Professional Ethics and Conflicts of Interest
What this domain tests
Conflicts of interest in insurance distribution and governance, the 임직원 행동강령 (code of conduct), the Improper Solicitation and Graft Act (청탁금지법), and the compliance officer's personal ethical obligations.
Core rules
- Conflicts must be identified, avoided where possible, controlled where not, and disclosed as a last resort - disclosure alone is not an acceptable control for a material conflict.
- Recurring conflicts in insurance: commission-driven product recommendations, proprietary-product bias, tied-agent incentives, reinsurer-sponsored travel, and personal interests in vendors or brokers.
- Gifts, meals and entertainment are capped by statute and by internal policy; strict value limits apply and preferential treatment in return for hospitality is prohibited even below the caps.
- Confidentiality survives resignation; personal dealing in securities of parent or related listed entities may engage insider-trading rules under the Capital Markets Act.
- Whistleblowers must be protected, and retaliation is itself a disciplinary matter.
Worked example
A compliance officer is reviewing a reinsurance treaty when the reinsurer's CEO offers a senior role at group headquarters. The correct handling: declare the recruitment discussion in writing, recuse from the treaty review and any related negotiation, and have a deputy take over with documented handover. Disclosure without recusal still leaves the decision tainted, and the recusal record is what the examiner will look for.
Traps that cost marks
- Believing that disclosure cures every conflict.
- Rationalising small gifts as "customary" when statutory caps apply.
- Failing to record recusals, which makes them unverifiable in an inspection.