CLU Chartered Life Underwriter Set Two

Correct: In Singapore, Professional Indemnity insurance for professionals such as lawyers (under the Legal Profession Act) and financial advisers (under the Financial Advisers Act) is typically written on a claims-made basis. This means the policy that is active at the time the claim is actually made against the professional is the one that responds to the loss, provided the negligent act occurred after the policy’s retroactive date. This is different from general liability policies which often use an occurrence-based trigger.

Incorrect: The occurrence basis is incorrect as it is standard for public liability but not for professional indemnity, where the gap between the error and the discovery can be years. PI insurance is not voluntary for these professionals; lawyers must have it to obtain a practicing certificate from the Law Society, and licensed financial advisers must maintain it under MAS regulations. A formal disciplinary order from a regulator is not a prerequisite for a PI policy trigger; the trigger is the claim made by the third party for a civil liability.

Takeaway: Professional Indemnity insurance in Singapore for regulated professionals operates on a claims-made basis, covering claims first made against the insured during the policy period for acts occurring after the retroactive date.

Correct: In Singapore, under the Insurance Act and the Risk-Based Capital (RBC 2) framework, insurers are required to maintain financial resources above the Prescribed Capital Requirement (PCR). If an insurer’s capital falls below this level, it is a regulatory breach that necessitates immediate notification to the Monetary Authority of Singapore (MAS). The insurer must then work with the regulator to implement a recovery plan to restore its capital position.

Incorrect: Suspending valid claim payments is a violation of the insurer’s contractual obligations and MAS’s fair dealing guidelines. Mergers and acquisitions in the Singapore insurance industry are strictly regulated and require the approval of MAS and the High Court. Reclassifying liabilities as equity without a legitimate legal basis is a violation of Singapore Financial Reporting Standards (SFRS) and constitutes a misrepresentation of the insurer’s financial health to the regulator.

Takeaway: Licensed insurers in Singapore must maintain capital adequacy above the Prescribed Capital Requirement and are legally obligated to report any breaches to the Monetary Authority of Singapore immediately.

Correct: In Singapore, the Free Look period is a consumer protection mechanism that typically grants policyholders 14 days from the date of receipt of the policy document to review the terms. If the policyholder finds the terms unsuitable, they have the right to cancel the policy by providing written notice. The insurer is then required to refund the premiums paid, although they are permitted to deduct expenses such as medical examination fees that were already incurred.

Incorrect: Seeking mediation through FIDReC is an appropriate step for resolving disputes after an insurer’s internal complaint process has been exhausted, but it is not the standard procedure for exercising the Free Look right. Reporting to the Monetary Authority of Singapore (MAS) is for regulatory or systemic issues and does not facilitate the immediate contractual refund provided by the Free Look provision. Waiting until the end of the policy year would result in the forfeiture of the Free Look rights, as the cancellation must occur within the specified 14-day window to qualify for a premium refund.

Takeaway: The Free Look period is a mandatory 14-day window in Singapore that allows personal insurance policyholders to cancel their policy for a refund if the terms are found to be unsuitable upon detailed review.

Correct: Under the Terrorism (Suppression of Financing) Act (TSOFA) in Singapore, specifically Section 7 and Section 8, every person in Singapore (including insurers) is prohibited from dealing with property of designated terrorists and has a duty to disclose information. If a match is confirmed against the designated list, the insurer is legally required to freeze the funds or property immediately and report the matter to the Suspicious Transaction Reporting Office (STRO). This takes precedence over contractual obligations to pay claims.

Incorrect: Informing the customer about the screening hit could constitute ‘tipping off,’ which is an offense under Singapore law. Waiting for a formal seizure order from MAS is incorrect because TSOFA imposes an immediate legal obligation on the entity holding the assets to freeze them. The S$20,000 threshold mentioned is relevant to Cash Transaction Reports (CTR) under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), but it does not apply to terrorism financing under TSOFA, where any amount must be reported.

Takeaway: Under Singapore’s TSOFA, insurers must immediately freeze assets of designated terrorists and report to the STRO, regardless of the transaction amount or contractual claim obligations.

Correct: In the context of Singapore’s general insurance principles, physical hazards are the tangible, objective characteristics of a risk that influence the likelihood or severity of a loss, such as the construction materials or fire protection systems of a building. Moral hazard (which includes morale hazard) refers to the subjective, behavioral factors related to the insured’s attitude or character, such as carelessness or indifference to loss because insurance exists.

Incorrect: The suggestion that staff negligence is a physical hazard is incorrect because physical hazards must be tangible features of the property, not human behavior. Categorizing both as physical hazards fails to distinguish between objective risk factors and subjective behavioral factors. Classifying a sprinkler system as a moral hazard or staff negligence as a legal hazard misapplies the standard definitions used in risk assessment and the SCI CGI curriculum.

Takeaway: Physical hazards relate to the tangible characteristics of the risk, whereas moral hazards relate to the behavioral and attitudinal risks posed by the insured.

Correct: In the Singapore context, catastrophe (CAT) modeling allows insurers to look beyond the relatively benign historical loss record. By simulating rare but severe events like extreme flooding or the impact of distant earthquakes, insurers can move toward risk-based pricing. This ensures that premiums accurately reflect the potential for ‘tail risk’ losses, which is a key component of sound underwriting and capital management as encouraged by the Monetary Authority of Singapore (MAS).

Incorrect: The suggestion that CAT modeling eliminates the need for reinsurance is incorrect; in fact, CAT model outputs are essential for determining the appropriate level of reinsurance cover to purchase. The idea that MAS mandates standardized pricing tariffs via CAT modeling is false, as Singapore has moved toward a liberalized, risk-based pricing environment. Finally, CAT modeling is designed for low-frequency, high-severity events (catastrophes), not high-frequency, low-severity events like routine maintenance issues or minor pipe bursts.

Takeaway: Catastrophe modeling shifts Singapore property insurance pricing from a purely historical approach to a forward-looking, risk-reflective model that accounts for rare but severe loss events.

Correct: In the Singapore insurance market, a Third Party Only (TPO) policy is the minimum legal requirement, covering only the insured’s legal liability for third-party death, bodily injury, and property damage. A Third Party Fire and Theft (TPFT) policy extends this by providing coverage for the insured’s own vehicle, but only if the loss or damage is specifically caused by fire or theft. It does not cover accidental damage from collisions.

Incorrect: The suggestion that TPFT covers accidental collision damage is incorrect because own-damage collision coverage is only available under a Comprehensive policy. Personal accident coverage is typically a feature of Comprehensive policies or an optional rider, not a standard distinction between TPO and TPFT. Coverage for natural disasters like floods is generally reserved for Comprehensive policies and is not included in the standard TPFT scope of fire and theft.

Takeaway: The key difference is that TPFT adds protection for the insured’s own vehicle against fire and theft risks, while TPO provides no coverage for the insured’s own vehicle at all.

Correct: The Singapore International Arbitration Centre (SIAC) is highly significant for high-value commercial insurance because it offers confidentiality, which protects sensitive commercial data, and allows parties to choose arbitrators with specific industry expertise. Additionally, because Singapore is a signatory to the New York Convention, SIAC arbitration awards are enforceable in over 160 jurisdictions, making it ideal for international commercial insurance and reinsurance disputes.

Incorrect: The statement regarding SIAC being a regulatory body under MAS is incorrect as MAS is the financial regulator, while SIAC is an independent arbitration institution. The claim that it is a mandatory mediation platform for all disputes is incorrect because arbitration is typically a consensual process driven by an arbitration clause in the insurance contract. The suggestion that it is a public judicial court is incorrect because arbitration is private and confidential, unlike the Singapore Courts which provide public judgments that set legal precedents.

Takeaway: SIAC is a preferred venue for high-value commercial insurance disputes due to its confidentiality, specialized expertise, and the international enforceability of its awards.

Correct: In Singapore, the Small Claims Tribunal (SCT) is established to provide a quick and inexpensive forum for resolving small claims. To maintain this objective and keep costs low, the Small Claims Tribunals Act stipulates that parties are not allowed to be represented by lawyers (advocates and solicitors) during the proceedings. This ensures that individuals are not disadvantaged by the legal resources of larger corporations like insurance companies.

Incorrect: The limitation period for filing a claim with the SCT is specifically two years from the date the cause of action accrued, which is shorter than the standard six-year period for general contract claims. The monetary limit for the SCT is generally S$20,000, which can be increased to S$30,000 only if all parties agree in writing; S$50,000 is outside its jurisdiction. The Monetary Authority of Singapore (MAS) is a regulatory body and does not issue certificates of non-resolution for the purpose of filing court or tribunal claims.

Takeaway: The Small Claims Tribunal in Singapore prohibits legal representation to ensure a cost-effective and accessible dispute resolution process for claims within its specific monetary and time limits.

Correct: Under the CDSA and TSOFA, the legal obligation to file a Suspicious Transaction Report (STR) is triggered when a person knows or has reasonable grounds to suspect that any property may be connected to criminal conduct or terrorism financing. This report must be lodged with the Suspicious Transaction Reporting Office (STRO), which is the financial intelligence unit of the Commercial Affairs Department (CAD), as soon as is reasonably practicable. The law provides immunity from any civil or criminal liability for reports made in good faith.

Incorrect: The S$20,000 threshold refers to specific Cash Transaction Reporting (CTR) requirements for certain sectors or cross-border movements, but an STR must be filed regardless of the amount if suspicion exists. Waiting for a full forensic audit to confirm a crime is incorrect because the legal standard is ‘reasonable grounds to suspect,’ not ‘absolute proof.’ Notifying the client about the report is a criminal offense known as ‘tipping off’ under both the CDSA and TSOFA, and the PDPA contains specific exemptions for disclosures required by law or for investigations.

Takeaway: In Singapore, any suspicion of money laundering or terrorism financing must be reported promptly to the STRO, regardless of the transaction amount, while strictly avoiding tipping off the suspected party.

Correct: In Singapore commercial insurance law, a warranty is a promise by the insured that a particular state of affairs exists or will continue to exist. It requires strict and literal compliance. If a warranty is breached, the insurer is discharged from liability from the date of the breach, even if the breach did not cause the loss. In contrast, a representation is a statement made during negotiations to induce the contract; it only needs to be substantially correct, and the insurer can typically only avoid the contract if the misrepresentation was material to the risk.

Incorrect: The suggestion that a warranty requires a proximate cause link is incorrect as warranties in Singapore commercial insurance generally do not require the breach to cause the loss for the insurer to be discharged. The idea that warranties are pre-contractual and representations are written terms is a reversal of their actual legal status; warranties are terms of the contract, while representations are often pre-contractual. The claim that a breach of warranty only entitles the insurer to damages is incorrect, as the standard remedy is discharge from liability.

Takeaway: In Singapore commercial insurance, warranties require strict compliance and their breach discharges the insurer from liability from the date of breach, regardless of materiality or causation.

Correct: In Singapore, the Carriage by Air Act gives the Montreal Convention 1999 the force of law. While the Convention provides a streamlined regime for carrier liability, that liability is capped at a specific number of Special Drawing Rights (SDRs) per kilogram (e.g., 22 SDR per kg). For high-value, low-weight items like microchips, the weight-based compensation would fall far short of the actual financial loss. Therefore, a separate ‘All Risks’ insurance policy like the Institute Cargo Clauses (Air) is necessary to protect the full value of the goods.

Incorrect: The approach of relying on the Montreal Convention for full market value is incorrect because the Convention specifically imposes weight-based liability limits rather than value-based indemnity. The suggestion to rely on the Warsaw Convention is incorrect because the Montreal Convention 1999 has largely superseded the Warsaw Convention for international carriage between signatory states and is the prevailing standard in Singapore’s Carriage by Air Act. The claim that electronic Air Waybills lead to unlimited liability is incorrect; the Montreal Convention modernized documentation requirements to allow for electronic records without penalizing the carrier with unlimited liability for doing so.

Takeaway: Shippers of high-value, low-weight cargo should always obtain separate cargo insurance because international air conventions limit carrier liability based on weight, not the actual value of the goods.

Correct: In accordance with the Insurance Act and MAS regulations in Singapore, insurance brokers are required to maintain an Insurance Broking Premium Account (IBPA). This is a trust account where all premiums received from insureds must be deposited. The broker must ensure that the premium is handled as trust money, and the full amount should be processed through this account to maintain a clear audit trail and protect the funds from the broker’s own creditors. Adhering to the Premium Payment Warranty (PPW) is also critical to ensure the validity of the insurance cover.

Incorrect: Depositing only the net premium or using a general operating account first are violations of the strict co-mingling rules under Singapore’s insurance regulations, which require client money to be kept separate from the firm’s own funds. Using funds from the IBPA to pay for another client’s claims or for any purpose other than those permitted by the Insurance (Intermediaries) Regulations is a breach of trust and a serious regulatory offense.

Takeaway: Insurance brokers in Singapore must use a dedicated Insurance Broking Premium Account (IBPA) to handle all client premiums as trust money, ensuring total separation from corporate funds.

Correct: The Life Insurance Association (LIA) Singapore has established standard definitions for 37 common Critical Illnesses (CI). All LIA member companies are required to use these exact definitions in their policy contracts. This standardization is designed to help consumers compare different CI products more easily and to provide greater clarity and certainty during the claims process, as the medical triggers for a claim remain consistent regardless of the insurer.

Incorrect: The definitions are not optional templates; they are mandatory for the 37 listed illnesses to prevent consumer confusion. These standards apply regardless of whether the CI benefit is a standalone policy or a rider, and they are relevant to any insurer following LIA standards in Singapore. Furthermore, the definitions are meant to be a standard baseline for clarity, not a ‘maximum coverage limit’ that prevents insurers from being more generous in other non-standardized areas.

Takeaway: The LIA standard definitions for 37 critical illnesses are mandatory for member insurers in Singapore to ensure industry-wide consistency and consumer protection.

Correct: The ‘Basis of Contract’ clause functions by converting the proposer’s representations into warranties. This means the proposer guarantees the absolute truth of the statements provided. If any statement is found to be incorrect, the insurer is entitled to avoid the contract from inception, as the truth of the answers is a condition precedent to the insurer’s liability. This principle is fundamental in the formation of general insurance contracts in Singapore, particularly in commercial lines where the duty of disclosure is strictly applied.

Incorrect: The other options are incorrect because the clause does not waive the insurer’s right to information, nor does it guarantee claim payment regardless of non-disclosure. Furthermore, the proposal form is a private contract document and does not serve as a regulatory filing to the Monetary Authority of Singapore (MAS). The 60-day credit period refers to premium payment terms (Premium Warranty) and is unrelated to the legal effect of the proposal form’s declarations regarding the basis of the contract.

Takeaway: The ‘Basis of Contract’ clause elevates the proposer’s answers to the status of warranties, making their accuracy a fundamental condition for the validity of the insurance policy.

Correct: Under the MAS Guidelines on Fit and Proper Criteria and the Insurance Act, any person to be appointed as a Key Executive Person (KEP), such as a Principal Officer or Director, must be fit and proper. Honesty, integrity, and reputation are core pillars of this assessment. Failure to disclose material information or providing misleading information during the application process is a serious breach that reflects poorly on the candidate’s integrity and can result in MAS refusing the appointment or even taking enforcement action.

Incorrect: The suggestion to use the Representative Notification Framework is incorrect because KEP appointments for insurers require prior written approval from MAS under the Insurance Act, rather than post-appointment notification. Thresholds from environmental risk guidelines are irrelevant to fit and proper integrity disclosures. Furthermore, MAS does not focus solely on financial soundness; the fit and proper criteria equally weight honesty, integrity, competence, and capability.

Takeaway: The appointment of Key Executive Persons in Singapore requires prior MAS approval based on a rigorous assessment of honesty and integrity, where full disclosure of potential conflicts is mandatory.

Correct: In Singapore, Products Liability insurance is designed to cover the insured’s legal liability for compensation to third parties for accidental bodily injury or property damage arising from products sold, supplied, or distributed. The trigger for a claim is typically the occurrence of the injury or damage during the policy period, rather than the date the product was manufactured.

Incorrect: One option is incorrect because Products Liability insurance is not a product warranty; it excludes the cost of replacing or repairing the defective product itself. Another option is incorrect because product recall expenses are generally excluded under a standard policy and require a specific Product Recall extension or separate cover. The final option is incorrect because liability can arise from various factors including marketing defects, such as inadequate warnings or instructions, which are typically covered under the scope of a distributor’s liability.

Takeaway: Products Liability insurance covers third-party injury or damage caused by product defects but excludes the cost of the defective product itself and product recall expenses unless specifically extended.

Correct: The Singapore Mediation Centre (SMC) provides a private and confidential forum for dispute resolution. Unlike litigation, which is adversarial and focused strictly on legal rights, mediation is interest-based. It allows commercial parties to reach a mutually acceptable settlement that can include creative business solutions not available in court, thereby helping to maintain business relationships.

Incorrect: The mediator does not have the power to impose a binding decision or judgment; their role is to facilitate a voluntary agreement between the parties. While the Singapore courts strongly encourage Alternative Dispute Resolution (ADR), mediation at the SMC is generally voluntary and not a mandatory statutory prerequisite under the Insurance Act for commercial claims. Furthermore, a key benefit of mediation is confidentiality; it does not set legal precedents and proceedings are not made public.

Takeaway: The Singapore Mediation Centre facilitates a confidential and flexible dispute resolution process that focuses on mutual agreement rather than imposed legal judgments.

Correct: In Singapore business interruption (BI) practice, the insurance definition of Gross Profit (often calculated on a ‘Difference Basis’) is distinct from the accounting definition. The insurance definition starts with turnover and only subtracts ‘Uninsured Working Expenses’ (variable costs like raw materials). This ensures that all other costs, known as ‘Standing Charges’ (fixed costs like rent and permanent wages), are included in the sum insured so they can be reimbursed if the business is interrupted. Using the accounting definition often results in under-insurance because it subtracts many fixed costs that the policyholder would still need to pay during a shutdown.

Incorrect: The suggestion that MAS mandates the use of Singapore Financial Reporting Standards (SFRS) for policy definitions is incorrect, as insurance contracts use specialized technical definitions to define the scope of indemnity. The Personal Data Protection Act (PDPA) governs the handling of personal data and has no relevance to the technical calculation of Gross Profit in a commercial policy. Increased Cost of Working (ICW) is a separate coverage element intended to minimize a reduction in turnover and is not part of the definition of Gross Profit itself; it must be specifically accounted for in the policy limits.

Takeaway: The insurance definition of Gross Profit is designed to protect fixed standing charges by only deducting variable expenses, which differs from standard accounting practices.

Correct: Under the Insurance Act, the Monetary Authority of Singapore (MAS) is the integrated regulator for the insurance industry. MAS has the statutory power to supervise insurers, which includes setting and enforcing capital adequacy requirements through the Risk-Based Capital (RBC) framework. MAS Notices, such as Notice 133 on Valuation and Capital, provide specific requirements that insurers must follow. MAS has the authority to inspect insurers and issue directions to ensure that they maintain sufficient financial resources to meet their obligations to policyholders.

Incorrect: The suggestion that SGX is the lead regulator for insurance solvency is incorrect because while SGX oversees listing rules, MAS is the primary regulator for financial soundness and insurance-specific regulations. The idea that an insurer can override MAS-mandated requirements with internal models without prior regulatory approval is false, as MAS must approve or prescribe the methods for calculating capital requirements. Finally, the General Insurance Association (GIA) is an industry body, not a statutory regulator, and MAS does not delegate its legal authority for solvency monitoring to trade associations.

Takeaway: The Monetary Authority of Singapore (MAS) is the primary statutory regulator for the insurance sector, exercising direct authority over solvency requirements and financial soundness under the Insurance Act.

Correct: In Singapore, the Ministry of Health (MOH) is responsible for the policy and benefit design of MediShield Life, the basic national health insurance. For Integrated Shield Plans (IPs), which consist of MediShield Life and a private insurance component, MOH regulates the clinical aspects and benefit structures, such as the implementation of the Cancer Drug List (CDL). By restricting claims to treatments on the CDL, MOH aims to manage healthcare cost inflation and ensure that premiums for both MediShield Life and IPs remain sustainable over the long term.

Incorrect: The Monetary Authority of Singapore (MAS), not MOH, is the primary financial regulator for insurers’ conduct and solvency. While MOH monitors premium sustainability, it does not directly fix or guarantee the premium prices for the private ‘top-up’ portion of IPs, nor does it provide a financial guarantee for private insurers’ losses. Private insurers are responsible for setting their own premiums for the additional coverage based on their risk assessments and claims experience, subject to MAS oversight and MOH’s clinical guidelines.

Takeaway: The Ministry of Health (MOH) regulates health insurance sustainability by defining MediShield Life benefits and setting clinical standards, like the Cancer Drug List, which private insurers must follow for Integrated Shield Plans.

Correct: In Singapore, the Motor Claims Framework (MCF) emphasizes the importance of reporting accidents promptly (within 24 hours or the next working day). Authorized workshops are a key part of this ecosystem, as they allow insurers to manage the cost of claims through pre-agreed rates and ensure repairs meet specific quality benchmarks. For policyholders with ‘Authorized Workshop’ plans, adhering to this network is a contractual requirement to ensure the claim is processed smoothly and to avoid higher out-of-pocket expenses like increased excesses.

Incorrect: The suggestion that the system is a mandatory government initiative for uniform pricing is incorrect, as it is an industry-led framework by the General Insurance Association (GIA) and pricing is competitive. The claim that policyholders can use any workshop without penalty on a restricted plan is false, as ‘Authorized Workshop’ plans specifically impose higher excesses or claim restrictions if non-authorized repairers are used. Suggesting the system exists primarily for referral fees is incorrect and describes a practice that would likely constitute a conflict of interest and a breach of professional conduct standards in Singapore.

Takeaway: The authorized workshop system in Singapore is designed to balance cost control and repair quality under the Motor Claims Framework, necessitating strict adherence to reporting timelines and designated repair networks.

Correct: Under the Montreal Convention, which is enacted in Singapore through the Carriage by Air Act, a two-tier liability system applies to passenger death or injury. The first tier involves strict liability (regardless of fault) for damages up to a certain limit expressed in Special Drawing Rights (SDRs). For damages exceeding this limit (the second tier), the carrier is liable unless it can prove that the damage was not caused by its negligence or was caused solely by the negligence of a third party.

Incorrect: The suggestion that a claimant must prove willful misconduct for any liability to arise is incorrect because the first tier of the Montreal Convention imposes strict liability. The idea that liability is capped at a fixed maximum for all claims is incorrect because the second tier allows for higher compensation if the carrier cannot prove it was not negligent. The claim that turbulence automatically exonerates a carrier is incorrect as the strict liability tier applies to accidents occurring on board the aircraft, regardless of whether the event was a common aviation risk.

Takeaway: Singapore’s Carriage by Air Act adopts the Montreal Convention’s two-tier system, providing strict liability for initial damages and fault-based liability for claims exceeding the SDR threshold.

Correct: In Singapore insurance law, the proximate cause is the active, efficient cause that sets in motion a train of events which brings about a result, without the intervention of any force started and working actively from a new and independent source. It is the dominant cause, not necessarily the one nearest in time. If the fire (an insured peril) weakened the wall to the extent that a normal windstorm caused it to fall, the fire remains the proximate cause as the windstorm was not an independent intervening cause but merely the final trigger for a loss already made inevitable by the fire.

Incorrect: Identifying the cause nearest in time is a common misconception; the principle of ‘causa proxima’ in modern insurance practice refers to the efficiency of the cause, not its temporal proximity. Apportioning the loss is generally not the standard approach for proximate cause unless the policy specifically provides for it or the causes are truly concurrent and independent. Rejecting the claim simply because an uninsured peril was involved is incorrect if the insured peril was the dominant cause that made the loss from the uninsured peril inevitable.

Takeaway: The proximate cause is the most dominant and effective cause in a sequence of events, rather than the event occurring closest to the time of the loss.

Correct: In Singapore, the Workplace Safety and Health Act (WSHA) imposes a statutory duty on ‘occupiers’ to ensure that the workplace, the means of access to or egress from the workplace, and any machinery, equipment, or substance in the workplace are safe and without risks to health for every person within the premises, even if they are not the occupier’s direct employees. This means a fund administrator must implement robust risk management and hazard identification processes for contractors and vendors to prevent accidents that could lead to criminal prosecution under the WSHA or civil suits for negligence.

Incorrect: The suggestion that the WSHA only applies to direct employees is incorrect because the Act specifically extends duties to contractors and other persons at work. The idea that WICA insurance removes the need for risk management is false, as insurance is a risk transfer mechanism and does not discharge statutory safety duties. The WSHA is a mandatory Act of Parliament administered by the Ministry of Manpower, not a voluntary guideline or a MAS-defined industrial regulation. Finally, statutory duties under the WSHA cannot be contracted away or fully transferred through indemnity clauses; the occupier remains personally liable for breaches of their own statutory duties.

Takeaway: Under Singapore’s WSHA, occupiers must manage liability risks by ensuring a safe environment for all persons at work, including contractors, through proactive risk assessments and safety measures.

Correct: In Singapore, the principle of Utmost Good Faith (Uberrimae Fidei) applies to reinsurance just as it does to direct insurance. The ceding insurer (cedant) has a positive duty to disclose all material facts to the reinsurer. A material fact is defined as any information that would influence the mind of a prudent reinsurer in deciding whether to accept the risk and on what terms. This duty is proactive and exists independently of the reinsurer asking specific questions.

Incorrect: Limiting disclosure only to specific questions asked is incorrect because the duty of utmost good faith requires proactive disclosure of all material facts. Providing only MAS regulatory filings is insufficient as these filings may not contain the specific underwriting details material to a particular reinsurance treaty. Withholding internal assessments based on the reinsurer’s perceived sophistication is a breach of the duty, as the cedant possesses unique knowledge of the underlying risks that the reinsurer cannot be expected to infer.

Takeaway: The principle of Utmost Good Faith requires a ceding insurer to proactively disclose all material facts to a reinsurer to ensure the risk is accurately assessed and priced.

Correct: Under the PDPA, organizations must obtain the individual’s consent for the collection, use, or disclosure of personal data for specific purposes. When disclosing data to a third-party (acting as a data intermediary), the bank remains responsible for ensuring that the recipient is contractually bound to protect the data with a level of security comparable to the bank’s own obligations under the PDPA Protection Obligation.

Incorrect: Relying solely on deemed consent for sensitive medical disclosures is risky and often insufficient for third-party transfers in insurance. Disclosing an entire medical folder regardless of the claim scope violates the Purpose Limitation Obligation, which requires data collection and disclosure to be limited to what is reasonable for the purpose. The age of the data (e.g., 24 months) does not exempt it from the PDPA; personal data remains protected regardless of its age as long as the individual is identifiable.

Takeaway: Compliance with the PDPA regarding sensitive medical records requires explicit consent for disclosure and ensuring that third-party intermediaries maintain equivalent data protection standards.

Correct: In Singapore, the Commercial Affairs Department (CAD) is the principal agency of the Singapore Police Force (SPF) responsible for investigating white-collar crimes, including insurance fraud. Under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), insurers have a statutory obligation to report suspicious transactions to the Suspicious Transaction Reporting Office (STRO), which is the financial intelligence unit within the CAD. This ensures that criminal activities are properly investigated and prosecuted, mitigating the risk of systemic fraud.

Incorrect: Negotiating private settlements instead of reporting crime fails to address the underlying criminal act and may lead to non-compliance with the CDSA. While sharing information with the General Insurance Association (GIA) is a good industry practice for fraud prevention, it does not fulfill the legal requirement to report suspected criminal acts to the SPF. Delaying the disclosure of evidence until civil litigation occurs hinders the SPF’s ability to conduct timely criminal investigations and may allow the syndicate to continue its operations.

Takeaway: Insurers must fulfill their legal obligations under the CDSA by reporting suspected criminal acts and suspicious transactions directly to the CAD and STRO of the Singapore Police Force.

Correct: In Singapore, under the Insurance Act, an Insurance Broking Premium Account (IBPA) is a trust account. The money held in this account does not belong to the broker; it is held on behalf of the policyholders (for premiums to be paid to insurers) or the insurers (for claims or refunds to be paid to policyholders). Using these funds for the broker’s own business expenses, such as administrative overheads, is a breach of trust and a violation of regulatory requirements, regardless of the intent to repay the funds.

Incorrect: The suggestion that professional indemnity insurance makes the withdrawal permissible is incorrect because insurance does not authorize the illegal use of trust funds. There is no ‘de minimis’ rule or accounting cycle exception in Singapore’s regulations that allows for the unauthorized withdrawal of premium funds for operational use. Crediting interest back to the account does not rectify the underlying regulatory breach of using trust money for personal or business gain.

Takeaway: Insurance Broking Premium Accounts are trust accounts in Singapore, and their funds must never be used for a broker’s operational or business expenses.

Correct: In the Singapore insurance market, standard travel policies for personal liability exclude risks that are typically covered by other specific insurance types, such as motor insurance (mechanically propelled vehicles). For baggage loss, insurers strictly require a Property Irregularity Report (PIR) from airlines or a police report within 24 hours to validate the claim and establish the timeline of the incident.

Incorrect: The suggestion that personal liability is unlimited or that baggage is settled on a new for old basis is incorrect as policies have defined limits of indemnity and usually apply depreciation to personal effects. Intentional acts are universally excluded from liability coverage as insurance is designed for accidental events. Wear and tear, gradual deterioration, and professional indemnity are standard exclusions or require separate specialized policies.

Takeaway: Standard Singapore travel policies require timely reporting of baggage loss to authorities and exclude liability related to motor vehicle use and intentional acts.