LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
An insurer asks a claimant to prove her identity and her relationship to the deceased. This requirement exists because:
- Aprovincial law requires every claimant to attend the insurer's office in person
- Bthe insurer must reduce the benefit if the relationship turns out to be a distant one
- Conly immediate family members are permitted to receive life insurance proceeds
- the insurer must pay the correct person and meet its identification obligations
Correct answer: D) the insurer must pay the correct person and meet its identification obligations
Paying the wrong person is a serious error, and anti-money-laundering rules require the recipient to be identified. The agent can speed the claim by explaining what is needed and helping assemble the documents.
Why the other options are wrong
- ANo requirement obliges a claimant to attend in person.
- BThe benefit is not scaled to the closeness of the relationship.
- CAnyone validly designated may receive proceeds, family or not.
Exam tip
Identification at claim serves both accuracy and anti-money-laundering rules.
Common mistake
Treating identification requests at claim as needless bureaucracy.
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.