I achieved a High Distinction on the LPC at BPP (London Holborn) using these notes and used them to secure a job and a training contract at a well-known FTSE 100 company. The LPC is all about having a good set of notes and learning them. Using these notes, you will have all of the key information...
Nothing on fraud in these notes, only 1 page on averages calculations for SGS 6/7
By: hollyeastwood • 2 year ago
By: Blumerzz • 2 year ago
Hi Holly,
Thank you for your review - I hope your exams went well!
Thanks,
CB
By: zarmane_dogar • 3 year ago
By: Blumerzz • 3 year ago
I’m sorry that you felt that the notes were only 3 stars.
As I offered in our exchanges, happy to discuss any concerns over the phone if you haven’t already sat your exam. I am an Insurance Lawyer in practice now so happy to help!
WHAT IS INSURANCE?
• Transfers RISK from insured to insurer for price to provide SECURITY in the event of loss
• Contractual relationship
o Policy holder (‘insured’) pays sum (‘premium’) to another (‘insurer’) who in turn agrees to
pay sum / benefit on occurrence of specific event (‘insured event’)
• Spreading Loss
o Multiple parties pay ‘premium’ into insurers ‘pool’ which is then used to pay out on claims
PROFIT
Shareholders / Mutual Insures (owned by policy holders
resulting in discounted premiums)
PURPOSE OF INSURANCE
• Transfers risk / Spreads loss
• Provides security to insured
o Peace of mind (Business + Customers)
o Financial security
o Renting capital – in exchange for a premium to meet unexpected cost
• Risk management – to reduce frequency + severity of claims = reduced premium
PURPOSE OF PREMIUM
• Consideration for contract
• Principal source of income for insurer
• To ensure sufficient ‘pool’ to pay claims + generate profit
INSURANCE MARKET (PARTIES)
• Insured = Buyer
o Companies / Private individuals / Trade Unions / Professionals
• Intermediary
o Broker = typically have specialist knowledge of specific risks + relationship with
specialised insurers (e.g. aviation)
o Agent = representative of insurers
• Insurer = Seller
o Lloyd’s Syndicates (Corporate Members / Individuals)
, o Companies (Owned / Controlled by shareholders)
o Mutuals
▪ Owned by policyholders that take share of any profit made payment /
deducted premiums
▪ Mutual Indemnity Association – trade members with specialist policies
o Captives
▪ subsidiaries of large multinational corporation that exclusively write
insurance needs of parent company
• Reinsurer = Can have reinsurance policy sellers only (1/3 of Lloyds Market)
CONTRACT OF INSURANCE (Based on principles of contract)
1) Proposer completes proposal form
• Specific questions to enable insurer to assess risk
2) U/W assesses risk
• historical evidence on claims / perceived risks (underwriters)
o likelihood (frequency) of the event occurring; AND
o associated costs of that event (severity)
• Insurer must quantify risk correctly to charge premiums that are sufficient (but
competitive) to cover claims of the few
3) Quote / Decline
4) Premium payment
CLASSES OF INSURANCE
• Property = General term to describe all ins. that covers loss or damage to property
o Fire / Home / Contents / Car / Aviation / Marine
• Business Interruption
• Liability (Negligence / Statutory Duties / Breach of Contract)
o Directors & Officers
o Employers Liability
o Professional Indemnity (Errors & Omissions Insurance)
o Public Liability (Legal costs + compensation for property damage / personal injury
suffered by members of public as a result of a business’ activities)
o Product Liability
• Fidelity = to protect employers from fraud by their staff
• Personal
o Accident
o Motor (5%)
▪ s143 RTA 1988: requires drivers to have insurance against 3rd party risks
▪ 3rd Party / Fire / Theft / Comprehensive
o Life (illness / loss of employment)
Negative consequences of not having insurance
• Lack of investor interest
• Poor risk management
• Clients nervous of doing business
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