All RE5 questions
Financial Products Apply knowledge of the financial products and services environment
Insurer X issues a life policy. Broker Y recommends it to a client. Administrator Z collects the monthly premiums on behalf of the insurer. How are the three classified under the FAIS Act?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) X is the product supplier; Y renders an intermediary service; Z is outside the Act.
- b) All three are product suppliers, because each takes part in delivering the policy.
- c) X is the product supplier; Y renders advice; Z renders an intermediary service.Correct
- d) X renders advice; Y is the product supplier; Z renders an intermediary service.
Why this is the answer
A product supplier is the person who issues the financial product, here the insurer. Recommending the policy is advice. Collecting or accounting for premiums is expressly an intermediary service. Y and Z therefore both render financial services and must be authorised FSPs or representatives of one.
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