BCP - Basic Insurance Concepts and Principles Singapore Risk and Insurance Fundamentals Questions and Answers

Question 1

Under Singapore's Insurance Act, which of the following relationships establishes a 'presumed' insurable interest for an individual taking out a life insurance policy on another person's life?

Accepted Answer

A person on the life of their spouse.

Answer

A business partner in a joint venture.

Answer

A creditor on the life of a debtor.

Answer

An employer on the life of a key employee.

Question 2

An applicant for a health insurance policy in Singapore fails to disclose a series of recent specialist consultations for a recurring health issue, which they believed to be minor. If the insurer discovers this omission after a claim is filed, what is the most likely consequence based on the principle of 'Utmost Good Faith'?

Accepted Answer

The insurer may be entitled to void the policy from inception and refuse the claim.

Answer

The insurer will pay the claim but increase the future premiums.

Answer

The insurer must pay the claim but can add an exclusion for that specific condition.

Answer

The Monetary Authority of Singapore (MAS) will fine the applicant for non-disclosure.

Question 3

A financial adviser in Singapore recommends a specific investment-linked policy to a client. According to the Financial Advisers Act (FAA) and its related notices, which of the following is a key disclosure requirement the adviser MUST fulfill regarding their remuneration?

Accepted Answer

Provide a written disclosure of all remuneration, including commissions and fees, or direct the client to the 'distribution cost' item in the Benefit Illustration for a life policy.

Answer

Verbally inform the client of the approximate commission during the sales presentation.

Answer

Disclose the full remuneration structure only if the client specifically asks for it in writing.

Answer

Submit the remuneration details directly to the Monetary Authority of Singapore (MAS) for their records.

Question 4

A policyholder has several individual life insurance policies with a Singaporean insurer that has just been declared insolvent. The Policy Owners' Protection (PPF) Scheme is activated. If the total guaranteed sum assured across all policies for this individual is S$700,000, what is the maximum amount they are entitled to receive from the scheme for the guaranteed sum assured?

Accepted Answer

S$500,000

Answer

S$100,000

Answer

S$700,000

Answer

S$250,000

Question 5

A consumer has a dispute with their insurer over a rejected travel insurance claim and has already gone through the insurer's internal complaint process without a satisfactory resolution. According to the established dispute resolution framework in Singapore, what is the next formal step the consumer should take?

Accepted Answer

File a dispute with the Financial Industry Disputes Resolution Centre Ltd (FIDReC).

Answer

Immediately file a lawsuit against the insurer in the Small Claims Tribunal.

Answer

Lodge a formal complaint with the General Insurance Association (GIA) of Singapore.

Answer

Submit a report to the Monetary Authority of Singapore (MAS) to request intervention.

Question 6

Which of the following entities is responsible for the registration and regulation of general insurance agents in Singapore, ensuring they meet the required competency and 'fit and proper' criteria?

Accepted Answer

The Agents' Registration Board (ARB) under the General Insurance Association (GIA).

Answer

The Monetary Authority of Singapore (MAS) directly.

Answer

The Singapore College of Insurance (SCI).

Answer

The Financial Industry Disputes Resolution Centre Ltd (FIDReC).