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8 Cards in this Set
- Front
- Back
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What is a TOBA? |
Terms of Business Agreement. -Intermediaries that are FCA authorised persons carry on their business under TOBAs. There are two principal types, those: 1) Individually entered into with insurers and, if the intermediary is a Lloyd's broker, with Lloyd's syndicates 2) Entered into with clients |
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What is the Distance Marketing Directive? |
- Distance communications with consumers are governed by the distance marketing directive. - However, they only apply where there is an 'organised distance sales or service- provision scheme'. - Generally, communications from intermediaries would not be subject to these rules for the sales of policies, even if such communication is by telephone. - The rules do apply where sales are made exclusively under an organised scheme and where this is the only permitted means of communication. For example, where the contract is offered, negotiated and concluded over the internet, or via a telemarketing firm where there is no face to face contact. They are, therefore, essentially applicable to insurers who run such schemes. |
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Describe demands and needs. |
- The demands and needs of the client must be established by the intermediary before providing any recommendation. - An intermediary must, before the conclusion of a contract (including at renewal), provide the client with a statement, in a durable medium, setting out the client's demands and needs. |
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What are the two types of protection policy? |
1) Pure protection - These are insurance contracts in which the benefits are payable only on death or in respect of incapacity due to injury, sickness or infirmity. They include certain life policies (that do not have a savings element) and critical illness policies. 2) Payment protection - These are insurance contracts where the benefits are designed to protect a policyholder's ability to continue to make payments they owe to third parties. The FCA has specific rules relating to protection contracts. These rules impose strict requirements on those offering such contracts to ensure that the product is suitable for the customer where a recommendation is being made, or to ensure that they fully understand what is on offer and the fact that the choice is theirs to make where no recommendation is being made by the intermediary. |
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What is an EDI system? |
- Electronic Data Interchange - Their major, but by no means only, function is to obtain quotations for prospective policyholders. - The objective from the intermediary's perspective is to input data only once but to then receive the benefit of a range of quotations from the insurance market. - On the basis of a decision by the proposer that a quotation is acceptable, the documentation, in the form of either a cover note or certificate of insurance, can be issued using the same EDI system. In fact, if the premium is paid in full, or an instalment arrangement agreed, all documentation can be issued straightaway. |
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What is the legal significance of procedures relating to quotations? |
- The quotation remains valid usually for a set number of days, if stated in the quotation. - Unless the quotation states otherwise, during this time cover is not effective, the insurer is not on risk. - The insurer is legally bound to honour the quotation in the event that the proposer accepts the quotation within the specified timescale. - If no period is set, the offer remains open for a 'reasonable time'. The insurer may withdraw the quotation at any time prior to acceptance by the proposer, but is otherwise bound by the terms of the offer as soon as the proposer indicated acceptance and agrees to pay the premium. - If there are material changes to the risk between the time of the quotation and it's acceptance by the proposer, the insurer is not bound to maintain the quotation. |
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What is a key features document? |
- Not compulsory for most general insurance contracts - Compulsory for all pure protection and payment indemnity contracts - It must contain the following: (pic) |
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Describe cancellation rights. |
- The intermediary must provide information about the existence or absence of a right to cancel. - Firms must offer go |
