Professional Ethics in Insurance 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 Professional Ethics in Insurance flashcards as text
What does 'suitability assessment' require an insurance agent to determine?
Answer: Whether the recommended product is appropriate for the client's specific needs, financial situation, and risk tolerance
A suitability assessment requires the agent to determine whether a recommended product genuinely matches the client's needs, financial situation, investment horizon, and risk tolerance — ensuring the recommendation is truly appropriate.
What is 'mis-selling' in the insurance context and what are its consequences?
Answer: Selling insurance through misrepresentation, omission, or inappropriate recommendation, leading to the client purchasing an unsuitable product
Mis-selling occurs when a client is sold an inappropriate product due to misrepresentation, omission of material information, or unsuitable recommendation. Consequences include regulatory sanctions, compensation obligations, and reputational damage.
What is the requirement for continuing professional development (CPD) for insurance agents in Singapore?
Answer: Licensed agents must meet annual CPD requirements to maintain their registration and stay current with industry developments
MAS and industry bodies require licensed insurance agents to fulfill annual CPD requirements, ensuring they stay current with regulatory changes, product developments, and best practices throughout their careers.
What is the ethical obligation regarding 'replacement business' in insurance?
Answer: When recommending replacement of an existing policy, the agent must compare benefits objectively and ensure the client is genuinely better off
When recommending policy replacement, agents must conduct an objective comparison, disclose costs of switching (e.g., loss of no-claims discounts, new exclusion periods), and ensure the client is genuinely better off with the new policy.
What does professional indemnity insurance protect insurance professionals against?
Answer: Legal liability for financial loss caused to clients due to negligent advice or errors in professional service
Professional indemnity insurance protects insurance professionals against claims from clients who suffer financial loss due to the professional's negligent advice, errors, or omissions in providing professional services.
Under Singapore's ethical framework, what must an insurance agent do before recommending a product?
Answer: Conduct a needs analysis to understand the client's financial situation and ensure the recommendation is suitable
Before recommending any insurance product, an agent must conduct a financial needs analysis to understand the client's circumstances, goals, existing coverage, and financial situation, ensuring any recommendation is based on the client's actual needs.