LLQP Ethics & Professional Practice · Component 2.1 · 40% of the exam
An insurer's own compliance function protects clients by:
- ANothing of substance, since the compliance function exists to protect the insurer from regulatory penalties rather than to protect clients
- Screening and monitoring agents, reviewing suitability and replacements, handling complaints, reporting and terminating
- CLicensing agents on the regulator's behalf, since the insurer is best placed to assess an agent's competence
- DSelling more policies by identifying clients whose existing coverage could be replaced with the insurer's products
Correct answer: B) Screening and monitoring agents, reviewing suitability and replacements, handling complaints, reporting and terminating
Insurers are accountable for their agents' conduct under FTC guidance and CLHIA screening guidelines.
Why the other options are wrong
- AThe compliance function has substantial client-protection duties.
- CLicensing is provincial; an insurer's compliance function does not license.
- DIts role is oversight, not sales.
Exam tip
Insurer compliance: screen, monitor, review, report, terminate.
Common mistake
Assuming an agent's conduct is invisible to the insurer.
What this tests
CISRO competency component 2.1 — 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.