LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
An agent discovers her licence expired four days ago and she has written two applications since. She must:
- Aask a licensed colleague to sign the applications so the business can proceed
- Bsubmit the applications quickly before anyone notices the gap in her licence
- stop transacting, renew at once and report the unlicensed activity as required
- Dtreat the gap as immaterial, since the renewal is merely an administrative step
Correct answer: C) stop transacting, renew at once and report the unlicensed activity as required
Transacting without a licence is unlicensed activity even where the lapse was accidental. The agent must stop, renew and disclose, since a colleague signing for business the agent wrote would be fronting.
Why the other options are wrong
- AHaving someone else sign is fronting and is a separate breach.
- BRushing the business through compounds the unlicensed activity.
- DThe gap is not immaterial; it is the difference between licensed and not.
Exam tip
An expired licence means no transacting, however brief the gap.
Common mistake
Treating a renewal deadline as a formality that can slip.
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.