Why must an insurer maintain accurate reserves?
To meet present and future claims.
Who is bound, if anyone, by the decisions made by the Financial Ombudsman?
insurer only
The Consumer Duty’s consumer principle requires firms to:
act to deliver good outcomes for retail customers.
If fraudulent claims are not detected, what is the likely outcome for the insurer?
profits will be reduced
When a claims department has customer service standards, what is the ultimate aim of these?
To encourage customer loyalty.
What circumstances does the incurred but not enough reported [IBNER] reserve cover?
claim amounts reported that are understated.
Alternative dispute resolution is most commonly used:
to resolve third party disputes without having to go to court.
Under the Claims and Underwriting Exchange database, what types of information can an insurer check?
Household, motor and personal injury claims for individuals.
What is the main purpose of the Insurance Act 2015?
To apply rules to aspects such as initial disclosure and dealing with fraudulent claims to non-consumer products as well as consumer products.
an insured has breached a relatively minor warranty on a non-consumer insurance policy. Under the Insurance Act 2015, if the insured subsequently made good this breach, what would the position be?
The insurer is discharged from any liability under the policy from the date of the breach. If the insured repaired the breach at a later date, the insurer’s liability would start again from the date the breach was repaired.
If Max has had a complaint upheld by the Financial Ombudsman Service for £15,000, he:
does not need to accept the award but it is binding on the insurer.
Which register was set up by the insurance industry and the art world in response to an increase in art theft?
Art loss register
Which organisation takes the lead on fraud prevention for the insurance industry in the UK?
The Insurance Fraud Bureau.
The Financial Ombudsman Service only deals with disputes from eligible complainants. To be eligible, a trust must have a net asset value of less than:
£5m
Greg is the director of a limited company. On behalf of the company, he has submitted claims in a short period of time to insurers for three events; a loss to a vehicle, a claim for employers’ liability and a loss under the buildings insurance for an office. Which of these, if at all, would an insurer be able to check on the Claims and Underwriting Exchange?
none of them
Under the rules contained in the Insurance: Conduct of Business Sourcebook, for how long should firms retain non-advice records?
For as long as is relevant.
Which reserves are required by law and are designed to smooth fluctuations in loss ratios for certain classes of business?
Equalisation reserves.
What type of claimants do the Insurance: Conduct of Business Sourcebook rules on claims handling apply to?
Both consumers and commercial customers.
The Financial Ombudsman Service deals with unresolved complaints. To be eligible, the guidance states that a small business must employ fewer than:
50 employees and have a turnover of less than £6.5m.
Who besides the claims manager should be involved in reserving reviews?
underwriters
Under the Insurance Act 2015, who is required to make a fair presentation of a risk to an insurer?
commercial customers
When dealing with an insurance claim where there has been a fraudulent act or omission, the view of the Financial Ombudsman Service is that the insurer:
must pay the claim in full if the act makes no difference to the insurer’s ultimate liability.
In addition to adjudication, what are the other two adjudicative options for resolving claim disputes?
Arbitration and by expert determination.
when settling a claims dispute, the process of mediation involves the two parties to the dispute jointly:
appointing an impartial third party to facilitate an amicable agreement, without having to meet each other.
