All RE5 questions
Code of Conduct Adhere to the specific Codes of Conduct
A broker has contracts with three insurers and may place business only with them. She tells a new client: 'I am fully independent, so I can get you any product in the market.' Which statement reflects the General Code?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Her statement is acceptable, because a provider with more than one supplier may describe itself as independent.
- b) She must disclose her contractual relationships with product suppliers and any restrictions on what she may offer.Correct
- c) Her statement is acceptable, provided the product she finally recommends is suitable for the client.
- d) She must disclose her supplier relationships only if the client asks which insurers she works with.
Why this is the answer
A provider must disclose its contractual relationships with product suppliers, whether it has such relationships with other suppliers, and any conditions or restrictions a supplier imposes on the products it may offer. Representations to clients must also be factually correct. Claiming access to the whole market when she can place business with only three insurers is misleading, whether or not the eventual product is suitable.
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 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.…
- A representative makes the required product disclosures to a client orally on 14 May, a…