LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
A client asks the agent to provide a 'letter of coverage' before the insurer has approved the application. The agent should:
- AAsk the MGA to write the letter, since a letter on agency letterhead carries more weight than one from the agent
- BWrite the letter, since the application has been submitted and approval is likely given the client's good health and occupation
- CWrite it only if the client needs it for a mortgage, since the lender will not rely on it for anything else
- Decline to confirm coverage that does not exist; explain the underwriting status and any conditional coverage
Correct answer: D) Decline to confirm coverage that does not exist; explain the underwriting status and any conditional coverage
Confirming non-existent coverage is misrepresentation with real third-party consequences.
Why the other options are wrong
- AHaving the MGA write it is equally improper.
- BWriting the letter is misrepresentation.
- CThe purpose does not change the facts.
Exam tip
Never confirm coverage that is not in force.
Common mistake
Issuing a 'binder' letter the agent has no authority to give.
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.