LLQP Ethics & Professional Practice · Component 1.1 · 60% of the exam
A client suffers a loss after an agent failed to submit an application she had been paid to process. The client may:
- Aclaim only against the insurer, because an agent has no personal legal responsibility
- sue the agent for negligence and separately complain to the regulator about the conduct
- Ccomplain to the regulator only, since civil courts do not hear claims against agents
- Drecover automatically from a government compensation fund established for losses of exactly this kind
Correct answer: B) sue the agent for negligence and separately complain to the regulator about the conduct
The two routes are independent. A civil claim seeks compensation for the loss caused by a breach of the duty of care, while a regulatory complaint addresses whether the agent should continue to hold a licence.
Why the other options are wrong
- AAn agent is personally responsible for failures in the agent's own work.
- CCourts hear negligence claims against agents in the ordinary way.
- DNo general government fund compensates clients for an agent's negligence.
Exam tip
Civil claims seek money; regulatory complaints address the licence.
Common mistake
Assuming a regulatory complaint is the only recourse available to a client.
What this tests
CISRO competency component 1.1 — Integrate into practice the legal aspects of insurance and annuity contracts — which is weighted at 60% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 1
- An 'assignee' of a life insurance policy is:
- A corporation as policyowner and beneficiary of a policy on a key employee:
- A 'trustee' named to receive proceeds on behalf of a beneficiary:
- The 'automatic premium loan' (APL) provision:
- A life insurance contract 'matures' when:
- The 'assignment' provision typically states that:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.