EPLE key terms

The set of principles and conduct rules that guide an insurance professional's decisions, balancing duties to clients, employers, regulators, and the public interest. It covers integrity, fairness, competence, confidentiality, and disclosure of conflicts.

A legal obligation to act in another party's best interest, placing that party's interests ahead of one's own. In insurance, agents and brokers may owe fiduciary duties when handling premiums or advising clients.

A situation where a professional's personal, financial, or other interest could improperly influence decisions made on behalf of a client or employer. It must be identified, disclosed, and managed or avoided.

The requirement that a recommended insurance product match the client's needs, objectives, financial situation, and risk tolerance. It requires gathering accurate information and documenting the basis for the recommendation.

The process of collecting and verifying information about a client's identity, circumstances, and objectives before providing advice or coverage. It supports suitability, anti-money-laundering compliance, and accurate underwriting.

A structured assessment of a client's exposures, obligations, and resources to determine which risks require insurance and how much coverage is appropriate. It also considers affordability and existing coverage.

A shortfall between the losses a client could suffer and the protection provided by existing insurance policies. Identifying gaps is a core purpose of needs analysis and periodic policy review.

The timely sharing of material facts with clients, insurers, or regulators, including policy terms, commissions, conflicts, and limitations. Failure to disclose can constitute misrepresentation or a breach of regulatory duties.

A mutual duty requiring both applicant and insurer to deal honestly and disclose material information relevant to the contract. Breach may allow the other party to avoid or rescind the policy.

Information that would influence a reasonable insurer's decision to accept a risk, set terms, or calculate a premium. Applicants must disclose such facts, and insurers must disclose material policy terms.

Failure by an applicant or insured to reveal a material fact when required. Depending on jurisdiction and intent, it may entitle the insurer to avoid the contract or reduce a claim payment.

A false or misleading statement made during application, renewal, or claims handling. If material and relied upon by the insurer, it can affect policy validity or claim outcomes.

The principle that insurance should restore the insured to approximately the financial position held before a loss, without profit. It underpins property and liability cover and links to sums insured and subrogation.

The insurer's right, after paying a claim, to pursue recovery from a third party legally responsible for the loss. It prevents double recovery and supports the indemnity principle.

The principle allowing several insurers covering the same loss to share the cost proportionately, preventing the insured from recovering more than the loss. It typically applies to indemnity policies with overlapping cover.

A legal or financial relationship with the subject of insurance such that the insured benefits from its preservation or suffers loss from its damage. It must exist at inception or at the time of loss, depending on the class.

The laws, rules, codes, and supervisory bodies governing insurance conduct, solvency, and market entry. It defines licensing requirements, capital standards, and enforcement powers within a jurisdiction.

The formal authorization granted by a regulator to an insurer, intermediary, or representative to conduct specified insurance activities. Operating without a licence is unlawful and can void client protections.

Supervision of how insurers and intermediaries treat customers, covering sales practices, disclosure, complaints, and claims. It aims to ensure fair outcomes rather than only financial soundness.

Rules focused on the financial soundness of insurers, including capital adequacy, reserves, governance, and risk management. Its goal is to reduce the likelihood of insurer failure and protect policyholders.

The excess of an insurer's admissible assets over its liabilities, required by regulation to absorb unexpected losses. Regulators set minimum levels and may intervene if they are breached.

A capital requirement calculated according to the risk profile of an insurer's assets and liabilities, so riskier portfolios must hold more capital. It aligns regulatory capital with actual exposures.

Controls and procedures designed to prevent criminals from disguising the proceeds of crime through insurance products. They include customer due diligence, transaction monitoring, record keeping, and suspicious activity reporting.

A confidential report filed with the relevant authority when a professional suspects funds or transactions are linked to criminal conduct. Filing in good faith is typically protected by law.

A regulatory principle requiring fair treatment of customers across product design, marketing, advice, and claims. It emphasizes clear communication, suitable outcomes, and handling complaints without detriment.

A client whose circumstances, such as age, health, disability, or financial distress, increase the risk of harm or disadvantage. Firms must adapt communication and processes to achieve fair outcomes.

The documented process for receiving, investigating, resolving, and reporting customer complaints within regulatory timeframes. Effective handling provides redress, identifies root causes, and supports fair treatment.

Professional liability cover protecting intermediaries and advisers against claims arising from negligent acts, errors, or omissions in their professional services. Many regulators require it as a licensing condition.

A structured record of identified risks, their likelihood and impact, assigned owners, and mitigation actions. It is reviewed regularly and supports governance, audit, and business continuity planning.

A firm-wide approach to identifying, assessing, and managing risks across strategy, operations, finance, and compliance. It links risk appetite to decision-making and reporting rather than treating risks in isolation.

Documented arrangements enabling a firm to maintain or restore critical operations after disruption, such as system failure, disaster, or staff loss. It includes recovery priorities, roles, and testing schedules.

Policies, procedures, and checks designed to prevent or detect errors, fraud, and non-compliance. Examples include segregation of duties, authorization limits, reconciliations, and audit trails.

Dividing responsibilities so that no single person controls all stages of a transaction, reducing fraud and error risk. It is a fundamental internal control in premium handling and claims processing.

A separate bank account where an intermediary holds client premiums until remittance to the insurer. Rules restrict its use and require accurate records, reconciliation, and protection from business creditors.

Ongoing training and learning required to maintain competence and, in many jurisdictions, to retain a licence. It covers technical knowledge, ethics, and regulatory updates.

The knowledge, skills, and judgement needed to perform professional duties to an acceptable standard. It must be maintained over time and limited to areas within the practitioner's expertise.

Legal and operational requirements for collecting, using, storing, and sharing personal information lawfully and securely. It includes consent, purpose limitation, security safeguards, and breach notification.

The practice of keeping client, transaction, and compliance records for periods set by regulation or business need. Records must remain accurate, accessible, and secure throughout the retention period.

The process of evaluating a proposed risk, deciding whether to accept it, and setting terms and premium. It relies on accurate disclosure and may include exclusions, conditions, or loadings.

The tendency of an insured to take fewer precautions or behave less carefully because insurance will bear the loss. Insurers manage it through deductibles, exclusions, conditions, and claims investigation.

The process of notifying, investigating, assessing, and settling claims according to policy terms and regulatory standards. It requires timely communication, fair assessment, and documented decisions.