they are unable to claim and indemnity from the company.

2) Cover to protect the company in circumstances where it's is permitted to indemnity the D&O.
What is the basis of cover for D&O?
Claims made.
What is an annual aggregate?
One single limit for all the claims against all the insured during the policy year.
Does D&O cover one person?
The policy cover past present and future directors.
What are the main exclusions for D&O?
1) Prior notification.
2) Prior and pending litigation.
3) A jurisdiction clause.
4) Bodily injury and property damage.
5) Pollution and contamination.
6) Claims based on improper personal gain by a director.
7) Fraud or dishonesty of a director.
8) Insured v insured.
9) Breach of professional duty.
10) Fine penalties and punitive damages.
What are the basic features for PI?
Protects a professional person against claims which might be made alleging that injury or loss resulted from their actions or advice.
Examples of a PI risk?
1) A broker may confirm cover but not arrange it.
2) An investment surveyor may give incorrect advice resulting in financial loss.
3) A surveyor may give advice resulting in the purchase of a defective policy.
Whar is the standard cover for PI?
Covers the liability of members for injury damage or financial loss.
What basis are PI policies on?
Claims made.
What are the extensions for PI?
1) Liability for financial loss caused by loss of document.
2) Liabity for breach of authority.
Exclusions for PI?
Normally only excludes dishonesty of the insured.
What are the two types of cover for TI?
1) Pension find trustees.

2) Charity trustees.
What are the basic features for TI?
1) To cover court awards against trustees.
2) Losses to the pension filings and the employer's plus defence costs.
Is theft of fund assets covered for TI?
Yes.
What must charity trustees have?
A document setting out a charity purpose and it's administration.
What does the trustee act 2000 give?
It gives the trustees of a charity the power to insure any property which is subject to the trust against risk of loss or damage.
What are the basic features for Charity Trustees?
1) Cover the management risk incurred by charities and their trustees.

2) Cover goes beyond that of a fidelity guarantee policy and provides a personal indemnity to the trustees.
What is the standard cover for TI?
Cover for trustees against risk of personal liability, whether to the charity or a third party, arising from their breach of trust.
When has legal expenses insurance been available in the UK?
Since the mid 1970s.
What is legal expenses insurance?
Provides indemnity for costs arising out of the need to seek legal action or to pursue or defend a claim.
What are civil actions?
Actions that are not prosecuted in the criminal courts.
What crimes are punished by the state?
crimes that involve some kind of punishment for wrongdoers.
What situations do civil actions tend to relate to?
Situations where one party is seeking legal redress such as compensation for injury or damage or perhaps a different remedy, such as injunction.
What are the two main types of cover for legal expenses?
1) Large benefit policies.
2) Commercial legal protection policies.
What are group legal benefit policies?
Operate on behalf of a company, and the immediate family of each member.
What does employment cover cover?
1) Defence of any claim or legal proceedings brought against a member arising out of and in the course of their employment.

2) Defence and compensation awards resulting from actions brought under specified legisllaion.

3) Costs of claims compensation arising out of the members employment.
What is conveyancing cover?
Covers the legal costs involving in buying and or selling one's house.
What is personal cover?
Covers the costs to pursue personal rights or defend a personal action against the member.
What is motor legal cover?
Covers he costs of defending claims arising out of the ownership or use of the vehicle.
CLP What is employment cover?
Covers the costs of defending an action by an employee against the firm for unfair dismissal of racial or sexual discrimination.
CLP What is criminal prosecution defence cover?
Covers the costs of defending an action brought against the company.
CLP What is property disputes cover?
This covers disputes incurred in disputes between for example landlord and tenant.
CLP What is motor cover?
1) Pursuing uninsured loss recovery after a motor accident.

2) Pursuing or defending actions brought in connection with the purchase sale lease hire service test or repair of the vehicle where a disputes has arisen.

3) Pursuing damages following a road accident.

4) Defending motoring prosecutions.
CLP What is patents registered designs copyright and trademarks cover?
Covers costs incurred in pursuing an action against any person alleged to be guilty of infringing the insured interest In patents.
CLP What are the optional extensions
1) Legal and slander protection.

2) Cover against the costs of involvement in public enquiries.

3) Cover against the costs of investigations by professional bodies.
CLP what are the limitations?
Does not cover any legal action where is can be covered elsewhere.
Business interruption cover?
Covers the actual or potential loss of earning and additional expenses incurred as a result.
BII What are the basic features?
Provides cover in two dimensions:

1) The monetary amount that needs to be insured.

2) The time that the interruption will affect business hours.
BII What is the indemnity period?
The time that the interruption will affect the business.
When did the ABI produce an all risks policy for BII?
1989.
BII What are the optional extensions for All Risks Business Interruption?
covers BI loss resulting from damage by the insured perils at such other places:

– Specified suppliers.
– Unspecified suppliers.
– Specifies customers.
– Transit.
– Prevention of access.
– Public utilities.
– Noticeable disdase/vermin.
What are the two headings perils fall under for an Engineering Business Interruption Policy?
1) Failure of the public utilites supply of gas electricity water or Tele communications at the supply undertakins feeds.

2) Sudden and unforseen damage from an accidental cause not specifically excluded.
What do Engineering Business Interuption Policys usually exclude?
1) Perils covered by the ABI standard fire & Special Perils policy.

2) General market exclusions.

3) A scheme which rations supplies by a supply authority.

4) A deliberate act of supply authority.
Define: Turnover.
The total income arising from the activities of he business.
What are the two parts of turnover?
1) Costs that are associated with the business.
2) Net profit.
What type of premium is used for business interruption?
Adjustable premium.
What are the most common types of BI policies?
1) Fire & special perils.
2) All Risks.
3) Engineering.
What is the material damage warranty?
There must be a policy which covers the physical damage.
What are the two options for settlement of household claims?
1) Indemnity.

2) New for old.
What is the indemnity option for household claims?
The amount paid is that required to replace the item with a replacement of the same age and in the same condition.
What is the new for old settlement option?
The full cost of replacing the items as new is paid.
Define: Contents.
Household good & personal effects of every description belonging to the insured or a family member living in the property.
Define: Single Article Limits.
No valuable item will be treated as being greater of for example 5% of the total contents sum insured.
Define: Valuables Limit.
The total value of valuable articles may be restricted to say one third of the total contents sum insured.
What is automatically included in contents cover?
1) Temporary removal.

2) Clothing and personal goods.

3) Accidental breakage.

4) Loss of rent.
What are non–automatic exclusions for contents?
1) Accidental damage to entertainment equipment.

2) Accidental damage whilst in the course of removal.

3) Other policy extensions.
What are specific exclusions for household insurance?
1) Property specifically insured under another policy.

2) Deeds, bonds, bills, cheques etc.

3) Medals and coins unless specified.

4) Motor vehicles.

5) Livestock.
Is legal liability included as part of basic household cover?
Yes.
What does caravan insurance cover?
Cover is all risks of accidental loss of or damage to the caravan and it's contents.
Define: Small Craft.
Vessels not exceeding 16feet overal and with design speeds not exceeding 17 knots.
What four sections of cover are there for small craft?
1) Accidental loss or damage to craft.

2) Personal effects.

3) Salvage charges.

4) Liability to third parties and passengers.
What is sports equipment cover in contents?
Accidental damage to equipment.
What do personal accident, hospital cash benefit & creditor insurance cover?
Cover is against the risk of personal accidental and or sickness, redundancy or unemployment.
Define: Domestic Animals.
Horses, ponies, cats and dogs.
What are the basic features of F&SP insurance?
Fire, lightning, and (limited) explosion.
What is the purpose of F&SP insurance?
To provide compensation to the insurance person or firm in the event of damage to the propery.
What are the recommended wordings for Fire & Special Perils?
(1989) The standard fire & Special Perils policy.
Within the recommended wording what does the word DAMAGE mean?
Loss or destruction of or damage to the property insured.
What are the standard perils for F&SP insurance?
1) Fire.

2) Lighting.

3) Limited explosion.
What is fire cover in F&SP insurance?
Covers fire damage excluding :

1) Explosion from fire.

2) Earthquake or subterranean fire.

3) Spontaneous ignition or heating.
What is covered under lightning cover in F&SP insurance?
All damage is covered.
What is explosion cover in F&SP restricted to?
Restricted to explosion of boilers or gas used for domestic purposes only.
Lloyds standard fire policy covers:
1) Loss or damage caused by fire/lightning.

2) Fire as a result of explosion.

3) Explosion as a result of fire.

4) Explosion of domestic boilers and or gas.
Special Perils : What are some examples of perils of a chemical type?
1) Explosion.
2) Spontaneous fermentation.
3) Heating.
special Perils – What are some examples of social perils?
1) Riot.

2) Civil commotion.

3) Strikes.

4) Locked out workers.

5) Malicious persons.
Special Perils – What are some examples of perils of nature?
1) Storm.

2) Flood.

3) Earthquake.

4) Subterranean fire.

6) subsidence heave and lanslip.
Special Perils – What are some examples of misc perils?
1) Escape of water.
2) Aircraft.
3) Impact.
What are the two types of cover for riot & civil commotion?
1) Cover for Fire.
2) Cover for any damage caused.
Define : Storm.
A violent disturbance in the atmosohere with strong winds and usually with thundet/rain/snow.
What are some examples of storm exclusions.
1) Caused by EOW.
2) Resulting from a change in the water table level.
3) Lightning/ frost /subs.
4) Fences and gates.
What is flood cover granted with?
Storm cover.
What does EOW cover?
Damage following the EOW from tanks apparatus or pipes.
What is excluded in EOW cover?
Water discharge or leaking from any automatic sprinkler installation in respect of any building which is empty or not in use.
What is impact cover restricted to?
It is restricted to losses from vehicles it animals owned or under the contact off third parties against whom the insured generally has a right of recovery.
What are sprinkler leakage exclusions?
1) Freezing whilst the premises are empty or not in use.
2) Explosion, earthquake, subterranean fire or heat from fire.
Define: Subsidence.
Movement of the land on which the premises stands due to movements, falls or changes in the ground.
Define: Ground Heave.
When the ground previously having a low moisture content suddenly is able to absorb more moisture.
Define: Landslip.
A small landslide.
What are subsidence, landslip and heave exclusions?
1) Originaing prior to policy.
2) Resulting from demolition, construction, structural alteration or repair.
What are the standard market exclusions?
1) Riot and civil war.
2) War risks.
3) Radioactive contamination.
4) Terrorism.
5) Pollution of contamination.
6) Marine policies.
7) Consequential loss.
What does all risks cover?
Accidental loss or destruction of or damage to the property itself.
What are the four limitation groups for all risks insurance?
1) Those exclusions which are absolute exclusions.
2) Those exclusions which relate to an aspect of cover which can sometimes be included.

3) Those exclusions which relate to an aspect of cover which can be written into he policy.

4) Those exclusions which relate to property or risks which are more appropriate to another class of business and can't be covered.
What does theft insurance not cover?
1) Key.
2) Trick.
3) Hiding in premises whilst open for business hours.
Does average apply to theft insurance?
Theft policies rely upon the full value being declared. The condition of average applies.
Optional extensions for theft insurnace?
1) Breakage of glass.
2) Replacement of locks.
3) Temporary removal.
4) Index linking.
What is the standard cover for glass insurance?
1) Covers destruction of damage to all fixed glass.

2) Policies include cover for cost I boarding up damage glass until replacement can be effected.

3) Cover is on an all risks basis.
Glass insurance optional extensions?
1) Damage too shop front contents as a result of broken glass.

2) Damage to washbasins and sanitary fittings in hairdressing salons.
Is money insurance all risks?
Yes.
In what situations is money covered?
1) In transit.
2) On insured premises during business hours.
3) In bank night safe.
4) In a locked safe or strong room.
5) On thd insured premises outside of safe.
Is money insurance subject to average?
No.
Money insurance optional extensions?
1) Personal accident benefit – Robbery.

2) Credit cards – Fraudulent use.
What is the main form of rating of PA&S?
Occupation.
What is general practice with regards to occupation?
To be grouped into four classes.
What is a benefit policy?
A contract to pay a sum of money irrespective of whether the insured sustains a direct financial loss.
What is benefit policy cover available in?
In units.
What is benefit policy standard cover?
Accident cover

1) Provides compensation in the event of accidental death or bodily injury.

2) Must be an accident.

3) Capital sums are paid in the event of death or certain injuries.
What is sickness cover?
Provides weekly benefit of up to 104 weeks if the insured is temporarily and totally disabled from engagin in their usual occupation.
What time franchise is sickness cover?
Seven days.
What does a time franchise of seven days means?
If the insured is sick for less than seven days no payment is made.
What does sickness cover exclude?
Sickness contracted within 31 days of the policy.
What are optional extensions for sickness cover?
Legal expenses cover to pursue actions against negligent third parties.
What are the geographical limits for sickness policies?
1) Cover for accidents is usually worldwide.

2) Sickness cover is restricted to the UK, Europe, USA, Canada, Australian & new Zealand.
What are the age limits for PA&S?
16–70 Accident cover.

16–60 Sickness cover.

Family PA policies may include children.
What are exclusions for PA&S?
1) Injured while on drugs/alcohol.

2) Self inflicted injury.

3) Physical defects prior to accidents.

4) Aviation, motor cycling, polo, racing, winter sports.

5) Childbirth pregnancy vernal disease or aids.

6) War risks.

7) Sickness within 21days of cover.
What is medical expenses insurance?
Cover for individuals who seek private medical treatment outside the NHS.
What are hospital & specilist charges?
Surgeon & anaesthetic fees.
What are additional costs ?
Ambulance fees & nursing fees.
What are the four levels of cover for private motor?
1) Road traffic act only.

2) Third party only.

3) Third party, fire and theft.

4) Comprehensive.
Define: Indemnity.
Security or protection against a loss or other financial burden.
What does RTAO cover?
1) Indemnity for bodily injury or death caused to third parties.

2) Indemnity for loss of or damage to property belonging to third parties.

3) Indemnity for claimants costs.
4) Charges for emergency treatment and hospital charges.
What must all policies do in accordance with the third EU motor directive?
1) Provide cover required by the EU country.

2) Cover liability to person's in the employment of the insured when travelling as a passenger in the course of employment.
What does TPO cover in addition to RTAO for private motor insurance?
1) Cover for vehicles whilst not on a road or in a public place but remaining within territorial limits.

2) A limit of 20million for to property damage for private car policies.

3) Indemnity for accidents which occur whilst the insured is driving a car that does not belong to them.

4) Indemnity to anyone who is driving/using the vehicle with insureds permission unless it is restricted to named driver.

5) Indemnity to passengers employees or business partnersn

6) Legal costs incurred in the defence of a claim.

7) Limited cover for legal representation costs.
What are TPO exclusions for private motor insurance?
1) Damage to own property.

2) Liability covered by any other insurance policy.
What does TPF&T cover in addition to TPO in private motor insurance?
1) Fire, lightning or explosion.

2) Damaged during attempted theft or while it is stolen.

3) Stolen & not recovered.
What is the only TPF&T exclusion in private motor insurance?
1) Loss of use.
What does COMP cover in addition to TPF&T In private motor insurance?
Accidental and malicious damage.
What are the private motor COMP exclusions?
1) Loss or damage to accessories and spare parts unless in garage.

2) Wear & tear & depreciation.

3) Loss of use.

4) Mechanical and electrical failure.

5) Damage to tyres caused by road punctures or bursts.

6) Driving other cars.

7) Limited to TPO.
What are the Typical benefits for COMP private motor insurance?
1) Personal accident cover.

2) Medical benefits.

3) Personal belongings and clothing.

4) No claims discount.
What are the Optional extensions private motor COMP insurance?
1) Breakage of glass.

2) Personal belongings & clothing.

3) Young additional drivers.

4) Loss of use.

5) Personal accident benefits.

6) Foreign use.
7) Elections.

8) Racing, competitions, rallies & trials.

9) Caravans & trailers.

10) Breakdown cover.

11) Joint policies.
What are the private motor general & market exclusions for COMP insurance?
1) Driving by unlicensed drivers.

2) Use of vehicle outside the use the policy permits.

3) War risks.

4) Radioactive contamination and explosive nuclear assembly.

5) Riot & civil commotion in northern Ireland.

6) Sonic bangs.

7) Pollution & contamination.
Define: Motor Cycle.
Includes any kind of cycle propelled mechanically and includes mopeds.
Why are motor cycle and car cover similar?
They are both subject to the RTA 1998.
What are the main differences between the motorcycle policy and the private motor policy?
1) Doesn't cover theft of accessories or spare parts unless the cycle is stolen at the time.

2) The liability section generally indemnifies the insured.

3) There are no personal accidents, medical expenses or personal effects cover.
Optional extensions for private motorcycle insurance?
1) Trailers.

2) Driving other cycles.
3) More than one cycles insured.

4) Invalid carriages.
What are the Main types of commercial vehicle?
1) Goods carrying vehicles.

2) Passenger carrying vehicles.
3) Agricultural & forestry vehicles.

4) Vehicles of special construction.
What does CMI not cover?
Goods in transit.
What is CMI concerned with?
The risks which attach to the vehicle themselves while they are being driven, left parked or being carried by sea or air.
What is CMI standard policy cover?
1) Most insures use the same standard policy wording for all commercial motor insurances, it is then modified as and where necessary.

2) The range of cover available for commercial vehicles is the same as for private motor and motor cycles.
What is CMI third party liability cover?
Private motor cover & commercial motor cover must provide unlimited indemnity for death or bodily injury to third parties.
What is CMI loading or unloading cover?
Cover in respect of third party liabilities also applies to accidents occurring during loading or unloading the vehicle.
What is CMI indemnity to driver cover?
Generally anyone may drive the vehicle with the insurers permissoon.
What is CMI indemnity to user cover?
The insured may allow someone to use the vehicle for social, domestic and/or pleasure purposes.
What is CMI indemnity to passengers cover?
Covers the liability of passengers for their negligent acts.
What is CMI loss or damage to the vehicle cover?
Covers any loss of or damage to the vehicle and to it's spare parts & accessories while they are on the vehit's?
Trailers – articulated and non articulated vehicles what cover is provided?
It is standard practice to include third party cover for trailers whilst attached to the insured vehicle.
Some policies provide comp cover for them whilst they are attached.
Trailers – disabled mechanically propelled vehicles what cover is provided?
TPO
Trailers – Is driving other vehicles covered?
The range of vehicles is so extensive that insurers do not want to encourage the insured vehicles I drive other vehicles under their policy.
Trailers – Personal benefits what is not covered?
1) Personal accident benefits.
2) Medical expenses.
3) Personal belongings and clothing.
Trailers – Optional extensions.
1) Third party property damage.
2) Medical expenses & pesonal accident benefits.
3) Personal belongings & clothing.
4) Windscreen/ glass cover
5) Indemnty to hirers.
6) Indemnity too principal.
7) Carnivals.
8) Sheets and ropes.
9) Loss of use.
What are External Customers?
Any person or business who is not an employee who can either buy/use the company's products.
what are Internal Customers?
Internal customers are the employees of an insurance company who receive service from other employees of the company.
What two categories can insurance companys customers be divided into?
1) External customers.

2) Internal customers.
What is customer service?
Customer service refers to the activities that a company and it's employees undertake in order to satisfy its customers.
What is a customer?
The person who buys a product.
What are three examples of value–added services?
1) 24 hour help lines.

2) Complaint handling mechanisms.

3) Uninsured loss recovery services.
What do customer care charters & codes of conduct do?
They set out the levels of service and the standards that the customer should expect.
What are two reasons why insurers need loyal clients?
1) Cost of finding new clients.

2) Future underwriting results are made more predictable.
What is the determining factor in the acquisition of business?
Pricing.
What are internal standards?
These are developed inside the company, based on the company's own customer service system.
Why do companies use internal standards?
1) Companies use internal standards because they are easy to gather.

2) They reflect actual practices and procedures followed.

3) They allow the companies to compare current perform and with past performance.
What does an industry standard do?
Allows a company to compare itself to other companies in the same business.
What is a performance standard?
A level of performance against which actual performance can be measured.
What can a performance standard be defined as?
The minimum level of service quality and quantity that he customer service system must reach.
Define: Competence.
Having the skills, knowledge and expertise to carry out a function without supervision.
What is the 6th principle of business?
Treat customers fairly.
What is the 6th conduct of business?
A firm must pay due regard to the interests of its customers and treat them fairly.
What must firms do with regards to TCF?
They must show not only that systems are in place but instead the consistent effectiveness of systems.
How must you handle claims?
Promptly and fairly.
What must claims handlers do for the insured?
Must provide reasonable guidance to help a policyholder make a claim and not reject a claim unreasonably.
What must firms do with regards to TCF?
They must show not only that systems are in place but instead the consistent effectiveness of systems.