LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
An agent's 'duty to the insurer' includes:
- AConcealing unfavourable client facts from the insurer, since the agent's first loyalty is to the client who pays the premium each month
- Presenting risks honestly, complying with the contract, transmitting applications and funds promptly, and reporting
- CMaximizing sales at any cost, since the insurer's interest is in volume and the agent's contract rewards production
- DNothing beyond the sale itself, since the agent's duties run to the client and the insurer has its own compliance staff
Correct answer: B) Presenting risks honestly, complying with the contract, transmitting applications and funds promptly, and reporting
The agent's dual role includes good faith toward the insurer.
Why the other options are wrong
- AConcealment breaches the duty of good faith.
- CHonesty governs, not sales at any cost.
- DDuties to the insurer do exist.
Exam tip
Duty to insurer: honesty, compliance, prompt transmission, no binding.
Common mistake
Withholding a known health fact from the insurer to get a policy issued.
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.