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Regulatory Framework 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.

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  1. Under MAS regulations, what is the minimum paid-up capital requirement for a direct life insurer in Singapore?

    Answer: SGD 10 million

    MAS requires direct life insurers to maintain a minimum paid-up capital of SGD 10 million as part of the financial soundness requirements under the Insurance Act.

  2. What is the purpose of the Financial Advisers Act (FAA) in Singapore?

    Answer: To regulate the provision of financial advisory services including insurance advice

    The FAA regulates individuals and firms providing financial advisory services in Singapore, including insurance recommendations, to ensure consumers receive suitable and fair advice.

  3. What certification must an insurance representative in Singapore obtain to sell life insurance?

    Answer: CMFAS Module 9 (Life Insurance) certification

    Insurance representatives must pass the relevant Capital Markets and Financial Advisory Services (CMFAS) examination modules, including Module 9 for life insurance, before they can advise on and sell life insurance products.

  4. What is the General Insurance Association (GIA) of Singapore?

    Answer: A trade association representing general insurance companies in Singapore

    The GIA is a trade body that represents general insurers in Singapore. It promotes best practices, develops industry guidelines, and provides a platform for collaboration among member companies.

  5. Under Singapore's MAS guidelines, what is the 'balanced scorecard' framework for financial advisers?

    Answer: A framework that evaluates advisers on non-sales measures like compliance, quality of advice, and customer outcomes, not just sales volume

    MAS introduced the balanced scorecard to ensure financial advisers are evaluated on multiple criteria beyond sales, including compliance, quality of recommendations, and customer satisfaction.

  6. What is 'risk-based capital' (RBC) framework as applied to Singapore insurers?

    Answer: A framework requiring insurers to hold capital proportionate to the risks they underwrite

    The RBC framework requires insurers to maintain capital levels that correspond to the risks they take. Higher-risk portfolios require more capital, ensuring insurers remain solvent.