LLQP Ethics & Professional Practice · Component 2.1 · 40% of the exam
An agent files a suspicious transaction report about a client. The agent must understand that:
- Athe client must be told so that an innocent explanation can be provided promptly
- disclosing the report to the client is prohibited, and the agent continues serving normally
- Cthe client's file must be closed immediately and all contact permanently discontinued
- Dthe report is forwarded to the police, who will contact the client within thirty days
Correct answer: B) disclosing the report to the client is prohibited, and the agent continues serving normally
Tipping off is prohibited because it would defeat any investigation. The agent files the report, keeps a record and continues to deal with the client in the ordinary way unless instructed otherwise.
Why the other options are wrong
- ATelling the client is exactly what the tipping off prohibition forbids.
- CClosing the file abruptly would itself signal that a report was made.
- DReports go to the financial intelligence unit, which analyzes them.
Exam tip
Never tip off a client that a suspicious transaction report has been filed.
Common mistake
Confronting a client about a transaction that has been reported.
What this tests
CISRO competency component 2.1 — 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.