Insurance Basics and Agents Quiz

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Questions and Answers

What is the primary role of an Investment Advisor/Agent/Consultant?

To create and distribute financial publications for free.

To manage customer accounts without any advisory services.

To engage in the business of advising others regarding securities for a fee. (correct)

To provide loans for businesses at a competitive interest rate.

Which of the following is excluded from the definition of an Investment Advisor?

A journalist writing financial news. (correct)

An accountant providing tax advice.

A financial analyst working on market trends.

A professor teaching investment strategies.

Who is considered a 'Customer' in the context provided?

Only individuals maintaining a personal savings account.

Any entity conducting transactions with a covered institution. (correct)

Individuals who donate money to charities.

Only beneficiaries of a trust or pension fund.

What does the term 'Property' refer to in this context?

Any item of value, tangible or intangible. Signup and view all the answers

What service is performed by a money payment, remittance, and transfer company?

Transmitting money on behalf of other individuals. Signup and view all the answers

Which of the following statements is true regarding Investment Advisors?

They can manage portfolio securities of investment companies. Signup and view all the answers

Which of the following would likely NOT be classified as an Investment Advisor?

A bank giving financial advice to its customers. Signup and view all the answers

Which of the following is a key characteristic of a moneychanger?

They buy and sell foreign currency notes. Signup and view all the answers

What is the duration for which existing freeze orders remain in force after the effectivity of the Act?

Thirty days Signup and view all the answers

What must happen for existing freeze orders, issued by the AMLC, to be extended beyond thirty days?

They must be extended by the Court of Appeals Signup and view all the answers

What happens to freeze orders that have been extended by the Court of Appeals under Republic Act No. 9194?

They remain effective unless dissolved by the same court Signup and view all the answers

When was this Act approved?

August 6, 2003 Signup and view all the answers

Who is the chairman of the Senate Panel mentioned in the provisions?

Hon. Ramon B. Magsaysay, Jr. Signup and view all the answers

How long must records related to a money laundering case be retained after a court filing?

Until the case is resolved or terminated by the court Signup and view all the answers

What is the maximum period allowed for the reporting of suspicious transactions by covered institutions?

Ten working days from occurrence Signup and view all the answers

If a transaction is both covered and suspicious, how should it be reported?

As suspicious transaction only Signup and view all the answers

What is the form of records that covered institutions must retain?

Originals admissible in court Signup and view all the answers

What must covered institutions do during the deferment period after Republic Act No. 9194 becomes effective?

Defer any reports for sixty days Signup and view all the answers

In what manner should covered transaction reports be submitted to the AMLC?

In electronic form securely Signup and view all the answers

What is the purpose of the manual of operations to be issued by the AMLC?

To map out final flow and procedures for reporting Signup and view all the answers

What must be done if the AMLC has not issued new sets of forms for transaction reports?

Use the existing forms for reporting Signup and view all the answers

Which definition best describes a contract of insurance?

An agreement that allows one party to indemnify another against loss from a specific event. Signup and view all the answers

What role does an insurance broker serve in the insurance industry?

Negotiates insurance contracts on behalf of clients. Signup and view all the answers

Which of the following best describes a professional reinsurer?

An entity that exclusively handles reinsurance business. Signup and view all the answers

Which activity is NOT considered part of transacting insurance business?

Performing insurance-related activities as an incidental part of another business. Signup and view all the answers

What is the primary function of an insurance agent?

To act on behalf of a company to sell insurance or collect applications. Signup and view all the answers

What distinguishes a reinsurance broker from an insurance agent?

A reinsurance broker negotiates reinsurance contracts for companies, not consumers. Signup and view all the answers

Which is an example of a business activity specifically recognized as insurance under Philippine law?

Transacting a contract of suretyship. Signup and view all the answers

Who among the following would be classified as an insurance agent?

A person who works exclusively for one insurance company to sell their policies. Signup and view all the answers

Which activity is considered a violation of the Securities Regulation Code regarding the sale of securities?

Offering securities without a duly filed registration statement Signup and view all the answers

What practice involves manipulating security prices by creating a false impression of trading activity?

Marking the close Signup and view all the answers

What is a violation when an issuer fails to fulfill its reporting obligations?

Failing to comply with reportorial requirements Signup and view all the answers

Which of the following actions is considered insider trading?

Using confidential information for trading Signup and view all the answers

What does the term 'hype and dump' refer to in the context of market manipulation?

Promoting a stock's success and selling after increase Signup and view all the answers

Which of these is NOT a method of manipulating security prices?

Proper and timely reporting of financial conditions Signup and view all the answers

What action constitutes 'aiding and abetting' under the Securities Regulation Code?

Helping someone commit a violation Signup and view all the answers

Which of the following is considered a fraud in connection with securities transactions?

Using insider knowledge for stock trading Signup and view all the answers

What does the term 'manipulative devices' include?

Painting the tape and squeeze the float Signup and view all the answers

What is a consequence of violating margin requirements?

Penalties enforced by the SEC Signup and view all the answers

Which of the following constitutes a deceptive device in the sale of securities?

Making untrue statements of material facts Signup and view all the answers

What constitutes a violation concerning broker or dealer registrations?

Acting as a broker without SEC registration Signup and view all the answers

Which practice is prohibited related to the sale or purchase of securities?

Employing devices to defraud investors Signup and view all the answers

What is a key violation regarding the execution of transactions in an Exchange?

Executing transactions without SEC registration Signup and view all the answers

Study Notes

Insurance

The insurance company is defined as any entity authorized to transact insurance business in the Philippines.
The concept of insurance involves an agreement where one party promises to indemnify another against loss, damage, or liability for an unknown or contingent event.
Transacting insurance business encompasses various activities, including proposing or making insurance contracts, acting as a surety, undertaking reinsurance business, and engaging in business activities equivalent to insurance business.

Insurance Agents & Brokers

An insurance agent is someone who solicits or obtains insurance on behalf of an insurance company, or transmits applications for insurance policies.
An insurance broker acts as an intermediary between an insured and an insurer, assisting in soliciting, negotiating, or procuring insurance contracts.

Reinsurance

Reinsurance involves an insurer transferring a portion of its risk to another insurer, known as a reinsurer.
Reinsurers are typically specialized entities that focus solely on reinsurance business.
Reinsurance brokers facilitate reinsurance transactions by negotiating contracts and placing risks on behalf of insurance companies.

Investment Advisors

Investment advisors provide advice on the value of securities and the advisability of trading them, for a specified advisory fee.
Investment advisors may also analyze capital markets and issue reports, but certain entities, such as banks, journalists, and certain professionals, are excluded from this definition.

Moneychangers & Remittance Companies

Moneychangers engage in the business of buying and selling foreign currency notes.
Money payment, remittance, and transfer companies offer services to pay, remit, or transfer money on behalf of individuals or entities.

Customers

Any person or entity that maintains an account or conducts transactions with a covered institution is considered a customer.
This also includes beneficiaries of trusts, investment funds, pension funds, and individuals whose assets are managed by asset managers.
Insurance policyholders, both actual and prospective, are also considered customers.

Property

"Property" encompasses any item of value, regardless of whether it is real or personal, tangible or intangible.
This includes all interests, benefits, privileges, claims, and rights related to property.

Securities Regulation Code

The Securities Regulation Code of 2000 defines a range of illegal activities involving securities.
These activities include the sale or distribution of securities without proper registration, the offering of pre-need plans that do not comply with SEC regulations, and violating reporting requirements by securities issuers.
The Code also prohibits the manipulation of security prices through various tactics such as creating false trading activity, spreading misleading information, and executing specific types of trades.

Covered Transactions

The Anti-Money Laundering Act requires covered institutions to report certain transactions, known as covered transactions, and suspicious transactions.
Covered transactions must be reported within five working days of occurrence, unless a longer period is prescribed by the supervising authority.
Institutions are required to report covered transactions in electronic form using specific reporting forms prescribed by the AMLC.

Transitory Provisions

Existing freeze orders issued by the AMLC remain in force for 30 days after the Anti-Money Laundering Act's effectivity, unless extended by the Court of Appeals.
Existing freeze orders extended by the Court of Appeals remain effective unless dissolved by the same court.

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Description

This quiz explores fundamental concepts of insurance, including definitions, the role of insurance agents and brokers, and the principles of reinsurance. Test your understanding of how these entities operate within the insurance framework in the Philippines.