BCP Singapore Insurance Act & Legal Framework 1 — Questions and Answers
Question 1: Which government body regulates the insurance industry in Singapore?
- Monetary Authority of Singapore (MAS) (Correct answer)
- Singapore Exchange (SGX)
- Ministry of Finance (MOF)
- Accounting and Corporate Regulatory Authority (ACRA)
Correct answer: Monetary Authority of Singapore (MAS)
The Monetary Authority of Singapore (MAS) is the integrated financial regulator in Singapore responsible for regulating and supervising the insurance industry under the Insurance Act.
Question 2: Under the Singapore Insurance Act, what is the minimum paid-up capital required for a direct insurer licensed to carry on general insurance business?
- S$5 million
- S$10 million (Correct answer)
- S$25 million
- S$50 million
Correct answer: S$10 million
Under the Insurance Act, a direct insurer licensed to carry on general insurance business must maintain a minimum paid-up capital of S$10 million.
Question 3: Which of the following is NOT a class of insurance business under the Singapore Insurance Act?
- Life insurance
- General insurance
- Health insurance
- Agricultural insurance (Correct answer)
Correct answer: Agricultural insurance
The Insurance Act categorizes insurance into Life insurance, General insurance, and Health insurance as the main classes. Agricultural insurance is not a separately defined class under Singapore's Insurance Act.
Question 4: What does the term 'policyholder protection' refer to under Singapore's regulatory framework?
- Protection of insurers from fraudulent claims
- Safeguarding policyholders' interests and ensuring insurers can meet obligations (Correct answer)
- Protecting agents from legal liability
- Ensuring premiums remain affordable
Correct answer: Safeguarding policyholders' interests and ensuring insurers can meet obligations
Policyholder protection refers to the regulatory framework ensuring insurers maintain sufficient financial resources and conduct business fairly to meet their obligations to policyholders.
Question 5: Under the Insurance Act, what must an insurer do if it wishes to carry on a new class of insurance business?
- Notify MAS within 30 days
- Apply for MAS approval (Correct answer)
- Inform the Singapore Parliament
- Register with ACRA
Correct answer: Apply for MAS approval
An insurer must apply to MAS for approval before commencing a new class of insurance business. MAS will assess whether the insurer meets the required standards.
Question 6: Which legislation governs the professional conduct of insurance intermediaries in Singapore?
- Companies Act
- Financial Advisers Act (FAA) (Correct answer)
- Securities and Futures Act
- Moneylenders Act
Correct answer: Financial Advisers Act (FAA)
The Financial Advisers Act (FAA) governs the professional conduct of insurance intermediaries, including licensed financial advisers who provide financial advisory services including insurance.
BCP Singapore Insurance Act & Legal Framework 1
Which government body regulates the insurance industry in Singapore?