BCP Professional Ethics in Insurance 1

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

A conflict of interest arises when an agent's personal interests (e.g., higher commissions for specific products) could compromise their professional duty to recommend what is genuinely best for the client.

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

Professional ethics require agents to periodically review clients' needs and coverage, recommending adjustments to ensure coverage remains appropriate — even if this results in lower commissions for the 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

Churning is the unethical practice of inducing clients to cancel existing policies and replace them with new ones without genuine benefit to the client, primarily to generate new commission income for the agent.

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

Insurance professionals are ethically and legally obligated to maintain strict confidentiality of all client information, disclosing it only with the client's consent or when legally required (e.g., AML reporting).

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

Twisting involves inducing a client to switch from one insurer's policy to another's through misrepresentation or incomplete comparison of the policies, to the detriment of the client.

BCP Insurance Practice Test

BCP Insurance Practice Test

BCP Professional Ethics in Insurance 1