NZ CFS L5 General Insurance flashcards
NZ CFS L5 General Insurance · 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.
- Financial Advice Provider licence
- A Financial Advice Provider licence is issued by the Financial Markets Authority under the Financial Markets Conduct Act 2013 and authorises a business to provide regulated financial advice.
- Code of Professional Conduct
- The Code of Professional Conduct for Financial Advice Services sets standards for ethical conduct, client care, competence, disclosure, conflicts of interest and records for people giving regulated financial advice in New Zealand.
- Dispute resolution scheme
- An approved dispute resolution scheme, such as FSCL, IFSO or Financial Services Complaints Ltd, handles unresolved complaints against financial advice providers and insurers who are members.
- Privacy Act 2020
- The Privacy Act 2020 governs collection, use, storage and disclosure of personal information in New Zealand and requires notification of privacy breaches likely to cause serious harm.
- AML/CFT customer due diligence
- Customer due diligence under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires reporting entities to identify customers, verify information and monitor transactions.
- Indemnity principle
- The indemnity principle restores an insured to the financial position held before a loss, subject to policy limits, excesses and terms, without allowing the insured to profit.
- Utmost good faith
- Utmost good faith is the mutual duty of insurer and insured to act honestly and disclose material information; New Zealand statute modifies some consequences of non-disclosure.
- Proximate cause
- Proximate cause is the dominant and effective cause of a loss; it determines whether an insured peril or an exclusion applies under a policy.
- Subrogation
- Subrogation allows an insurer that has paid a claim to take over the insured's legal rights against a responsible third party and recover the loss.
- Risk pooling
- Risk pooling combines many similar but independent exposures so that premiums from the group fund losses; the law of large numbers improves predictability as the pool grows.
- Home building insurance
- Home building insurance covers the dwelling and permanent improvements against insured perils, usually on a replacement or agreed basis, subject to exclusions and sum insured.
- Contents insurance
- Contents insurance covers movable household property and personal effects against insured perils, with special limits for valuables, cash and items away from home.
- Business interruption cover
- Business interruption insurance pays lost profit and increased working costs following insured property damage at the business premises, subject to an indemnity period.
- Public liability insurance
- Public liability insurance covers the insured's legal liability for third-party bodily injury or property damage arising from the insured's business activities, subject to policy limits.
- Professional indemnity insurance
- Professional indemnity insurance covers legal liability and defence costs arising from negligent acts, errors or omissions in professional services, subject to exclusions and retroactive dates.
- Needs analysis
- A needs analysis compares a client's objectives, financial situation, existing cover and risk tolerance with available products to identify suitable insurance cover and limits.
- Scope of advice
- Scope of advice defines which products, insurers or areas a financial adviser will consider; limitations must be disclosed so the client understands the advice boundaries.
- Replacement analysis
- Replacement analysis compares benefits, costs, exclusions, exit penalties and risks of replacing existing insurance, and must justify any replacement in the client's interest.
- Vulnerable client
- A vulnerable client may have limited capacity, language, health or financial resilience; advisers must adapt communication and record how the client's interests were protected.
- Sum insured
- The sum insured is the maximum amount an insurer will pay for an insured loss under a policy, and it should reflect rebuild or replacement cost rather than market value.
- Policy excess
- A policy excess is the first amount of each claim that the insured must bear; a higher excess usually reduces premium but increases the insured's retained loss.
- Premium rating factors
- Premium rating factors are characteristics used to price risk, such as construction, location, occupancy, claims history and sum insured, adjusted by loadings or discounts.
- Endorsement
- An endorsement is a written amendment to an insurance policy that extends, restricts or clarifies cover and prevails over inconsistent standard policy wording.
- Averaging clause
- An averaging clause reduces a claim proportionally when the sum insured is less than the value at risk, so the insured shares the underinsurance loss.
- Claim reserve
- A claim reserve is an insurer's estimate of the ultimate cost of a reported claim, including indemnity, defence and adjustment costs, reviewed as new information emerges.
- Proximate cause in claims
- Claims assessors use proximate cause to identify the effective cause of loss and decide whether an insured peril, exclusion or condition determines cover.
- Salvage rights
- Salvage rights let an insurer take or sell damaged property after paying a total loss, reducing the net claim cost; the insured must not dispose of salvage without consent.
- Fraudulent claim
- A fraudulent claim involves deliberate misrepresentation or exaggeration; it can void cover, require repayment and lead to criminal referral, while genuine claims must still be handled fairly.
- Insurance broker
- An insurance broker acts for the client rather than the insurer, arranges cover, discloses remuneration and must place client money in trust under New Zealand rules.
- Binding authority
- A binding authority allows an intermediary to accept risks or issue policies on an insurer's behalf within agreed limits, while the insurer remains liable under the policy.
- Commission disclosure
- Commission disclosure informs a client about remuneration an intermediary receives from an insurer, helping the client understand conflicts of interest when choosing insurance.
- Nominated representative
- A nominated representative is an individual authorised to give financial advice on behalf of a licensed financial advice provider and must meet competence and conduct standards.