GEN 2A Sample GEN 2A Sample QuestionsQuestions

Sample Multi-ChoiceSample Multi-ChoiceQuestions Questions

Sample Question Sample Question

Which regulatory tool is used to ensure assets are more Which regulatory tool is used to ensure assets are more than adequate to meet liabilities?than adequate to meet liabilities?

AA Deposit requirementDeposit requirementBB Reserve requirementReserve requirementCC Capital requirementCapital requirementDD Right of examination Right of examination

Answer Answer

Which regulatory tool is used to ensure assets are more Which regulatory tool is used to ensure assets are more than adequate to meet liabilities?than adequate to meet liabilities?

AA Deposit requirementDeposit requirementBB Reserve requirementReserve requirementCC Capital requirementCapital requirementDD Right of examinationRight of examination

Answer: CAnswer: C

Sample Question Sample Question

The Motor Insurance Advisory Board (MIAB) recommended The Motor Insurance Advisory Board (MIAB) recommended which of the following measures?which of the following measures?

AA Greater use of experts in legal casesGreater use of experts in legal casesBB Earlier communication of renewal terms to motor Earlier communication of renewal terms to motor

policyholderspolicyholdersCC Guidelines on damages to apply to the Personal Injuries Guidelines on damages to apply to the Personal Injuries

Assessment Board (PIAB)Assessment Board (PIAB)DD An increase in the solvency margins of authorised motor An increase in the solvency margins of authorised motor

insurers insurers

Answer Answer

The Motor Insurance Advisory Board (MIAB) recommended The Motor Insurance Advisory Board (MIAB) recommended which of the following measures?which of the following measures?

AA Greater use of experts in legal casesGreater use of experts in legal casesBB Earlier communication of renewal terms to motor policyholdersEarlier communication of renewal terms to motor policyholdersCC Guidelines on damages to apply to the Personal Injuries Guidelines on damages to apply to the Personal Injuries

Assessment Board (PIAB)Assessment Board (PIAB)DD An increase in the solvency margins of authorised motor An increase in the solvency margins of authorised motor

insurers insurers Answer: CAnswer: C

Sample Question Sample Question

Member States of the European Union are not permitted to Member States of the European Union are not permitted to grant authorisation to an insurance undertaking where there grant authorisation to an insurance undertaking where there are any close links:are any close links:

AA with any other commercial enterprisewith any other commercial enterpriseBB with any other business unless there are common directors with any other business unless there are common directors

appointed to each entityappointed to each entityCC with any other business unless prior notification is given to with any other business unless prior notification is given to

the regulatorthe regulatorDD with any other business unless they do not prevent effective with any other business unless they do not prevent effective

supervision supervision

Answer Answer

Member States of the European Union are not permitted to grant Member States of the European Union are not permitted to grant authorisation to an insurance undertaking where there are any authorisation to an insurance undertaking where there are any close links:close links:

AA with any other commercial enterprisewith any other commercial enterpriseBB with any other business unless there are common directors with any other business unless there are common directors

appointed to each entityappointed to each entityCC with any other business unless prior notification is given to the with any other business unless prior notification is given to the

regulatorregulatorDD with any other business unless they do not prevent effective with any other business unless they do not prevent effective

supervision supervision Answer: DAnswer: D

Sample Question Sample Question

An insurer’s solvency margin is reduced by reinsurance An insurer’s solvency margin is reduced by reinsurance provision, but up to what maximum limit?provision, but up to what maximum limit?

AA 10%10%BB 25%25%CC 50%50%DD 75% 75%

Answer Answer

An insurer’s solvency margin is reduced by reinsurance An insurer’s solvency margin is reduced by reinsurance provision, but up to what maximum limit?provision, but up to what maximum limit?

AA 10%10%BB 25%25%CC 50%50%DD 75% 75%

Answer: CAnswer: C

Sample Question Sample Question

If a Non-Life insurer fails to maintain an adequate solvency If a Non-Life insurer fails to maintain an adequate solvency margin, what power is given to the Financial Regulator (FR) margin, what power is given to the Financial Regulator (FR) by virtue of the 1994 Non-life framework regulations?by virtue of the 1994 Non-life framework regulations?

AA Imposition of a fineImposition of a fineBB Control over the disposal of assetsControl over the disposal of assetsCC Publicising the inadequacy in the National pressPublicising the inadequacy in the National pressDD Withdrawal of authorisation Withdrawal of authorisation

Answer Answer

If a Non-Life insurer fails to maintain an adequate solvency If a Non-Life insurer fails to maintain an adequate solvency margin, what power is given to the Financial Regulator (FR) by margin, what power is given to the Financial Regulator (FR) by virtue of the 1994 Non-life framework regulations?virtue of the 1994 Non-life framework regulations?

AA Imposition of a fineImposition of a fineBB Control over the disposal of assetsControl over the disposal of assetsCC Publicising the inadequacy in the National pressPublicising the inadequacy in the National pressDD Withdrawal of authorisationWithdrawal of authorisation

Answer: B Answer: B

Sample Question Sample Question

Under the terms of the Insurance Acts what action (if any) can the Under the terms of the Insurance Acts what action (if any) can the Financial Regulator (FR) take if it feels that a person proposed as Financial Regulator (FR) take if it feels that a person proposed as director of an authorised Non-Life insurer is not suitably qualified to director of an authorised Non-Life insurer is not suitably qualified to hold that office?hold that office?

AA None. Effectively the Financial Regulator (FR) can only adviseNone. Effectively the Financial Regulator (FR) can only adviseBB The Financial Regulator (FR) has the right to investigate but may The Financial Regulator (FR) has the right to investigate but may

then only offer advice to the Non-Life insurerthen only offer advice to the Non-Life insurerCC The Financial Regulator (FR) can impose a time delay but not The Financial Regulator (FR) can impose a time delay but not

prohibit the appointment entirelyprohibit the appointment entirely

DD The Financial Regulator (FR) can prohibit the appointmentThe Financial Regulator (FR) can prohibit the appointment

Answer Answer

Under the terms of the Insurance Acts what action (if any) can the Financial Under the terms of the Insurance Acts what action (if any) can the Financial Regulator (FR) take if it feels that a person proposed as director of an Regulator (FR) take if it feels that a person proposed as director of an authorised Non-Life insurer is not suitably qualified to hold that office?authorised Non-Life insurer is not suitably qualified to hold that office?

AA None. Effectively the Financial Regulator (FR) can only adviseNone. Effectively the Financial Regulator (FR) can only adviseBB The Financial Regulator (FR) has the right to investigate but may then only The Financial Regulator (FR) has the right to investigate but may then only

offer advice to the Non-Life insureroffer advice to the Non-Life insurerCC The Financial Regulator (FR) can impose a time delay but not prohibit the The Financial Regulator (FR) can impose a time delay but not prohibit the

appointment entirelyappointment entirely

DD The Financial Regulator (FR) can prohibit the appointmentThe Financial Regulator (FR) can prohibit the appointment

Answer: DAnswer: D

Sample Question Sample Question

Which of the following methods of terminating an agency Which of the following methods of terminating an agency may lead to a breach of contract by the agent?may lead to a breach of contract by the agent?

AA PerformancePerformanceBB RevocationRevocationCC RenunciationRenunciationDD Frustration Frustration

Answer Answer

Which of the following methods of terminating an agency Which of the following methods of terminating an agency may lead to a breach of contract by the agent?may lead to a breach of contract by the agent?

AA PerformancePerformanceBB RevocationRevocationCC RenunciationRenunciationDD Frustration Frustration

Answer: CAnswer: C

Sample Question Sample Question

Which of the following statements highlights a key difference between Which of the following statements highlights a key difference between Multi-agency intermediaries and Authorised Advisors?Multi-agency intermediaries and Authorised Advisors?

AA The Multi-agency intermediary has a more onerous regulatory The Multi-agency intermediary has a more onerous regulatory responsibility than an Authorised Advisor responsibility than an Authorised Advisor

BB The Multi-agency intermediary cannot hold client money; an Authorised The Multi-agency intermediary cannot hold client money; an Authorised Advisor canAdvisor can

CC The Multi-agency intermediary may provide advice only on those The Multi-agency intermediary may provide advice only on those products from providers with whom it holds an agency appointment; an products from providers with whom it holds an agency appointment; an Authorised Advisor’s remit is widerAuthorised Advisor’s remit is wider

DD An Authorised Advisor’s role is better suited to operating with a limited An Authorised Advisor’s role is better suited to operating with a limited number of insurers than a Multi-agency Intermediary number of insurers than a Multi-agency Intermediary

Answer Answer

Which of the following statements highlights a key difference between Multi-Which of the following statements highlights a key difference between Multi-agency intermediaries and Authorised Advisors?agency intermediaries and Authorised Advisors?

AA The Multi-agency intermediary has a more onerous regulatory responsibility than The Multi-agency intermediary has a more onerous regulatory responsibility than an Authorised Advisor an Authorised Advisor

BB The Multi-agency intermediary cannot hold client money; an Authorised Advisor The Multi-agency intermediary cannot hold client money; an Authorised Advisor cancan

CC The Multi-agency intermediary may provide advice only on those products from The Multi-agency intermediary may provide advice only on those products from providers with whom it holds an agency appointment; an Authorised Advisor’s providers with whom it holds an agency appointment; an Authorised Advisor’s remit is widerremit is wider

DD An Authorised Advisor’s role is better suited to operating with a limited number of An Authorised Advisor’s role is better suited to operating with a limited number of insurers than a Multi-agency Intermediary insurers than a Multi-agency Intermediary

Answer: CAnswer: C

Sample Question Sample Question

The Financial Regulator’s (FR) guidance notes for retail The Financial Regulator’s (FR) guidance notes for retail investment products in relation to the investment products in relation to the Criminal Justice Act Criminal Justice Act 19941994 relate to what subject? relate to what subject?

AA Accounting practices Accounting practices BB Money launderingMoney launderingCC CompetitionCompetitionDD Data Protection Data Protection

Answer Answer

The Financial Regulator’s (FR) guidance notes for retail The Financial Regulator’s (FR) guidance notes for retail investment products in relation to the investment products in relation to the Criminal Justice Act Criminal Justice Act 19941994 relate to what subject? relate to what subject?

AA Accounting practices Accounting practices BB Money launderingMoney launderingCC CompetitionCompetitionDD Data Protection Data Protection

Answer: BAnswer: B

Sample Question Sample Question

Which of the following statements is true regarding the Which of the following statements is true regarding the Consumer Information Act 1978Consumer Information Act 1978??

AA The Act is of general application and has no specific The Act is of general application and has no specific insurance requirementsinsurance requirements

BB The Act gives insurers and policyholders equal rightsThe Act gives insurers and policyholders equal rightsCC The Act is concerned with the release of personal information The Act is concerned with the release of personal information

to other parties to other parties DD The Act creates offences for insurers that make false The Act creates offences for insurers that make false

statements statements

Answer Answer

Which of the following statements is true regarding the Which of the following statements is true regarding the Consumer Consumer Information Act 1978Information Act 1978??

AA The Act is of general application and has no specific insurance The Act is of general application and has no specific insurance requirementsrequirements

BB The Act gives insurers and policyholders equal rightsThe Act gives insurers and policyholders equal rightsCC The Act is concerned with the release of personal information to The Act is concerned with the release of personal information to

other parties other parties DD The Act creates offences for insurers that make false statementsThe Act creates offences for insurers that make false statements

Answer: D Answer: D

Sample ProblemSample ProblemQuestion Question

Sample Problem Sample Problem Question Question

ABC, an insurer established in Ireland, wish to extend their market ABC, an insurer established in Ireland, wish to extend their market and offer insurance in the United Kingdom. The insurer specialises in and offer insurance in the United Kingdom. The insurer specialises in commercial property business. commercial property business.

Problem Question AProblem Question A

When ABC consider how to develop in the UK market, which of the When ABC consider how to develop in the UK market, which of the following means would be controlled by the Irish Financial Regulator following means would be controlled by the Irish Financial Regulator (FR) with the least permissible UK regulatory intervention?(FR) with the least permissible UK regulatory intervention?

AA Passporting into the UKPassporting into the UKBB Opening a branch office in the UKOpening a branch office in the UKCC Purchasing an existing UK insurer as a subsidiaryPurchasing an existing UK insurer as a subsidiaryDD Operating through an intermediary based in the UK Operating through an intermediary based in the UK

Problem Question B Problem Question B

If ABC decides to operate on a If ABC decides to operate on a freedom of servicesfreedom of services basis in the UK basis in the UK which of the following must occur first?which of the following must occur first?

AA Advising the Financial Regulator (FR) of the intention to open the Advising the Financial Regulator (FR) of the intention to open the BranchBranch

BB Advising the UK Regulator of the intention to open the BranchAdvising the UK Regulator of the intention to open the BranchCC Setting up the branch as a going concernSetting up the branch as a going concernDD Printing of stationery and opening of appropriate bank accounts Printing of stationery and opening of appropriate bank accounts

Problem Question C Problem Question C

If ABC decide to proceed on the basis of freedom of services, how If ABC decide to proceed on the basis of freedom of services, how soon must the Financial Regulator (FR) advise the UK authorities of soon must the Financial Regulator (FR) advise the UK authorities of this fact?this fact?

AA Within 15 daysWithin 15 daysBB Within 1 monthWithin 1 monthCC Within 6 weeksWithin 6 weeksDD Within 3 months Within 3 months

Problem Question DProblem Question D

If ABC wish all insurance contracts to be subject to Irish law, which of the If ABC wish all insurance contracts to be subject to Irish law, which of the following statements is true?following statements is true?

AA The Second Non-Life Insurance Directive allows ABC to choose entirely at The Second Non-Life Insurance Directive allows ABC to choose entirely at their discretion, provided the fact is made clear in documentationtheir discretion, provided the fact is made clear in documentation

BB The Second Non-Life Insurance Directive insists that English or Scots law The Second Non-Life Insurance Directive insists that English or Scots law applies in order to protect the consumerapplies in order to protect the consumer

CC If UK law permits another system of law to operate, ABC is free to choose If UK law permits another system of law to operate, ABC is free to choose Irish law to govern the interpretation, otherwise, English or Scots law would Irish law to govern the interpretation, otherwise, English or Scots law would applyapply

DD The UK regulatory authorities would need to give prior approval for Irish The UK regulatory authorities would need to give prior approval for Irish law to apply to the interpretation of UK issued policies law to apply to the interpretation of UK issued policies

Problem Question E Problem Question E

When ABC consider their investment policy which of the following When ABC consider their investment policy which of the following statements is true?statements is true?

AA ABC are free to choose any reasonable investment for funds ABC are free to choose any reasonable investment for funds regardless of currencyregardless of currency

BB A fixed proportion (25%) of assets must be held in GB£A fixed proportion (25%) of assets must be held in GB£CC ABC must match liabilities and assets denominated in GB£ABC must match liabilities and assets denominated in GB£DD ABC must maintain the investment mix originally advised to the ABC must maintain the investment mix originally advised to the

Financial Regulator (FR) when originally applying to carry on Financial Regulator (FR) when originally applying to carry on business in Ireland business in Ireland

Answers to Problem Answers to Problem QuestionQuestion

1A – Answer: B1A – Answer: B

1B 1B – Answer: A– Answer: A

1C 1C – Answer: B– Answer: B

1D 1D – Answer: C– Answer: C

1E 1E – Answer: C– Answer: C