BCP Professional Ethics in Insurance

Question 1

What does 'conflict of interest' mean for an insurance agent in Singapore?

Accepted Answer

When an agent's personal interests could compromise their duty to act in the client's best interest

Answer

When an agent sells both life and general insurance

Answer

When an agent represents two different insurers

Answer

When an agent earns commission higher than market rate

Question 2

What is the ethical obligation of an insurance agent when a client's needs change?

Accepted Answer

Review the client's coverage and recommend appropriate adjustments, even if it means lower premiums for the agent

Answer

Continue selling the same products regardless of changed needs

Answer

Immediately cancel all existing policies

Answer

Refer the client to another agent

Question 3

What does 'churning' mean in insurance sales ethics?

Accepted Answer

Inappropriately encouraging clients to cancel existing policies and buy new ones, primarily to generate new commissions

Answer

Selling insurance products to high-net-worth clients

Answer

Selling multiple policies to the same client

Answer

Transferring clients between agents within the same company

Question 4

What is the ethical requirement regarding confidentiality for insurance professionals in Singapore?

Accepted Answer

Client information must be kept confidential and not disclosed without consent or legal requirement

Answer

Client information may be shared freely within the industry

Answer

Only financial information needs to be kept confidential

Answer

Confidentiality only applies to life insurance clients

Question 5

What is 'twisting' in insurance sales ethics?

Accepted Answer

Inducing a client to cancel a policy from one insurer and replace it with a policy from another, using misrepresentation

Answer

Selling insurance products using complex financial illustrations

Answer

Training agents on technical product knowledge

Answer

Converting term policies to whole life policies

Question 6

What professional obligation does an insurance agent have when a client requests unsuitable coverage?

Accepted Answer

Explain the risks of the unsuitable coverage, document the client's informed decision, but still respect the client's autonomy

Answer

Accept the client's instruction without comment

Answer

Refuse to assist the client entirely

Answer

Report the client to MAS immediately