LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
A client asks whether the agent is required to tell them about cheaper products from other insurers. The honest answer depends on:
- The agent's status: independents disclose shelf limits, captives disclose one insurer; neither may claim to survey the market
- BThe season, since insurers change their rates at set times of year and the agent can only compare current rates
- CNothing, since every agent must survey the whole market and present the cheapest product before selling anything to any client
- DThe client's income, since low-income clients are entitled to a market comparison that high-income clients are not
Correct answer: A) The agent's status: independents disclose shelf limits, captives disclose one insurer; neither may claim to survey the market
Shelf disclosure frames the scope of the agent's duty: an agent must be honest about which insurers' products they can access and must not claim a market comparison they did not perform.
Why the other options are wrong
- BThe season is irrelevant.
- CIt depends on the agent's shelf and disclosure.
- DThe client's income is irrelevant to the agent's shelf.
Exam tip
Disclose your shelf; do not claim market-wide comparison you did not do.
Common mistake
Claiming to have 'shopped the market' after checking one insurer.
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.