LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
A client asks the agent for tax and legal advice on a complex estate freeze. The agent should:
- Explain the insurance aspects within competence, and refer the freeze itself to a tax professional and lawyer
- BRefuse to discuss the matter at all, since anything connected with an estate freeze is outside an insurance licence
- CProvide the tax and legal advice, since an experienced agent has seen enough estate freezes to advise on them
- DCharge a legal fee for the advice, since specialized work deserves compensation beyond the insurance commission
Correct answer: A) Explain the insurance aspects within competence, and refer the freeze itself to a tax professional and lawyer
Practising law or accounting without qualification is prohibited; coordination is professional.
Why the other options are wrong
- BInsurance aspects are within scope.
- CTax and legal advice are beyond competence and licence.
- DAn agent cannot charge legal fees.
Exam tip
Stay within competence; refer and coordinate.
Common mistake
Drafting a shareholders' agreement clause for a client.
What this tests
CISRO competency component 2.2 — Integrate into practice the rules governing the activities of life insurance agents — which is weighted at 40% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 2
- A prospective client wants to confirm that an agent is properly licensed before meeting him. She should:
- A dual-licensed agent's mutual fund business is reviewed following a client complaint. The review will be conducted by:
- Assuris coverage applies to:
- OLHI's services are available to:
- Complaints about an agent's conduct (as opposed to an insurer's claim decision) should be directed to:
- The best summary of an agent's ethical obligations is to:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.