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LLQP · Ethics and Professional Practice (Common Law)

520 Ethics & Professional Practice Practice Questions

Grouped by the competency components CISRO uses to build the exam, in the same proportions. Each question opens to its answer and a worked explanation.

1.Integrate into practice the legal aspects of insurance and annuity contracts

60% of the exam · 312 questions
  1. In Canada, the regulation of insurance contracts and the licensing of agents falls mainly under:1.1
  2. The 'uniform' life insurance provisions in the common-law provinces' Insurance Acts mean that:1.1
  3. The Office of the Superintendent of Financial Institutions (OSFI) is responsible for:1.1
  4. A provincial insurance regulator (for example, FSRA in Ontario, BCFSA in British Columbia, or the AIC in Alberta) is responsible for:1.1
  5. The Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) are:1.1
  6. The Canadian Life and Health Insurance Association (CLHIA) is:1.1
  7. Assuris is:1.1
  8. The OmbudService for Life & Health Insurance (OLHI) provides:1.1
  9. The Financial Consumer Agency of Canada (FCAC) is relevant to life agents because:1.1
  10. Under provincial Insurance Acts, a 'contract of life insurance' includes:1.1
  11. The principle of 'utmost good faith' (uberrimae fidei) in insurance contracts requires that:1.1
  12. 'Insurable interest' in life insurance means:1.1
  13. A contract of life insurance without insurable interest or the consent of the life insured is:1.1
  14. Life insurance is generally not a contract of 'indemnity'. This means:1.1
  15. The Personal Information Protection and Electronic Documents Act (PIPEDA) and equivalent provincial laws require an agent to:1.1
  16. Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, life insurance agents and companies must:1.1
  17. The 'fair treatment of customers' (FTC) guidance issued by CCIR and CISRO expects agents and insurers to:1.1
  18. The Income Tax Act affects life insurance contracts by:1.1
  19. Provincial legislation typically requires an agent to be:1.1
  20. The 'Insurance Act' provisions on life insurance generally apply to contracts:1.1
  21. 'Common law' in the context of the LLQP ethics module refers to:1.1
  22. The 'statutory conditions' or statutory provisions in a life insurance contract:1.1
  23. Which of the following is a source of law governing an agent's conduct in addition to the Insurance Act?1.1
  24. The federal Genetic Non-Discrimination Act affects the legal framework of life insurance by:1.1
  25. A 'regulation' made under a provincial Insurance Act differs from the Act itself in that:1.1
  26. The insurer's 'ombudsman' or complaints officer is:1.1
  27. Which body would investigate an allegation that an agent forged a client's signature?1.1
  28. Legislation dealing with 'unfair or deceptive acts or practices' in insurance prohibits:1.1
  29. The Criminal Code is relevant to agents because:1.1
  30. Provincial human rights legislation affects insurance by:1.1
  31. Family law legislation intersects with life insurance when:1.1
  32. Bankruptcy legislation affects life insurance and annuities by:1.1
  33. The common law of 'agency' establishes that an insurance agent:1.1
  34. The tort of 'negligence' applies to an agent who:1.1
  35. Errors and omissions (E&O) insurance for agents:1.1
  36. 'Tied selling' or coercive tied selling is:1.1
  37. The legal framework requires that insurance policies delivered in a province be:1.1
  38. The role of the courts in the insurance legal framework is to:1.1
  39. 'Rebating' — returning part of the commission to a client as an inducement — is:1.1
  40. A client asks which law applies if their insurer is federally incorporated and the client lives in Ontario. The agent should explain:1.1
  41. The parties and persons involved in a life insurance contract are:1.2
  42. The 'policyowner' of a life insurance contract has the right to:1.2
  43. The 'life insured' is:1.2
  44. The 'beneficiary' of a life insurance contract:1.2
  45. A 'contingent' (secondary) beneficiary:1.2
  46. The 'applicant' on a life insurance application is:1.2
  47. The insurer's obligations under the contract include:1.2
  48. A minor as beneficiary raises the issue that:1.2
  49. The 'group policyholder' in group insurance is:1.2
  50. An 'assignee' of a life insurance policy is:1.2
  51. A corporation as policyowner and beneficiary of a policy on a key employee:1.2
  52. A 'trustee' named to receive proceeds on behalf of a beneficiary:1.2
  53. The 'personal representative' (executor or administrator) of a deceased owner:1.2
  54. When the owner and life insured are different people and the owner dies first:1.2
  55. The agent's role relative to the parties is:1.2
  56. A client wants to name her daughter as beneficiary but cannot find the insurer's form. Under the Insurance Act, a designation may be made:1.2
  57. A 'joint owner' arrangement on a life policy (two owners) means:1.2
  58. For a policy owned by one spouse on the other spouse's life, with the children as beneficiaries, the roles are:1.2
  59. The 'insurer' as a party must be:1.2
  60. A 'successor owner' or 'contingent owner' designation:1.2
  61. The essential elements for a valid insurance contract are:1.3
  62. In life insurance, the 'offer' is usually made by:1.3
  63. 'Consideration' in a life insurance contract consists of:1.3
  64. 'Capacity' to contract for life insurance is lacking in:1.3
  65. A life insurance contract generally 'takes effect' when:1.3
  66. A 'conditional insurance agreement' (temporary insurance receipt) provides:1.3
  67. The 'grace period' under a life insurance contract:1.3
  68. A policy 'lapses' when:1.3
  69. The statutory right of 'reinstatement' of a lapsed life policy generally allows the owner to:1.3
  70. The 'rescission' (free-look) right in life insurance:1.3
  71. A life policy may be 'terminated' by:1.3
  72. 'Non-forfeiture' options in a cash-value policy:1.3
  73. The 'incontestability' provision means that after the policy has been in force for two years during the life insured's lifetime:1.3
  74. The statutory rule on 'misrepresentation' within the contestability period allows the insurer to:1.3
  75. The 'suicide' provision in life insurance typically:1.3
  76. The 'misstatement of age' provision in life insurance:1.3
  77. An insurer 'rescinds' a policy within the contestability period by:1.3
  78. A 'change in insurability' between application and delivery (for example, a new diagnosis) has the effect that:1.3
  79. The 'entire contract' provision states that:1.3
  80. A 'policy loan' provision in a permanent policy:1.3
  81. The 'effective date' versus the 'issue date' of a policy matters because:1.3
  82. If the applicant dies after signing the application but before the policy is issued, and no conditional coverage applies:1.3
  83. A 'counter-offer' by the insurer (policy issued with a rating or exclusion) becomes a contract when:1.3
  84. The statutory provisions on 'designation of beneficiary' after lapse and reinstatement provide that:1.3
  85. A group life insurance certificate holder whose employment ends generally has:1.3
  86. 'Undue influence' or 'duress' in the formation of an insurance contract:1.3
  87. The statutory requirement that a contract contain the 'name of the insurer, the insured, the beneficiary, the amount, the premium, the term, and the conditions' ensures that:1.3
  88. A 'binding receipt' differs from a 'conditional receipt' in that a binding receipt:1.3
  89. The insurer's 'right to examine' or require evidence during formation:1.3
  90. A term policy's 'renewal' provision:1.3
  91. A term policy's 'conversion' provision:1.3
  92. If the first premium cheque is returned NSF after the policy is delivered:1.3
  93. 'Surrender' of a permanent policy by the owner:1.3
  94. The 'automatic premium loan' (APL) provision:1.3
  95. A life insurance contract 'matures' when:1.3
  96. The insurer must provide the owner with 'notice of lapse' in the sense that:1.3
  97. For a policy reinstated after lapse, the two-year contestability period:1.3
  98. An agent who delivers a policy must:1.3
  99. 'Legality of purpose' as a formation requirement means an insurance contract is void if:1.3
  100. A client asks whether the insurer can cancel her in-force whole life policy because she developed a serious illness. The correct answer is:1.3
  101. The 'insuring clause' or 'insuring agreement' of a life policy states:1.4
  102. The 'premium' provisions of a life policy set out:1.4
  103. The 'ownership' provision of a policy:1.4
  104. The 'assignment' provision typically states that:1.4
  105. The 'exclusions' in a life policy commonly include:1.4
  106. The 'dividend' provision in a participating policy:1.4
  107. The 'settlement options' provision allows the death benefit to be paid:1.4
  108. A 'waiver of premium' rider on a life policy:1.4
  109. A 'guaranteed insurability' rider on a life policy allows:1.4
  110. An 'accidental death benefit' rider:1.4
  111. A 'child term rider' or 'family rider':1.4
  112. The 'reinstatement' provision in the contract:1.4
  113. The 'incontestability' clause in the contract:1.4
  114. A 'cost of insurance' (COI) provision in universal life:1.4
  115. The 'policy fund' or 'account value' provision of a universal life policy explains:1.4
  116. The 'death benefit option' in universal life (level vs increasing):1.4
  117. The 'exempt policy' rules under the Income Tax Act mean that:1.4
  118. The 'adjusted cost basis' (ACB) of a life policy is relevant because:1.4
  119. The 'annuity contract' provisions specify:1.4
  120. The 'segregated fund' contract provisions include:1.4
  121. A 'fundamental change' provision in a segregated fund contract gives the owner:1.4
  122. The 'accident and sickness' provisions attached to a life policy (for example, a CI or DI rider) are governed by:1.4
  123. The 'modification' or 'changes to the contract' provision states that:1.4
  124. A 'participating' versus 'non-participating' policy:1.4
  125. The 'currency and place of payment' provision:1.4
  126. A 'return of premium' provision on term insurance:1.4
  127. The 'grace period' provision in the contract:1.4
  128. A couple buys a policy that pays when either of them dies, to replace the lost income. This joint first-to-die policy:1.4
  129. A 'joint last-to-die' policy provision:1.4
  130. The 'legal actions' provision in life insurance:1.4
  131. The 'payor benefit' rider on a juvenile policy:1.4
  132. The 'cash surrender value' provision:1.4
  133. A 'revocable' beneficiary designation means:1.5
  134. A business owner names his wife irrevocably to strengthen creditor protection. He should understand that an irrevocable designation means:1.5
  135. A designation of a minor as irrevocable beneficiary:1.5
  136. The 'protected class' or 'family class' of beneficiaries for exemption from seizure in common-law provinces includes:1.5
  137. 'Exemption from seizure' of insurance money means:1.5
  138. When the beneficiary is the 'estate' of the life insured, the proceeds:1.5
  139. If the sole named beneficiary predeceases the life insured and no contingent is named:1.5
  140. Where several beneficiaries are named without shares specified:1.5
  141. A beneficiary designation made in a 'will':1.5
  142. The insurer's protection when paying a beneficiary is that:1.5
  143. A beneficiary who feloniously causes the death of the life insured:1.5
  144. A 'trustee' designation for an adult beneficiary who is incapable:1.5
  145. The exemption from seizure for a policy with a family-class beneficiary applies:1.5
  146. A creditor of the beneficiary (not the owner):1.5
  147. A designation of the 'spouse' by that word rather than by name:1.5
  148. Under common-law provinces' rules, divorce:1.5
  149. A designation 'to my children' typically includes:1.5
  150. 'Per stirpes' in a designation means:1.5
  151. For a group life certificate, the beneficiary designation is made by:1.5
  152. A 'declaration' for beneficiary purposes under the Insurance Act is:1.5
  153. Proceeds payable to a named beneficiary (not the estate) are:1.5
  154. A designation of a beneficiary 'in trust' with a named trustee:1.5
  155. The effect of naming a charity as beneficiary is that:1.5
  156. A beneficiary designation for a registered plan (RRSP/RRIF/TFSA) in common-law provinces:1.5
  157. If a beneficiary cannot be located after the life insured's death:1.5
  158. An owner wants to change a beneficiary but the existing beneficiary is irrevocable and refuses consent. The result is:1.5
  159. A beneficiary designation made under a power of attorney by the attorney:1.5
  160. The exemption from seizure for insurance contracts extends to segregated fund contracts and annuities because:1.5
  161. When a deposit into a creditor-protected seg fund is made shortly before bankruptcy with intent to shield assets:1.5
  162. The agent's best practice at every review regarding beneficiaries is to:1.5
  163. To claim a life insurance death benefit, the claimant must generally provide:1.6
  164. The Insurance Act requires the insurer, within a set time after receiving sufficient evidence of the claim (commonly 30 days), to:1.6
  165. Interest on death benefits:1.6
  166. 'Payment into court' by an insurer occurs when:1.6
  167. The 'limitation period' for suing an insurer on a life insurance claim:1.6
  168. An insurer's 'defences' to a life claim may include:1.6
  169. For an accident and sickness claim under the statutory conditions, the claimant must:1.6
  170. The insurer's right to 'examine' a claimant under an A&S contract means:1.6
  171. 'Proof of loss' for a disability claim consists of:1.6
  172. A claim under a segregated fund contract on the annuitant's death requires:1.6
  173. The agent's role when a client dies is to:1.6
  174. A claim is denied for misrepresentation. The beneficiary's options include:1.6
  175. When a life insured dies within the two-year contestability period, the insurer typically:1.6
  176. A 'simultaneous death' of the life insured and the beneficiary (common disaster) is resolved by:1.6
  177. If the insurer pays a claim and later discovers fraud:1.6
  178. A claim for a death that occurred abroad requires:1.6
  179. A disability claimant is required to provide 'continuing proof' because:1.6
  180. The 'assignment of benefits' at claim time means:1.6
  181. A claim under a group life certificate is made by:1.6
  182. 'Good faith claims handling' obligates the insurer to:1.6
  183. A claim under a critical illness policy requires:1.6
  184. When a life insured is missing and presumed dead:1.6
  185. If a policy has an outstanding loan at death:1.6
  186. A claim where the beneficiary is the estate and there is no will:1.6
  187. The insurer discovers at claim that the life insured's age was misstated. The claim is:1.6
  188. The tax treatment of a life insurance death benefit paid to a named beneficiary is:1.6
  189. For an annuity in payment, when the annuitant dies during a guarantee period, the claim involves:1.6
  190. A claimant is dissatisfied with the insurer's claim decision. The proper escalation is:1.6
  191. Privacy at claim time requires the agent to:1.6
  192. The 'proof of claim' for a maturity or endowment payment under a life policy requires:1.6
  193. An agent licensed only in Ontario is asked to advise a long-standing client who has moved permanently to Alberta. The agent must:1.1
  194. An agent holds licences in two provinces whose continuing education and disclosure requirements differ. The agent must:1.1
  195. A client asks why a federally incorporated insurer's policy is still governed by his province's Insurance Act. The agent should explain that:1.1
  196. A life-licensed agent is asked by a client to recommend a mutual fund. The agent should explain that:1.1
  197. An agent is found by the provincial regulator to have misled several clients. The regulator's powers typically include:1.1
  198. An agent realizes near the end of the licence period that he has completed no continuing education. The likely consequence is that:1.1
  199. An agent is convicted of a criminal offence involving dishonesty unrelated to her insurance work. She must:1.1
  200. A client remains unhappy after the insurer's internal complaints officer has issued a final position. The agent should explain that the client may:1.1
  201. A client asks whether the federal deposit insurance that protects his bank account also covers his life insurance policy. The agent should explain that:1.1
  202. An agent plans to email a marketing newsletter to a purchased list of local residents. Canadian anti-spam legislation requires that:1.1
  203. An agent builds a prospecting list by telephoning names from a public directory. Before calling the agent must:1.1
  204. An applicant mentions that she once took a genetic test. Under federal law the agent must understand that:1.1
  205. An agent declines to meet a prospective client because of the client's religion. This conduct is:1.1
  206. An agent's laptop holding unencrypted client files is stolen from a car. Privacy legislation requires the agent to:1.1
  207. A client mails back a signed change form and asks the agent to sign as witness. The agent should:1.1
  208. An agent deposits a client's premium cheque into her own account, intending to forward the money the following week. This conduct is:1.1
  209. A client questions whether the agent can act in the client's interest when the insurer pays the commission. The most accurate answer is that the agent:1.1
  210. A client suffers a loss after an agent failed to submit an application she had been paid to process. The client may:1.1
  211. An agent is asked how long identification and transaction records must be kept under anti-money-laundering rules. The correct position is that records must be:1.1
  212. An agent's advertisement describes a segregated fund as offering a return that cannot fall. Legislation on unfair or deceptive practices means this advertisement is:1.1
  213. A client wants to insure the life of his business partner to fund a buy-sell agreement. Insurable interest:1.2
  214. A client wants to buy a new policy on the life of her former spouse, from whom she receives support payments. The agent should explain that:1.2
  215. A father wants to take out a policy on his thirty-year-old daughter's life without telling her. The agent must explain that:1.2
  216. A client asks to replace the life insured on an existing policy with her younger spouse. The agent should explain that:1.2
  217. A corporation owns a policy on a departing shareholder and wants to transfer ownership to him personally. The agent should explain that:1.2
  218. A policy owner names her estate as beneficiary. On her death the proceeds will be:1.2
  219. A policy is absolutely assigned to a new owner while a revocable beneficiary remains named. The effect is that the assignee:1.2
  220. A bank takes a collateral assignment of a client's life policy to secure a loan. On the client's death the bank is entitled to:1.2
  221. A grandparent wants to make a fifteen-year-old the owner of a policy on the child's own life. The agent should explain that:1.2
  222. A client in a long-term common-law relationship wants his partner to own a policy on his life. The agent should confirm that:1.2
  223. An employee covered under her employer's group life plan asks the agent to change a policy term for her. The agent should explain that:1.2
  224. A grandmother applies for a policy on her infant grandchild's life. The requirements include:1.2
  225. A client's attorney under a continuing power of attorney wants to surrender the client's policy for cash. The agent should:1.2
  226. Two joint owners of a policy disagree, and one alone instructs the agent to change the beneficiary. The agent should explain that:1.2
  227. An elderly client with no close relatives asks the agent to be named as beneficiary of her policy. The agent should:1.2
  228. A client asks the agent to act as trustee for proceeds payable to her young children. The agent should:1.2
  229. A corporation owns key person coverage and asks what happens if it is wound up. The agent should explain that a successor owner designation:1.2
  230. A life insured who does not own the policy asks the agent for a copy of the contract and its values. The agent should:1.2
  231. A policy owner has become mentally incapable and no power of attorney exists. Ownership rights will generally be exercised by:1.2
  232. A family trust is proposed as the owner and beneficiary of a policy on a parent's life. The agent should understand that:1.2
  233. Eighteen months after a policy is issued, the insurer discovers the applicant failed to disclose a serious diagnosis. The insurer may:1.3
  234. A client pays the first premium with the application and dies before underwriting is complete. The temporary insurance agreement:1.3
  235. An insurer issues a policy with a rating the applicant did not request. In contract terms this issued policy is:1.3
  236. Between application and delivery, an applicant is diagnosed with a serious illness. At delivery the agent must:1.3
  237. An agent delivers a policy containing an exclusion the client never saw, and the client signs nothing. The likely position is that:1.3
  238. A client misses a premium and dies twenty days later without paying it. The grace period means the insurer will generally:1.3
  239. A client whose policy lapsed eighteen months ago asks to have it reinstated. The insurer will typically require:1.3
  240. A client stops paying premiums on a whole life policy with substantial cash value and assumes it has lapsed. In fact the automatic premium loan provision may have:1.3
  241. A client returns her newly delivered policy within the rescission period stated in the contract. The insurer must:1.3
  242. Six years after issue, an insurer discovers a non-fraudulent error in the answers on a client's application. The insurer may:1.3
  243. At claim, a family shows that the agent recorded an answer on the application differently from what the client actually said. The agent's exposure includes:1.3
  244. An applicant signs an application written in a language he cannot read. Before submitting it the agent must:1.3
  245. A client reinstates a lapsed policy and dies by suicide eight months later. The suicide provision will generally:1.3
  246. A client's renewable term policy reaches the end of its term and she is now in poor health. The renewal provision means she:1.3
  247. A client in his late fifties asks to convert his term policy to permanent coverage. The agent should check:1.3
  248. An employee whose job ends is told her group life coverage stops at the end of the month. The agent should explain that she may:1.3
  249. An insurer treats a policy as lapsed although it never sent the notice the legislation requires. The likely consequence is that:1.3
  250. A client whose birthday falls next week asks whether the policy can be dated earlier to secure a lower age. The agent should explain that:1.3
  251. An applicant dies after the insurer approved and issued the policy but before it was delivered and the first premium paid. Coverage will generally depend on:1.3
  252. An agent realizes that a client signed an application while visibly intoxicated. The agent should:1.3
  253. A universal life policyholder complains that his monthly deduction has climbed steeply over the past decade. The agent should explain that:1.4
  254. A client takes a policy loan against her whole life contract and asks how it affects her family. The agent should explain that:1.4
  255. A participating policyholder has left dividends on deposit with the insurer for many years. At death these amounts will generally be:1.4
  256. A couple wants coverage on both lives but only one of them needs a large amount. A term rider on the spouse would:1.4
  257. A critical illness policyholder is diagnosed with a covered condition but dies four days later. The survival period provision typically means that:1.4
  258. A client with a waiver of premium rider becomes disabled and asks when the insurer will stop billing him. The agent should explain that:1.4
  259. A beneficiary asks whether the accidental death rider pays because the insured died of a heart attack while driving. The agent should explain that:1.4
  260. A participating policyholder was told his premiums would eventually be covered by dividends, but the insurer is still billing him. The agent should explain that:1.4
  261. A client wants to deposit far more into a universal life policy than the plan anticipated. The agent should warn that:1.4
  262. A participating policyholder selects the paid-up additions dividend option. This means each dividend will:1.4
  263. A client is shocked when his ten-year term premium jumps sharply at the end of the term. The agent should have explained at the outset that:1.4
  264. A client who flies a private aircraft as a hobby is issued a policy with an aviation exclusion. The effect is that:1.4
  265. A client fears his adult son would spend a lump sum quickly. The settlement options provision allows the client to:1.4
  266. A client with a guaranteed insurability rider wants to add coverage after a serious diagnosis. The agent should explain that:1.4
  267. A couple wants coverage to fund the tax arising when the second of them dies. The provision suited to this need is:1.4
  268. A client points to an illustration showing dividends increasing every year and asks whether that is promised. The agent must explain that:1.4
  269. A client surrenders a permanent policy and is surprised to receive a tax slip. The agent should explain that:1.4
  270. A client asks what her critical illness policy pays if she dies without ever being diagnosed. The return of premium on death benefit:1.4
  271. A client who will live abroad for three years asks whether her coverage continues. The agent should:1.4
  272. A whole life policyholder receives a notice from the insurer and fears his guaranteed premium will rise. The agent should explain that:1.4
  273. A client designated 'my wife Jane' years ago, later divorced and has now remarried. Unless the designation is changed:1.5
  274. A client's will, signed after the policy designation, leaves the insurance proceeds to a different person. The position in common law provinces is that:1.5
  275. A client named her three children equally, and one child dies before her leaving two young sons. Without a per stirpes direction the proceeds will normally:1.5
  276. A business owner exposed to creditors names his estate as beneficiary for administrative simplicity. The agent should point out that:1.5
  277. A separating client wants to remove his spouse, who was named irrevocably. The agent should explain that:1.5
  278. A client names a registered charity as beneficiary of her life policy. On her death her estate will generally:1.5
  279. A Quebec client designates her married spouse as beneficiary without saying anything about revocability. The likely result is that:1.5
  280. A client names his adult daughter as beneficiary of his registered retirement income fund. His agent should point out that:1.5
  281. A client wants to name her brother, who lives overseas, as beneficiary. The agent should explain that:1.5
  282. A client wants the proceeds used only for her granddaughter's education. The appropriate structure is to:1.5
  283. A creditor of a policy owner seeks to seize a policy on which the owner's spouse is named beneficiary. In the common law provinces the policy is generally:1.5
  284. A client with a family class beneficiary collaterally assigns his policy to a lender. The effect on creditor protection is that:1.5
  285. A deceased client named her estate as beneficiary and left substantial unpaid debts. The proceeds will be:1.5
  286. A shareholder personally owns a policy and wants his corporation named as beneficiary. The agent should warn that:1.5
  287. An employee names a beneficiary on her group life certificate and also has an individual policy. She should understand that:1.5
  288. A designation gives one beneficiary a stated share and leaves the remainder unallocated. The unallocated portion will generally:1.5
  289. An insurer pays the beneficiary shown in its records, and a later designation form is then produced. The statutory protection means that:1.5
  290. A named beneficiary tells the insurer she does not want the proceeds. Where she validly disclaims, the money will generally:1.5
  291. A client asks whether naming his son on his registered plan will prevent tax arising on his death. The correct answer is that the designation:1.5
  292. A separation agreement requires a client to keep his former spouse as beneficiary of a policy. If he names someone else instead:1.5
  293. A beneficiary telephones the agent the day after the insured's death. The agent's first step should be to:1.6
  294. A family cannot find the policy document for a client they believe was insured. The agent should explain that:1.6
  295. An insurer takes several months to settle a death claim after receiving complete proof. The legislation generally provides that:1.6
  296. An insurer asks a claimant to sign an authorization for the deceased's medical records during the contestability period. The agent should explain that:1.6
  297. The named beneficiary of a death benefit is an adult who lacks capacity to manage money. The proceeds will generally:1.6
  298. An insurer pays a base death benefit but declines the accidental death rider. The beneficiary should understand that:1.6
  299. At claim the insurer discovers the insured was three years older than stated on the application. Under the misstatement of age provision the insurer will:1.6
  300. An insured dies during the grace period with one premium unpaid. At claim the insurer will normally:1.6
  301. A critical illness claimant's diagnosis does not match the contract's definition of the covered condition. The agent should explain that:1.6
  302. A disability claimant asks why no benefit has arrived although her claim was approved. The likely explanation is that:1.6
  303. A grieving claimant asks the agent to fill in and sign the claim form for her. The agent should:1.6
  304. An insurer asks a claimant to prove her identity and her relationship to the deceased. This requirement exists because:1.6
  305. A beneficiary asks whether she must report the life insurance death benefit on her tax return. The agent should explain that:1.6
  306. An insured disappears at sea and the family asks when a claim can be made. The agent should explain that:1.6
  307. A family is certain a policy existed but the insurer's initial search finds nothing. The agent should:1.6
  308. A beneficiary believes the settlement the insurer has calculated is too low. The agent should:1.6
  309. An agent settling a claim notices the deceased held a second policy with the same insurer that nobody has mentioned. The agent should:1.6
  310. A death occurred abroad and the certificate is written in a language other than English or French. The insurer will generally require:1.6
  311. A named beneficiary is convicted of criminally causing the insured's death. The proceeds will generally:1.6
  312. After a death claim is settled, the agent's file should record:1.6

2.Integrate into practice the rules governing the activities of life insurance agents

40% of the exam · 208 questions
  1. The primary body that licenses and disciplines life insurance agents in a province is:2.1
  2. The sanctions a provincial regulator or council can impose on an agent include:2.1
  3. The role of CISRO in protecting clients is to:2.1
  4. The CCIR's 'Guidance: Conduct of Insurance Business and Fair Treatment of Customers' matters to agents because:2.1
  5. OSFI protects clients indirectly by:2.1
  6. Assuris coverage applies to:2.1
  7. OLHI's services are available to:2.1
  8. Complaints about an agent's conduct (as opposed to an insurer's claim decision) should be directed to:2.1
  9. CLHIA protects clients by:2.1
  10. The federal Privacy Commissioner (and provincial commissioners) protect clients by:2.1
  11. FINTRAC's role is to:2.1
  12. The courts protect clients in insurance matters by:2.1
  13. Professional associations such as Advocis (and its designation bodies) protect clients by:2.1
  14. An insurer's own compliance function protects clients by:2.1
  15. A managing general agency (MGA) has responsibilities toward clients through:2.1
  16. The provincial regulator's 'licence check' or public register allows clients to:2.1
  17. 'Errors and omissions' insurance protects clients because:2.1
  18. The Financial Consumer Agency of Canada protects insurance clients mainly where:2.1
  19. The Canadian Anti-Fraud Centre and provincial consumer-protection offices help clients by:2.1
  20. The 'Life Licence Qualification Program' itself protects clients by:2.1
  21. Continuing education requirements protect clients because:2.1
  22. The provincial regulator's power to conduct 'market conduct examinations' means:2.1
  23. The requirement that agents be 'sponsored' by or contracted with an insurer in many provinces protects clients because:2.1
  24. The 'Ombudsman for Banking Services and Investments' (OBSI) is relevant to a dual-licensed agent because:2.1
  25. Provincial 'insurance councils' (for example, in Alberta, BC, Saskatchewan, Manitoba) are:2.1
  26. The requirement to give clients a written 'disclosure' about the agent (licence, insurers represented, compensation, conflicts) is enforced by:2.1
  27. Whistleblower or reporting obligations protect clients because:2.1
  28. The interplay between regulators and insurers when an agent is terminated 'for cause' is that:2.1
  29. Provincial 'unclaimed property' or unclaimed benefits regimes protect clients by:2.1
  30. The role of the 'Autorité des marchés financiers' (AMF) is relevant to a common-law agent when:2.1
  31. 'Reciprocal licensing' between provinces means:2.1
  32. The requirement for a 'complaint-handling process' at the insurer level (with a designated complaints officer and public information) exists because:2.1
  33. The 'public interest' mandate of regulators means that when an agent's interests conflict with client protection, the regulator will:2.1
  34. The CLHIA 'Advisor Disclosure' guideline recommends that agents disclose to clients:2.1
  35. The 'Canadian Association of Independent Life Brokerage Agencies' (CAILBA) contributes to client protection by:2.1
  36. If a client believes their personal health information was shared improperly by an agent, the appropriate bodies are:2.1
  37. The requirement that illustrations follow the CLHIA 'Guidelines on Illustrations' protects clients by:2.1
  38. The regulators' focus on 'vulnerable clients' (seniors, persons with diminished capacity) protects them by:2.1
  39. A client asks who to contact if they suspect their agent is unlicensed. The answer is:2.1
  40. The insurer's obligation under FTC guidance to 'design products with target markets in mind' protects clients because:2.1
  41. The 'National Do Not Call List' and anti-spam legislation (CASL) protect clients by:2.1
  42. The requirement that insurers provide 'plain-language' policy summaries or key facts documents protects clients by:2.1
  43. The 'Insurance Bureau of Canada' (IBC) is:2.1
  44. A regulator's 'consumer alert' or public warning about an individual or firm is:2.1
  45. The most complete list of the bodies a life agent may be accountable to is:2.1
  46. For a dual-licensed agent selling mutual funds, the relevant SRO is:2.1
  47. The Canada Deposit Insurance Corporation (CDIC) protects:2.1
  48. When a client asks an agent 'who protects me if something goes wrong?', the best answer covers:2.1
  49. An agent's foundational duty to the client is:2.2
  50. 'Know your client' (KYC) obligations require the agent to:2.2
  51. A recommendation is 'suitable' when:2.2
  52. The agent's 'duty of disclosure' to the client includes:2.2
  53. A 'conflict of interest' arises when:2.2
  54. Compensation disclosure rules generally require an agent to tell the client:2.2
  55. 'Holding out' rules require that an agent:2.2
  56. When replacing an existing life policy, the agent must:2.2
  57. 'Twisting' is:2.2
  58. 'Churning' refers to:2.2
  59. Rules on 'handling client funds' require that an agent:2.2
  60. The agent's 'confidentiality' obligation means:2.2
  61. Record-keeping obligations require the agent to:2.2
  62. An agent's advertising and marketing must:2.2
  63. Completing an application, the agent must:2.2
  64. 'Forgery' or signing a client's name, even with permission, is:2.2
  65. Electronic signatures on insurance documents are:2.2
  66. An agent must not 'induce' a purchase by:2.2
  67. 'Fronting' — allowing another person to sell under the agent's licence — is:2.2
  68. Unlicensed staff in an agent's office may:2.2
  69. When an agent lacks expertise in a client's need (for example, complex corporate tax planning), the agent should:2.2
  70. 'Referral arrangements' where an agent pays or receives fees for referrals:2.2
  71. An agent becomes aware that a client is being financially exploited by a family member. The agent should:2.2
  72. An agent must report to the regulator (self-report) events such as:2.2
  73. Selling a product from an insurer the agent is not contracted with, through another agent's contract ('splitting' without disclosure), is:2.2
  74. An agent's obligation regarding 'needs analysis' documentation is to:2.2
  75. If a client insists on a product the agent believes is unsuitable, the agent should:2.2
  76. The obligation to 'deliver the policy promptly' exists because:2.2
  77. An agent learns after delivery that the client omitted a material health fact on the application. The agent should:2.2
  78. The agent's responsibility for 'illustrations' is to:2.2
  79. An agent's obligation when a client's premium is about to lapse is to:2.2
  80. 'Misrepresentation' by an agent includes:2.2
  81. The 'best interest' expectation in FTC guidance means the agent should:2.2
  82. An agent who is 'captive' (contracted to one insurer) must:2.2
  83. An agent may accept a gift from a client:2.2
  84. 'Outside business activities' of an agent (for example, a mortgage brokerage or tax preparation) must be:2.2
  85. The obligation to 'cooperate with regulators and insurers' means the agent must:2.2
  86. An agent's duty when a client asks them to backdate a document or misstate a date is to:2.2
  87. The agent's obligation regarding 'group insurance enrolment' is to:2.2
  88. When an agent leaves an insurer or MGA, their obligation regarding clients is to:2.2
  89. A client asks the agent to recommend a policy for her elderly father, who is not present. The agent should:2.2
  90. An insurer runs a sales contest with a trip for agents who reach a target with one product. The agent's obligation is to:2.2
  91. A client wants to surrender a permanent policy with a large gain to buy a new policy the agent is offering. The agent should:2.2
  92. A client's spouse calls asking about the client's policy details. The agent should:2.2
  93. A prospective client wants to buy a large annuity with cash from an unexplained source and seems evasive. The agent should:2.2
  94. An agent discovers a colleague is forging client signatures. The agent's obligation is to:2.2
  95. A client wants to name the agent as beneficiary 'because you've been so helpful'. The agent must:2.2
  96. A client asks the agent to hold a cheque and 'submit it next month when the bonus comes in'. The agent should:2.2
  97. During a review, an agent finds a client's seg fund has a guarantee about to mature while the market is well above the guaranteed amount. The agent should:2.2
  98. An agent uses a social media post claiming 'tax-free retirement income guaranteed' for a UL policy. This is:2.2
  99. A client with limited English asks a relative to interpret. The agent should:2.2
  100. A client asks the agent to 'just put down non-smoker' although she smokes occasionally. The agent must:2.2
  101. A client asks whether the agent is required to tell them about cheaper products from other insurers. The honest answer depends on:2.2
  102. An agent receives a subpoena for client records. The agent should:2.2
  103. A client asks the agent to invest in a private business deal alongside them. The agent should:2.2
  104. The agent's obligation regarding 'continuing suitability' means:2.2
  105. A client asks the agent for tax and legal advice on a complex estate freeze. The agent should:2.2
  106. A client wants to buy a policy for a business partner but the partner has not agreed. The agent should:2.2
  107. A client asks for a copy of the personal information the agent holds about them. The agent must:2.2
  108. The agent's obligation when an insurer requests additional underwriting information from the client is to:2.2
  109. 'Professional judgment' in ethics means the agent should:2.2
  110. An agent is asked by an MGA to 'sign off' on applications taken by an unlicensed trainee. The agent should:2.2
  111. An agent must maintain 'competence' by:2.2
  112. A client asks the agent to recommend a beneficiary designation that would defeat a court-ordered support obligation. The agent should:2.2
  113. The agent's obligation to 'explain the policy at delivery' includes:2.2
  114. A client mentions during a review that she has been diagnosed with early dementia. Regarding a proposed large seg fund transfer she requested, the agent should:2.2
  115. An agent who is also licensed to sell mutual funds must:2.2
  116. A client complains to the agent about the insurer's service. The agent should:2.2
  117. The agent's obligation regarding 'insurer's underwriting guidelines' is to:2.2
  118. An agent receives a 'lead' from a referral service that obtained the client's data without consent. The agent should:2.2
  119. The 'reasonable expectations' of a client include that the agent will:2.2
  120. An agent is offered a 'finder's fee' by a developer for referring clients to a real estate investment. The agent should:2.2
  121. A client asks the agent to keep a copy of her will and POA 'for safekeeping'. The agent should:2.2
  122. An agent's obligation when a client dies and the agent is aware of a policy the family does not know about is to:2.2
  123. 'Supervision' obligations for an agent who leads a team mean:2.2
  124. A client asks the agent to provide a 'letter of coverage' before the insurer has approved the application. The agent should:2.2
  125. When a client's circumstances mean insurance is not needed, the ethical agent:2.2
  126. An agent's 'duty to the insurer' includes:2.2
  127. If an agent's own licence lapses (missed renewal or CE), the agent must:2.2
  128. The best summary of an agent's ethical obligations is to:2.2
  129. A prospective client wants to confirm that an agent is properly licensed before meeting him. She should:2.1
  130. A client's federally incorporated insurer has merged with another company and he asks who watches its financial strength. The answer is:2.1
  131. A client sees an insurer advertisement she believes is misleading. The body that would examine the conduct is:2.1
  132. A client is delighted that the ombudservice has recommended in his favour and asks when the insurer must pay. The agent should explain that:2.1
  133. An insurer terminates an agent's contract for cause after finding falsified applications. The insurer is generally required to:2.1
  134. A managing general agency contracts a new agent. Its screening responsibility toward clients includes:2.1
  135. A client believes an insurer disclosed her health information improperly and the insurer's response has not satisfied her. She may next:2.1
  136. A client with a very large policy asks how much of it Assuris would protect if the insurer failed. The agent should explain that:2.1
  137. A client asks whether Assuris stands behind the maturity guarantee on her segregated fund contract. The accurate answer is that:2.1
  138. An agent licensed in Ontario is asked to serve a client residing in Quebec. The body whose licensing requirements apply is:2.1
  139. A dual-licensed agent's mutual fund business is reviewed following a client complaint. The review will be conducted by:2.1
  140. A candidate asks who sets the national qualification standard the licensing examinations are based on. The answer is:2.1
  141. Under fair treatment of customers guidance, an insurer's responsibility for a product it has sold:2.1
  142. A client is telephoned by someone claiming to be from the regulator and demanding a payment to release a policy benefit. The agent should advise her to:2.1
  143. An insurer cannot trace the beneficiary of a matured benefit after extensive searching. Unclaimed property arrangements exist so that:2.1
  144. An agent hesitates to report a colleague's misconduct for fear of retaliation. Whistleblower provisions generally:2.1
  145. A regulator announces a market conduct examination of an agency. The agency must expect the examination to review:2.1
  146. A client holds a policy from a foreign insurer that is not an Assuris member. The agent should explain that:2.1
  147. Industry disclosure guidance expects an agent to tell a new client, at or before the first transaction:2.1
  148. An agent presents an illustration produced by the insurer's software. Industry guidelines mean that:2.1
  149. A client wants to complain about an insurer's handling of her file. The first formal step is to:2.1
  150. A client asks whether the insurance council can order an agent to repay the money she lost. The agent should explain that a council:2.1
  151. An insurer declines to follow an ombudservice recommendation in a client's favour. The client may then:2.1
  152. A regulator audits an agent's continuing education declaration and finds the credits were never earned. The agent faces:2.1
  153. An insurer's compliance team monitors an agent whose policies lapse unusually early and often. This monitoring exists to:2.1
  154. An agent files a suspicious transaction report about a client. The agent must understand that:2.1
  155. An agent belongs to a professional association with its own code of conduct. That code:2.1
  156. A newly licensed agent asks whether errors and omissions coverage is optional. In most provinces it is:2.1
  157. A client asks why agents in different provinces answer to differently named bodies. The explanation is that:2.1
  158. A client wants to know whether an agent has ever been disciplined. Regulators normally:2.1
  159. An agent's only insurer withdraws its sponsorship of his licence. In provinces requiring sponsorship the licence will:2.1
  160. A client receives a short plain-language summary alongside a lengthy contract. The purpose of that summary is to:2.1
  161. Regulatory guidance on vulnerable clients encourages agents to collect a trusted contact person. That person may be contacted:2.1
  162. An agent suspects a client is exaggerating a disability claim. The agent should:2.1
  163. A client asks the agent to summarize who to approach if something goes wrong. The clearest answer is:2.1
  164. An agent wants to quote a satisfied client's praise in a brochure. Before doing so the agent must:2.2
  165. An agent posts on social media that a claim was paid quickly, naming the family and their circumstances. This is:2.2
  166. An agent's unlicensed assistant telephones clients to discuss which coverage they should add. This is:2.2
  167. An agent joining a new firm wants to take his client list with him. Before contacting those clients the agent should:2.2
  168. A client offers to pay her first premium in cash at the kitchen table. The agent should:2.2
  169. An agent in financial difficulty asks a long-standing client for a personal loan. This is:2.2
  170. A client cannot afford a premium and the agent offers to lend her the money personally. The agent should recognize this as:2.2
  171. A life-licensed agent is asked about general insurance for a client's home. The agent should:2.2
  172. An advertisement states that the agent is 'regulator approved'. This wording is:2.2
  173. An agent uses professional letters after her name although she never completed the program. This is:2.2
  174. An agent signs an insurer's annual compliance attestation without reading it. The agent should understand that:2.2
  175. An agent plans to operate under a business name different from his own. Before using it he must:2.2
  176. An agent stores client files on a personal cloud account shared with family members. This arrangement:2.2
  177. An agent emails a client's completed health questionnaire to an underwriter without encryption. The agent should recognize that:2.2
  178. A client asks to handle everything by text message. The agent may agree provided that:2.2
  179. An agent realizes after issue that she selected the wrong rider on a client's application. She should:2.2
  180. A client tells an agent he intends to complain to the regulator about her conduct. The agent should:2.2
  181. An insurer asks an agent to explain why so many of his clients have replaced existing policies. The agent must:2.2
  182. A needs analysis shows a client is carrying far more coverage than her circumstances require. The agent should:2.2
  183. An agent takes over the book of a retiring colleague. Toward those clients the agent should:2.2
  184. An agent whose colleague has left the firm is approached by that colleague's clients. The agent should:2.2
  185. Two products suit a client equally well, and one pays the agent substantially more. The agent should:2.2
  186. An agent offers to pay a prospective client's first premium to secure the sale. This is:2.2
  187. An agent notices that an applicant's identity document does not appear to belong to the person presenting it. The agent should:2.2
  188. An adult son insists on answering for his capable mother and discourages the agent from speaking to her alone. The agent should:2.2
  189. A client asks the agent to write to his bank confirming the value of his policies to support a loan application. The agent should:2.2
  190. An insurer's audit team asks to examine an agent's client files. The agent must:2.2
  191. An agent discovers her licence expired four days ago and she has written two applications since. She must:2.2
  192. An agent moves to a new managing general agency. Regarding existing clients the agent should:2.2
  193. An agent delivers a policy issued with a higher premium than illustrated because of a health rating. At delivery he must:2.2
  194. An agent builds his own spreadsheet projecting a policy's future values and shows it to a client. This is:2.2
  195. An agent learns that an insurer will withdraw a product in two months but has a client application in progress. The agent should:2.2
  196. An applicant refuses to answer several health questions, saying they are private. The agent must explain that:2.2
  197. A client in a hurry asks the agent to skip the needs analysis and simply sell him the largest policy available. The agent should:2.2
  198. An unlicensed acquaintance offers to send clients to an agent in return for a share of the commission. The agent should:2.2
  199. A client writes to the agent directly complaining about advice she received two years ago. The agent should:2.2
  200. A client pressing for coverage before a trip asks the agent to skip the usual documentation. The agent should:2.2
  201. An agent sells a policy to his own brother. The professional obligations that apply are:2.2
  202. A client refuses to sign anything and wants to conduct the whole relationship by telephone. The agent should:2.2
  203. An insurer asks an agent to obtain a client's consent to share information with a reinsurer. The agent should:2.2
  204. A grandmother wants a very large permanent policy on her healthy eight-year-old grandson. The agent should:2.2
  205. An employer offers to pay the premiums on a policy owned by and insuring a key employee personally. The agent should:2.2
  206. A prospective client says he will buy only if the agent guarantees the best return available. The agent should:2.2
  207. At a review an agent learns a client has divorced, changed jobs and had a child since the policy was issued. The agent should:2.2
  208. Asked to summarize the obligations owed to a client, the most complete answer is to:2.2

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