LLQP Ethics & Professional Practice · Component 2.1 · 40% of the exam
An agent presents an illustration produced by the insurer's software. Industry guidelines mean that:
- Athe agent bears no responsibility because the insurer generated the document
- Bthe illustration replaces the need for any needs analysis or suitability discussion
- Cthe agent may adjust the assumptions to make the product more attractive to a client
- the agent must use approved material and explain what is guaranteed and what is not
Correct answer: D) the agent must use approved material and explain what is guaranteed and what is not
Illustration guidelines require insurers to produce compliant material showing alternative scenarios. The agent must use it unaltered, explain the guaranteed and non-guaranteed elements and keep a signed copy on file.
Why the other options are wrong
- AThe agent is responsible for how the illustration is used and explained.
- BAn illustration is not a substitute for a needs analysis.
- CAltering assumptions to flatter a product is a serious misrepresentation.
Exam tip
Use the approved illustration unaltered and separate guaranteed from projected.
Common mistake
Presenting a projected column without explaining that it is not guaranteed.
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.