LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
A client mentions during a review that she has been diagnosed with early dementia. Regarding a proposed large seg fund transfer she requested, the agent should:
- AAsk a relative to sign the transfer on her behalf, so the transaction can proceed without relying on her judgment
- Consider her capacity, slow the process, involve the trusted contact or professionals, avoid transactions she may not grasp, and document
- CRefuse to provide any further service, since a client with dementia can no longer give instructions of any kind
- DProceed as instructed, since the client made the request herself and the agent is not qualified to assess capacity or diagnose
Correct answer: B) Consider her capacity, slow the process, involve the trusted contact or professionals, avoid transactions she may not grasp, and document
Capacity concerns require caution, not either blind compliance or abandonment.
Why the other options are wrong
- ARelatives cannot sign without legal authority.
- CService continues with safeguards.
- DProceeding as instructed ignores the capacity concern.
Exam tip
Capacity concern: slow down, involve TCP/professionals, document.
Common mistake
Executing a complex transaction for a client who cannot explain it back.
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.