LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
A life-licensed agent is asked about general insurance for a client's home. The agent should:
- Agive the advice, since all insurance products rest on the same underlying principles
- Barrange the coverage himself and share the resulting commission with a licensed broker afterward
- refer the client to a licensed general insurance broker and stay within his own class
- Ddecline all further contact, since the request falls outside the agent's expertise
Correct answer: C) refer the client to a licensed general insurance broker and stay within his own class
A licence authorizes specific classes of business. Advising outside the class held is unlicensed activity, and sharing commission with an unlicensed person for that business is separately prohibited.
Why the other options are wrong
- AShared principles do not extend the scope of a licence.
- BArranging business outside the licence class is unlicensed activity.
- DA referral serves the client without declining the relationship.
Exam tip
Stay inside your licence class and refer the rest.
Common mistake
Helping with a product outside the licence because the client asked.
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.