CII IF3 flashcards
CII IF3 · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Utmost good faith
- A mutual duty in insurance requiring both parties to act honestly and disclose material information; breach can allow the insurer to avoid the contract or reduce a claim.
- Insurable interest
- A legal or financial interest in the subject-matter of insurance such that the insured benefits from its preservation or suffers loss from its destruction; required at inception for indemnity policies.
- Indemnity principle
- The principle that insurance should restore the insured to their pre-loss financial position, no better and no worse; valued policies are an exception.
- Subrogation
- The insurer's right, after paying a claim, to step into the insured's shoes and pursue third parties responsible for the loss, up to the amount paid.
- Contribution
- The right of an insurer to share the cost of a loss with other insurers covering the same risk, often calculated proportionately or by independent liability.
- Proximate cause
- The dominant, effective cause of a loss; it determines whether the loss falls within the policy perils and is used to resolve claims.
- Insurance Act 2015
- UK legislation reforming insurance law, introducing fair presentation of risk, proportionate remedies for breach, and changes to warranties and fraudulent claims.
- Dual regulation
- The system where insurers are regulated by both the Prudential Regulation Authority (PRA) for financial soundness and the Financial Conduct Authority (FCA) for conduct.
- Proposal form
- A document completed by an applicant for insurance, providing information the insurer uses to assess risk; it forms the basis of the contract and is an offer to insure.
- Fair presentation
- The insured's duty under the Insurance Act 2015 to disclose all material circumstances and not mislead the insurer, enabling the insurer to assess the risk accurately.
- Warranty
- A policy term that must be complied with exactly; breach suspends cover for the period of breach, and the insurer may avoid liability for losses during that time.
- Condition precedent
- A policy condition that must be satisfied before the insurer's liability arises, such as notifying a claim promptly; failure can entitle the insurer to deny liability.
- Contra proferentem
- A rule of contractual interpretation that ambiguous policy wording is construed against the party who drafted it, usually the insurer.
- Fraudulent claim
- A claim made dishonestly; under the Insurance Act 2015 the insurer may refuse the entire claim and recover sums paid, and may avoid the policy.
- Exclusion clause
- A policy term that removes specified perils or circumstances from cover; it is interpreted narrowly and must be clearly communicated to the insured.
- Claims notification
- The insured's duty to inform the insurer of a loss promptly and provide proof and cooperation; breach may allow the insurer to reduce or deny the claim if prejudiced.
- FCA objectives
- The Financial Conduct Authority's statutory objectives are consumer protection, market integrity, and competition; it regulates conduct in financial services.
- PRA objectives
- The Prudential Regulation Authority aims to ensure the safety and soundness of insurers and to secure appropriate protection for policyholders.
- Treating Customers Fairly
- An FCA principle requiring firms to deliver fair outcomes for customers across the product lifecycle, embedded in the Principles for Businesses.
- Consumer Duty
- A 2023 FCA rule requiring firms to act to deliver good outcomes for retail customers, with a higher standard of care and clear communication.
- Senior Managers Regime
- A regulatory framework assigning clear responsibilities to senior individuals in firms and requiring fitness and propriety, with accountability for conduct.
- Financial Ombudsman Service
- An independent body resolving disputes between financial firms and consumers; its awards are binding on the firm if accepted by the consumer.
- FSCS
- The Financial Services Compensation Scheme protects policyholders up to specified limits if an insurer or intermediary fails, providing a safety net.
- Principles for Businesses
- The FCA's high-level rules including integrity, skill and care, and clear communication; firms must comply and breaches can lead to enforcement action.
- Insurance broker
- An intermediary who acts as agent of the insured, advising on and placing cover with insurers, and owing duties of care, skill, and disclosure to the client.
- Agency authority
- The power of an agent to act for a principal; it may be actual (express or implied) or apparent, where a third party reasonably relies on the agent's appearance of authority.
- IDD disclosure
- The Insurance Distribution Directive requires intermediaries to disclose their status, remuneration, and conflicts of interest to clients before advising.
- Commission disclosure
- The requirement for intermediaries to reveal remuneration that may influence advice, supporting transparency and fair treatment of customers.
- Errors and omissions insurance
- Professional indemnity cover protecting insurance intermediaries against claims arising from negligent advice or placement errors.
- Lloyd's market
- A specialist insurance market where syndicates underwrite risks, often through brokers and managing agents, with delegated binding authority.
- Duty to place cover
- A broker's obligation to arrange insurance that meets the client's needs, communicate material facts to insurers, and explain key policy terms.
- Apparent authority
- A situation where a principal's conduct leads a third party to reasonably believe an agent has authority, binding the principal as if authority were actual.