LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
An agent is asked by an MGA to 'sign off' on applications taken by an unlicensed trainee. The agent should:
- AComply, since the MGA is responsible for the trainee's supervision and has asked the agent to help with training
- Refuse; the trainee cannot take applications, and signing as agent of record for business not transacted is fronting
- CComply once as a favour, since a single instance during training is unlikely to come to the regulator's attention
- DComply if the MGA pays a share of the commission, since the agent is then compensated for the responsibility assumed
Correct answer: B) Refuse; the trainee cannot take applications, and signing as agent of record for business not transacted is fronting
Pressure from a supervisor or MGA does not excuse fronting; signing as agent of record for business an unlicensed person transacted is misconduct for everyone involved.
Why the other options are wrong
- ASigning off is misconduct.
- CDoing it once is still misconduct.
- DPayment does not change the misconduct.
Exam tip
Never sign as agent of record for others' unlicensed work.
Common mistake
Yielding to MGA pressure.
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.