LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
An agent realizes that a client signed an application while visibly intoxicated. The agent should:
- Ahave a colleague countersign as a witness to confirm the client's apparent agreement
- Bsubmit the application, since the signature appears on the form as required
- Cnote the condition on the application and let the insurer decide whether to accept it
- set the application aside and review the answers with the client when he is sober
Correct answer: D) set the application aside and review the answers with the client when he is sober
Capacity means understanding what is being agreed. An application completed by someone unable to understand the questions is unreliable and may be challenged, so the proper step is to redo it when the client is capable.
Why the other options are wrong
- AA second witness does not supply the capacity that was missing.
- BA signature without understanding does not produce a reliable application.
- CThe agent should not submit answers known to be unreliable.
Exam tip
Capacity is required at the moment of signing, not merely a signature.
Common mistake
Submitting an application because the form was signed, despite doubts about capacity.
What this tests
CISRO competency component 1.3 — 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.