Mock GRID Exam GRID Exam, especially for Debbie! Because Kelly and Becky are awesome!! crother published on August 22, 20113 responses 0 « Previous Next » Questions in vertical order 1/50 What type of scheme allows members to select their own benefits? Hint: 1 choice Flexible Benefits scheme DB Pension Scheme Group Life Scheme Group Income Protection scheme 2/50 What is the benefit of a discretionary Trust? Hint: 1 choice All employees are authorised to receive information on the scheme Beneficial Tax treatment All employees can opt for flexible benefits Discounts can be made on the annual premiums 3/50 Which of these is not an FSA objective? Hint: 1 choice Maintain confidence in the financial system Promote public understanding of the financial system Reduce financial crime Increase the wealth of the financial system 4/50 Why are clearly defined eligibility criteria important? Hint: 1 choice To avoid being discriminatory To avoid anti selection It’s a requirement when registering the scheme It’s an FSA requirement 5/50 Typically under group life insurance temporary absence cover in the case of illness and injury will be provided: Hint: 1 choice For 3 years Until normal retirement age Until the next renewal date Indefinitely 6/50 Which of the following should an IFA take into account when recommending insurers? The commission offered B. How many schemes they currently hold with the insurer The premium offered The insurers share price 7/50 Which of the following is not a way of committing fraud under the Fraud Act 2006? Fraud by false representation Fraud by abuse of position Fraud by use of internet technology Fraud by failing to disclose information 8/50 If Debbie earns £30,000 a year with benefits in kind of £500, how much of her salary will be taxed (tax year 2010/2011)? £5,975 £24,025 £24,525 £30,000 9/50 Which of these is not part of the ABI’s statement of best practice for Critical Illness cover? Having a common format in the way critical illness cover is described to potential buyers at the point of purchase The use of common generic terms To provide policy wording to all members The use of model wording for critical illness and exclusions 10/50 When will medical underwriting not be required? Where benefits exceed the free cover limit When the member is over age 65 Where the member has discretionary benefits When the member is a discretionary entrant 11/50 If a policy is called critical illness cover it must cover at the very least which of the following conditions: Cancer, Heart attack, Stoke Cancer, Heart attack, diabetes Heart attack, HIV, Alzheimer’s Parkinson’s, Terminal Illness, Coma 12/50 In a reinsurance treaty contract between a reinsurer and an insurer the insurer is often referred to as the: Procurer Cedant Client Administrator 13/50 If an intermediary is not authorised by the FSA: The insurer can only provide information The insurer cannot deal with them The insurer may only issue a quote The insurer must obtain authority to deal with them from the trustees 14/50 Which of the following is an example of anti-selection? Selecting an insurer based on who offers the lowest premiums Having an eligibility period on the scheme Joining a scheme within the eligibility requirements Joining a group life or critical illness scheme after being diagnosed with cancer 15/50 Who must register a group risk scheme with the HMRC? The Insurer The Trustees The Scheme Administrator The Intermediary 16/50 What is the single persons allowance for an under 65 (tax year 2010/2011)? £9,490 £6,475 £7,475 £6,965 17/50 An intermediary who can advise on a limited range of product providers is known as…? A. Single Tied Agent B. Multi-Tied Agent C. Whole of the Market Advisor D. Independent Financial Advisor 18/50 Which of the following is not a benefit of reinsurance? Catastrophe cover Spreading risk Stability Reducing medical underwriting 19/50 What does a catastrophe limit do? Provide cover in the event of a catastrophe Limit the number of claims following a catastrophe Limit the amount of benefit paid following a catastrophe Provides insurers with an exemption on paying claims on catastrophe’s in certain areas 20/50 When may cover be provided to employees working overseas? Always As long as the employee has a UK contract of employment As long as the employee is paid in Pounds Sterling Never 21/50 Which of these is not subject to income tax? Employed earning Pensions Interest on national savings certificates Trust Income 22/50 Which of these is not part of the pathways to work process? A. Personal capability assessment (PCA) B. Mandatory volunteer work C. Access to ‘Choices’ programmes D. Return to work credits 23/50 If a member has a salary of £25,000 with lump sum benefits of 4 times salary and a death in service pension of 25%. What is their total capitalized benefit. The cap factor on the scheme is 30. £287,500 £250,000 £125,000 £3,187,500 24/50 Which one of these is not a Group Risk benefit? Group Life Group Income Protection Group Personal Pension Group Critical Illness 25/50 How long must maternity payments be made for provided the employee has previously worked for her employer for at least six months and they earn enough to pay class 1 NIC’s. 36 weeks 39 weeks 46 weeks 52 weeks 26/50 What type of group life benefit payment will result in a benefit crystallisation event? Payment of a death in service pension Payment of a registered lump sum benefit ayment of a death in service pension and lump sum benefit Payment of an excepted lump sum benefit 27/50 In a compensation claim which can the FOS not award as redress? A Money Award up to £500,000 To pay an insurance claim that had previously been rejected To calculate and pay redress according to an approach or formula set by the regulator To personally apologise to the customer 28/50 Which of the following is not a Group income protection benefit basis available? Non-integrated benefits Partially integrated benefits Fully integrated benefits Variable integrated benefits 29/50 Why might an excepted policy be set up? To make administration simpler HMRC approval was rejected Members have benefits over the lifetime allowance If approval was not obtained in the designated time 30/50 When issuing a formal quotation to an intermediary, an insurer must also issue which of the following: Policy Schedule Scheme Authorisation form Technical guide Trustee Proposal 31/50 When might an insurer cost a scheme on a single premium costing basis? When a scheme has over 20 lives When a scheme has under 20 lives When a scheme has a high claim history When a schemes average age exceeds 50 32/50 Which of these is not a reason a company would set up a captive insurance company? Captives get similar tax benefits to commercial insurance companies Companies do not pay premiums to captive insurance companies Premiums paid may be eligible for tax relief Captives can cover risks that an insurance company may decline to cover 33/50 When does the financial year for corporate tax run from? 6th April-5th April 1st January – 31st December 1st July – 30th June 1st April – 31st March 34/50 What is the current life time allowance? £129,600 £255,000 £1,500,000 £1,800,000 35/50 Which of the following is not a permitted activity for intermediaries regulated by the FSA? Advising clients on insurance contracts Negotiating best terms on insurance contracts Assistance in the administration and performance of insurance contracts Making claims on behalf of the claimant 36/50 When should an intermediary provide its client with a demands and needs statement? Before the conclusion of the insurance contract Before obtaining a quote Before a claim is made Before the first premium is made 37/50 On a Group Life scheme why might having a large number of long term absentees increase the premium? Because they are not available for medical underwriting Because they may have higher salaries Because there is unknown risk Because there is a great risk of a claim being made 38/50 Who will pay out on a group income protect policy when cover switches to another insurer when a claim is already in force? The trustees The existing insurer The new insurer The Employer 39/50 Which of these is not a trust based scheme? Defined Benefit scheme Career averaged earnings (CARE) schemes Occupational defined contribution (money purchase) scheme Group personal pensions (GPP) 40/50 Pre-existing condition exclusions are commonly used on which product? Group Life Group Critical Illness Group Income Protection Group Pension Schemes 41/50 Once cover has been agreed the insurer will require which of the following paperwork: A proposal form A scheme Authorisation form An application form Expression of wishes forms 42/50 On a unit rate scheme the sum insured is £2,000,000 and the unit rate is 1.37‰ what is the premium? £274,000 £27,400 £2,740 £274 43/50 In group income protection what is the deferred period? A period of cover after the normal retirement age A period of time after inception before premiums have to be paid A period of time an employee must be absent for before benefits will be paid The maximum period benefits will be paid for 44/50 Which one of the below can a group life scheme not attach to? Define Benefit Pension scheme Group Money Purchase Scheme Final Salary Scheme Group Personal Pension 45/50 Which of the following is not a key component of a group income protection policy? Clearly defined eligibility Definition of disability Deferred retiree category The benefit in payment escalation rate 46/50 Which of the following is not required when making a claim for a spouses pension? Fully completed claim form Original death certificate Original marriage certificate Morticians report 47/50 Who may be contractually obligated to provide an employee with group risk benefits? The financial advisor The Employer The insurance company The Employee 48/50 When obtaining a quotation an intermediary will need to provide accurate membership data. This should include: Date of birth, pre-existing conditions and marital status Date of birth, gender and whether members are smokers Dates of birth, gender and number of children Date of birth, gender and job title 49/50 Who is responsible for compliance with DPA principles? Data Protection Officer Senior Management The FSA Everyone 50/50 Why do insurance companies ask for a claims history when quoting? It is useful on small schemes to predict future claims It is useful on large schemes to predict future claims It may be an indication that the duties the employees carry out are high risk A scheme will have lost its no claims discount
