LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
A client asks the agent to 'just put down non-smoker' although she smokes occasionally. The agent must:
- ALeave the smoking question blank, so the client has not made a false statement and the insurer can follow up
- BRecord 'occasional' in the margin, so the insurer has the information and can classify the client itself
- CComply with the request, since the client is responsible for the accuracy of the answers on the application and signs to that effect
- Refuse; explain that smoker status is material and tested, that misrepresentation risks rescission, and record the truth
Correct answer: D) Refuse; explain that smoker status is material and tested, that misrepresentation risks rescission, and record the truth
The agent cannot record an answer known to be false; smoker status is material, insurers test for nicotine, and a false answer exposes the client to rescission and the agent to discipline.
Why the other options are wrong
- AThe smoking question must be answered.
- BThe answer must match the insurer's definition; occasional use is generally 'smoker'.
- CRecording non-smoker would be misrepresentation.
Exam tip
Record the truth; explain materiality.
Common mistake
Accepting 'I only smoke socially' as non-smoker.
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.