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1 – 10 of 762In this brief paper the authors consider the duties owed by professional indemnity insurance brokers to their insured clients. Given the prevalence of claims for financial…
Abstract
In this brief paper the authors consider the duties owed by professional indemnity insurance brokers to their insured clients. Given the prevalence of claims for financial mis‐selling this is an important issue of concern to all authorised advisers. Any failure to obtain or maintain cover leading to uninsured loss will naturally attract the potential attention of the broker’s own insurers. The authors summarise what the law expects of brokers in standard situations.
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The purpose of this paper is to examine the influence of disclosure of sales compensations on insurance brokers’ intention to make inappropriate product recommendations.
Abstract
Purpose
The purpose of this paper is to examine the influence of disclosure of sales compensations on insurance brokers’ intention to make inappropriate product recommendations.
Design/methodology/approach
This research examines the insurance brokers’ intention to make inappropriate product recommendations through an application of the theory of planned behavior. Surveys are used as the research instrument, and the hypotheses are tested with a between-subjects experimental design. One case of mandatory disclosure and one case of non-mandatory disclosure are compared in the research.
Findings
The results indicate that the disclosure of sales compensations is significantly associated with the subjective norms from the official authority and perceived behavioral control (PBC). The results of this study also indicate that, when the disclosure is mandatory, the PBC has a stronger effect on the insurance brokers’ intention to make biased product recommendations than dose the attitude and subjective norms. When the disclosure is non-mandatory, however, the subjective norms have a stronger effect on the insurance brokers’ intention.
Originality/value
The impacts of compensation disclosures on the financial professionals’ product recommendations have been less examined. This study could make a contribution to the literature by providing some empirical observations from the views of Taiwan’s life insurance brokers.
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While competition within car and home insurance increases through more players and also unfamiliar entrants to the market (supermarkets), the purpose of this paper is to report on…
Abstract
Purpose
While competition within car and home insurance increases through more players and also unfamiliar entrants to the market (supermarkets), the purpose of this paper is to report on a study of one large insurer in Ireland which attempts to differentiate itself from its peers.
Design/methodology/approach
The paper does this through a literature review of the insurance market and customer relationship management, and a detailed study of the company loyalty programme and its application to its customers.
Findings
The loyalty programme employed suits the particular sector in terms of purchase intention and also gives the customer of the insurance brand a sense of belonging and relevance where they can avail themselves of savings on related products.
Research limitations/implications
Information sourced is based on published data from the company and other peer reviewed journals. This is a study on a simple loyalty programme that can be applied to low frequency purchases.
Practical implications
This simplified loyalty programme gives the brand high recognition values in terms of how the brand is made relevant to the customer through discounted related products.
Originality/value
As loyalty programmes are not a usual feature of financial services, this paper highlights a unique programme in operation that is being replicated elsewhere.
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The purpose of this paper is to chart the chronology of insurance regulation in Ireland and evaluate the integration within European Union directives.
Abstract
Purpose
The purpose of this paper is to chart the chronology of insurance regulation in Ireland and evaluate the integration within European Union directives.
Design/methodology/approach
The approach used was to chart the development of insurance regulation in Ireland and establish the stakeholders in the insurance industry that are affected by regulation. The various aspects of the EU involvement in regulation were also listed.
Findings
Ireland is one of the few countries that has a single financial regulator that is the Central (Reserve) Bank. The Central Bank is recognised as the Irish national regulator for all insurance activities in the EU and with that carries responsibility for implementing EU directives. In comparing other regulatory systems, there is a mixture of direct government involvement, sector specific regulation, financial services regulation and Central Bank acting as regulator.
Research limitations/implications
Research is based on literature review and data obtained from the EU regarding national regulators. It does not set a standard of regulation or compare different regulators but establishes the different forms of regulation in Ireland and the EU.
Practical implications
The paper establishes Ireland's insurance regulatory environment amongst its European peers. It also charts the development of insurance regulation from solvency to the current model of solvency and consumer protection with the other offices of Financial Services Ombudsman.
Originality/value
The paper is based on research based on literature review and data obtained from the EU regarding national regulators.
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Advice — liability for negligent A person is not liable for giving negligent advice unless it is proved either that the defendants carried on the business of giving advice in…
Abstract
Advice — liability for negligent A person is not liable for giving negligent advice unless it is proved either that the defendants carried on the business of giving advice in respect of the particular subject matter or else that they had let the plaintiff know that they claimed to possess the necessary skill and competence to do so and were prepared to give reliable advice upon the subject matter of the inquiry.
Knight's Industrial Law Reports goes into a new style and format as Managerial Law This issue of KILR is restyled Managerial Law and it now appears on a continuous updating basis…
Abstract
Knight's Industrial Law Reports goes into a new style and format as Managerial Law This issue of KILR is restyled Managerial Law and it now appears on a continuous updating basis rather than as a monthly routine affair.
Lu-Ming Tseng and Yue-Min Kang
The purpose of this paper is to explore the impacts of the size and timing of sales compensations, the management stringency of the insurer and the insurance broker's own moral…
Abstract
Purpose
The purpose of this paper is to explore the impacts of the size and timing of sales compensations, the management stringency of the insurer and the insurance broker's own moral views on product recommendations made by the brokers.
Design/methodology/approach
The data used in this research were gathered from life insurance broker companies in Taiwan.
Findings
The results showed that the sales compensations, perceived leniency of the insurer's underwriting and claim policy would affect the product recommendations made by the brokers.
Practical implications
Insurance brokers are one of the most important marketing channels in the insurance industry. However, using the insurance brokers to sell insurance may result in some ethical problems. For example, some insurance brokers may sell insurance to high-risk customers because the high-risk customers may prefer to buy more insurance and that means more sales compensations can be earned. The findings of this research may have some implications for insurance management and insurance regulation.
Originality/value
This study contributes to the understanding of insurance brokers' responses to adverse selection problems (high-risk customers may prefer to buy more insurance) and product recommendation decisions. The issue has been less mentioned in the financial regulation literature.
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Discusses the factors which have led to a proliferation oflitigation in respect of professional negligence in the field of realestate. Outlines caveat emptor (or ′buyer beware′)…
Abstract
Discusses the factors which have led to a proliferation of litigation in respect of professional negligence in the field of real estate. Outlines caveat emptor (or ′buyer beware′), fraud, negligent misrepresentation, negligence, innocent misrepresentation and strict liability and statutory liability for misrepresentation. Gives examples of specific cases. Suggests that both the residential market and the commercial sector have been affected to such an extent that it is no longer clear whether the decision‐makers take any responsibility for their actions, but rely solely upon the real estate profession to act as a guarantor of the transaction.
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L.J. Willmer, L.J. Diplock and L.J. Winn
May 10, 1967 Insurance — Employer's liability — Breach by brokers of contract to obtain employer's liability insurance — Damage flowing — Condition precedent in form of policy…
Abstract
May 10, 1967 Insurance — Employer's liability — Breach by brokers of contract to obtain employer's liability insurance — Damage flowing — Condition precedent in form of policy envisaged that employers should take reasonable precautions to prevent accidents — Accident to employee — Negligence and breach of statutory duty to fence dangerous machine established against employers — Risk not appreciated by employers — Whether employers would have been indemnified by insurers — “Reasonable precautions” — Whether necessary to establish their legal liability to do so — Whether probability of payment as matter of business policy sufficient.
The purpose of this paper is to provide an overview of how the Employee Retirement Income Security Act (“ERISA”) of 1974, as amended , applies to securities professionals such as…
Abstract
Purpose
The purpose of this paper is to provide an overview of how the Employee Retirement Income Security Act (“ERISA”) of 1974, as amended , applies to securities professionals such as registered investment advisers, registered broker‐dealers and individual registered representatives and financial planners who advise, manage, or trade for investment portfolios of private employee benefit plans and individual retirement accounts.
Design/methodology/approach
The paper is designed as a primer to familiarize securities professionals with the terminology, scope and subject‐matter of ERISA as it applies to benefit plan investment transactions. When appropriate, the regulatory framework of ERISA is compared and contrasted with the more familiar securities law regulatory scheme.
Findings
The various Federal laws loosely known as “ERISA” significantly impact securities professionals in connection with the marketing of financial products and services to employee benefit plans, including IRAs, and it is critical that securities professionals have a general overview of how they do so.
Research limitations/implications
The research set out is only a broad summary, and covers an area of law that is rapidly developing. It should not be considered a definitive summary of the law but a starting‐point for further, in‐depth inquiry.
Practical implications
Any financial professional seeking to develop or market financial products and services to benefit plans can use the paper to become familiar with the framework and terminology of ERISA.
Originality/value
This is a reprint of a paper first published in 2004, with extensive revisions to reflect sweeping changes in the law and new developments in the financial marketplace, plus an overview of “hot topics”.
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