PGI Insurance Ethics and Consumer Protection 2

Question 1

What anti-money laundering (AML) checks apply to general insurance in Singapore?

Accepted Answer

Insurers must conduct customer due diligence, monitor for suspicious transactions, and file suspicious transaction reports as required by MAS regulations

Answer

Under MAS regulations, general insurers must implement AML/CFT measures including Know Your Customer (KYC) procedures, transaction monitoring, and reporting suspicious activities to STRO.

Question 2

What is the insurance intermediary's duty to clients in Singapore?

Accepted Answer

To provide honest advice, recommend suitable products based on client needs, disclose all material information, and act in the client's best interest

Answer

Insurance intermediaries in Singapore must follow MAS fair dealing guidelines: understand client needs, recommend suitable products, disclose fees and commissions, and prioritise client interests.

Question 3

What is 'warranty' in general insurance contracts in Singapore?

Accepted Answer

A strict condition in the policy that the insured must comply with; breach may void the policy regardless of whether it contributed to the loss

Answer

Insurance warranties are strict conditions. For example, a burglar alarm warranty requires the alarm to be operational. Breach of warranty can void the policy even if the breach did not cause the loss.

Question 4

What does 'utmost good faith' (uberrima fides) mean in Singapore general insurance?

Accepted Answer

Both the insurer and the insured must deal with each other honestly, disclosing all relevant information and not misrepresenting facts

Answer

Utmost good faith is a fundamental principle requiring both parties to be completely honest. The insured must disclose all material facts; the insurer must be transparent about policy terms and conditions.

Question 5

What is the MAS Fair Dealing initiative and how does it affect general insurance in Singapore?

Accepted Answer

A mandatory framework requiring financial institutions including insurers to treat customers fairly in all business dealings, from product design to claims handling

Answer

Fair Dealing is a core MAS expectation requiring insurers to offer products suited to client needs, provide clear information, handle complaints fairly, and ensure staff competency and ethical conduct.

PGI Insurance Practice Test

PGI Insurance Practice Test

PGI Insurance Ethics and Consumer Protection 2