Insurance Principles 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 Insurance Principles flashcards as text
Under Singapore's insurance regulations, what is the principle of 'utmost good faith' (uberrima fides)?
Answer: Both insurer and insured must disclose all material facts honestly
Utmost good faith requires both parties in an insurance contract to disclose all material facts honestly. In Singapore, failure to do so can void the policy under MAS guidelines.
What does the principle of indemnity mean in a basic insurance policy sold in Singapore?
Answer: The insured is restored to the same financial position as before the loss
The principle of indemnity ensures that the insured is compensated to the exact extent of the loss, restoring them to the same financial position as before, not to profit from the claim.
Which Singapore authority regulates the insurance industry?
Answer: Monetary Authority of Singapore (MAS)
The Monetary Authority of Singapore (MAS) is the central regulatory authority overseeing all financial institutions in Singapore, including insurance companies.
What is 'insurable interest' as required in Singapore insurance law?
Answer: Having a financial interest in the subject matter of insurance
Insurable interest means the policyholder must have a legitimate financial stake in the subject matter insured. Without it, the insurance contract is not legally enforceable in Singapore.
Under the Insurance Act (Cap. 142) of Singapore, which type of insurer must be registered to operate?
Answer: All insurers carrying on insurance business in Singapore
The Insurance Act requires all insurers — life, general, and composite — carrying on insurance business in Singapore to be registered with MAS.
What is the 'free-look' period for life insurance policies purchased in Singapore?
Answer: 14 days
In Singapore, policyholders have a 14-day free-look period from the date they receive the policy document to review and cancel a life insurance policy with a full refund of premiums paid.