LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
An agent settling a claim notices the deceased held a second policy with the same insurer that nobody has mentioned. The agent should:
- raise the second policy so the family can claim the benefit to which they are entitled
- Breport the family to the insurer for having concealed the existence of coverage
- Csay nothing, because the beneficiary is responsible for identifying every claim
- Dclaim it personally and hold the proceeds on trust until the family enquires about it
Correct answer: A) raise the second policy so the family can claim the benefit to which they are entitled
Acting honestly and in the client's interest requires telling the family about coverage they may not know exists. Withholding it to avoid administrative work would be a plain breach of the agent's professional duty.
Why the other options are wrong
- BNot knowing about a policy is not concealment by the family.
- CAn agent who knows of coverage must tell the family about it.
- DAn agent never claims or holds proceeds on a family's behalf.
Exam tip
Tell the family about every policy you know of, claimed or not.
Common mistake
Settling only the claim presented when other coverage is known to exist.
What this tests
CISRO competency component 1.6 — 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.