LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
An agent joining a new firm wants to take his client list with him. Before contacting those clients the agent should:
- Aproceed, since the relationships belong to the agent rather than to the former firm
- Bcopy the entire client database quietly, so as to avoid any dispute with the previous employer
- check the contractual and privacy position, since client information is not simply portable
- Dask the new firm to obtain the records from the former firm on his behalf
Correct answer: C) check the contractual and privacy position, since client information is not simply portable
Ownership of client information depends on the contracts signed, and privacy law limits how personal information can be moved or used for a new purpose. Clients also decide for themselves whether to follow the agent.
Why the other options are wrong
- ARelationships may be personal, but the records are governed by contract and privacy law.
- BCopying a database quietly compounds a contractual and privacy problem.
- DRouting the request through a new firm does not resolve either issue.
Exam tip
Client information is governed by contract and privacy law, not by who built the relationship.
Common mistake
Taking client data to a new firm without checking the contractual position.
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.