As per the FAIS requirements it is vital that the intermediary or representative keep a record for each client, which should reflect the following:
• A copy of the record on which the insured items were recorded • A copy of all quotations considered
• A copy of the recommendation made to the client.
• A copy of the client’s acceptance of the recommendation or alternative quote.
• Copies of all additional documentation and information required
• A copy of the policy schedule with the terms and conditions of the policy wording.
Summary
Without a client’s consent to the terms and conditions, underwriting loadings and restrictions imposed, as well as the premium charged with the relevant excesses, the insurance contract is null and void.
Self-Assessment Questions
1. What is the purpose of an endorsement on a personal lines policy? a) It outlines the terms and conditions of a policy.
b) An endorsement is a clause that records changes in circumstances to a policy.
c) It details the item to be insured.
2. What are exclusions to the contract of insurance?
a) Exclusions are the insured perils covered by an insurance contract.
b) Exclusions detail the insured assets.
c) Exclusions are conditions in the contract that relieve one party of liability toward another.
d) Exclusions are conditions for which claims will be accepted.
3. What restrictions may be imposed in an insurance contract? a) Limitation of the use of a specified item
b) The purchase price of an insured item c) The make and model of an insured item d) The benefits of the item
4. Name one common condition of insurance. a) The banking details of the insured b) The age of the insured
c) Procedures for maintaining the vehicle
d) Procedures to be followed in the event of a claim
5. Which of the following must be included in the insurance proposal presented to the client?
a) A copy of the representative’s payslip b) A comparison of cover proposed
c) A copy of the representative’s qualification
d) A copy of the insurer’s annual financial statements
6. Which one of the following records must be kept in terms of the FAIS requirements?
a) A copy of the insured’s payslip
b) A copy of the insured’s bank statement
c) A copy of the recommendation made to the client
d) A copy of the insured’s financial arrangement for HP agreements
7. One of the items to be highlighted in a proposal by a representative is: a) exclusions and restrictions to proposed cover.
b) the value of the client’s property.
8. A manner in which the client’s acceptance can be recorded is: a) with the nod of the head.
b) there is no acceptance necessary.
c) a contract signed before a commissioner of oaths.
d) a recorded telephone call between the client and the representative.
9. What are the implications to be considered when obtaining additional requirements for cover?
a) The location of the vehicle when it is parked at night
b) Any drivers that may use the vehicle other than the insured c) Any time limits imposed by the insurer and documents must be
complete and accurate
d) The maintenance plan the insured will follow in maintaining his home and vehicle
10. What additional requirement may the insurer impose to conclude the transaction?
a) Valuation certificate, security requirement certificates b) Loadings and discounts
c) To ensure the admin fee is paid
d) That the client sign a contract of insurance in hard copy
Self-Assessment Answers
1. What is the purpose of an endorsement on a personal lines policy? a) It outlines the terms and conditions of a policy.
b) An endorsement is a clause that records changes in circumstances to a policy.
c) It details the item to be insured.
d) An endorsement removes an item from a policy.
2. What are exclusions to the contract of insurance?
a) Exclusions are the insured perils covered by an insurance contract.
b) Exclusions detail the insured assets.
c) Exclusions are conditions in the contract that relieve one party of liability toward another.
d) Exclusions are conditions for which claims will be accepted.
3. What restrictions may be imposed in an insurance contract?
a) Limitation of the use of a specified item
b) The purchase price of an insured item c) The make and model of an insured item d) The benefits of the item
4. Name one common condition of insurance. a) The banking details of the insured b) The age of the insured
c) Procedures for maintaining the vehicle
d) Procedures to be followed in the event of a claim
5. Which of the following must be included in the insurance proposal presented to the client?
a) A copy of the representative’s payslip
b) A comparison of cover proposed
c) A copy of the representative’s qualification
d) A copy of the insurer’s annual financial statements
6. Which one of the following records must be kept in terms of the FAIS requirements?
a) A copy of the insured’s payslip
b) A copy of the insured’s bank statement
c) A copy of the recommendation made to the client
d) A copy of the insured’s financial arrangement for HP agreements
7. One of the items to be highlighted in a proposal by a representative is:
a) exclusions and restrictions to proposed cover.
b) the value of the client’s property.
c) the security measures the client should maintain. d) the fact that the client may require armed response.
8. A manner in which the client’s acceptance can be recorded is: a) with the nod of the head.
b) there is no acceptance necessary.
c) a contract signed before a commissioner of oaths.
d) a recorded telephone call between the client and the representative.
9. What are the implications to be considered when obtaining additional requirements for cover?
a) The location of the vehicle when it is parked at night
b) Any drivers that may use the vehicle other than the insured
c) Any time limits imposed by the insurer and documents must be complete and accurate
d) The maintenance plan the insured will follow in maintaining his home and vehicle
10. What additional requirement may the insurer impose to conclude the transaction?
a) Valuation certificate, security requirement certificates
b) Loadings and discounts
c) To ensure the admin fee is paid