LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
An insurer's 'defences' to a life claim may include:
- AA change in the insurer's ownership since issue, which releases the new owner from the old contract
- BThe agent's error in completing the application, which the insurer may treat as the applicant's misrepresentation and use to deny the claim outright
- CThe claimant's conduct toward the claims examiner, since an abusive claimant forfeits the right to prompt payment
- Material misrepresentation within contestability, fraud, suicide within the exclusion, no policy in force, an exclusion, or no insurable interest
Correct answer: D) Material misrepresentation within contestability, fraud, suicide within the exclusion, no policy in force, an exclusion, or no insurable interest
Defences are limited to the contract and statute. The insurer bears the burden of proving misrepresentation and its materiality.
Why the other options are wrong
- AA change in the insurer's ownership is irrelevant to claim defences.
- BAgent error may be the insurer's responsibility, not a defence.
- CA claimant's manner is irrelevant to the insurer's defences.
Exam tip
Defences: misrepresentation (2 yrs), fraud, suicide period, not in force, exclusion, void.
Common mistake
Believing insurers can deny for any reason.
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.