IIQE Paper 5 Investment Quiz 01 Advanced

The question tests the understanding of the regulatory framework governing investment-linked insurance products in Hong Kong, specifically the role of the Insurance Authority (IA) and the Securities and Futures Commission (SFC) in oversight. Investment-linked insurance policies (ILIPs) are dual-regulated products. The Insurance Authority (IA) is responsible for the prudential supervision of insurers and the conduct of insurance intermediaries, ensuring the solvency and financial soundness of insurance companies and the fair treatment of policyholders. The Securities and Futures Commission (SFC) regulates the investment component of these products, ensuring that the investment funds and activities associated with ILIPs comply with securities and futures legislation, including investor protection measures related to investment advice and product suitability. Therefore, both the IA and the SFC have oversight responsibilities, albeit in different domains. Option (b) is incorrect because while the IA is primary for insurance, it doesn’t solely cover the investment aspect. Option (c) is incorrect as the SFC’s role is specific to the investment component, not the entire insurance product’s regulatory framework. Option (d) is incorrect because the IA’s mandate extends beyond just solvency to include conduct of business, and the SFC’s involvement is crucial for the investment element.

The Guidance Note on Product Recommendation for Long Term Insurance Business (Including Linked Long Term Insurance) (CIB-GN(12)) emphasizes the importance of a structured and documented process for recommending investment-linked long-term insurance products. This process must begin with a thorough understanding of the client’s financial situation, needs, and objectives, which forms the basis for suitability assessment. The note mandates that recommendations should be based on this assessment and that the rationale for the recommendation, including how it aligns with the client’s profile, must be clearly documented. This documentation serves as evidence of the advisor’s diligence and adherence to regulatory expectations. While client education and ongoing reviews are crucial components of good practice, the foundational step and the primary focus of the recommendation process itself, as outlined in the Guidance Note, is the suitability assessment and its subsequent documentation.

The Securities and Futures Ordinance (SFO) empowers the Securities and Futures Commission (SFC) with broad regulatory objectives. Among these, protecting the public who invest in financial products is a primary mandate. This protection is achieved through various means, including setting licensing standards for intermediaries, maintaining a public register of licensees, and developing codes of conduct. While promoting market fairness, efficiency, and orderliness, and minimizing misconduct are also crucial objectives, the direct and overarching goal related to investor interaction is safeguarding them. Minimizing systemic risk is important for market stability, but it’s a broader objective than direct investor protection. Assisting the Financial Secretary is a specific function, not a primary regulatory objective for intermediaries in their day-to-day operations.

The question tests the understanding of the ‘Initiative on Financial Needs Analysis’ as promoted by the Hong Kong Federation of Insurers (HKFI). This initiative emphasizes a structured and comprehensive approach to understanding a client’s financial situation and needs before recommending any investment-linked insurance products. Option A correctly identifies that the core purpose is to ensure suitability and appropriateness by thoroughly assessing the client’s financial circumstances, objectives, and risk tolerance. Option B is incorrect because while understanding the client’s risk tolerance is part of the analysis, it’s not the sole or primary focus; the overall financial picture is paramount. Option C is incorrect as the initiative is not primarily about comparing different product features in isolation but about matching products to the client’s unique needs. Option D is incorrect because while regulatory compliance is a consequence of proper needs analysis, the initiative’s direct aim is client-centric advice, not just adherence to rules.

This question tests the understanding of the regulatory framework governing investment-linked insurance products in Hong Kong, specifically the role of the Insurance Authority (IA) and the relevant legislation. The Insurance Companies Ordinance (Cap. 41) is the primary legislation that governs the conduct of insurance business in Hong Kong, including the authorization and regulation of insurers. The IA, established under the Federal Reserve Act, is responsible for enforcing this ordinance and ensuring the stability and integrity of the insurance market. The question highlights the IA’s mandate to protect policyholders and maintain public confidence, which are core objectives of insurance regulation. Options B, C, and D are incorrect because while the SFC regulates the securities and futures markets, and the MPFA regulates the Mandatory Provident Fund, and the HKMA regulates banks, the IA is the primary regulator for insurance companies and their products, including investment-linked policies, under the relevant insurance legislation.

This question tests the understanding of how initial premiums are allocated in an investment-linked insurance policy, specifically considering the bid-offer spread and initial charges. The initial premium of HKD50,000 is applied to purchase investment fund units. The offer price, which is the price at which the insurance company sells units to the policyholder, is calculated based on the bid price (NAV) and the bid-offer spread. Given a bid price of HKD12 and a 5% spread, the offer price is HKD12 \times (1 + 0.05) = HKD12.60. The number of units purchased is the total premium divided by the offer price: HKD50,000 / HKD12.60 \approx 3,968.25 units. Subsequently, policy fees and charges are deducted by cancelling units at the bid price. The policy fee is HKD1,000, and the administrative and mortality charges are 2.5% of the premium, which is HKD50,000 \times 0.025 = HKD1,250. The total charges are HKD1,000 + HKD1,250 = HKD2,250. These charges are deducted by cancelling units at the bid price of HKD12, requiring HKD2,250 / HKD12 = 187.5 units to be cancelled. Therefore, the remaining number of units is approximately 3,968.25 – 187.5 = 3,780.75 units. Option (a) correctly reflects this calculation.

This question tests the understanding of the regulatory framework governing investment-linked insurance products in Hong Kong, specifically the role of the Insurance Authority (IA) and the relevant legislation. The Insurance Ordinance (Cap. 41) is the primary legislation that governs the insurance industry in Hong Kong, including the authorization, regulation, and supervision of insurers and intermediaries. The IA is the statutory body responsible for implementing and enforcing this ordinance. Option (b) is incorrect because while the Securities and Futures Commission (SFC) regulates the securities and futures markets, its jurisdiction over investment-linked products is primarily through its collaboration with the IA and specific provisions related to the investment component, not as the primary regulator of the insurance aspect. Option (c) is incorrect as the Hong Kong Monetary Authority (HKMA) regulates banks and monetary policy, and while banks may distribute insurance products, they are not the primary regulator of the insurance products themselves. Option (d) is incorrect because the Mandatory Provident Fund Schemes Authority (MPFA) regulates the Mandatory Provident Fund (MPF) schemes, which are retirement savings schemes, and not general investment-linked insurance products.

The Insurance Companies Ordinance (Cap. 41) mandates that insurers must maintain adequate solvency margins to protect policyholders. This involves ensuring that the value of an insurer’s assets consistently exceeds its liabilities by a specified amount. The solvency margin is a key regulatory requirement designed to safeguard the financial stability of insurance companies and their ability to meet future claims. Option B is incorrect because while policyholder protection is a goal, the solvency margin is a specific financial metric, not a general principle of fair dealing. Option C is incorrect as the Insurance Authority’s role is oversight and enforcement, not the direct calculation of an individual insurer’s solvency margin, which is the insurer’s responsibility under regulatory guidance. Option D is incorrect because while investment performance impacts an insurer’s financial health, the solvency margin is a broader measure of financial resilience that accounts for all assets and liabilities, not just investment returns.

The Insurance Companies Ordinance (Cap. 41) mandates that insurers must maintain adequate solvency margins to protect policyholders. This involves ensuring that the insurer’s assets exceed its liabilities by a specified amount, which is calculated based on the nature and volume of its business. The solvency margin is a key regulatory requirement designed to safeguard the financial stability of insurance companies and their ability to meet future claims. Option B is incorrect because while a “reserve” is a liability representing future claims, it’s not the primary mechanism for ensuring solvency in the way the solvency margin is defined. Option C is incorrect as the “premium income” is revenue, not a direct measure of solvency, although it contributes to the insurer’s financial health. Option D is incorrect because “actuarial valuation” is a process to determine reserves and liabilities, which feeds into the solvency calculation, but it is not the solvency margin itself.

The Insurance Companies Ordinance (Cap. 41) mandates that insurers must maintain adequate solvency margins to protect policyholders. This involves ensuring that the insurer’s assets exceed its liabilities by a specified amount. The solvency margin is a key indicator of an insurer’s financial health and its ability to meet its obligations. Option (b) is incorrect because while a “winding-up” is a consequence of insolvency, it’s not the primary regulatory requirement for maintaining financial stability. Option (c) is incorrect as the “prescribed minimum capital” is a component of solvency, but the solvency margin itself is a broader measure of financial resilience. Option (d) is incorrect because while “actuarial reserves” are crucial liabilities that must be covered, the solvency margin encompasses more than just these reserves; it’s a net worth requirement.

The question tests the understanding of the SFC’s authorization requirements for investment funds, specifically concerning the management company’s financial stability and operational base. According to the ‘Code on Unit Trusts and Mutual Funds,’ an authorized management company must have sufficient financial resources, including a minimum issued and paid-up capital and capital reserves of HKD 1 million or its equivalent. Furthermore, its investment management operations must be based in a jurisdiction with an inspection regime acceptable to the SFC. Option (a) correctly identifies these two key requirements. Option (b) is incorrect because while a management company must be licensed or registered, the specific capital requirement is HKD 1 million, not HKD 5 million, and the jurisdiction of operations is a critical factor, not just being incorporated in Hong Kong. Option (c) is incorrect as it omits the crucial requirement regarding the jurisdiction of investment management operations and misstates the capital requirement. Option (d) is incorrect because it focuses on the trustee/custodian’s requirements (being a licensed bank or trust company) rather than the management company’s, and it also fails to mention the jurisdictional requirement for the management company’s operations.

The Insurance Companies Ordinance (Cap. 41) mandates that insurers must maintain solvency margins to protect policyholders. This involves ensuring that the value of an insurer’s assets exceeds its liabilities by a specified amount. The solvency margin is a key regulatory requirement designed to ensure financial stability and the ability of the insurer to meet its obligations. Option B is incorrect because while policyholder protection is a goal, the specific mechanism is the solvency margin, not direct government guarantees for all policies. Option C is incorrect as while financial soundness is important, the primary regulatory focus for solvency is the prescribed margin, not just general profitability. Option D is incorrect because while risk management is crucial, the solvency margin is a direct quantitative measure of financial resilience mandated by law.

The Global Financial Crisis of 2007-2008, triggered by the US real estate market downturn and subsequent mortgage defaults, highlighted the interconnectedness of financial markets and the critical importance of comprehensive risk management. The collapse of major institutions like Bear Stearns and Lehman Brothers demonstrated that even seemingly robust firms could fail due to misjudgments in default and market risk. The Lehman Brothers collapse, in particular, led to the Minibond crisis in Hong Kong, underscoring that financial institutions must manage not only financial risks but also legal, reputational, and systemic risks. Regulatory bodies like the HKMA and SFC, along with industry groups like the Life Insurance Council, responded by issuing guidelines to enhance consumer protection in the offering and selling of investment products, including investment-linked long-term insurance policies. This demonstrates a shift towards a more holistic approach to risk management and consumer protection in the financial services industry.

The question probes the understanding of the regulatory framework governing investment-linked insurance products in Hong Kong, specifically focusing on the role of the Securities and Futures Commission (SFC) and the Insurance Authority (IA). Investment-linked products are dual-regulated. The SFC oversees the investment component, ensuring compliance with securities laws regarding marketing, sales, and investment advice. The IA regulates the insurance aspect, focusing on policy terms, solvency, and consumer protection related to the insurance contract. Therefore, a financial advisor selling such a product must be licensed by both the SFC for the investment advice and the IA for the insurance sales. The other options present incomplete or incorrect regulatory scopes. Option B is incorrect because while the IA regulates insurance, it doesn’t solely govern the investment aspects. Option C is incorrect as the SFC’s mandate is primarily for securities and futures, not the entirety of insurance operations. Option D is incorrect because while the Mandatory Provident Fund Schemes Authority (MPFSA) is relevant for retirement schemes, it’s not the primary regulator for general investment-linked insurance products unless they are specifically structured as MPF-exempt schemes or similar, and even then, the SFC and IA roles remain paramount for the core product.

The question tests the understanding of the regulatory framework governing investment-linked insurance products in Hong Kong, specifically the role of the Insurance Authority (IA) and the Securities and Futures Commission (SFC) in oversight. Investment-linked insurance policies involve both insurance and investment components, necessitating a dual regulatory approach. The IA is primarily responsible for regulating the insurance aspects, including solvency, policyholder protection, and the conduct of insurance intermediaries. The SFC, on the other hand, regulates the investment aspects, such as the offering of investment products, the provision of investment advice, and the conduct of licensed persons involved in these activities. Therefore, for an investment-linked insurance product to be legally offered and sold, it must comply with the regulations of both the IA and the SFC. Option B is incorrect because while the IA is the primary regulator for insurance, it does not solely oversee the investment components. Option C is incorrect as the SFC’s mandate extends to investment products offered within insurance policies. Option D is incorrect because the Hong Kong Monetary Authority (HKMA) primarily regulates banks and monetary policy, not investment-linked insurance products directly, although there can be overlap in areas like distribution channels.

The question tests the understanding of how diversification impacts portfolio risk, specifically distinguishing between systematic and unsystematic risk. Diversification is a strategy to reduce risk by spreading investments across various assets. Unsystematic risk, also known as specific risk or diversifiable risk, is associated with individual companies or industries and can be significantly reduced or eliminated by holding a diverse portfolio. Systematic risk, also known as market risk or non-diversifiable risk, is inherent to the overall market or economy and cannot be eliminated through diversification. Examples include changes in interest rates, inflation, or geopolitical events. Therefore, while diversification effectively mitigates unsystematic risk, it does not eliminate systematic risk, which remains a fundamental component of overall market exposure. The other options are incorrect because diversification does not eliminate all risk, nor does it inherently increase risk; it aims to optimize the risk-return profile by reducing the impact of specific asset failures.

The Guidance Note on Product Recommendation for Long Term Insurance Business (Including Linked Long Term Insurance) (CIB-GN(12)) emphasizes the importance of a structured and documented process for recommending investment-linked long-term insurance products. This process must begin with a thorough understanding of the client’s financial situation, needs, and objectives. The advisor must then identify suitable products that align with these factors, considering the client’s risk tolerance, investment horizon, and knowledge of investment products. Crucially, the recommendation must be documented, including the rationale for the chosen product and why other alternatives were not selected. This documentation serves as evidence of the advisor’s due diligence and adherence to regulatory requirements, protecting both the client and the advisor. Options B, C, and D describe aspects that might be part of the process but do not encompass the overarching requirement of a documented, client-centric recommendation framework as mandated by the Guidance Note.

The question tests the understanding of the principal objective and key features of an Index Fund, as outlined in the IIQE Paper 5 syllabus. An Index Fund’s primary goal is to replicate the performance of a specific market index, such as the Hang Seng Index or the S&P 500. This is achieved through passive management, where investment decisions are largely automated to mirror the composition and weighting of the target index, leading to a limited number of transactions. While hedging is available, the core objective is not active outperformance or capitalisation on market movements, but rather tracking. A Warrant Fund, conversely, aims for high returns by investing in warrants, which inherently carries extreme risk. A Global Fund focuses on international diversification, and a Specialty Fund concentrates on a specific industry. Therefore, the description accurately defines an Index Fund.

The Product Key Facts Statement (PFS) is a crucial document mandated by regulatory bodies like the SFC to ensure transparency and informed decision-making for consumers purchasing investment-linked insurance products. Its primary purpose is to provide a concise, easy-to-understand summary of the product’s essential features, risks, and costs. This includes details on investment choices, charges, surrender values, and potential returns, enabling consumers to compare products and make suitable choices. The PFS is not a marketing brochure, nor is it a substitute for the full policy document, although it is derived from it. Its focus is on key facts, not exhaustive legal clauses. Therefore, its core function is to facilitate informed consumer choice by highlighting critical information.

The question tests the understanding of disclosure requirements for fees and charges in Investment-Linked Assurance Schemes (ILAS) as per relevant regulations. Option (a) correctly identifies that all fees and charges payable by a scheme participant, including those on subscription, redemption, and switching, must be clearly disclosed. This aligns with the principle of transparency in financial products. Option (b) is incorrect because while fees payable by the scheme or investment option are important, the primary focus for participant understanding is on the direct costs they incur. Option (c) is partially correct as it mentions tabular summaries, but it omits the crucial detail of disclosing all individual fees payable by the participant. Option (d) is incorrect because it focuses only on the charges of the scheme itself and not the direct charges levied on the participant’s transactions, which are a critical component of the overall cost structure.

This question tests the understanding of the relationship between a bond’s coupon rate, market yield, and its price, as governed by the principles of the time value of money and bond valuation. When the market yield (the required rate of return for similar investments) is higher than the bond’s fixed coupon rate, the bond’s future cash flows (coupon payments and principal repayment) are less attractive compared to new investments offering a higher yield. To compensate for this lower coupon rate relative to the market, the bond must be sold at a price below its par value. This discount effectively increases the bondholder’s overall yield to maturity, bringing it in line with the prevailing market rates. Conversely, if the market yield is lower than the coupon rate, the bond’s cash flows are more attractive, and it will trade at a premium. If the coupon rate equals the market yield, the bond will trade at par.

This question tests the understanding of the regulatory framework governing investment-linked insurance products in Hong Kong, specifically focusing on the role of the Insurance Authority (IA) and the relevant legislation. The Insurance Companies Ordinance (Cap. 41) is the primary legislation that governs the conduct of insurance business in Hong Kong. It establishes the framework for licensing, regulation, and supervision of insurance companies. Section 10 of the Ordinance, for instance, deals with the licensing of insurers. The Insurance Authority, established under the Insurance Ordinance, is responsible for enforcing these regulations. Option (b) is incorrect because while the Securities and Futures Commission (SFC) regulates the securities and futures markets, the primary regulatory body for insurance products, including investment-linked ones, is the IA. Option (c) is incorrect as the Mandatory Provident Fund Schemes Authority (MPFA) regulates the MPF system, which is distinct from general investment-linked insurance. Option (d) is incorrect because the Hong Kong Monetary Authority (HKMA) is the central banking institution and regulates banks and the monetary system, not insurance products directly.

The question tests the understanding of the ‘Initiative on Financial Needs Analysis’ as promoted by the Hong Kong Federation of Insurers (HKFI). This initiative emphasizes a structured approach to financial needs analysis (FNA) to ensure that insurance products recommended to clients are suitable and align with their genuine financial objectives and circumstances. Option A correctly identifies that the core purpose is to ensure suitability and alignment with client needs, which is the fundamental principle behind any robust FNA process. Option B is incorrect because while understanding the client’s risk tolerance is part of FNA, it’s not the sole or primary objective; the broader financial needs are paramount. Option C is incorrect as the initiative is not primarily about maximizing sales volume but about responsible selling and client protection. Option D is incorrect because while regulatory compliance is a consequence of good FNA, the initiative’s direct focus is on the client’s financial well-being and product suitability, not solely on meeting minimum regulatory disclosure requirements.

The question probes the historical evolution and distinct characteristics of investment-linked policies, particularly in the UK context. The core of the development in the UK stemmed from regulatory constraints on unit trusts, which limited their sales channels and commission structures. To overcome these limitations, unit trust managers devised a strategy to embed their offerings within life insurance policies. This structure allowed for direct sales to the public by salesmen and higher commissions, making it a more viable distribution model. Furthermore, unit-linked policies offered greater flexibility in investment choices, such as the ability to invest in property, which was restricted for unit trusts due to liquidity concerns. The other options present plausible but incorrect historical drivers or policy features. Option B is incorrect because while universal life offers premium flexibility, the UK’s initial development of unit-linked policies was driven by regulatory issues with unit trusts, not primarily by the desire for flexible premiums in the same way as universal life. Option C is incorrect as the primary driver was not the direct competition with single-premium unit trusts for lump-sum investments, but rather the regulatory environment that made unit trusts difficult to sell. While single-premium unit-linked policies did emerge and were seen as a better lump-sum investment, the foundational development was rooted in overcoming unit trust sales challenges. Option D is incorrect because while tax relief on premiums was a factor in the popularity of unit-linked products, it was not the primary catalyst for their initial introduction and development in the UK; the regulatory landscape for unit trusts was the more significant foundational reason.

The Cooling-off Period is a statutory right granted to policyholders to review their insurance policy after issuance and decide whether to proceed. The Hong Kong Federation of Insurers (HKFI) provides guidelines to ensure this right is clearly communicated. Specifically, the announcement of cooling-off rights must appear on the application form immediately above the signature space, using a font size no smaller than other declarations and at least font size 8. Furthermore, upon policy issuance, the policyholder must be reminded of these rights. This reminder should be in the same language as other policy documents and use a typeface no smaller than font size 10. The HKFI also advises intermediaries to inform prospective policyholders about their cooling-off rights and their expiry date when they sign the application form. Additionally, insurers must ensure policies are delivered or a notice of availability is issued within 9 days of the policy issue date, along with a reminder of the cooling-off period’s expiry. Option (a) correctly encapsulates these requirements regarding the placement, font size, and language of the cooling-off rights announcement on the application form. Option (b) is incorrect because while policy issuance communication is important, it’s a separate requirement from the application form announcement and has different font size specifications. Option (c) is incorrect as it conflates the application form announcement with the policy issuance communication and misstates the font size requirement for the application form. Option (d) is incorrect because it suggests the cooling-off period announcement is optional on the application form and misrepresents the font size and placement requirements.

The question tests the understanding of the SFC’s authorization requirements for investment funds, specifically concerning the management company’s financial standing. According to the ‘Code on Unit Trusts and Mutual Funds,’ an authorized management company must possess sufficient financial resources, including a minimum issued and paid-up capital and capital reserves of HKD 1 million or its foreign currency equivalent. This ensures the company has the capacity to conduct its business effectively and meet its liabilities, thereby protecting investors. The other options present incorrect capital requirements or focus on aspects not directly related to the minimum financial resource requirement for the management company’s authorization.

The Insurance Companies Ordinance (Cap. 41) and its subsequent amendments, particularly those related to investment-linked insurance, mandate that insurers must maintain a clear segregation between policyholder assets and the insurer’s own assets. This is crucial for protecting policyholders’ interests, especially in the event of the insurer’s insolvency. Policyholder assets in investment-linked policies are typically held in unit trusts or other investment vehicles, and their value fluctuates with market performance. The insurer acts as a trustee or custodian for these assets, and any gains or losses directly impact the policy value, not the insurer’s general revenue. The regulatory framework aims to ensure transparency and prevent the commingling of funds, thereby safeguarding the investment performance and capital of policyholders. Option B is incorrect because while insurers do earn management fees, these are separate from the direct investment performance of policyholder funds. Option C is incorrect as the insurer’s own capital is distinct from policyholder assets and is used to cover operational expenses and solvency requirements, not directly to absorb investment losses of individual policies. Option D is incorrect because while insurers must meet solvency requirements, these are based on their overall financial health and liabilities, not solely on the performance of specific investment-linked policy assets.

The question tests the understanding of the regulatory framework governing investment-linked insurance products in Hong Kong, specifically the role of the Securities and Futures Commission (SFC) and the Insurance Authority (IA). Investment-linked insurance policies involve both investment and insurance components. The SFC regulates the investment aspect, ensuring that the investment products offered are compliant with securities laws and that intermediaries are licensed to deal in securities. The IA regulates the insurance aspect, ensuring the solvency and conduct of insurers. Therefore, for an investment-linked insurance product to be legally distributed, it must satisfy the requirements of both regulatory bodies. Option (a) correctly identifies this dual regulatory oversight. Option (b) is incorrect because while the IA oversees the insurance aspect, it does not have primary jurisdiction over the investment products themselves. Option (c) is incorrect because the SFC’s role is crucial for the investment component, and excluding it would mean the investment products are not properly regulated. Option (d) is incorrect as the Hong Kong Monetary Authority (HKMA) primarily regulates banks and monetary policy, not the distribution of investment-linked insurance products.

The scenario describes a situation where an insurance agent is advising a client who already holds a policy. According to the provided text, an agent’s duty is to present each policy with complete honesty and objectivity. When a client is an existing policyholder, this duty extends to providing full and fair disclosure regarding both the new coverage being considered and the existing insurance. This includes making the client aware of the estimated cost of replacing the current policy. The Customer Protection Declaration (CPD) form is a specific requirement for life insurance policies to ensure this disclosure and understanding, but the overarching principle of full disclosure applies to all policy replacements or modifications. Therefore, the agent must ensure the client understands the implications of replacing their existing policy, including costs and benefits, before proceeding.

The question tests the understanding of the regulatory framework governing investment-linked insurance products in Hong Kong, specifically the role of the Securities and Futures Commission (SFC) and the Insurance Authority (IA). Investment-linked insurance policies are dual-regulated products. The SFC regulates the investment component, ensuring compliance with securities laws and investor protection measures related to investment advice and product suitability. The IA regulates the insurance component, overseeing policy terms, solvency, and consumer protection as an insurer. Therefore, both authorities have a vested interest and regulatory oversight. Option (b) is incorrect because while the IA is the primary regulator for insurance, the investment aspect necessitates SFC involvement. Option (c) is incorrect as the IA’s mandate is broader than just solvency; it includes consumer protection and market conduct for insurance products. Option (d) is incorrect because the SFC’s role is specifically tied to the investment nature of the product, not the general insurance operations.