LLQP Ethics & Professional Practice · Component 1.1 · 60% of the exam
An agent is asked how long identification and transaction records must be kept under anti-money-laundering rules. The correct position is that records must be:
- Akept only while the client remains active, and discarded once the relationship ends
- Bheld by the insurer alone, since agents have no record-keeping obligation of their own
- retained for the prescribed period and made available to the regulator on request
- Ddestroyed as soon as the transaction settles, in order to protect the client's privacy
Correct answer: C) retained for the prescribed period and made available to the regulator on request
The legislation prescribes a retention period for client identification, transaction records and reports. Records must be retrievable within a set time when a compliance examination or an investigation requires them.
Why the other options are wrong
- AThe retention period runs from the transaction, not from the relationship ending.
- BAgents have their own obligations under the legislation.
- DPrivacy does not justify destroying records the law requires to be kept.
Exam tip
Retention periods are prescribed and survive the end of the client relationship.
Common mistake
Purging files when a client leaves, in the belief that privacy requires it.
What this tests
CISRO competency component 1.1 — Integrate into practice the legal aspects of insurance and annuity contracts — which is weighted at 60% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 1
- An 'assignee' of a life insurance policy is:
- A corporation as policyowner and beneficiary of a policy on a key employee:
- A 'trustee' named to receive proceeds on behalf of a beneficiary:
- The 'automatic premium loan' (APL) provision:
- A life insurance contract 'matures' when:
- The 'assignment' provision typically states that:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.