Ethics, Sales Practices, and Consumer Protection
Domain 8 tests conduct: need-based selling, honest disclosure, lawful handling of money and the protection of customer information.
Sales standards
An agent must understand the customer's needs and affordability, explain the product, exclusions, charges and risk, and complete the proposal truthfully. Rebating - sharing commission or offering a discount to win business - is prohibited under Section 41 of the Insurance Act. Misrepresentation, false guarantees and pressure tactics attract penalties.
Process controls
Know-your-customer and anti-money-laundering checks; premium paid to the insurer, never to a personal account; confidentiality of customer data; disclosure when replacing an existing policy; proper grievance redress to the insurer and, if unresolved, to the Insurance Ombudsman.
Worked example
An agent tells a customer that a ULIP will "definitely give 15% a year" and offers to pay half the first premium. Both acts are breaches: the return is not guaranteed, and the payment is rebating. The insurer can terminate the agency and forfeit renewal commission; the customer can complain.
Traps
Believing rebating is acceptable if the customer asks; treating an illustration as a promise; collecting cash premiums personally; failing to disclose replacement.