LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
An insurer's audit team asks to examine an agent's client files. The agent must:
- Aproduce only the files relating to clients who have given specific written permission
- cooperate and produce the records, since the obligation is part of being contracted
- Crefuse, because client files are confidential and belong to the agent personally
- Dredact the client names so the insurer cannot identify whose files are being reviewed
Correct answer: B) cooperate and produce the records, since the obligation is part of being contracted
Agents undertake to cooperate with the insurers and regulators that oversee their business. Clients consent at application to information being used for administration and oversight, so an audit does not breach confidentiality.
Why the other options are wrong
- ACase-by-case permission is not required for a compliance review.
- CCooperation with oversight is a professional obligation, not optional.
- DRedacting names would defeat the purpose of the audit.
Exam tip
Cooperation with insurer and regulator reviews is part of the obligation.
Common mistake
Citing confidentiality to resist a legitimate compliance review.
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.