LLQP Ethics & Professional Practice · Component 2.1 · 40% of the exam
A client asks whether Assuris stands behind the maturity guarantee on her segregated fund contract. The accurate answer is that:
- protection applies to the guaranteed amounts of a member insurer's contract, up to the limits
- Bdeposit insurance covers segregated funds in the same way it covers bank deposits
- Cno protection applies, because segregated funds are investments rather than insurance
- Dprotection applies only where the fund has fallen in value since the deposit was made
Correct answer: A) protection applies to the guaranteed amounts of a member insurer's contract, up to the limits
Segregated fund contracts are insurance contracts, and the guaranteed amounts provided by a member insurer fall within the Assuris framework subject to its limits. The market value of the funds themselves is not guaranteed by anyone.
Why the other options are wrong
- BDeposit insurance covers eligible bank deposits, not insurance contracts.
- CA segregated fund contract is an insurance contract issued by a life insurer.
- DProtection does not depend on whether the fund has fallen in value.
Exam tip
Assuris backs the guarantees; nobody guarantees the fund's market value.
Common mistake
Telling a client segregated funds fall outside Assuris because they are investments.
What this tests
CISRO competency component 2.1 — 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.