BCP Insurance Principles 2

Question 1

Which principle prevents an insured from claiming from multiple insurers for the same loss to make a profit in Singapore?

Accepted Answer

Principle of contribution

Answer

The principle of contribution ensures that if the same risk is covered by multiple policies, the insurers share the claim proportionally, preventing the insured from profiting by claiming the full amount from each.

Question 2

What is subrogation in the context of Singapore insurance?

Accepted Answer

The insurer's right to take over the insured's legal rights against a third party after paying a claim

Answer

Subrogation allows the insurer, after settling a claim, to step into the insured's shoes and pursue recovery from the responsible third party.

Question 3

What does 'proximate cause' determine in a Singapore insurance claim?

Accepted Answer

The dominant or effective cause of the loss

Answer

Proximate cause identifies the dominant, effective, or operative cause of a loss. A claim is payable only if the proximate cause is a peril covered under the policy.

Question 4

Under MAS guidelines, what must a financial adviser in Singapore do before recommending an insurance product?

Accepted Answer

Conduct a Financial Needs Analysis (FNA)

Answer

MAS requires financial advisers to conduct a Financial Needs Analysis (FNA) to understand the client's financial situation, protection needs, and objectives before making a product recommendation.

Question 5

What is the role of the Life Insurance Association (LIA) of Singapore?

Accepted Answer

To represent and promote the interests of life insurance companies in Singapore

Answer

The LIA is a trade association that represents life insurance companies in Singapore. It promotes industry standards and public education but does not regulate or sell policies.

BCP Insurance Practice Test

BCP Insurance Practice Test

BCP Insurance Principles 2