LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
An agent's obligation regarding 'needs analysis' documentation is to:
- AConduct it verbally and rely on memory, since a written analysis could later be used against the agent in a dispute
- Complete and retain a written needs analysis, or a signed waiver where permitted, for every sale
- CSkip it for term policies, since term insurance is simple enough that the client's stated amount is sufficient
- DComplete it only for large sales, since the cost of the analysis is not justified by the commission on a small policy
Correct answer: B) Complete and retain a written needs analysis, or a signed waiver where permitted, for every sale
CLHIA guidance and provincial rules expect a documented needs analysis; some regimes allow a client to waive a full analysis with a signed acknowledgment.
Why the other options are wrong
- AThe needs analysis must be written, not verbal.
- CA needs analysis is required for term policies too.
- DA needs analysis is required for small sales as well.
Exam tip
Written needs analysis (or documented waiver) for every sale.
Common mistake
Filing a product illustration as the 'needs analysis'.
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.