Question

Why does diligence in identification need to be of high order in the case of high-risk customers?

a.

Because they require more paperwork

b.

Because they are less likely to make a claim

c.

Because they pose an inherently higher risk to the insurance company

d.

Because they are easier to verify

Posted under IC 14 Regulations of Insurance Business

Answer: (c).Because they pose an inherently higher risk to the insurance company Explanation:Diligence in identification needs to be of high order in the case of high-risk customers because they pose an inherently higher risk to the insurance company. Due to factors such as non-residency, high net worth, or political exposure, these customers may present greater challenges in verifying their identities and sources of funds.

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Q. Why does diligence in identification need to be of high order in the case of high-risk customers?
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