LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
An agent's foundational duty to the client is:
- To act honestly and with competent care, placing the client's interests ahead of the agent's own
- BTo meet the insurer's production quota, since an agent who fails to produce cannot keep the contract that lets them serve clients
- CTo avoid making recommendations, since any recommendation exposes the agent to liability if the product later disappoints
- DTo sell the product with the highest commission, since the insurer prices commissions to reflect the product's value to clients
Correct answer: A) To act honestly and with competent care, placing the client's interests ahead of the agent's own
The duty of care and good faith underlies every specific obligation in the module.
Why the other options are wrong
- BQuotas are subordinate to client interests.
- CAdvice is the agent's role.
- DCompensation must never drive advice.
Exam tip
Honesty, good faith, competence, client first, suitability.
Common mistake
Rationalizing an unsuitable sale as 'what the client wanted'.
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.