RPLU Fiduciary Liability Insurance Exam
12 Questions And Answers 100% Pass.
Retirement Equity Act of 1984 - answerCreated spousal rights to pension benefits through qualified
domestic relations orders (QDROs) in the event of divorce and through pre-retirement survivor annuities
What is a purpos...
Retirement Equity Act of 1984 - answer✔Created spousal rights to pension benefits through qualified
domestic relations orders (QDROs) in the event of divorce and through pre-retirement survivor annuities
What is a purpose of ERISA? - answer✔Provide guidelines for creating and administering employee
benefits plans
What is a purpose of ERISA? - answer✔Define the standards of conduct for fiduciaries of employee
benefit plans
What is a purpose of ERISA? - answer✔Prohibit corporate indemnification for fiduciaries of employee
benefit plans
What is a purpose of ERISA? - answer✔Define fiduciary for employee benefit plans
What is a purpose of ERISA? - answer✔Make Fiduciaries of employee benefits plans personally liable for
plan losses
What is a purpose of ERISA? - answer✔Require most fiduciaries of employee benefits plans to obtain
ERISA bonds
How did the enactment of ERISA change the professional liability insurance industry? -
answer✔Fiduciary liability existed before ERISA. However, this type of insurance was not offered until
after ERISA was enacted. ERISA imposed guidelines that increased the potential liability of fiduciaries of
employee benefits plans. Consequently the need for this insurance emerged.
NAMED fiduciaries and FUNCTIONAL fiduciaries - answer✔ERISA regulates two types of fiduciaries:
A person or organization is a fiduciary if that person or organization holds the confidence or trust of
another, especially when that trust surrounds the control of the other party's assets. - answer✔What is
a fiduciary?
When property or assets of others are entrusted to a person or organization, that person or organization
assumes a fiduciary role regarding those assets or property. - answer✔What is a fiduciary?
Exercises any discretionary authority or discretionary control in managing the plan or exercises any
authority or control in managing or disposing of plan assets. - answer✔ERISA's Functional Definition of a
Fiduciary
Renders investment advice for a fee or other compensation, regarding any monies or other property
belonging to the plan. - answer✔ERISA's Functional Definition of a Fiduciary
Has any discretionary authority or responsibility in administering the plan - answer✔ERISA's Functional
Definition of a Fiduciary
Under ERISA's functional definition fiduciaries are defined by function not title. The person or
organization must exercise some authority or control over: - answer✔(1) offering investment advice, (2)
administering the plan, or (3) managing the plan before that person or organization is truly a plan
fiduciary.
state, local, or foreign law that governs the plan would likely determine whether a person or
organization is a fiduciary. - answer✔If a plan is not subject to ERISA, then the applicable..
means, that although the director or officer was not listed as aplan fiduciary, that person did
exercisesome control over those who acted as plan fiduciaries. - answer✔De facto control
D&O and Fiduciary Liability Insurance Policies. - answer✔The primary risk of duplicate coverage seems
to exist between
D&O insurance cover economic loss that occurs as the result of mismanagement by corporate directors
and officers. - answer✔What type of loss is covered by D&O insurance?
Judgments, Settlements, Damages (may or may not cover punitive or exemplary damages), Interest,
Defense costs, Attorneys' fees, Other taxed costs. - answer✔What does a Fiduciary Liability policy
typically cover?
Directors and officers of the sponsoring organization. - answer✔Who is Typically Covered by a Fiduciary
Liability Insurance Policy?
1) prudently select the fiduciaries they appoint, or 2) adequately monitor the performance of those
fiduciaries. - answer✔Corporate executives who appoint plan fiduciaries can be held liable, if they do
not:
the actual plan benefits. - answer✔A Fiduciary Liability Insurance Policy usually does not cover..
1) Losses incurred by the plan, 2) Return of profits made through improper use of assets, 3) Other
equitable or remedial relief dictated by the courts. - answer✔A fiduciary can be held personally liable for
all of the following:
non-monetary relief that can include, among other things, an injunction barring the fiduciary from
continuing to serve in that capacity. - answer✔Other equitable or remedial relief is typically:
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