LLQP Ethics & Professional Practice · Component 1.1 · 60% of the exam
In Canada, the regulation of insurance contracts and the licensing of agents falls mainly under:
- Provincial jurisdiction for contracts and licensing, with OSFI supervising insurer solvency federally
- BInternational treaties, since Canadian insurers are bound by the standards of the global regulatory bodies they belong to
- CFederal jurisdiction only, since insurance companies are incorporated under federal law and supervised by OSFI
- DMunicipal by-laws, since agents must hold a business licence in each municipality where they sell
Correct answer: A) Provincial jurisdiction for contracts and licensing, with OSFI supervising insurer solvency federally
The constitutional division gives provinces authority over contracts and market conduct; OSFI supervises federally incorporated insurers' financial soundness. This split is the starting point of the legal framework.
Why the other options are wrong
- BTreaties do not govern domestic insurance contracts.
- CFederal authority is limited mainly to solvency supervision.
- DMunicipalities have no role in insurance regulation.
Exam tip
Provinces: contracts, licensing, market conduct. OSFI: solvency of federal insurers.
Common mistake
Assuming one national insurance law applies everywhere.
What this tests
CISRO competency component 1.1 — 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.