LLQP Ethics & Professional Practice · Component 1.1 · 60% of the exam
An agent is found by the provincial regulator to have misled several clients. The regulator's powers typically include:
- suspending or revoking the licence and imposing administrative penalties or conditions
- Bimposing a prison sentence directly, without any involvement of the criminal courts
- Cnothing beyond a private warning, because discipline is a matter for the insurer alone
- Dordering the insurer to pay the agent's clients, since regulators settle civil claims
Correct answer: A) suspending or revoking the licence and imposing administrative penalties or conditions
Regulators can suspend, revoke or attach conditions to a licence, order penalties and require further education or supervision. Criminal sanctions require a prosecution, and compensation is usually pursued separately by the client.
Why the other options are wrong
- BOnly a criminal court can impose imprisonment after a prosecution.
- CDiscipline is a public regulatory function, not an internal matter for the insurer.
- DA regulator disciplines the licensee rather than settling civil claims for clients.
Exam tip
Regulators act on the licence; courts award damages and impose criminal penalties.
Common mistake
Confusing regulatory discipline with a client's civil claim for compensation.
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.