LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
An agent who is also licensed to sell mutual funds must:
- AApply insurance rules to mutual funds as well, since the agent's insurance licence is the senior qualification
- BTreat all products identically under a single set of rules, since clients are confused by different standards
- Comply with both regimes and make clear to clients which capacity the agent is acting in for each product
- DApply securities rules to segregated funds as well, since they are investments in substance whatever their legal form
Correct answer: C) Comply with both regimes and make clear to clients which capacity the agent is acting in for each product
Dual licensing doubles the obligations; capacity disclosure prevents confusion.
Why the other options are wrong
- ASecurities rules apply to mutual funds.
- BThe two product types fall under different regimes.
- DInsurance rules apply to segregated funds.
Exam tip
Dual licence: two rulebooks; disclose the capacity.
Common mistake
Using a mutual fund KYC form to justify a seg fund sale without meeting insurance suitability expectations.
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.