LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
At a review an agent learns a client has divorced, changed jobs and had a child since the policy was issued. The agent should:
- Arecommend replacing the existing policy so that the file properly reflects her new circumstances
- Bupdate the address on the file and leave the coverage arrangements as they are
- reassess the needs, review the designations and document the updated recommendation
- Dnote the changes and revisit the coverage only if the client raises a concern
Correct answer: C) reassess the needs, review the designations and document the updated recommendation
Continuing suitability means testing the coverage against the client's current circumstances. Life events change both the amount needed and who should receive the proceeds, so the designations must be reviewed too.
Why the other options are wrong
- AReplacement must be justified on its merits, not by a change in circumstances.
- BAn address change does not address the coverage or the designations.
- DThe agent identifies the issue rather than waiting for the client to raise it.
Exam tip
Life events change both the amount needed and the designation.
Common mistake
Treating an annual review as an administrative check of contact details.
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.