LLQP Ethics & Professional Practice · Component 1.1 · 60% of the exam
An agent's laptop holding unencrypted client files is stolen from a car. Privacy legislation requires the agent to:
- Areplace the laptop quietly, since a theft is a criminal matter rather than a privacy one
- assess the risk of significant harm and notify affected individuals and the commissioner
- Cdo nothing unless a client later reports that personal information has been misused
- Dreport only to the insurer, which then decides whether anyone else needs to be told
Correct answer: B) assess the risk of significant harm and notify affected individuals and the commissioner
A breach of security safeguards creating a real risk of significant harm must be reported to the privacy commissioner and to the affected individuals, and a record of the breach must be kept. Encryption is the obvious preventive step.
Why the other options are wrong
- AA theft of personal information is a privacy breach as well as a crime.
- CThe duty is triggered by the breach, not by evidence of later misuse.
- DThe obligation runs to the commissioner and the individuals affected.
Exam tip
A breach creating a real risk of significant harm must be reported and recorded.
Common mistake
Waiting for evidence of harm before reporting a lost device.
What this tests
CISRO competency component 1.1 — 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.