🗂️ Agency & relationship management; documentation & other legal requirements

1. Which type of authority arises where a principal has expressly instructed an agent, whether orally or in writing, to perform a specific act on the principal's behalf?

1. Express actual authority
2. Implied actual authority
3. Apparent (ostensible) authority
4. Authority by ratification

Express actual authority is authority explicitly conferred by the principal's words, oral or written; implied authority, by contrast, arises by inference from the agent's role or conduct without express instruction. (Common law of agency (Irish law); Insurance Institute of Ireland (III) APA syllabus – Agency & Relationship Management module)

2. An insurance intermediary is authorised by an insurer to issue cover notes. Although never told so explicitly, the intermediary is also understood to have authority to correct obvious clerical errors on those cover notes, because this is a necessary incident of the role. Which type of authority does this represent?

1. Express actual authority
2. Implied actual authority
3. Apparent (ostensible) authority
4. Authority by ratification

Implied actual authority arises from the nature of the role or the usual course of business, even without an express instruction, distinguishing it from apparent authority, which depends on a representation made to a third party. (Common law of agency (Irish law); Insurance Institute of Ireland (III) APA syllabus – Agency & Relationship Management module)

3. Apparent (ostensible) authority to bind a principal arises primarily from which of the following?

1. A private instruction given by the principal to the agent
2. The agent's mistaken belief that authority has been granted
3. A representation made by the principal to a third party
4. A written agency agreement signed by the agent and principal

Apparent authority rests on a representation, by words or conduct, made by the principal to a third party who reasonably relies on it, not on any private instruction given to the agent or on the agent's own belief. (Common law of agency (Irish law); Insurance Institute of Ireland (III) APA syllabus – Agency & Relationship Management module)

4. An insurer has terminated an intermediary's agency agreement but has not notified existing policyholders of the termination. A policyholder, unaware of the termination, pays a renewal premium to the former intermediary, who absconds with it. On what basis might the insurer still be bound by receipt of that premium?

1. Actual authority, because the agency agreement remains valid until a court sets it aside
2. Ratification, because the insurer became aware of the payment after the event
3. Implied authority, because collecting premium is not a usual part of an intermediary's role
4. Apparent authority, because the insurer's own conduct led the policyholder reasonably to believe authority continued

Where a principal fails to give notice of termination, apparent authority may persist because the third party's reasonable reliance on the earlier representation continues until notice is given, even though actual authority ended on termination. (Common law of agency (apparent authority continuing until third parties have notice of termination); Insurance Institute of Ireland (III) APA syllabus)

5. Ratification of an agent's unauthorised act by the principal has which effect?

1. It retrospectively validates the act as though authority existed at the time it occurred
2. It converts the agent's apparent authority into express authority for future acts only
3. It releases the agent from all fiduciary duties owed to the principal
4. It automatically transfers the agent's liability for the act to the third party

Ratification operates retrospectively, binding the principal from the moment the unauthorised act was originally performed, not merely from the date of ratification. (Common law of agency (doctrine of ratification); Insurance Institute of Ireland (III) APA syllabus)

6. Which of the following best describes a fiduciary duty owed by an agent to a principal under the general law of agency?

1. A duty to guarantee the principal a specified level of investment return
2. A duty not to make a secret profit or take a secret commission
3. A duty to disclose the agency relationship to all competitors
4. A duty to indemnify the principal for all losses regardless of cause

An agent's fiduciary duties include avoiding conflicts of interest and not profiting secretly from the agency, for example through an undisclosed commission. (Common law of agency (fiduciary duties of an agent); Insurance Institute of Ireland (III) APA syllabus)

7. An agent who personally carries out the tasks entrusted by the principal, rather than sub-contracting them to another party without the principal's consent, is complying with which duty?

1. The duty to account
2. The duty of good faith
3. The duty to perform personally
4. The duty of care and skill

Agency is generally a personal relationship of trust, so an agent may not delegate performance without authority; this is distinct from the duty to account, which concerns recording and remitting funds. (Common law of agency (delegatus non potest delegare); Insurance Institute of Ireland (III) APA syllabus)

8. A broker has express instructions from an insurer limiting his authority to quoting premiums up to €50,000 in sums insured, but the insurer has, over several years, accepted and paid claims on policies the broker bound above that limit without objection. A client, unaware of the private limit, reasonably relies on the broker's apparent ability to bind cover of €80,000. Which statement most accurately reflects the legal position?

1. The insurer cannot be bound, because apparent authority cannot exceed the actual authority stated in the agency agreement
2. The client cannot rely on apparent authority because the private instructions were in writing and therefore binding on all third parties
3. The broker's acts are void ab initio and require ratification by the client before the insurer can be bound
4. The insurer may be bound by apparent authority, because its own conduct represented wider authority to third parties despite the private limit

Apparent authority can exceed a privately communicated restriction on actual authority where the principal's own conduct represents wider authority to third parties who are unaware of the internal limit. (Common law of agency (apparent authority exceeding restricted actual authority); Insurance Institute of Ireland (III) APA syllabus)

9. Which of the following is NOT a recognised route by which an agent may acquire authority to bind a principal?

1. Authority arising automatically after five years of dealings between the parties
2. Express actual authority conferred directly by the principal
3. Apparent authority arising from the principal's representation
4. Ratification by the principal of a previously unauthorised act

Authority arises only through actual (express or implied) authority, apparent authority, or ratification; the mere passage of time dealing with a party does not, of itself, create authority. (Common law of agency (Irish law); Insurance Institute of Ireland (III) APA syllabus)

10. For a given task carried out by an intermediary, such as completing a proposal form based on information supplied by the applicant, or collecting a premium on behalf of an insurer, whether the intermediary is acting as agent of the insurer or agent of the consumer depends primarily on which factor?

1. The intermediary's job title as stated on their business card
2. The specific task being performed and the terms of the intermediary's appointment for that task
3. Whether the intermediary is remunerated by commission or by fee
4. The length of time the intermediary has held an appointment with the insurer

Agency status is task-specific: an intermediary who is generally the insurer's agent for arranging cover may, for a particular function, be treated as agent of the consumer instead, depending on the terms of appointment for that function. (Common law of agency applied to insurance intermediaries; Insurance Institute of Ireland (III) APA syllabus)

11. A tied insurance agent, appointed under an agency agreement to sell only one insurer's motor policies, collects a renewal premium in cash from a policyholder but fails to remit it to the insurer, who has already issued a valid renewal notice and confirmed cover. For the purpose of that premium payment, whose agent is the tied agent generally taken to be?

1. The policyholder's agent, so that the policyholder remains liable for the premium
2. A dual agent representing both parties equally so that liability is shared
3. The insurer's agent, so that payment to the agent is treated as payment to the insurer
4. Neither party's agent, since collecting premium falls outside any agency function

Where an intermediary is authorised to collect premium on the insurer's behalf, payment to the agent within that authority discharges the policyholder's obligation, treating the agent as acting for the insurer for that task. (Common law of agency applied to insurance intermediaries; Insurance Institute of Ireland (III) APA syllabus)

12. An intermediary holds agency agreements with two competing insurers and is approached by a client seeking the most suitable cover available. The intermediary secretly receives a higher commission from one insurer and, without disclosing this, recommends that insurer's product even though a competitor's product is more suitable for the client's needs. Which fiduciary breach does this best illustrate?

1. A breach of the duty to perform personally
2. A breach of the duty to obey lawful instructions
3. A breach of the duty to exercise due care and skill
4. A breach of the fiduciary duty to avoid conflicts of interest

Recommending a less suitable product to earn an undisclosed higher commission is a classic conflict of interest and secret-profit scenario, breaching the fiduciary duty to act in the client's best interest rather than the agent's own; it is not a mere failure of care and skill. (Common law of agency (fiduciary duties of an agent); Insurance Institute of Ireland (III) APA syllabus)

13. Under the Consumer Protection Code 2025, for how long, at a minimum, must a regulated entity generally retain records relating to a consumer after it has ceased providing any product or service to that consumer?

1. 6 years
2. 5 years
3. 7 years
4. 3 years

The Consumer Protection Code 2025 requires records relating to a consumer to be kept for six years from the date the entity ceased providing that consumer with any product or service. (Consumer Protection Code 2025 (Consumer Protection Regulations 2025), record-keeping requirements)

14. A firm must decide how long to retain two categories of records: general consumer records under the Consumer Protection Code 2025, and customer due diligence records obtained under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010. Which combination correctly states the applicable minimum retention periods?

1. 5 years for CPC consumer records; 6 years for AML customer due diligence records
2. 6 years for CPC consumer records; 5 years for AML customer due diligence records
3. 6 years for both CPC consumer records and AML customer due diligence records
4. 5 years for both CPC consumer records and AML customer due diligence records

The Consumer Protection Code 2025 sets a six-year minimum retention period, while the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 sets a five-year minimum for customer due diligence records; the two regimes are not aligned to the same figure. (Consumer Protection Code 2025 (Consumer Protection Regulations 2025), record-keeping requirements; Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, section 55)

15. Under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, for how long, at a minimum, must a designated person retain documents and information obtained through customer due diligence?

1. 6 years
2. 3 years
3. 5 years
4. 10 years

Section 55 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 sets a minimum retention period of five years for customer due diligence records. (Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, section 55)

16. A consumer's motor policy, arranged by a regulated entity, lapses on 1 March 2025, and the entity provides no further product or service to that consumer thereafter. Under the Consumer Protection Code 2025, until what date must the entity generally retain records relating to that consumer?

1. 1 March 2030
2. 1 March 2032
3. 1 March 2035
4. 1 March 2031

The six-year period under the Consumer Protection Code 2025 runs from the date service ceased (1 March 2025), giving 1 March 2031; the other dates correspond to a five-year, seven-year or ten-year period, none of which is the correct minimum. (Consumer Protection Code 2025 (Consumer Protection Regulations 2025), record-keeping requirements)

17. A regulated entity ceased providing services to a consumer four years ago, but a complaint made by that consumer about those services remains unresolved. Under the Consumer Protection Code 2025, what is the correct approach to retention of the records relating to that consumer?

1. Records relating to the outstanding complaint must be kept beyond the standard 6 years until resolved
2. The records may be destroyed after exactly 6 years regardless of the outstanding complaint
3. The records must be destroyed immediately once litigation is threatened, to avoid discovery obligations
4. The 6-year period is suspended and restarts once the complaint is formally closed

The Consumer Protection Code 2025 requires certain records, such as those relating to an outstanding matter, to be retained beyond the standard six-year period until the matter is resolved, rather than being destroyed at the standard cut-off. (Consumer Protection Code 2025 (Consumer Protection Regulations 2025), record-keeping requirements)

18. Which of the following statements about minimum record-retention periods applicable to insurance intermediaries in Ireland is NOT correct?

1. Customer due diligence records under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 must be kept for at least 5 years
2. Records relating to an unresolved consumer complaint may be destroyed once 6 years have elapsed, irrespective of whether the complaint remains open
3. General consumer records under the Consumer Protection Code 2025 must be kept for at least 6 years from cessation of service
4. Some categories of consumer records may need to be retained for longer than the standard minimum period where a matter remains outstanding

This statement is false: The Consumer Protection Code 2025 requires records relating to an outstanding matter to be kept beyond the standard six years until the matter is resolved, not destroyed regardless of its status. (Consumer Protection Code 2025 (Consumer Protection Regulations 2025), record-keeping requirements; Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, section 55)

19. A firm establishes a business relationship with a customer identified as a politically exposed person (PEP) on 14 January 2019, applying enhanced due diligence measures. The business relationship ends on 30 September 2023. Under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, what is the earliest date on which the firm could lawfully destroy the due diligence records relating to that customer?

1. 14 January 2024
2. 30 September 2029
3. 30 September 2028
4. 30 September 2026

The five-year minimum retention period under section 55 runs from the end of the business relationship (30 September 2023), giving 30 September 2028, regardless of when the relationship began or that enhanced measures were applied. (Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, sections 37 and 55)

20. A customer with no ongoing business relationship with a regulated firm carries out a single cash payment of €18,000 for an insurance premium. The firm applies customer due diligence to this occasional transaction and retains the resulting records from the date the transaction is completed. Under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, which statement correctly identifies both the trigger for due diligence and the retention period?

1. Due diligence does not apply because the threshold for an occasional transaction is €20,000, and no retention obligation therefore arises
2. Due diligence applies because €18,000 exceeds the €15,000 occasional-transaction threshold, and records must be kept for at least 6 years from completion of the transaction
3. Due diligence applies because €18,000 exceeds the €15,000 occasional-transaction threshold, but records need not be retained for any minimum statutory period once the transaction is reconciled
4. Due diligence applies because €18,000 exceeds the €15,000 occasional-transaction threshold, and records must be kept for at least 5 years from completion of the transaction

An occasional transaction is defined as one exceeding €15,000, which triggers customer due diligence, and section 55 requires the resulting records to be retained for a minimum of five years from completion of the transaction. (Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, sections 24, 33 and 55)

21. The GDPR principle that personal data should be kept in a form permitting identification of data subjects for no longer than necessary for the purposes for which the data are processed is known as which of the following?

1. Storage limitation
2. Data minimisation
3. Purpose limitation
4. Integrity and confidentiality

Storage limitation, one of the Article 5 principles, requires that personal data not be kept longer than is necessary for the purposes of processing, distinct from data minimisation (limiting the data collected) or purpose limitation (restricting its use). (Regulation (EU) 2016/679 (GDPR), Article 5(1)(e))

22. An insurance intermediary wishes to delete a former client's personal data promptly to comply with the GDPR storage limitation principle, but the client's file falls within the 6-year record-retention period required under the Consumer Protection Code 2025. What is the correct approach?

1. The firm must delete the data immediately, since GDPR takes precedence over sectoral retention obligations
2. The firm may retain the data for the period the Code requires, since GDPR permits retention necessary for legal compliance
3. The firm must obtain the client's renewed consent before retaining any data beyond the point of service cessation
4. The firm may retain the data if the client explicitly requests that it be kept

The storage-limitation principle does not prevent retention that is necessary to comply with another legal obligation, such as the Code's six-year rule, so GDPR and sectoral retention rules operate together rather than one automatically overriding the other. (Regulation (EU) 2016/679 (GDPR), Articles 5(1)(e) and 6(1)(c); Consumer Protection Code 2025 (Consumer Protection Regulations 2025), record-keeping requirements)

23. An intermediary firm is acquired by another firm, and the acquiring firm continues to provide services to the former firm's existing clients. Does the 6-year record-retention clock under the Consumer Protection Code 2025 begin running for those clients at the date of acquisition?

1. Yes, retention runs 6 years from the date control of the firm changed
2. Yes, retention runs 6 years from the date the client's file was first opened by the original firm
3. No, the 6-year period begins when the successor firm stops providing any product or service to that consumer
4. No, retention obligations lapse and restart automatically with each change in firm ownership

The six-year period under the Consumer Protection Code 2025 is triggered by cessation of service to the particular consumer, not by a change in ownership or control of the firm providing that service. (Consumer Protection Code 2025 (Consumer Protection Regulations 2025), record-keeping requirements)

24. Under the common law of agency, which duty specifically prohibits an insurance agent from receiving an undisclosed commission or benefit from a third party in connection with the agency?

1. The duty to exercise reasonable care and skill
2. The duty to avoid secret profit
3. The duty to account for property received
4. The duty to obey lawful instructions

An agent's fiduciary duty prohibits taking an undisclosed profit or commission from a third party; the duties of care, accounting and obedience address different aspects of the relationship and do not specifically target secret payments. (Common law of agency (fiduciary duties); Insurance Institute of Ireland (III) APA syllabus)

25. Which of the following is NOT one of the core common-law duties an agent owes to the principal?

1. To act in good faith and avoid conflicts of interest
2. To account for money and property received on the principal's behalf
3. To guarantee that the transaction will achieve a specific financial outcome
4. To perform the agency personally, without unauthorised delegation

An agent's duty is one of reasonable care and skill, not a warranty of a particular outcome; personal performance, good faith and accounting for property received are all recognised common-law duties of an agent. (Common law of agency (fiduciary duties); Insurance Institute of Ireland (III) APA syllabus)

26. An insurance agent, without informing the client or the principal, hands over the entire task of assessing a client's insurance needs to an unqualified junior colleague who has no authority to act in the matter. Which duty has the agent most clearly breached?

1. The duty to avoid a conflict of interest
2. The duty to obey lawful instructions
3. The duty to perform the agency personally
4. The duty of confidentiality

The maxim delegatus non potest delegare means an agent must generally perform the agency personally and may not hand the task to an unauthorised person; the scenario does not primarily raise a conflict of interest, an instruction issue, or a breach of confidentiality. (Common law of agency (duty of personal performance); Insurance Institute of Ireland (III) APA syllabus)

27. A broker discovers that one insurer pays a significantly higher volume-related bonus than a competitor offering more suitable cover for a particular client, and places the business with that insurer without disclosing the bonus arrangement to the client. Which fiduciary principle has the broker breached?

1. The duty to avoid conflicts of interest and secret profit
2. The doctrine of apparent authority
3. The duty to perform the agency personally
4. The principle of ratification

Placing business to maximise an undisclosed personal bonus rather than the client's interest breaches the fiduciary duty to avoid conflicts of interest and secret profit; apparent authority and ratification concern how authority is created or validated, not loyalty to the principal. (Common law of agency (fiduciary duties); Insurance Institute of Ireland (III) APA syllabus)

28. Which of the following best describes an agent's fiduciary duty of good faith towards the principal?

1. Charging the principal the maximum fee the market will bear
2. Delegating routine tasks freely to reduce the principal's costs
3. Maintaining confidentiality only after the agency relationship has ended
4. Acting honestly in the principal's best interest and avoiding self-dealing

Good faith requires the agent to act honestly and in the principal's interest, avoiding self-dealing; the other options either misstate the duty or wrongly limit its scope or timing. (Common law of agency (fiduciary duties); Insurance Institute of Ireland (III) APA syllabus)

29. An agent collects premium from a client on behalf of the insurer but pays it into a personal account and delays remitting it, rather than keeping it separately identifiable and accounting for it promptly. Which duty has the agent breached?

1. The duty to obey lawful instructions
2. The duty to account
3. The duty to perform the agency personally
4. The duty to avoid a conflict of interest

Mixing client premium with personal funds and delaying remittance breaches the duty to account for money received on the principal's behalf; the scenario does not primarily involve instructions, personal performance, or a conflict of interest. (Common law of agency (duty to account); Insurance Institute of Ireland (III) APA syllabus)

30. Under the general common law of agency, which duty does a principal (for example, an insurer) owe to its appointed agent?

1. To guarantee the agent a fixed minimum volume of business each year
2. To indemnify the agent for liabilities properly incurred in the authorised performance of the agency
3. To account personally to the agent for all premiums the agent has collected
4. To indemnify the agent for any liability whatsoever, whether or not properly incurred in the agency

A principal must indemnify an agent against liabilities and expenses properly incurred in the authorised performance of the agency; guaranteeing business volume, reversing the accounting duty, or indemnifying without the 'properly incurred' limitation do not reflect the recognised duty. (Common law of agency (principal's duties); Insurance Institute of Ireland (III) APA syllabus)

31. An agency agreement between a broker and an insurer is silent on the level of remuneration, but it is well established trade custom for insurers to pay a standard percentage commission on premium placed through such agreements. Under the common law of agency, what is the broker generally entitled to receive?

1. A reasonable commission consistent with the established trade custom
2. No remuneration at all, since none was expressly agreed
3. Only reimbursement of out-of-pocket expenses
4. Remuneration only if the insurer later ratifies a specific figure

Where a term as to remuneration is not expressed, the law implies an obligation to pay a reasonable sum reflecting established trade custom; silence does not mean no remuneration is due, and payment does not depend on a separate act of ratification. (Common law of agency (implied terms as to remuneration); Insurance Institute of Ireland (III) APA syllabus)

32. Authority that arises where a principal's words or conduct lead a third party reasonably to believe that an agent has authority to act, even though no such authority was actually granted, is best described as which type of authority?

1. Express actual authority
2. Implied actual authority
3. Authority by ratification
4. Apparent (ostensible) authority

Apparent (ostensible) authority arises from the principal's own representation to a third party, independently of any authority actually conferred on the agent; express and implied authority instead derive from the principal-agent relationship itself, and ratification only validates authority after the act. (Common law of agency (apparent/ostensible authority); Insurance Institute of Ireland (III) APA 'Compliance and Advice' module)

33. A broker quotes a client a discounted premium that exceeds the discretion actually granted by the insurer. On discovering this, the insurer writes to the client confirming that the discounted premium will be honoured. Which doctrine explains why the insurer is now bound?

1. Apparent authority arising from the insurer's conduct
2. Ratification of the broker's unauthorised act
3. Vicarious liability for the broker's negligence
4. Implied actual authority incidental to the broker's role

By adopting the unauthorised act with full knowledge of the facts, the insurer ratifies it, which retrospectively validates the broker's act as though authorised from the outset; this differs from apparent authority, which must exist before or at the time of the act. (Common law of agency (ratification); Insurance Institute of Ireland (III) APA 'Compliance and Advice' module)

34. Under a regulated entity's terms of business, an intermediary who advises on the basis of a sufficiently large number of contracts available on the market, so as to give an unbiased recommendation, is providing which level of service?

1. Limited analysis of the market
2. Fair analysis of the market
3. Tied agency services
4. Execution-only services

Terms of business must state whether the intermediary offers 'fair analysis' — advice based on a sufficiently large number of contracts to give an unbiased recommendation — or 'limited analysis' of the market; tied and execution-only describe different service models. (Consumer Protection Code 2025 (Consumer Protection Regulations 2025), scope of service disclosure requirements)

35. Where a regulated entity's terms of business describe it as tied for a particular product, which combination of disclosures must those terms of business contain in respect of that product?

1. A general statement that the entity is 'not independent,' without naming the insurer
2. The name of each tied product or service and the name of the insurer to which it is tied
3. A full fair-analysis comparison of that product against competitor products
4. The tied status only where the client specifically requests this information

For a tied product, terms of business must name each product or service and the insurer to which the entity is tied; a vague statement of non-independence or a client-triggered disclosure does not satisfy this requirement. (Consumer Protection Code 2025 (Consumer Protection Regulations 2025), scope of service disclosure requirements)