LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
A recommendation is 'suitable' when:
- AThe insurer approves the application, since underwriting confirms that the product fits the risk the client presents
- BThe client agrees to buy it, since an informed adult's consent is the only measure of whether a product suits them
- It matches the client's documented needs and circumstances, and the agent can explain why over alternatives
- DIt is the cheapest option available, since a lower premium always leaves the client better off than a higher one
Correct answer: C) It matches the client's documented needs and circumstances, and the agent can explain why over alternatives
Suitability is an objective standard tested against the file, not the client's willingness to buy.
Why the other options are wrong
- AUnderwriting approval is not suitability.
- BAgreement alone does not make it suitable.
- DCost is one factor in suitability, not the whole test.
Exam tip
Suitability = fit to documented needs, with reasons.
Common mistake
Confusing 'the client signed' with 'it was suitable'.
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.