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TCF Product Management Consumer Protection
An insurer markets credit life cover, without advice, to self-employed traders. A large part of the premium pays for retrenchment cover, which a self-employed person can never claim. The wording is clear and claims are paid promptly. Which Treating Customers Fairly outcome has failed?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Outcome 6: the traders face unreasonable barriers when they try to claim.
- b) Outcome 4: the advice the traders received did not suit their circumstances.
- c) Outcome 3: the traders were not given clear information about the cover.
- d) Outcome 2: the product does not meet the needs of the group it was aimed at.Correct
Why this is the answer
Outcome 2 requires products marketed and sold in the retail market to be designed to meet the needs of identified customer groups and targeted accordingly. Selling cover that the target group can never claim fails that test. No advice was given, so Outcome 4 is not in point; the wording was clear (Outcome 3) and claims are handled promptly (Outcome 6).
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