LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
A client in a hurry asks the agent to skip the needs analysis and simply sell him the largest policy available. The agent should:
- explain why the analysis protects him and gather at least the essential information
- Brefuse to serve the client until a full financial plan has been completed and signed
- Ccomply but note in the file that the client declined to provide any information
- Dcomply, since the client has stated his requirement clearly and is entitled to decide
Correct answer: A) explain why the analysis protects him and gather at least the essential information
Suitability cannot be assessed without knowing the client's situation and objectives. The analysis can be proportionate to the transaction, but it cannot be skipped, and the reasoning must be documented.
Why the other options are wrong
- BA full financial plan is more than the transaction requires.
- CA file note does not substitute for the information needed to advise.
- DA client's preference does not remove the agent's suitability obligation.
Exam tip
Scale the analysis to the transaction, but never skip it entirely.
Common mistake
Accepting a client's instruction to skip the fact-finding.
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.