PGI Insurance Ethics and Consumer Protection — Questions and Answers
Question 1: What is the duty of disclosure for general insurance applicants in Singapore?
- No disclosure is needed
- Applicants must honestly disclose all material facts that would influence the insurer's decision to accept the risk and set the premium (Correct answer)
- Only disclose major claims history
- Only disclose the vehicle's age
Correct answer: Applicants must honestly disclose all material facts that would influence the insurer's decision to accept the risk and set the premium
The duty of utmost good faith requires full disclosure of all material facts — past claims, property condition, security measures, previous policy cancellations, and any information that would affect the insurer's assessment.
Question 2: What is the role of the General Insurance Association (GIA) of Singapore in consumer protection?
- GIA sells insurance directly
- GIA promotes industry standards, handles consumer complaints, publishes guidelines, and works with regulators to protect policyholder interests (Correct answer)
- GIA only represents large insurers
- GIA has no consumer protection role
Correct answer: GIA promotes industry standards, handles consumer complaints, publishes guidelines, and works with regulators to protect policyholder interests
The GIA sets industry standards, provides consumer complaint channels, publishes guides on insurance products, and collaborates with MAS and other bodies to maintain fair practices in general insurance.
Question 3: What happens if an insured person submits a fraudulent insurance claim in Singapore?
- The insurer must still pay part of the claim
- The claim is rejected, the policy may be voided, the insured could face criminal prosecution, and they may be blacklisted by the industry (Correct answer)
- Only the fraudulent portion is rejected
- A warning is issued for the first offence
Correct answer: The claim is rejected, the policy may be voided, the insured could face criminal prosecution, and they may be blacklisted by the industry
Insurance fraud is a serious offence. Consequences include claim rejection, policy voidance, recovery of previously paid claims, criminal prosecution under the Penal Code, and difficulty obtaining future insurance.
Question 4: What cooling-off period applies to general insurance policies in Singapore?
- 30 days for all general insurance
- For most general insurance policies, there is no standard free-look period unlike life insurance; however, some policies and insurers may offer voluntary cancellation windows (Correct answer)
- 7 days for all policies
- No cooling-off period exists for any insurance
Correct answer: For most general insurance policies, there is no standard free-look period unlike life insurance; however, some policies and insurers may offer voluntary cancellation windows
Unlike life insurance (14-day free-look), general insurance policies in Singapore do not have a standardised cooling-off period. Some insurers offer voluntary cancellation terms, but this varies by product.
Question 5: How can consumers compare general insurance products in Singapore?
- All products are the same
- Use comparison websites, consult insurance brokers, check GIA resources, read policy wordings carefully, and compare coverage, exclusions, and premiums (Correct answer)
- Only ask friends for recommendations
- Price is the only factor to compare
Correct answer: Use comparison websites, consult insurance brokers, check GIA resources, read policy wordings carefully, and compare coverage, exclusions, and premiums
Consumers should compare policies on multiple factors: coverage scope, exclusions, claim limits, excess amounts, premium costs, insurer reputation, claim process, and any special terms or conditions.
Question 6: What is FIDReC and how does it help insurance consumers in Singapore?
- A government insurance company
- The Financial Industry Disputes Resolution Centre — an independent body that resolves disputes between consumers and financial institutions including insurers through mediation and adjudication (Correct answer)
- A financial advisory firm
- A consumer credit bureau
Correct answer: The Financial Industry Disputes Resolution Centre — an independent body that resolves disputes between consumers and financial institutions including insurers through mediation and adjudication
FIDReC provides consumers with a free, independent avenue to resolve disputes with insurance companies. Claims up to SGD 100,000 can be adjudicated, and the process is designed to be accessible and fair.
PGI Insurance Ethics and Consumer Protection
What is the duty of disclosure for general insurance applicants in Singapore?