CIP 02 compliance and advice Questions
and Answers.
Four key areas that suggest a need for external regulation in the insurance/financial services -
Answer 1. Potential for serious financial loss
2. conflict of interest
3. competence of advice
4. financial failure of an insurance provider
Structural regulation - Answer concerned with how financial markets work, esp. in terms of
competition. it is geared towards maintaining a competitive market.
Systemic Regulation - Answer concerned with the stability of the financial market as a whole.
the failure of one could cause other interconnected institutions to fail
Prudential Regulation - Answer focuses on the financial stability and the soundness of
individual financial institutions. designed to set min standards, and to contain, identify and
minimise risk.
does European law or the Irish constitution have more power? - Answer European law
Freedom of establishment - Answer refers to the freedom for any business or person in the EU
to establish a subsidiary, agency or branch in another member state, with the same rights as a
domestic business
freedom to provide services - Answer refers to the right of a business or person in one
member state to provide cross border services in another member state without establishing a
business
Aims of EU regulation in the insurance market - Answer same rules and requirements across
the single European market, consumers should be protected in their dealings with insurers and
intermediaries in a consistent way across the EU
EU regulations - Answer legislation that is of general application, binding in its entirety and
directly applicable in all EU member states
EU Directives - Answer Law that allows EU member states the choice of form and methods of
implementation under national law, but is binding in the results to be achieved
and Answers.
Four key areas that suggest a need for external regulation in the insurance/financial services -
Answer 1. Potential for serious financial loss
2. conflict of interest
3. competence of advice
4. financial failure of an insurance provider
Structural regulation - Answer concerned with how financial markets work, esp. in terms of
competition. it is geared towards maintaining a competitive market.
Systemic Regulation - Answer concerned with the stability of the financial market as a whole.
the failure of one could cause other interconnected institutions to fail
Prudential Regulation - Answer focuses on the financial stability and the soundness of
individual financial institutions. designed to set min standards, and to contain, identify and
minimise risk.
does European law or the Irish constitution have more power? - Answer European law
Freedom of establishment - Answer refers to the freedom for any business or person in the EU
to establish a subsidiary, agency or branch in another member state, with the same rights as a
domestic business
freedom to provide services - Answer refers to the right of a business or person in one
member state to provide cross border services in another member state without establishing a
business
Aims of EU regulation in the insurance market - Answer same rules and requirements across
the single European market, consumers should be protected in their dealings with insurers and
intermediaries in a consistent way across the EU
EU regulations - Answer legislation that is of general application, binding in its entirety and
directly applicable in all EU member states
EU Directives - Answer Law that allows EU member states the choice of form and methods of
implementation under national law, but is binding in the results to be achieved
