LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
An agent builds his own spreadsheet projecting a policy's future values and shows it to a client. This is:
- Aacceptable because the agent's own analysis is more tailored than the insurer's material
- improper, since client presentations must use the insurer's approved illustration material
- Cacceptable where the projected returns are lower than the insurer's own illustration shows
- Dacceptable provided the spreadsheet is printed on the insurer's letterhead for consistency
Correct answer: B) improper, since client presentations must use the insurer's approved illustration material
Illustration rules exist so clients receive consistent, compliant projections showing guaranteed and non-guaranteed elements. Unapproved material can mislead and leaves the agent personally responsible for what it shows.
Why the other options are wrong
- ATailoring does not justify departing from approved illustration material.
- CConservatism does not make unapproved projections permissible.
- DUsing an insurer's letterhead on unapproved material makes it worse.
Exam tip
Only approved illustration material goes in front of a client.
Common mistake
Building a personal projection spreadsheet to explain a product.
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.