CII IF9 cheat sheet

Sources rank: statute (Act of Parliament) > statutory instrument > delegated/regulatory rules (FCA Handbook) > common law and equity > custom; EU-derived law retained in UK law continues to apply unless revoked or amended.

Criminal cases: prosecution must prove guilt beyond reasonable doubt; civil cases: claimant proves on the balance of probabilities - the standard applied in insurance coverage and negligence disputes.

Precedent (stare decisis): Supreme Court decisions bind all lower courts; Court of Appeal binds High Court and below; High Court decisions are persuasive, not binding, on other High Court judges.

Equity supplements common law: remedies include injunction, specific performance and rectification; rectification is used to correct a written policy that misstates the agreed terms.

Civil procedure: pre-action protocols, then issue of claim, defence, allocation to track (small claims, fast, multi-track), disclosure, trial; limitation for contract claims is generally 6 years (12 for deeds).

Statutory interpretation aids: literal rule, golden rule, mischief rule and purposive approach; explanatory notes and the Human Rights Act 1998 influence construction of ambiguous wording.

Devolved and territorial dimension: Scotland has its own legal system and courts; Northern Ireland and England & Wales differ procedurally, so choice of law and jurisdiction clauses matter in policies.

Formation needs offer, acceptance, consideration and intention to create legal relations; acceptance must be unqualified - a counter-offer destroys the original offer (Hyde v Wrench principle).

Invitation to treat vs offer: advertisements, displays and price lists are generally invitations to treat; the customer makes the offer.

Terms may be express, incorporated by signature, by reasonable notice, or by a consistent course of dealing; onerous clauses require clearer notice.

Consumer test of fairness: a term is unfair if, contrary to good faith, it causes a significant imbalance in rights and obligations to the consumer's detriment; it is then not binding.

Breach: actual breach (failure to perform) vs anticipatory breach (clear repudiation before performance is due); the innocent party may affirm or accept and terminate.

Remedies: damages aim to put the claimant in the position had the contract been performed, subject to causation, remoteness (reasonably foreseeable) and mitigation; equitable remedies include specific performance and injunction.

Exemption clauses are construed contra proferentem against the party relying on them and cannot exclude liability for death or personal injury caused by negligence.

Agency requires the principal's consent and the agent's authority: actual (express or implied), apparent/ostensible (representation by principal plus reliance), or authority of necessity in emergencies.

Undisclosed principal: the agent contracts personally but the principal may intervene; election and merger rules can bar the principal's rights once the third party elects to sue the agent.

Duties of an agent: obey lawful instructions, exercise reasonable care and skill, act personally, avoid conflicts of interest, account for profits and disclose material information.

Principal's duties: pay commission and expenses, indemnify the agent against authorised liabilities; commission is generally earned when the agent has done what is required, even if the principal then completes.

Termination: by act of the parties, operation of law (death, insolvency, insanity) or frustration; termination does not affect rights already accrued, such as earned commission.

In insurance, intermediaries act for the insured when placing and for the insurer when handling claims or binding cover under a delegated authority; the agency status determines whose knowledge is imputed.

The Insurance Distribution Directive framework requires disclosure of status, remuneration and conflicts; an intermediary that acts as agent of the insurer owes a duty to treat customers fairly.

Insurable interest must exist at inception for indemnity policies (and at loss for life policies); without it the contract is void.

Utmost good faith: the insured must disclose all material circumstances and not misrepresent; materiality is judged by the prudent insurer test.

Misrepresentation remedies under the Insurance Act 2015 are proportionate: a qualifying breach allows the insurer to treat the contract as if the breach had not occurred, with the remedy scaled to the insurer's culpability.

Indemnity restores the insured to the pre-loss position, subject to sum insured, average, limits and policy excess; new-for-old cover is an exception.

Subrogation: after paying, the insurer steps into the insured's rights against a third party; the insured must not prejudice those rights.

Contribution applies where two or more policies cover the same loss at the same level; double insurance is resolved by rateable proportion.

Proximate cause determines which peril triggered the loss; concurrent causes, one excluded, are resolved under the policy wording and the Insurance Act 2015 default rules.

FSMA 2000 gives the FCA and PRA statutory objectives; the FCA has consumer protection, integrity, competition and international objectives; the PRA focuses on safety and soundness.

The general prohibition: no person may carry on a regulated activity by way of business in the UK unless authorised or exempt; breach is a criminal offence.

Regulated activities are defined by the RAO (Regulated Activities Order) and include effecting and carrying out contracts of insurance, advising on and arranging investments.

The FCA Handbook contains the Principles for Businesses, rules (COBS, ICOBS), guidance and evidential provisions; rules are binding, guidance is not.

Approved Persons regime: senior managers and certification staff require approval or certification; SM&CR imposes prescribed responsibilities and conduct rules.

The Financial Services Compensation Scheme pays limited compensation for claims against failed firms; the Financial Ombudsman Service resolves individual complaints.

FSMA Part 7 gives the FCA powers to investigate, and Part 14 to impose penalties; the Upper Tribunal hears references against some decisions.

Applicants must satisfy the threshold conditions: legal status, location of offices, effective supervision, appropriate resources and suitability.

The PRA authorises banks, insurers and major investment firms; the FCA authorises most other firms; dual-regulated firms deal with both regulators.

Supervision uses a risk-based approach: firm categories, periodic assessment, data requests, skilled person reports and thematic reviews.

The FCA's enforcement powers include public censure, financial penalties, prohibition orders, conditions on permissions and withdrawal of authorisation.

Penalties are set under the FCA's decision procedure: the amount reflects the seriousness of the breach, the firm's financial resources and any aggravating or mitigating factors.

The PRA has its own enforcement and can impose penalties on dual-regulated firms; the FCA and PRA coordinate through memoranda of understanding.

Firms must notify the regulator of material events, breaches and changes in control; failure to notify is itself a breach of Principle 11.

The FCA's Principles for Businesses apply to all regulated firms; COBS and ICOBS set detailed rules, including fair treatment of customers and clear, fair and not misleading communications.

Consumer Duty: firms must act to deliver good outcomes, avoid foreseeable harm and support customers' financial objectives; it applies to retail customers and is enforced as a rule.

Disclosure: ICOBS requires the customer be given the essential policy information before conclusion, including the insurer's identity, cover, exclusions and complaints route.

Advice and suitability: personal recommendations must be suitable and take account of the customer's circumstances and objectives; execution-only sales require defined conditions.

Conflicts of interest must be identified, managed and disclosed; inducements must not impair the duty to act in the customer's best interests.

Claims handling is part of the conduct regime: firms must handle claims promptly and fairly, not unreasonably reject valid claims and explain any decision.

Vulnerable customers: firms must identify and respond to characteristics of vulnerability, including health, life events, resilience and capability.

UK GDPR and the Data Protection Act 2018 require lawful, fair and transparent processing, purpose limitation, data minimisation, accuracy, storage limitation, integrity and accountability.

Lawful bases include consent, contract, legal obligation, vital interests, public task and legitimate interests; special category data needs an additional condition.

Individual rights: access, rectification, erasure, restriction, portability, objection and rights relating to automated decisions; subject access requests are normally answered within one month.

Money laundering offences: concealing, arranging, acquiring or possessing criminal property, and failure to disclose; the Proceeds of Crime Act 2002 provides the framework.

Customer due diligence requires identifying the customer and beneficial owner, verifying identity, and enhanced due diligence for politically exposed persons and high-risk relationships.

Reporting: suspicious activity reports go to the National Crime Agency; firms must appoint a nominated officer (MLRO) and maintain records for at least five years after the relationship ends.

Financial crime controls include sanctions screening, terrorist financing checks, bribery prevention under the Bribery Act 2010 and fraud controls; the FCA expects a risk-based approach.

Firms must have a complaints procedure, acknowledge promptly, keep the complainant informed and issue a final response within eight weeks.

If the complaint is not resolved within eight weeks, or the customer rejects the final response, the customer may refer it to the Financial Ombudsman Service within six months of the final response.

The FOS decides what is fair and reasonable in all the circumstances, having regard to law, regulator rules, guidance and good industry practice.

FOS awards are capped at the statutory limit (awards above the limit may be made only with the complainant's consent); the limit is reviewed periodically.

FOS decisions are binding on the firm if accepted by the complainant, but not binding on the complainant, who may still go to court.

Firms must pay the case fee and cooperate with FOS information requests; failure to comply can lead to enforcement action by the FCA.

Alternative dispute resolution and the courts remain available; limitation periods and the FOS time limits run separately, so customers should be advised of both routes.

Sources rank: statute (Act of Parliament) > statutory instrument > delegated/regulatory rules (FCA Handbook) > common law and equity > custom; EU-derived law retained in UK law continues to apply unless revoked or amended.

Criminal cases: prosecution must prove guilt beyond reasonable doubt; civil cases: claimant proves on the balance of probabilities - the standard applied in insurance coverage and negligence disputes.

Precedent (stare decisis): Supreme Court decisions bind all lower courts; Court of Appeal binds High Court and below; High Court decisions are persuasive, not binding, on other High Court judges.

Equity supplements common law: remedies include injunction, specific performance and rectification; rectification is used to correct a written policy that misstates the agreed terms.

Civil procedure: pre-action protocols, then issue of claim, defence, allocation to track (small claims, fast, multi-track), disclosure, trial; limitation for contract claims is generally 6 years (12 for deeds).

Statutory interpretation aids: literal rule, golden rule, mischief rule and purposive approach; explanatory notes and the Human Rights Act 1998 influence construction of ambiguous wording.

Devolved and territorial dimension: Scotland has its own legal system and courts; Northern Ireland and England & Wales differ procedurally, so choice of law and jurisdiction clauses matter in policies.

Formation needs offer, acceptance, consideration and intention to create legal relations; acceptance must be unqualified - a counter-offer destroys the original offer (Hyde v Wrench principle).

Invitation to treat vs offer: advertisements, displays and price lists are generally invitations to treat; the customer makes the offer.

Terms may be express, incorporated by signature, by reasonable notice, or by a consistent course of dealing; onerous clauses require clearer notice.

Consumer test of fairness: a term is unfair if, contrary to good faith, it causes a significant imbalance in rights and obligations to the consumer's detriment; it is then not binding.

Breach: actual breach (failure to perform) vs anticipatory breach (clear repudiation before performance is due); the innocent party may affirm or accept and terminate.

Remedies: damages aim to put the claimant in the position had the contract been performed, subject to causation, remoteness (reasonably foreseeable) and mitigation; equitable remedies include specific performance and injunction.

Exemption clauses are construed contra proferentem against the party relying on them and cannot exclude liability for death or personal injury caused by negligence.

Agency requires the principal's consent and the agent's authority: actual (express or implied), apparent/ostensible (representation by principal plus reliance), or authority of necessity in emergencies.

Undisclosed principal: the agent contracts personally but the principal may intervene; election and merger rules can bar the principal's rights once the third party elects to sue the agent.

Duties of an agent: obey lawful instructions, exercise reasonable care and skill, act personally, avoid conflicts of interest, account for profits and disclose material information.

Principal's duties: pay commission and expenses, indemnify the agent against authorised liabilities; commission is generally earned when the agent has done what is required, even if the principal then completes.

Termination: by act of the parties, operation of law (death, insolvency, insanity) or frustration; termination does not affect rights already accrued, such as earned commission.

In insurance, intermediaries act for the insured when placing and for the insurer when handling claims or binding cover under a delegated authority; the agency status determines whose knowledge is imputed.

The Insurance Distribution Directive framework requires disclosure of status, remuneration and conflicts; an intermediary that acts as agent of the insurer owes a duty to treat customers fairly.

Insurable interest must exist at inception for indemnity policies (and at loss for life policies); without it the contract is void.

Utmost good faith: the insured must disclose all material circumstances and not misrepresent; materiality is judged by the prudent insurer test.

Misrepresentation remedies under the Insurance Act 2015 are proportionate: a qualifying breach allows the insurer to treat the contract as if the breach had not occurred, with the remedy scaled to the insurer's culpability.

Indemnity restores the insured to the pre-loss position, subject to sum insured, average, limits and policy excess; new-for-old cover is an exception.

Subrogation: after paying, the insurer steps into the insured's rights against a third party; the insured must not prejudice those rights.

Contribution applies where two or more policies cover the same loss at the same level; double insurance is resolved by rateable proportion.

Proximate cause determines which peril triggered the loss; concurrent causes, one excluded, are resolved under the policy wording and the Insurance Act 2015 default rules.

FSMA 2000 gives the FCA and PRA statutory objectives; the FCA has consumer protection, integrity, competition and international objectives; the PRA focuses on safety and soundness.

The general prohibition: no person may carry on a regulated activity by way of business in the UK unless authorised or exempt; breach is a criminal offence.

Regulated activities are defined by the RAO (Regulated Activities Order) and include effecting and carrying out contracts of insurance, advising on and arranging investments.

The FCA Handbook contains the Principles for Businesses, rules (COBS, ICOBS), guidance and evidential provisions; rules are binding, guidance is not.

Approved Persons regime: senior managers and certification staff require approval or certification; SM&CR imposes prescribed responsibilities and conduct rules.

The Financial Services Compensation Scheme pays limited compensation for claims against failed firms; the Financial Ombudsman Service resolves individual complaints.

FSMA Part 7 gives the FCA powers to investigate, and Part 14 to impose penalties; the Upper Tribunal hears references against some decisions.

Applicants must satisfy the threshold conditions: legal status, location of offices, effective supervision, appropriate resources and suitability.

The PRA authorises banks, insurers and major investment firms; the FCA authorises most other firms; dual-regulated firms deal with both regulators.

Supervision uses a risk-based approach: firm categories, periodic assessment, data requests, skilled person reports and thematic reviews.

The FCA's enforcement powers include public censure, financial penalties, prohibition orders, conditions on permissions and withdrawal of authorisation.

Penalties are set under the FCA's decision procedure: the amount reflects the seriousness of the breach, the firm's financial resources and any aggravating or mitigating factors.

The PRA has its own enforcement and can impose penalties on dual-regulated firms; the FCA and PRA coordinate through memoranda of understanding.

Firms must notify the regulator of material events, breaches and changes in control; failure to notify is itself a breach of Principle 11.

The FCA's Principles for Businesses apply to all regulated firms; COBS and ICOBS set detailed rules, including fair treatment of customers and clear, fair and not misleading communications.

Consumer Duty: firms must act to deliver good outcomes, avoid foreseeable harm and support customers' financial objectives; it applies to retail customers and is enforced as a rule.

Disclosure: ICOBS requires the customer be given the essential policy information before conclusion, including the insurer's identity, cover, exclusions and complaints route.

Advice and suitability: personal recommendations must be suitable and take account of the customer's circumstances and objectives; execution-only sales require defined conditions.

Conflicts of interest must be identified, managed and disclosed; inducements must not impair the duty to act in the customer's best interests.

Claims handling is part of the conduct regime: firms must handle claims promptly and fairly, not unreasonably reject valid claims and explain any decision.

Vulnerable customers: firms must identify and respond to characteristics of vulnerability, including health, life events, resilience and capability.

UK GDPR and the Data Protection Act 2018 require lawful, fair and transparent processing, purpose limitation, data minimisation, accuracy, storage limitation, integrity and accountability.

Lawful bases include consent, contract, legal obligation, vital interests, public task and legitimate interests; special category data needs an additional condition.

Individual rights: access, rectification, erasure, restriction, portability, objection and rights relating to automated decisions; subject access requests are normally answered within one month.

Money laundering offences: concealing, arranging, acquiring or possessing criminal property, and failure to disclose; the Proceeds of Crime Act 2002 provides the framework.

Customer due diligence requires identifying the customer and beneficial owner, verifying identity, and enhanced due diligence for politically exposed persons and high-risk relationships.

Reporting: suspicious activity reports go to the National Crime Agency; firms must appoint a nominated officer (MLRO) and maintain records for at least five years after the relationship ends.

Financial crime controls include sanctions screening, terrorist financing checks, bribery prevention under the Bribery Act 2010 and fraud controls; the FCA expects a risk-based approach.

Firms must have a complaints procedure, acknowledge promptly, keep the complainant informed and issue a final response within eight weeks.

If the complaint is not resolved within eight weeks, or the customer rejects the final response, the customer may refer it to the Financial Ombudsman Service within six months of the final response.

The FOS decides what is fair and reasonable in all the circumstances, having regard to law, regulator rules, guidance and good industry practice.

FOS awards are capped at the statutory limit (awards above the limit may be made only with the complainant's consent); the limit is reviewed periodically.

FOS decisions are binding on the firm if accepted by the complainant, but not binding on the complainant, who may still go to court.

Firms must pay the case fee and cooperate with FOS information requests; failure to comply can lead to enforcement action by the FCA.

Alternative dispute resolution and the courts remain available; limitation periods and the FOS time limits run separately, so customers should be advised of both routes.