QFA Regulation flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Insurable interest

A life assurance policy requires the policyholder to hold a legal or financial interest in the life assured at the outset; the interest does not have to continue afterwards.

Life assurance exit tax

Gains in Irish life assurance investment policies are taxed at 41% on encashment, with a deemed chargeable event at every eight-year anniversary during the policy term.

Life policy cooling-off period

A policyholder may cancel a life assurance policy within 30 days of receiving the policy documents and receive a refund of premiums, adjusted for any fall in unit-linked fund value.

Income protection tax treatment

Premiums for income protection qualify for tax relief at the marginal rate up to 10% of income, while benefits received are taxed as income in the hands of the claimant.

Gross roll-up

The arrangement under which income and gains inside an Irish life assurance investment fund accumulate free of tax until a chargeable event triggers exit tax.

Chargeable event

An encashment, maturity, death or eight-year anniversary of a life assurance investment policy which triggers exit tax at 41% on any gain arising.

Standard Fund Threshold

The lifetime ceiling on an individual's pension capital value for Irish tax purposes, set at €2,000,000; any excess is a chargeable excess taxed at 40%.

Retirement lump sum limits

The first €200,000 of retirement lump sums is tax-free, the next €200,000 taxed at 20%, and any amount above €500,000 at the marginal rate.

Imputed distribution

An annual deemed withdrawal from an ARF or vested PRSA of 4% (5% on the portion above €2 million), taxed as income whether or not money is actually taken.

Age-related contribution limits

Tax relief on pension contributions is capped at a percentage of net relevant earnings by age, from 15% under age 30 up to 40% from age 60, on earnings capped at €115,000.

Approved Retirement Fund

An Irish post-retirement investment vehicle available from age 60; the fund stays invested, withdrawals are taxed as income and annual imputed distributions apply.

Standard PRSA charge cap

Charges on a standard PRSA cannot exceed 5% of each contribution and 1% a year of fund value, with these statutory caps not applying to non-standard PRSAs.

Deposit Guarantee Scheme

Irish deposit protection covers up to €100,000 per depositor per participating bank or credit union if that institution fails and cannot repay deposits.

Investor compensation limit

The Investor Compensation Company pays 90% of an eligible client's loss up to a maximum of €20,000 when an investment firm fails, excluding deposits.

PRIIPs key information document

A short standardised document for packaged retail products showing the summary risk indicator from 1 to 7, costs and performance scenarios before purchase.

DIRT

Deposit Interest Retention Tax is charged at 33% on Irish deposit interest, deducted at source by the bank or credit union and remitted to Revenue.

Suitability assessment

Under MiFID II an investment firm must gather information on a client's knowledge, experience, financial situation and objectives before giving advice or managing a portfolio.

Best execution

The MiFID II duty to take all sufficient steps to obtain the best possible result for clients considering price, cost, speed, likelihood of execution and settlement.

Compulsory motor insurance

Under the Road Traffic Act 1961 it is an offence to drive a mechanically propelled vehicle in a public place without a valid policy covering third-party liability.

Declined Cases Agreement

A voluntary arrangement whereby an applicant refused motor cover by three insurers can obtain a quotation from the market, unless refused for reasons such as fraud or non-payment.

Motor Insurers' Bureau

The body that compensates victims of uninsured or untraced drivers in Ireland under agreements with the State, funded by a levy on motor insurers.

Insurance Compensation Fund

A statutory Irish fund paying third-party claims when a non-life insurer is insolvent, at 100% for motor claims and 65% for other non-life claims.

Average clause

Where a property sum insured is below the full reinstatement value, partial losses are reduced in the same proportion as the underinsurance, so the insured bears part of the loss.

Duty of disclosure

In non-consumer insurance the proposer must volunteer every material fact a prudent insurer would consider relevant; breach allows the insurer to avoid the contract from the outset.

Third party direct action

The Third Parties (Rights Against Insurers) Act 2016 lets a claimant sue the insurer directly for a judgment debt when the insured is insolvent, without suing the insured first.

Solvency Capital Requirement

The Solvency II capital an insurer must hold to absorb a 1-in-200-year adverse scenario over one year, calculated by standard formula or an approved internal model.

Business interruption sum insured

The insured gross profit for a trading year multiplied by the indemnity period expressed as a fraction of a year, used to set the business interruption limit.

Declaration-linked policy

A commercial policy with a provisional premium that is adjusted after expiry according to declared turnover, wages or another exposure measure for the period.

Lifetime community rating

A 2% loading on private health insurance premiums for each year of age over 35 when first insuring in Ireland, capped at 70% of the base premium.

Open enrolment

The Irish rule that health insurers must accept any applicant for a health insurance product regardless of age, current health status or past claims experience.

Risk equalisation

A statutory scheme transferring funds from health insurers with younger, healthier members to those with older, more expensive members so community-rated pricing remains viable.

Health premium tax relief

Qualifying private health insurance premiums attract relief at 20%, applied at source by the insurer and capped at €1,000 per adult and €500 per child.