LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
'Fronting' — allowing another person to sell under the agent's licence — is:
- APermitted with supervision, since the licensed agent remains responsible for the business written under the licence
- BAllowed for immediate family members, who are treated as extensions of the licensed agent for regulatory purposes
- Prohibited; each person who solicits or negotiates insurance must be licensed, and lending a licence risks revocation
- DCommon for administrative assistants, who take applications under the agent's licence as part of their routine duties
Correct answer: C) Prohibited; each person who solicits or negotiates insurance must be licensed, and lending a licence risks revocation
Unlicensed selling under another's licence is a serious offence for both parties.
Why the other options are wrong
- AFronting is not permitted even with supervision.
- BThere is no family exception to licensing.
- DAssistants may do administrative work only.
Exam tip
No selling under another's licence; administrative help only.
Common mistake
Letting an unlicensed assistant explain products and take applications.
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.