BCP Professional Ethics in Insurance 2

Question 1

What does 'know your client' (KYC) mean for insurance professionals in Singapore?

Accepted Answer

Understanding client needs, financial situation, risk appetite, and circumstances to make appropriate recommendations

Answer

KYC in an advisory context means thoroughly understanding the client's financial situation, needs, goals, risk tolerance, and circumstances to ensure recommendations are appropriate and suitable for them.

Question 2

What is the consequence of misrepresentation by an insurance agent in Singapore?

Accepted Answer

Disciplinary action including license suspension or revocation, and potential civil or criminal liability

Answer

Misrepresentation by an insurance agent can result in disciplinary action (including suspension or revocation of registration), civil liability to affected clients, and potentially criminal prosecution for fraud.

Question 3

What is the ethical significance of 'informed consent' in insurance sales?

Accepted Answer

It ensures clients understand what they are purchasing and agree based on accurate, complete information

Answer

Informed consent is ethically fundamental — clients must understand the product's features, costs, benefits, exclusions, and risks before agreeing to purchase. Without genuine understanding, consent is not truly informed.

Question 4

What is the obligation of an insurance professional upon discovering a colleague has committed misconduct?

Accepted Answer

Report it to appropriate supervisory or regulatory authorities, as failure to report may itself constitute misconduct

Answer

Insurance professionals have an ethical and potentially regulatory obligation to report known misconduct by colleagues. Turning a blind eye to misconduct can itself constitute a breach of professional standards.

Question 5

What does the 'best interest' duty require of insurance intermediaries in Singapore?

Accepted Answer

Acting in the client's best interest, even if it conflicts with the intermediary's own financial interest

Answer

The best interest duty requires intermediaries to prioritize the client's interests above their own financial interests, recommending products genuinely suitable for the client rather than those offering higher commissions.

BCP Insurance Practice Test

BCP Insurance Practice Test

BCP Professional Ethics in Insurance 2