LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
During a review, an agent finds a client's seg fund has a guarantee about to mature while the market is well above the guaranteed amount. The agent should:
- Explain the maturity options, consider whether a reset or renewal serves the objectives, and document the advice
- BSay nothing until the insurer's maturity notice arrives, since the insurer is responsible for communicating maturity
- CReset the guarantee immediately without asking, since locking in the higher value is obviously in the client's interest
- DWithdraw the whole contract at market value, since the client has made a gain and should take the money
Correct answer: A) Explain the maturity options, consider whether a reset or renewal serves the objectives, and document the advice
Ongoing service includes acting on contract events such as maturity dates and reset opportunities, so the client makes an informed election rather than falling into the default.
Why the other options are wrong
- BSilence would breach the service duty.
- CThe client's instruction is required.
- DWithdrawing everything is the client's decision, not the agent's.
Exam tip
Act on maturity/reset events with the client.
Common mistake
Letting a default maturity election happen.
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.