Claims and Underwriting Flashcards
6 cards from real BCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Claims and Underwriting flashcards as text
What is 'co-insurance' in the Singapore insurance market?
Answer: When two or more insurers share the same risk, each covering a specified percentage
Co-insurance involves multiple insurers sharing a single risk, with each taking a specified percentage. One insurer acts as the lead, issuing the policy and handling claims on behalf of all.
What is 'reinsurance' as practised in Singapore's insurance market?
Answer: Insurance purchased by an insurer from another insurer to spread its risk
Reinsurance allows primary insurers to transfer portions of their risk to reinsurers, reducing their exposure to large or catastrophic losses. Singapore is a major reinsurance hub in Asia.
What is 'moral hazard' in insurance underwriting in Singapore?
Answer: The risk that the insured may act dishonestly or take greater risks because they have insurance
Moral hazard refers to the tendency of insured individuals to be less careful or even dishonest because they know they are protected by insurance. Underwriters assess this risk during evaluation.
In Singapore, what is the Financial Industry Disputes Resolution Centre (FIDReC)?
Answer: An independent body that resolves disputes between consumers and financial institutions including insurers
FIDReC is Singapore's independent dispute resolution scheme that handles complaints from consumers against financial institutions, including insurance companies, through mediation and adjudication.
What does 'average clause' mean in a Singapore property insurance policy?
Answer: If the property is underinsured, the claim payout is proportionally reduced
The average clause penalises underinsurance. If the sum insured is less than the actual value of the property, the claim payout is reduced in proportion to the degree of underinsurance.
What is a 'condition precedent to liability' in a Singapore insurance policy?
Answer: A condition that must be met before the insurer is liable to pay a claim
A condition precedent to liability is a policy term that must be fulfilled before the insurer is obligated to pay any claim. For example, giving timely notice of a claim is often such a condition.