LLQP Ethics & Professional Practice · Component 2.1 · 40% of the exam
Industry disclosure guidance expects an agent to tell a new client, at or before the first transaction:
- Athe names of other clients the agent serves in the same neighbourhood or profession
- Bthe agent's own opinion of which insurer is financially strongest in the market today
- the licence held, the companies represented and how the agent is compensated
- Dthe agent's personal income, so the client can judge how successful the agent has been
Correct answer: C) the licence held, the companies represented and how the agent is compensated
Disclosure covers the agent's licence and the provinces where it is held, the insurers represented, how the agent is paid and any conflict that could affect the recommendation. It should be given in writing.
Why the other options are wrong
- ANaming other clients would breach confidentiality.
- BA personal opinion on insurers is not what disclosure requires.
- DAn agent's personal income is not part of the disclosure expected.
Exam tip
Disclose the licence, the companies represented, the compensation and the conflicts.
Common mistake
Giving disclosure verbally at the end rather than in writing at the start.
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.