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x W01/March 2017 Award in General Insurance

Chapter 10 self-test answers

1. Professional codes of conduct apply to individuals as a result of their membership of a professional
(or trade) body.
2. In order to meet fit and proper requirements, a significant owner should have and demonstrate the
necessary qualities that will allow him/her to perform the duties and carry out the responsibilities of
his/her position with the insurer. With respect to a significant owner, these qualities relate at a
minimum to:
• the integrity demonstrated in personal behaviour and business conduct;
• soundness of judgment; and
• financial soundness.
3. An insurer should have a risk management policy which outlines the way in which they manage each
material category of risk, both strategically and operationally, and describes the link with the
insurer’s tolerance limits, regulatory capital requirements, economic capital and the processes and
methods for monitoring risk.
4. The compliance function is the system or process that is meant to reasonably ensure that a firm is
complying with all applicable laws, rules, regulations, codes of conduct, firm policies, and
standards of good practice. On the other hand, a key role of the internal audit function is to monitor
and evaluate the firm’s adequacy, implementation, and performance with respect to risk controls
within all aspects of the firm’s businesses.
5. The stages of an effective complaints procedure include the following:
• Complaints should be reported immediately to the complaints department of the product provider.
• Full details of the complaint and the source should be logged.
• A prompt written response should be made to the complainant.
• A full internal investigation into the complaint should be conducted immediately by the product Reference copy for CII Face to Face Training
provider.
• The firm’s decision remedy or offer should be sent to the complainant without delay
• Dissatisfied complainants should be advised if they have the right to pursue their grievance with
another external body.