BCP Singapore Insurance Act & Legal Framework 2

Question 1

What is the purpose of the Policy Owners' Protection Scheme (PPF) in Singapore?

Accepted Answer

To compensate policyholders if a licensed insurer fails

Answer

The Policy Owners' Protection Scheme (PPF) compensates policyholders if their licensed insurer fails, ensuring they receive a portion of their entitlements even in insolvency situations.

Question 2

Under Singapore law, an insurance contract requires which essential element to be valid?

Accepted Answer

Insurable interest

Answer

Insurable interest is an essential element of a valid insurance contract under Singapore law. Without insurable interest, the contract would be considered a wagering agreement and void.

Question 3

Which MAS Notice requires insurers to have proper internal controls and risk management systems?

Accepted Answer

MAS Notice 124

Answer

MAS Notice 124 sets out requirements for insurers regarding internal controls, corporate governance, and risk management systems that must be maintained.

Question 4

What is the maximum penalty for operating as an unauthorized insurer in Singapore?

Accepted Answer

Fine of S$125,000 and/or 5 years imprisonment

Answer

Operating as an unauthorized insurer in Singapore can result in a fine not exceeding S$125,000 and/or imprisonment for a term not exceeding 5 years under the Insurance Act.

Question 5

The Insurance Act in Singapore requires insurers to maintain separate insurance funds for what purpose?

Accepted Answer

To protect policyholders' assets from being used for shareholders' purposes

Answer

The Insurance Act requires insurers to maintain separate insurance funds to ensure that policyholder assets are protected and kept separate from shareholders' funds, ensuring obligations can be met.

BCP Insurance Practice Test

BCP Insurance Practice Test

BCP Singapore Insurance Act & Legal Framework 2