Network Protect:

Finance GAP & RTI Gap Network

Module Objectives

By the end of this module you will be able to complete an online assessment

which will demonstrate your:

Knowledge of both Finance GAP & RTI GAP

Competence in presenting the products

Ability to deliver outstanding levels of Customer Service

Agenda

What is Network Protect (Finance GAP & RTI Gap)?

Why Should A Customer Buy GAP & What are the benefits?

Eligibility

Policy Exclusions / Conditions

Sales Process

Administration Procedure

Claims Procedure

Complaints Procedure

Summary and Next Steps…

Network Protect

There are two Network Protect Products available

Finance Gap

RTI Gap

Let’s look at Finance Gap first…

Finance GAP – What it Covers

Applicable to Hire and lease agreements only, where the customer does not have

ownership of the vehicle. Finance Gap covers the following:

In the event the customer’s vehicle is declared a total loss as a result of being

stolen or written off, Finance GAP will pay the difference between:

the motor insurance company settlement and

The amount you require to settle your finance agreement

The maximum benefit payable is £15,000

Finance GAP- Additional Features

Accessories

Manufacturer fitted accessories are covered

Motor Insurance Excess

The policy will cover up to £250 motor insurance excess

Network Gap

Cover for up to 60 months, in line with the customer’s finance agreement

Cover extends to member countries of the European Community

Network Protect

There are two Network Protect Products available

Finance Gap

RTI Gap

Now let’s look at RTI Gap…

RTI Gap – What it Covers

Applicable to Purchase agreements only, where the customer will have the

opportunity to, or has purchased the vehicle.

In the event the customer’s vehicle is declared a total loss as a result of being

stolen or written off, RTI GAP will pay the difference between:

the motor insurance company settlement and

the original purchase price of the vehicle, or the amount outstanding to the

finance company to settle the loan where this figure is greater than the original

purchase price

The maximum benefits payable are:

£10,000 for vehicles under £50,000

£20,000 for vehicles between £25,000 and £75,000

Network RTI Gap – Additional Features

Accessories

Manufacturer fitted accessories are covered

Motor Insurance Excess

The policy will cover up to £250 motor insurance excess

RTI Gap

Cover is for 36 months

Cover extends to member countries of the European Community

Why Should A Customer Buy GAP

Did you know…

It was reported that last year there were 450,000 vehicles declared as ‘written off’

in the UK due to accidents.

A further 150,000 cars were stolen and unrecovered.

This amounts to 600,000 cars in total which were deemed ‘a total loss’.

The benefits of GAP insurance

Prevents customer being short of sufficient funds to buy an equivalent vehicle

Prevents customer paying for a vehicle they’re no longer able to drive

Customer doesn’t have to rely on their savings to settle any outstanding finance

Eligibility

In order to qualify for Finance GAP and RTI Gap the vehicle must be

a vehicle less than 3.5 tonnes

have a maximum purchase price not greater than

£75,000 for RTI Gap

£125, 000 for Finance GAP

The “net selling invoice” price is determined by the following:

The sale price of the insured vehicle, including factory fitted accessories and including any discount

given, but excluding any warranty charges, insurance premiums, road fund licence, and dealer fitted

extras and accessories unless specified on the relevant manufacturer’s price list.

Furthermore

the customer must be covered by a fully comprehensive motor insurance policy throughout the term of

the GAP policy

Vehicle Exclusions

The following vehicles are excluded from cover

Vehicle’s used for pacemaking, racing, speed testing or reliability trials, hire or

reward, including private hire or taxi, couriers, tuition, etc

Emergency vehicles, buses, invalid carriers and commercial vehicles exceeding 3.5

tonnes

Any left hand drive vehicles and vehicles which do not meet UK or EC approval or

are not commercially available in the UK direct from a manufacturer or its

authorised importer or dealer

Conditions & Exclusions

The following are the main conditions and exclusions of the policy, a full list of policy exclusions and

conditions can be found in the policy document, for which the customer must be made aware:

If the claim is directly or indirectly caused by the insured's involvement in a crime or drink driving offence

or being under the influence of drugs

Any warranties, dealer fitted accessories and insurance products (purchased along with the vehicle) are not

covered

Any VAT, where a policy holder is able to reclaim the VAT from HMRC

Any excess over £250

Where the vehicle is stolen by an individual who has access to the keys

If the insured vehicle has been modified in any way from the manufacturers specification

To the extent that the GAP is caused or increased by payments which are in arrears under the finance

agreement at the date of loss

Sales Process

It’s important we understand these products are regulated.

Therefore, we must follow certain steps as part of the sales process.

Let’s take a look at a generic sales process and the compliance touch points for

insurance products, highlighted in red.

Sales Process

By following these steps we will ensure that the customer is appropriately

informed and made aware that:

The products are optional and the prescribed information is issued

They are eligible for the product(s) that have been presented to them

The customer is aware of;

Features

Benefits

Claims procedure

Cancellations procedure

Complaints procedure

Sales Process

New regulation has recently come in to being around the sale of GAP insurance.

Let’s take a look at this now…

Sales Process

The FCA recently conducted a review of the add on insurance market.

As part of this review, GAP insurance was analysed to determine the

effectiveness of the market in terms of value for money, competition and the

ability for the consumer to shop around.

The results of the findings have now been published and the FCA have introduced

new rules for the sale of GAP insurance by motor dealerships.

These changes came into effect on the 1st September 2015

Firms distributing GAP insurance in connection with the sale of a motor vehicle

(add-on GAP) will be required to:

Provide customers with prescribed information to help them shop around and be more

engaged when making decisions about purchasing the product.

Introduce a deferral period, which means GAP insurance cannot be introduced and

sold on the same day

Sales Process – Prescribed Information

GAP insurance distributors must provide customers with the following information as a minimum to

trigger the deferred opt-in:

The total premium of the add-on GAP insurance policy, separately from other prices

The significant features and benefits, significant and unusual exclusions or limitations, and cross-references to

the relevant policy document provisions

whether or not the GAP contract is sold in connection with the vehicle finance, that GAP insurance is sold by

other distributors

The duration of the GAP insurance policy

Whether the GAP insurance policy is optional

When the GAP insurance contract can be concluded by the firm, including the date on which the prescribed

information was provided so that it is clear to the customer when the ‘clock’ has started

This information is all provided to the customer when you issue the

Prescribed Information from Synergy

Administration Procedure

To incept the customer’s policy on the SYNERGY:

Enter the customer’s details, including details of the vehicle

Select the policy

The system will provide the appropriate documentation

The Policy documentation, and their attention drawn to the policy detail.

In accordance with the deferred opt-in period, you will not be able to conclude the

sale until at least 24 hours after you have provided the customer with the

Prescribed Information

You will then be able to complete the sale and issue the customer with their policy

documentation, and fixed sum loan agreement (if the customer is paying by direct

debit)

Where the customer has exercised their right to break the deferred opt-in, as

outlined in ICOBS 6A.1.7-R, this will be annotated on their policy schedule.

Claims Procedure

Your Role; is to ensure the customer is aware of the correct procedure, including

telephone numbers and details of the scheme administrator, Premia Solutions.

The customer’s claim must be reported within 30 days.

Administrator Role; Premia Solutions administer all claims, you must advise a

customer to contact them on the dedicated number on the Summary of Cover

Procedure; the customer will be asked details of their claim over the telephone

and a claim form will be issued for completion and signature

Complaints Procedure

A complaint is defined by the FCA as

Any expression of dissatisfaction, whether oral or written, and whether justified or

not, from or on behalf of an eligible complainant about the firm’s provision of, or

failure to provide, a financial service’

In the first instance you will need to establish the nature of the complaint that

the customer wishes to make

If the complaint relates to the sale of the policy, the customer should contact the

complaints officer at the franchise

If the complaint relates to the administration or claims process involved, they

should follow the procedure outlined on the next slide…

Complaints Procedure

You should advise customers of the correct procedure which is to contact the

administrator or insurer

Should the customer remain dissatisfied, they can ask the Financial Ombudsman

to review their case

Contact details for all the above can be found on the Summary of Cover

Next Steps

You now have two choices, you may either:

If you are totally prepared and confident that you have fully understood this

module, you may now move forward and sit the online test by clicking here and

logging in

If you are not 100% prepared and do not feel ready to sit the online assessment you

may return to the beginning of this module and complete your preparation