All RE5 questions
Code of Conduct Adhere to the specific Codes of Conduct
After investigating a complaint, an FSP accepts that its administrative error caused the client a loss of R6 000 and pays her that amount. How does the General Code classify the payment?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) A goodwill payment, because it was made voluntarily and without an order from the Ombud.
- b) A compensation payment, because the provider accepts that it caused the loss.Correct
- c) A determination, because the payment finally resolves the complaint of the client.
- d) A financial interest, because it is a payment made by a provider to another person.
Why this is the answer
A compensation payment compensates a complainant for a proven or estimated financial loss where the provider accepts that its contravention, error, omission, maladministration or unfair treatment caused it. A goodwill payment is made where the provider does not accept liability. Whether the Ombud is involved is irrelevant to the classification.
Want to test yourself on 700+ more questions like this?
Start your free RE5 simulator today — timed mock exams, full answer explanations and cloud-synced progress tracking.
More Code of Conduct questions
- A broker has contracts with three insurers and may place business only with them. She t…
- A broker receives a client's premium cheque at 16:00 on the Thursday before Good Friday…
- A risk policy provides that the premium will increase every year. What does the General…
- A client instructs her adviser on Monday to buy a large block of a thinly traded share.…