BCP Ethics and Professional Conduct

Question 1

What is 'churning' in the Singapore insurance industry?

Accepted Answer

Encouraging a policyholder to replace an existing policy with a new one primarily to generate commission

Answer

Regularly reviewing a client's portfolio

Answer

Processing claims quickly

Answer

Offering discounts on premiums

Question 2

What ethical obligation does an insurance agent in Singapore have regarding conflicts of interest?

Accepted Answer

The agent must disclose any conflicts of interest to the client and act in the client's best interest

Answer

No obligation exists

Answer

The agent only needs to disclose conflicts to their supervisor

Answer

Conflicts of interest are permitted as long as premiums are paid

Question 3

In Singapore, what is the consequence for an insurance agent who misrepresents policy benefits to a client?

Accepted Answer

The agent may face disciplinary action, licence revocation, and legal liability

Answer

No consequences if the client signs the proposal

Answer

The agent receives a verbal warning only

Answer

The client must accept the policy as sold

Question 4

What is the 'needs-based advisory' approach required by MAS for insurance sales in Singapore?

Accepted Answer

Recommending products that match the client's actual financial needs, objectives, and risk profile

Answer

Selling the most expensive policy available

Answer

Selling only products from the agent's own company

Answer

Recommending all available products to the client

Question 5

What record-keeping obligations do Singapore insurance agents have?

Accepted Answer

Agents must maintain records of client interactions, recommendations made, and the basis for those recommendations for at least 5 years

Answer

No records need to be kept

Answer

Only premium receipts need to be kept

Answer

Records are only needed for claims

Question 6

What is the 'replacement policy' notification requirement in Singapore?

Accepted Answer

When a client replaces an existing policy, the new insurer must notify the existing insurer and ensure the client understands the implications

Answer

No notification is needed when replacing a policy

Answer

Only the client needs to notify their family

Answer

Replacement policies are prohibited in Singapore